Exhibit 1.1
--------------------------------------------------------------------------------
AMERISOURCE HEALTH CORPORATION
and
MELLON INVESTOR SERVICES LLC
RIGHTS AGREEMENT
Dated as of March 16, 2001
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
-----
SECTION 1. Certain Definitions................................................................................ 1
SECTION 2. Appointment of Rights Agent........................................................................ 5
SECTION 3. Issue of Right Certificates........................................................................ 6
SECTION 4. Form of Right Certificates......................................................................... 8
SECTION 5. Countersignature and Registration.................................................................. 9
SECTION 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates.......................................................................... 9
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................... 10
SECTION 8. Cancellation and Destruction of Right Certificates................................................. 12
SECTION 9. Reservation and Availability of Common Shares...................................................... 12
SECTION 10. Common Shares Record Date.......................................................................... 14
SECTION 11. Adjustment of Purchase Price, Number of Shares or Number of Rights................................. 14
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares......................................... 22
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power............................... 22
SECTION 14. Fractional Rights and Fractional Shares............................................................ 25
SECTION 15. Rights of Action................................................................................... 26
SECTION 16. Agreement of Right Holders......................................................................... 26
SECTION 17. Right Certificate Holder Not Deemed a Shareholder.................................................. 27
SECTION 18. Concerning the Rights Agent........................................................................ 27
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.......................................... 28
SECTION 20. Duties of Rights Agent............................................................................. 28
SECTION 21. Change of Rights Agent............................................................................. 30
SECTION 22. Issuance of New Right Certificates................................................................. 31
SECTION 23. Redemption and Termination......................................................................... 32
SECTION 24. Exchange........................................................................................... 32
SECTION 25. Notice of Certain Events........................................................................... 34
SECTION 26. Notices............................................................................................ 34
SECTION 27. Supplements and Amendments......................................................................... 35
SECTION 28. Successors......................................................................................... 36
SECTION 29. Determinations and Actions by the Board of Directors............................................... 36
SECTION 30. Benefits of this Agreement......................................................................... 37
SECTION 31. Severability....................................................................................... 37
SECTION 32. Governing Law...................................................................................... 37
SECTION 33. Counterparts....................................................................................... 37
SECTION 34. Descriptive Headings............................................................................... 37
Exhibit A Form of Right Certificate
-i-
RIGHTS AGREEMENT
Rights Agreement, dated as of March 16, 2001, between AmeriSource
Health Corporation, a Delaware corporation (the "Company"), and Mellon Investor
Services LLC, a New Jersey limited liability corporation, as rights agent (the
"Rights Agent").
The Board of Directors of the Company (the "Board of Directors") has
authorized and declared a dividend distribution of one right (a "Right") for
each share of Company Securities (as hereinafter defined) of the Company
outstanding as of the Close of Business (as hereinafter defined) on March 30,
2001 (the "Record Date"), each Right initially representing the right to
purchase one-tenth of one Common Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further authorized (i)
the issuance of one Right with respect to each share of Company Securities that
shall become outstanding between the Record Date and the earliest of the
Distribution Date (as defined in Section 3), the Redemption Date and the Final
Expiration Date (as such terms are defined in Section 7) and (ii) in certain
circumstances provided in Section 22, the issuance of one Right with respect to
each share of Company Securities that shall become outstanding between the
Distribution Date and the earlier of the Redemption Date and the Final
Expiration Date.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, and intending to be legally bound hereby, the
parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Company Securities then outstanding, but shall not include
any Exempt Person (as hereinafter defined). Notwithstanding the foregoing, no
Person shall become an Acquiring Person as the result of an acquisition of
beneficial ownership of Company Securities by the Company that, by reducing the
number of Company Securities (or securities convertible into or exchangeable for
Company Securities) outstanding, increases the percentage of Company Securities
beneficially owned by such Person (together with all Affiliates and Associates
of such Person) to 15% or more of the Company Securities then outstanding;
provided, however, that if any Person (other than Exempt Persons) shall become
the Beneficial Owner of 15% or more of the Company Securities then outstanding
by reason of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional Company
Securities, then such Person shall be an Acquiring Person. Notwithstanding the
foregoing, if the Board of Directors determines in good faith that a Person who
would otherwise be an Acquiring Person has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of Company
Securities so that such Person would no longer be an Acquiring Person, then such
Person shall not, solely as a result of such inadvertent acquisition, be deemed
to be an Acquiring Person for any purpose of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), as such rule is in effect on the Record Date.
(c) "AABB Corporation" shall mean AABB Corporation, a Delaware
corporation.
(d) "A-Sub Acquisition Corp." shall mean A-Sub Acquisition Corp., a
Delaware corporation.
(e) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own," and shall be deemed to have "beneficial ownership"
of, any securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly has
(A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own (1) 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, (2) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, or (3)
securities issuable upon exercise of Rights from and after the occurrence of a
Triggering Event, if such Rights were acquired by such Person or such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 or pursuant to Section 11(a)(i) in connection with an
adjustment made with respect to any of the Rights heretofore specified in this
clause (3); or
(B) the right to vote or otherwise has "beneficial
ownership" (as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any agreement,
arrangement or understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, pursuant to this subparagraph (B), any security as a result of any
agreement, arrangement or understanding to vote such security if such agreement,
arrangement or understanding (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(ii) that are beneficially owned, including pursuant to
subparagraphs (i)(A) and (B) of this subsection (c), directly or
indirectly, by any other Person (or Affiliate or Associate thereof) with
which such Person or any of such Person's Affiliates
-2-
or Associates has any agreement, arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso in subparagraph
(i)(B) of this subsection (c)) or disposing of any securities of the
Company;
provided, however, that nothing in this subsection (c) shall cause a Person
engaged in business as an underwriter of securities to be the Beneficial Owner
of, or to beneficially own, any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(f) "Bergen Xxxxxxxx" shall mean Bergen Xxxxxxxx Corporation, a New
Jersey Corporation.
(g) "B-Sub Acquisition Corp." shall mean B-Sub Acquisition Corp., a
New Jersey corporation.
(h) "Board of Directors" shall have the meaning set forth in the
second introductory paragraph.
(i) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of Delaware or the State in
which the office of the Rights Agent designated for such purpose is located, as
designated in and pursuant to Section 26, are authorized or obligated by law or
executive order to close.
(j) "Close of Business" on any given date shall mean 5:00 P.M.,
Philadelphia, Pennsylvania time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 P.M., Philadelphia, Pennsylvania
time, on the next succeeding Business Day.
(k) "Common Shares" when used with reference to the Company shall
mean the shares of Class A Common Stock, par value $0.01 per share, of the
Company. "Common Shares" when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) with the greatest
voting power of such Person or, if such Person is a Subsidiary (as hereinafter
defined) of another Person, the Person or Persons that ultimately control such
first-mentioned Person.
(l) "Company" shall have the meaning as set forth in the first
introductory paragraph.
(m) "Company Securities" shall mean the Common Shares, the Class B
Common Stock, par value $0.01 per share, of the Company and the Class C Common
Stock, par value $0.01 per share, of the Company.
(n) "Company Security Equivalents" shall have the meaning set forth
in Section 11(a)(iii).
-3-
(o) "Current Per Share Market Price" shall have the meaning set
forth in Section 11(d).
(p) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(q) "Distribution Date" shall have the meaning set forth in
Section 3.
(r) "Equivalent Common Shares" shall have the meaning set forth in
Section 11(b).
(s) "Exchange Shares" shall have the meaning set forth in Section
24(a).
(t) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary
of the Company, (iii) any employee benefit plan of the Company or of any
Subsidiary of the Company or, (iv) any entity holding Company Securities for the
benefit of present or future participants (e.g., a trustee or plan fiduciary)
pursuant to the terms of any such plan.
(u) "Final Expiration Date" shall have the meaning set forth in
Section 7(a).
(v) "Merger Agreement" shall mean the Agreement and Plan of Merger
among AABB Corporation, the Company, Bergen Xxxxxxxx, A-Sub Acquisition Corp.
and B-Sub Acquisition Corp. dated March 16, 2001.
(w) "Mergers" shall mean the merger of (i) A-Sub Acquisition Corp.
with and into the Company and (ii) B-Sub Acquisition Corp. with and into Bergen
Xxxxxxxx, pursuant Section 1.2 of the Merger Agreement.
(x) "NASDAQ shall have the meaning set forth in Section 11(d).
(y) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company or other entity or organization, and
shall include any successor (by merger or otherwise) of such entity or
organization.
(z) "Principal Party" shall have the meaning set forth in Section
13(b).
(aa) "Purchase Price" shall have the meaning set forth in section
4(a).
(bb) "Record Date" shall have the meaning set forth in the second
introductory paragraph.
(cc) "Redemption Date" shall have the meaning set forth in Section
7(a).
(dd) "Right" shall have the meaning set forth in the second
introductory paragraph.
(ee) "Right Certificate" shall have the meaning set forth in Section
3(a).
-4-
(ff) "Rights Agent" shall have the meaning set forth in the first
introductory paragraph.
(gg) "Section 11(a)(ii) Event" shall mean the event described in
Section 11(a)(ii).
(hh) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii).
(ii) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
(jj) "Securities Act" shall have the meaning set forth in Section 7(c)
(kk) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such;
provided, however, no Shares Acquisition Date shall occur as a result of (i) the
execution of the Merger Agreement, (ii) the execution of the Stock Option
Agreement (as hereinafter defined), (iii) the consummation of the Mergers or
(iv) the acquisition or transfer of shares of Common Shares by Bergen Xxxxxxxx
pursuant to the Stock Option Agreement.
(ll) "Spread" shall have the meaning set forth in Section 11(a)(iii).
(mm) "Stock Option Agreement" shall mean the Stock Option Agreement
dated March 16, 2001, between the Company and Bergen Xxxxxxxx granting Bergen
Xxxxxxxx the option to purchase 10,472,304 Common Shares.
(nn) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
(oo) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(pp) "Surviving Corporation" shall have the meaning set forth in
Section 11(p).
(qq) "Trading Day" shall have the meaning set forth in Section 11(d).
(rr) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
SECTION 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions
-5-
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 Rights Agent shall have no duty to supervise, and in no event
shall be liable for, the acts or omissions of any such co-rights agents. In the
event the Company appoints one or more co-Rights Agents, the respective duties
of the Rights Agent and any co-Rights Agents shall be as the Company shall
determine.
SECTION 3. Issue of Right Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
calendar day after the Shares Acquisition Date or (ii) the Close of Business on
the tenth Business Day (or such later date as the Board of Directors shall
determine) after the date that a tender or exchange offer by any Person (other
than an Exempt Person) is first published or sent or given within the meaning of
Rule 14d-4(a) of the General Rules and Regulations under the Exchange Act, the
consummation of which would result in beneficial ownership by a Person (other
than an Exempt Person) of 15% or more of the outstanding Company Securities
(including any such date that is after the date of this Agreement and prior to
the issuance of the Rights) (the earlier of (i) and (ii) 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 Company
Securities 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 right to receive Right Certificates will be
transferable only in connection with the transfer of Company Securities;
provided, however, no Distribution Date will occur as a result of (i) the
execution of the Merger Agreement, (ii) the execution of the Stock Option
Agreement, (iii) the consummation of the Mergers or (iv) the acquisition or
transfer of shares of Common Stock by Bergen Xxxxxxxx pursuant to the Stock
Option Agreement. As soon as practicable after the Distribution Date and upon
receipt of all necessary information, the Rights Agent will send, by first-
class, insured, postage-prepaid mail, to each record holder of Company
Securities as of the Close of Business on the Distribution Date, or, with
respect to Company Securities so issued on or after the Distribution Date
(unless otherwise provided with respect thereto as aforesaid), to the record
holder of such Company Securities on the date of issuance, at the address of
such holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit A, (the "Right Certificate") evidencing one
Right for each Company Security so held, subject to adjustments as provided
herein. In the event that an adjustment in the number of Rights per Company
Security has been made pursuant to Section 11(i) hereof, at the time of
distribution of the Right Certificates, the Company may make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) so
that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
-6-
(b) With respect to certificates for Company Securities outstanding
as of the Record Date, until the Distribution Date, the Rights will be evidenced
by such certificates for Company Securities registered in the names of the
holders thereof. Until the earlier of the Distribution Date or Final Expiration
Date, the surrender for transfer of any certificate for Company Securities
outstanding on the Record Date shall also constitute the transfer of the Rights
associated with the Company Securities represented thereby.
(c) Rights shall be issued in respect of all Company Securities
which are issued (whether originally issued or delivered from the Company's
treasury) after the Record Date, but prior to the earlier of the Distribution
Date or Final Expiration Date, or in certain circumstances provided in Section
22, after the Distribution Date. Certificates for Company Securities issued
after the Record Date but prior to the earlier of the Distribution Date or the
Final Expiration Date (including, without limitation, reacquired Company
Securities referred to in the last sentence of this paragraph (c)) 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 AmeriSource
Health Corporation (the "Company") and Mellon Investor Services LLC,
as Rights Agent, dated as of March 16, 2001 (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, as in
effect on the date of mailing, without charge promptly following
receipt of a written request therefor.
Under certain circumstances, Rights beneficially owned by Acquiring
Persons or Associates or Affiliates of Acquiring Persons (as such
terms are defined in the Rights Agreement) and any subsequent holder
of such Rights may become null and void.
With respect to such certificates bearing the foregoing legend, until the
earlier of the Distribution Date or the Final Expiration Date, the Rights
associated with the Company Securities represented by such certificates shall be
evidenced by such certificates alone and registered holders of Company
Securities shall also be the registered holders of the associated Rights, and
the transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Company Securities represented by such
certificates. In the event that the Company purchases or acquires any Company
Securities after the Record Date but prior to the earlier of the Distribution
Date or the Final Expiration Date, any Rights associated with such Company
-7-
Securities shall be deemed cancelled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Company Securities which
are no longer outstanding.
SECTION 4. Form of Right Certificates. (a) The Right
Certificates (and the forms of election to purchase shares and of assignment to
be printed on the reverse thereof) shall be substantially in the form of Exhibit
A, and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate,
but which do not affect the duties, rights or responsibilities of the Rights
Agent, 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 any securities association
on whose interdealer quotation system the Rights may from time to time be
authorized for quotation, or to conform to usage. Subject to the provisions of
Section 22, the Right Certificates that are issued in respect of Company
Securities that were issued and outstanding as of the Record Date, shall be
dated as of the Record Date, and all Right Certificates that are issued in
respect of other Company Securities shall be dated as of the respective dates of
issuance of such Company Securities, and in either case on their faces shall
entitle the holders thereof to purchase such number of Common Shares as shall be
set forth therein at the price per Common Share set forth therein (the "Purchase
Price"), but the number of such Common Shares and the Purchase Price shall be
subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3 or Section
22 that represents Rights beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or any Associate or Affiliate of an Acquiring Person) which becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or any Associate or Affiliate of an Acquiring Person) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person (or any Associate or Affiliate of
such Acquiring Person) to holders of equity interests in such Acquiring Person
(or of such Associate or Affiliate) or to any Person with whom the Acquiring
Person has any agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer that the Board of Directors has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of Section 7(e) or Section 11 hereof, and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or an Associate of an Acquiring Person. This Right
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of the Rights
Agreement.
-8-
The absence of the foregoing legend on any Right Certificate shall in
no way affect any of the other provisions of this Agreement, including, without
limitation, the provisions of Section 7(e). The Company shall instruct the
Rights Agent in writing of the Rights which should be so legended and shall
supply the Rights Agent with such legended Right Certificates.
SECTION 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its chairman of the
Board of Directors, its president or a vice president, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a facsimile
thereof that shall be attested by the secretary, or an assistant secretary or
treasurer, of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company, and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date and written notice thereof to
the Rights Agent and receipt by the Rights Agent of all necessary information,
the Rights Agent will keep or cause to be kept, at the office of the Rights
Agent designated for such purposes, 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 as evidenced on the face of each of the Right Certificates and the date
and certificate number 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 4(b), Section 7(e), Section 11 and Section
14, at any time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
Common Shares (or other securities or other assets, as the case may be) as the
Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate 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, with the form
of assignment and certificate appropriately executed, at the office of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate until the registered holder
shall have completed and signed
-9-
the certificate contained in the form of assignment on the reverse side of such
Right 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 and the Rights Agent shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e), Section
11 and Section 14, 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 charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates. The Rights Agent shall have no duty or
obligation under this Section 6 unless and until it is satisfied that all such
taxes and/or charges have been paid.
(b) Upon receipt by the Company and the Rights Agent of evidence
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 satisfactory to them, and, at the Company's request, reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Right Certificate
if mutilated, the Company will make and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)),
in whole or in part at any time after the Distribution Date, upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly and properly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the Purchase
Price for each one-tenth of one Common Share (or other securities, cash or other
assets, as the case may be) as to which the Rights are exercised, at or prior to
the earliest of (i) the earlier of (x) the Close of Business on March 16, 2002
or (y) the consummation of the Mergers (the earlier of (x) or (y) being the
"Final Expiration Date"), (ii) the time at which the Rights are redeemed as
provided in Section 23 (the "Redemption Date"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one-tenth of one Common Share
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 and shall be
payable in lawful money of the United States of America, subject to paragraph
(c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly and properly executed,
accompanied by payment of the Purchase Price for the shares (or other securities
or other assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax or charge required to be paid by the holder of such
Right Certificate in accordance with Section 9(e), the Rights Agent shall,
subject
-10-
to Section 20(k), thereupon promptly (i) (A) requisition from any transfer agent
of the Common Shares certificates for the number of Common Shares to be
purchased, and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have elected to
deposit the total number of Common Shares usable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of Common Shares to be purchased
(in which case certificates for the Common Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional interests in shares in accordance with Section
14, (iii) after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificates registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii))
may be made in cash or by certified or bank check or money order payable to the
order of the Company. In the event the Company is obligated to issue other
securities (including Common Shares) of the Company or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities or property are available for
distribution by the Rights Agent, if and when necessary to comply with this
Agreement. The Company reserves the right to require, prior to the occurrence of
a Triggering Event, that upon any exercise of Rights, a number of Rights be
exercised so that only whole Common Shares would be issued.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 6 and Section 14.
(e) Notwithstanding anything to the contrary in this Agreement,
from and after the first occurrence of any Triggering Event, any Rights
beneficially owned by (i) any Acquiring Person (or any Associate or Affiliate of
an Acquiring Person), (ii) a transferee of an Acquiring Person (or any Associate
or Affiliate of an Acquiring Person) which becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or
any Associate or Affiliate of an Acquiring Person) who becomes a transferee
prior to or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) to holders of equity interests in such Acquiring Person (or of such
Associate or Affiliate) or to any Person with whom the Acquiring Person has any
agreement, arrangement or understanding regarding the transferred Rights, or (B)
a transfer that the Board of Directors has determined is part of a plan,
agreement, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall be null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
-11-
otherwise. The Company shall notify the Rights Agent when this Section 7(e)
applies and shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) and Section 4(b) are complied with, but neither the Company
nor the Rights Agent shall have any liability to any holder of Rights or any
other Person as a result of the Company's failure to make any determination
under this Section 7(e) or such Section 4(b) with respect to any Acquiring
Person or an Associate or Affiliate of an Acquiring Person or their transferees.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
transfer or exercise unless such registered holder shall have (i) properly
completed and signed the certificate following the form of assignment or
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such assignment or exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company and the Rights Agent shall
reasonably request.
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 Common Shares.
(a) Subject to the Company's rights under Section 11(a)(iii) hereof to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that it will cause to be reserved and kept available out of its authorized and
unissued Common Shares or any Common Shares held in its treasury, the number of
Common Shares that will be sufficient to permit the exercise in full of all
outstanding Rights pursuant to the terms of this Agreement; provided, however,
that such action need not be taken with respect to Common Shares (or other
securities) issuable upon exercise of the Rights until after such time as the
Rights become exercisable, and with respect to Common Shares (or other
securities) issuable upon occurrence of a Triggering Event until the occurrence
of such event.
(b) So long as the Common Shares issuable upon the exercise of
Rights may be listed on any national stock exchange or authorized for quotation
on any interdealer quotation system of any securities association, 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
-12-
listed on such exchange or quoted on such system upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as is
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with Sections 11(a)(ii)
(or Section 11(a)(iii) and 13 hereof), or as soon as is required by law
following the Distribution Date, as the case may be, a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Common Shares or other securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities 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 and other appropriate jurisdictions in connection
with the exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement and permit it to
become effective and to take such actions under such other securities or blue
sky laws and permit them 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, each time with prompt written
notice thereof to the Rights Agent. In addition, if the Company shall determine
that a registration statement is required following the Distribution Date, the
Company may temporarily suspend, with prompt written notice thereof to the
Rights Agent, the exercisability of the Rights until such time as a registration
statement has been declared effective. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained or the exercise thereof shall not be permitted under applicable
law or a registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Common Shares or other securities
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that, subject to
Sections 6 and 7(c), it will pay when due and payable, any and all transfer
taxes and charges that may be payable in respect of the issuance or delivery of
the Right Certificates or of any Common Shares (or other securities or property)
upon the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax or charge that 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
-13-
depositary receipts for the Common Shares (or other securities or property) 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 Common Shares (or other securities or
property) upon the exercise of any Rights, until any such transfer tax or charge
shall have been paid (any such transfer tax or charge 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 transfer tax or charge is
due.
SECTION 10. Common Shares Record Date. Each Person in whose name
any certificate for Common Shares (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Common Shares (or other securities) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes or charges) was made; provided, however, that
if the date of such surrender and payment is a date upon which the Common Shares
(or Company Securities and/or other securities, as the case may be) transfer
books of the Company are closed or a date on which the exercisability of the
Rights is suspended pursuant to Section 9(c), such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, as applicable, the next succeeding Business Day on which the Common
Shares (or Company Securities and/or other securities, as the case may be)
transfer books of the Company are open or the next succeeding Business Day on
which such suspension is no longer in effect. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate, as such, shall not
be entitled to any rights of a holder of Common Shares (or other securities) for
which the Rights shall be exercisable, including, without limitation, the right
to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number and kind of securities covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on any class of the Company Securities
payable in Company Securities, (B) subdivide any class of the outstanding
Company Securities, (C) combine any class of outstanding Company Securities into
a smaller number of shares of such Company Securities or (D) issue any shares of
its capital stock in a reclassification of the Company Securities (including any
such reclassification in connection with the execution of the Merger Agreement,
the execution of the Stock Option Agreement, the consummation of the Mergers,
the acquisition or transfer of shares of Common Stock by Bergen Xxxxxxxx
pursuant to the Stock Option Agreement, or any other consolidation or merger in
which the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e), the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of capital
-14-
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of Company Securities or other securities
that, if such Right had been exercised immediately prior to such date and at a
time when the Company Securities (or other securities, as the case may be)
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. If an event occurs that would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event any Person (other than an Exempt Person), at any
time after the date of this Agreement, is or becomes an Acquiring
Person, then, promptly following the occurrence of such Section
11(a)(ii) Event, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have a right
to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of the number of
Common Shares for which a Right was theretofore exercisable, such number
of Common Shares as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the number of one-tenths of a Common
Share for which a Right was exercisable immediately prior to the first
occurrence of the Section 11(a)(ii) Event and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Per Share Market Price of the Common
Shares (determined pursuant to Section 11(d)) on the date of the
occurrence of the Section 11(a)(ii) Event (such number of shares is
herein called the "Adjustment Shares"); provided, however, that the
Purchase Price and number of Adjustment Shares shall be further adjusted
as provided in this Agreement to reflect any event occurring after the
date of such first occurrence.
(iii) In the event that after the Distribution Date, or, in the
case of a Section 11(a)(ii) Event after the date of the occurrence of
such Section 11(a)(ii) Event, the number of Common Shares which is
authorized by the Company's articles of incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full
of the Rights, the Company shall: (A) determine the excess of (1) the
value of the Common Shares, or Adjustment Shares in accordance with
Section 11(a)(ii), as the case may be, issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such excess is
herein called the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Common Shares, or Adjustment
Shares, as the case may be, upon exercise of the Rights, (1) cash, (2) a
reduction in the Purchase Price, (3) Company Securities of the same or
different class or other equity securities of the Company (including,
without limitation, shares, or units of shares, of Company Securities
which the Board of Directors has deemed to have substantially the same
economic value as Common Shares (such shares or units of shares of
common stock are referred to herein as "Company Security Equivalents
")), (4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing having an aggregate value equal to the
Current Value (less the amount of any reduction in the Purchase Price),
where such aggregate value has been determined by the Board
-15-
of Directors based upon the advice of a nationally recognized investment banking
firm selected by the Board of Directors; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the Distribution Date, or in the case of a
Section 11(a)(ii) Event the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right, and without
requiring payment of the Purchase Price, Common Shares (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board of Directors shall determine in good faith
that it is likely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be extended to the extent necessary, but not more than one
hundred twenty (120) days after the Distribution Date or the Section 11(a)(ii)
Trigger Date, as the case may be, in order that the Company may seek shareholder
approval for the authorization of such additional shares (such period, as it may
be extended, the "Substitution Period"). To the extent that the Company
determines that some action should be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any authorization of
additional securities and/or to decide the appropriate form of distribution to
be made pursuant to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public announcement
stating that 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, each time with prompt written notice thereof to the Rights Agent. For
purposes of this Section 11(a)(iii), the value of the Common Shares shall be the
Current Per Share Market Price per Common Share on the Distribution Date or the
Section 11(a)(ii) Trigger Date, as the case may be, and the value of any
"Company Security Equivalent" shall be deemed to have the same value as the
Common Shares on such date.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Company
Securities entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Shares, or shares having
the same rights, privileges and preferences as Common Shares ("Equivalent Common
Shares"), or securities convertible into Common Shares or Equivalent Common
Shares at a price per Common Share or per Equivalent Common Share, or having a
conversion price per share, if a security convertible into Common Shares or
Equivalent Common Shares, less than the Current Per Share Market Price of the
Common Shares (as determined pursuant to Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Company Securities
outstanding on such record date plus the number of Common Shares which the
aggregate offering price of the total number of Common Shares and/or Equivalent
Common Shares so to be offered (and/or the aggregate initial conversion price of
the convertible securities
-16-
so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Company Securities outstanding on
such record date plus the number of additional Common Shares and/or Equivalent
Common Shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such
subscription price may be paid in 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 and shall be conclusive and binding
on the Rights Agent and the holders of Rights. Company Securities owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price that would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Company Securities (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash or
assets (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company or a dividend payable in Company Securities but
including a dividend payable in stock other than Company Securities) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Per Share Market
Price of the Company Securities (as determined pursuant to Section 11(d)) 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 and shall be conclusive and binding on the Rights Agent
and the holders of the Rights) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Company Security and the denominator of which shall be such
Current Per Share Market Price of the Company Securities. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price that would then be in effect if such record date had not
been fixed.
(d) For the purpose of any computation hereunder (other than
computations made pursuant to Section 11(a)(iii) hereof), the Current Per Share
Market Price of the Company Securities on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the
twenty (20) consecutive Trading Days (as such term is hereinafter defined)
immediately prior to, but not including, such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Per Share
Market Price of Common Shares on any date shall be deemed to be the average of
the daily closing prices per share of such Common Shares for the ten (10)
consecutive Trading Days immediately following, but not including, such date;
provided, however, that in the event that the Current Per Share Market Price of
the Company Securities is determined during a period following the announcement
by
-17-
the issuer of such Company Securities of (1) a dividend or distribution on
such Company Securities payable in such Company Securities or securities
convertible into such Company Securities (other than the Rights), or (2) any
subdivision, combination or reclassification of such Company Securities, and
prior to the expiration of twenty (20) Trading Days, or ten (10) Trading Days,
as set forth above, 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 take into account ex-dividend trading.
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Common Shares are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal United States national securities exchange on
which the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any United States national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the United States over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use, or, if on any such
date the Common Shares are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a United States professional
market maker making a market in the Common Shares selected by the Board of
Directors. If on any such date no such market maker is making a market in the
Common Shares, the fair value of the Common Shares on such date as determined in
good faith by the Board of Directors shall be used. The term "Trading Day" shall
mean a day on which the principal United States 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 United States national securities exchange, a Business Day. If
the Common Shares are not publicly held or not 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 and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments that 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-thousandth of a Common Share or other share, as
the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three (3) years from the date of the transaction which mandates such
adjustment or (ii) the Final Expiration Date.
-18-
(f) If as a result of an adjustment made pursuant to Section 11(a)
(ii) or Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than Common
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
shares contained in Section 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m) and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Common Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Common Shares
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 Common Shares obtained
by (i) multiplying (x) the number of Common Shares covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement, with prompt written notice
thereof to the Rights Agent, 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 ten (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 Rights on such record date Right Certificates evidencing, subject to
Section 14, 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
-19-
to which such holders shall be entitled after such adjustment. Right
Certificates to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the holders of
record of Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of Common Shares 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 Common Shares that 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 stated par value, if any, of the Common Shares
issuable upon exercise of the Rights, the Company shall take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Common Shares
at such adjusted Purchase Price.
(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 (and shall promptly notify the
Rights Agent in writing of any such election) until the occurrence of such event
the issuing to the holder of any Right exercised after such record date the
Common Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Common Shares and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Common Shares, (ii) issuance wholly for cash of any Common Shares at less
than the current market price, (iii) issuance wholly for cash of Common Shares
or other securities that by their terms are convertible into or exchangeable for
Common Shares, (iv) dividends on Common Shares payable in Common Shares or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Common Shares, shall not be
taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into or engage in a share exchange with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to
-20-
sell or transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger, share exchange or sale
there are any rights, warrants, or other instruments or securities outstanding
or agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger, share
exchange or sale, the shareholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it shall not, except as permitted by Section 23, Section 24 or Section 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.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Record Date and prior to
the Distribution Date (i) declare a dividend on the outstanding shares of
Company Securities payable in Company Securities, (ii) subdivide any class of
the outstanding Company Securities, (iii) combine any class of outstanding
Company Securities into a smaller number of shares of such Company Securities,
the number of Rights associated with each outstanding share of Company
Securities, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each such share of Company Securities outstanding immediately
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Company Securities immediately
prior to such event by a fraction the numerator of which shall be the total
number of Company Securities outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares of
Company Securities outstanding immediately following the occurrence of such
event.
(q) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution Date consolidate with, or merge with or into, any
other Person for the primary purpose of a change of domicile of the Company,
and, in connection with such consolidation or merger, all of the outstanding
Company Securities shall be changed into or exchanged for Common Shares of the
surviving corporation of such consolidation or merger (the "Surviving
Corporation"), then proper provision shall be made so that Rights shall be
associated with each Common Share of the Surviving Corporation, except as
provided in Section 7(e) hereof, such that the number of Rights associated with
each Common Share of the Surviving Corporation following any such event shall
equal the result obtained by multiplying the number of Rights associated with
each Common Share immediately prior to such event by a fraction the numerator of
which shall be the
-21-
total number of Company Securities outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of Common Shares of the Surviving Corporation which the Common Shares were
changed into or exchanged for pursuant to the consolidation or merger. Following
such a consolidation or merger, the Rights Agent shall be notified thereof in
writing, and this Agreement shall remain in effect and all references to the
Company shall be deemed to be references to the Surviving Corporation.
SECTION 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement, reasonably detailed, of the facts and computations
accounting for such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Common Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of record of a Right Certificate
(or, if prior to the Distribution Date, to each holder of record of a
certificate representing Common Shares) in accordance with Section 25. The
Rights Agent shall be fully protected in relying on such certificate and on any
adjustment contained therein and shall have no duty with respect to and shall
not be deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall engage in a share exchange with or
shall consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such share exchange,
consolidation or merger and, in connection with such share exchange,
consolidation or merger, all or part of the outstanding Company Securities shall
be changed into or exchanged for stock or other securities of any other Person
or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one transaction or a series of related transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case proper
provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Principal Party (as
such term is hereinafter defined), not subject to any liens,
-22-
encumbrances, rights of call, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number of Common Shares for which a
Right was exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the Purchase Price
in effect immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the number of Common Shares for which a Right was exercisable
immediately prior to such first occurrence of a Section 11(a)(ii) Event)
and (2) dividing that product (such product following the first occurrence
of a Section 13 Event shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the Current Per
Share Market Price of the Common Shares of such Principal Party (determined
pursuant to Section 11(d)) on the date of consummation of such Section 13
Event;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions
of Section 11 hereof shall apply only to such Principal Party following the
first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of Common Shares) in
connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event.
If, in the case of a transaction of the kind described in clause (z)
of the first sentence of this Section 13(a), the Person or Persons to whom
assets or earning power are sold or otherwise transferred are individuals, then
the preceding sentences of this Section 13(a) shall be inapplicable, and the
Company shall require as a condition to such sale of transfer that such Person
or Persons pay to each holder of a Right Certificate, upon its surrender to the
Rights Agent and in exchange therefor (without requiring payment by such
holder), cash in the amount determined by multiplying the then current Purchase
Price by the number of Common Shares for which a Right is then exercisable.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is the issuer
of any securities for or into which Common Shares of the Company are
converted in such share exchange, merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or
-23-
consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
provided, however, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized shares of
Common Shares which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and, unless
prior thereto, the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any such Section 13 Event, the
Principal Party will
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the securities
or blue sky laws of such jurisdictions as may be necessary or appropriate;
and
(iii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
share exchanges, mergers or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the first occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section
13(a).
-24-
SECTION 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Right Certificates that evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal United States 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 United States
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the United States 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 United States 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 Common
Shares upon exercise of the Rights or to issue certificates that evidence
fractions of Common Shares. In lieu of fractional interests in Common Shares,
the Company shall pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one Common Share. For purposes of
this Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to Section 11(d) hereof)
for the Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
(except as provided by this Section 14) upon exercise of a Right.
(d) The Rights Agent shall have no duty or obligation with respect
to this Section 14 and Section 24(e) unless and until it has received specific
instructions (and sufficient cash, if required) from the Company with respect to
its duties and obligations under such Sections.
-25-
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
this Agreement, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Company Securities); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Company Securities), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Company Securities), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
SECTION 16. Agreement of Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Company Securities;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully completed and duly executed;
(c) subject to Section 6 and Section 7(f) hereof, 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 Company
Securities 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 Company Securities certificate made
by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to Section
7(e), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether interlocutory or
final) 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
-26-
efforts to have any such order, decree, judgment or ruling lifted or
otherwise overturned as soon as possible.
SECTION 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Common Shares or any
other securities of the Company that may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), 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.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration, preparation, delivery,
execution and amendment 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, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent
(each as finally determined by a court of competent jurisdiction), for any
action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including, without limitation,
the costs and expenses of defending against any claim of liability arising
therefrom.
(b) The Rights Agent shall be authorized and 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 Company Securities 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 advise of counsel as set
forth in Section 20 hereof.
(c) The indemnity and compensation provided in this Section 18 shall
survive the expiration of the Rights, the termination of this Agreement and the
resignation or removal of the Rights Agent. The costs and expenses incurred in
enforcing this right of indemnification and compensation shall be paid by the
Company.
-27-
SECTION 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name, and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes
only the duties and obligations expressly 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 advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or 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
(including, without limitation, the identity or existence of any Acquiring
Person and the determination of Current Per Share Market Price) be proved or
established by the Company prior to taking, suffering or omitting 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 of
Directors, the president, any vice president, the secretary, an assistant
secretary or the treasurer of the Company and delivered to
-28-
the Rights Agent; and such certificate shall be full authorization and
protection to the Rights Agent for any action taken, suffered or omitted 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 gross negligence, bad faith or willful
misconduct (each as finally determined by a court of competent jurisdiction).
Anything to the contrary notwithstanding, in no event shall the Rights Agent be
liable for special, punitive, indirect, consequential or incidental loss or
damage of any kind whatsoever (including, but not limited to, lost profits) even
if the Rights Agent has been advised of the likelihood of such loss or damage.
Notwithstanding anything contained herein, any liability of the Rights agent
under this Agreement shall be limited to $20,000. This Section 20(c) shall
survive the termination of this Agreement, the expiration of the Rights, and the
resignation or removal of the Rights Agent.
(d) The Rights Agent shall not be liable or responsible 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 liability or
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 liable or responsible for any breach
by the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 3, Section 11, Section 13, Section 23 or Section
24, or liable or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such 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 Common
Shares to be issued pursuant to this Agreement or any Right Certificate or as to
whether any Common Shares will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the chairman of the Board of Directors, the president, any vice
president, the secretary or the treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken, suffered or omitted by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while awaiting
-29-
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken, suffered or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken, suffered or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken by, suffered by or omission of, the Rights Agent in accordance with
a proposal included in any such application on or after the date specified in
such application (which date shall not be less than five (5) Business Days after
the date any officer of the Company actually receives such application, unless
any such officer shall have consented in writing to an earlier date) unless,
prior to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or 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 Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith or willful misconduct
in the selection and continued employment thereof (each as finally determined by
a court of competent jurisdiction).
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its rights
if it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) 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 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.
(l) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or obligations
shall be read into this Agreement with respect to the Rights Agent.
SECTION 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares by
-30-
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares by registered or certified mail, and to the 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 incapacity by the 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
holder of record of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after it has been
notified in writing of such resignation by the resigning Rights Agent, then the
holder of record of any Right Certificate or the Rights Agent 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 Person organized and doing business under the laws of the United
States or any state of the United States so long as such Person is authorized to
perform shareholder services, is in good standing, is authorized under such laws
to exercise corporate trust powers, and is subject to supervision or examination
by federal or state authority, and has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million. 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 with the predecessor Rights Agent and each transfer
agent of the Common Shares, and mail a notice thereof in writing to the holders
of record of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
SECTION 22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (a) shall, with
respect to Common Shares so issued or sold (i) pursuant to the exercise of stock
options or under any employee plan or arrangement or (ii) upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors, issue Right Certificates representing the appropriate number of
Rights in connection with such
-31-
issuance or sale; provided, however, that (i) no such Right Certificate shall
be issued if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse tax
consequences to the Company or to the Person to whom such Right Certificate
would be issued, and (ii) no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustments shall otherwise have been made in lieu
of the issuance thereof.
SECTION 23. Redemption and Termination.
(a) The Board of Directors may, at its option, at any time prior to
the earlier of (i) the Close of Business on the tenth calendar day following the
Shares Acquisition Date (or, if the Shares Acquisition Date occurred prior to
the Record Date, the Close of Business on the tenth calendar day following such
Record Date) or (ii) the Close of Business on the Final Expiration Date, redeem
all, but not less than all, of the then outstanding Rights at a redemption price
of $.001 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"). Notwithstanding
the foregoing, in the event payment of the Redemption Price to a holder of
Rights would result in the payment of an amount not equal to $.01 or an integral
multiple of $.01, the amount to be paid shall be rounded upward to the next
$.01. Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption set forth
in the first sentence of this Section 23(a) has expired. The Company, may, at
its option, pay the Redemption Price in cash (whether in United States dollars
or in such other currency or currencies as the Board of Directors may
determine), Common Shares (based on the current market price per share at the
time of redemption) or any other form of consideration deemed appropriate by the
Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights pursuant to subsection (a) of this Section 23, and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Within ten (10) days after action of
the Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at 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
Company Securities. Any notice that is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made.
SECTION 24. Exchange.
(a) The Board of Directors may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions
-32-
of Section 7(e) hereof) for Common Shares, each Right being exchangeable for
one-tenth of a Common Share, appropriately adjusted to reflect any transaction
specified in Section 11(a)(i) occurring after the date hereof (such number of
Common Shares issuable in exchange for one Right being referred to herein as the
"Exchange Shares"). Notwithstanding the foregoing, the Board of Director shall
not be empowered to effect such exchange at any time after any Person (other
than any 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 subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive the Exchange Shares. The Company shall promptly give public
notice of any such exchange with prompt notice thereof to the Rights Agent;
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
that is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become null and void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange event pursuant to this Section 24, the Company,
at its option, may substitute Equivalent Common Shares (as such term is defined
in paragraph (b) of Section 11) for Common Shares exchangeable for Rights, at
the initial rate of one-tenth of a share of Equivalent Common Shares for each
Common Share, as appropriately adjusted to reflect stock splits, stock dividends
and other similar transactions occurring after the date hereof.
(d) In the event that there shall not be sufficient Common 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
for issuance upon exchange of the Rights or shall take such other action
specified in Section 11(a)(iii) hereof.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
subsection (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second and third
sentences of
-33-
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
SECTION 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of its Company Securities or to make any other distribution to the
holders of its Company Securities (other than a regular quarterly cash dividend)
or (ii) to offer to the holders of its Company Securities rights or warrants to
subscribe for or to purchase any additional Company Securities or shares of
stock of any class or any other securities, rights or options, or (iii) to
effect any reclassification of its Company Securities (other than a
reclassification involving only the subdivision of outstanding Company
Securities), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer),
in one 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 or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions, each of which complies with Section 11(o) hereof), or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Right Certificate to the
extent feasible, and to the Rights Agent, in accordance with Section 26 hereof,
a notice of such proposed action that 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 Company Securities, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the Company Securities for purposes of
such action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Company Securities, whichever shall
be the earlier.
(b) In case a Triggering Event shall occur, then, in any such case,
the Company shall as soon as practicable thereafter give to the Rights Agent and
each holder of a Right Certificate to the extent feasible, in accordance with
Section 26, 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.
The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote on any such action.
SECTION 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:
-34-
AmeriSource Health Corporation
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxxx
Vice President & General Counsel
Subject to the notice requirements of Section 21, 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 by the Rights Agent with the Company) as follows:
Mellon Investor Services LLC
One Mellon Center
000 Xxxxx Xx., Xxxx 0000
Xxxxxxxxxx, XX 00000-0000
Attention: Relationship Manager
Copy to:
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000-0000
Attention: General Counsel
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
Company Securities) 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. Prior to the earlier of
(i) the Distribution Date or (ii) the occurrence of a Triggering Event, the
Company may, and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement (including supplements or amendments
that may be deemed to affect the interests of the holders of Right Certificates
adversely) without the approval of any holders of certificates representing the
Company Securities and associated Rights. From and after the earlier of (i) the
Distribution Date or (ii) the occurrence of a Triggering Event, the Company may,
and the Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Right Certificates (x) in any
manner that will not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of any
such Acquiring Person), or (y) in order to cure any ambiguity or to correct or
supplement any provision contained herein which, in the good faith determination
of a majority of the Board of Directors, may be defective or inconsistent with
the other provisions contained herein or (z) to
-35-
shorten or lengthen any time period hereunder; provided, however, that, from and
after the earlier of (i) the Distribution Date or (ii) the occurrence of a
Triggering Event, this Agreement shall not be supplemented or amended to
lengthen (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable, or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or, the benefits to, the holders of Rights (other than an
Acquiring Person or any Affiliate or Associate of an Acquiring Person). Upon the
delivery of a certificate from an officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms of this Section
27 (and such supplement or amendment does not change or increase the Rights
Agent's duties, liabilities, rights or obligations), the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, but subject to the next succeeding paragraph, no
supplement or amendment shall be made that changes the (i) Redemption Price,
(ii) the Final Expiration Date after the Distribution Date, (iii) the Purchase
Price or (iv) the number of Common Shares for which a Right is exercisable, and
no such supplement or amendment that changes the rights, duties, liabilities or
obligations of the Rights Agent under this Agreement shall be effective without
the execution of such supplement or amendment by the Rights Agent. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Company Securities.
Notwithstanding anything contained in this Agreement to the contrary,
in the event that at any time after the date of this Agreement the Company
authorizes one or more series of preferred stock, then this Agreement may be
amended or supplemented as the Board of Directors shall deem necessary or
advisable, without the approval of any holders of Right Certificates, to provide
for the issuance of shares (or fractional shares) of preferred stock of the
Company in place of Common Shares which may be received upon exercise of Rights
hereunder prior to the occurrence of any Triggering Event, and to modify or
amend this Agreement in any respect to take into account the use of such
preferred stock (or fractional shares of preferred stock) in place of such
Common Shares.
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.
For all purposes of this Agreement, any calculation of the number of Company
Securities outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Company Securities of
which any person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act. The Board of Directors 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 to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the
-36-
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties and
(y) not subject the Board of Directors to any liability to the holders of the
Rights. The Rights Agent is entitled to always assume the Company's Board of
Directors acted in good faith and shall be fully protected and incur no
liability in reliance thereon.
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 Company Securities) 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
registered holders of the Company Securities).
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;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors determines, in its good faith judgment, that severing the invalid
language of this Agreement would adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the Close of Business on the tenth day
following the date of such determination by the Board of Directors.
SECTION 32. Governing Law. This Agreement, each Right 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; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be 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.
-37-
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
AMERISOURCE HEALTH CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President & General Counsel
MELLON INVESTOR SERVICES LLC
By:/s/ Xxxxx Xxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxx
Title: Assistant Vice President
-38-
Exhibit A
[Form of Right Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER MARCH 16, 2002 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER RIGHT ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON. THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Right Certificate
AmeriSource Health Corporation
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 March 16, 2001 (the "Rights Agreement"),
between AmeriSource Health Corporation, a Delaware corporation (the "Company"),
and Mellon Investor Services LLC, a New Jersey limited liability company (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(Philadelphia, Pennsylvania time) on March 16, 2002, at the office of the Rights
Agent designated for such purpose, or at the office of its successors as Rights
Agent, one-tenth of one share of Class A Common Stock, par value $0.01 per share
(the "Common Shares"), of the Company, fully paid and nonassessable (or in
certain circumstances, cash, property or other securities of the Company), at a
purchase price of $20.00 per one-tenth of one Common Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed.
The number of Rights evidenced by this Right Certificate (and the
number of Common Shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of March 16, 2001 based on the Common Shares as constituted at such date.
------------------------
* The portion of the legend shall be modified to apply to an Acquiring Person
as applicable, and shall replace the preceding sentence.
As provided in the Rights Agreement, the Purchase Price and the number
of Common Shares or other securities that 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, including Triggering Events (as
such term is defined in the Rights Agreement). The Company reserves the right
to require, prior to the occurrence of a Triggering Event, that a number of
Rights be exercised so that only whole shares of Common Shares will be issued.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any rights whatsoever with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the principal executive
offices of the Company and the offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Common Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may, but are not required to, be redeemed by the
Company at a redemption price of $.001 per Right, payable in cash, Company
Securities or any other form of consideration deemed appropriate by the
Company's Board of Directors at any time prior to the earlier of the Close of
Business (as such term is defined in the Rights Agreement) on (i) the tenth
calendar day following the Shares Acquisition Date (as such time period may be
extended or shortened pursuant to the Rights Agreement) or (ii) the Final
Expiration Date. Immediately upon the action by the Board of Directors of the
Company authorizing any such exchange, and without any further action or notice,
the Rights (other than Rights which are not subject to such exchange)
A-2
will terminate and the Rights will only enable holders to receive the shares
issuable upon such exchange.
No fractional Common Shares will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu thereof a cash payment will be
made, as provided in the Rights 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 Common
Shares or of any other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _______________________________.
AmeriSource Health Corporation
By:
---------------------------
Attest:
By:
--------------------------
Countersigned:
Mellon Investor Services LLC
By:
--------------------------
A-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates)
FOR VALUE RECEIVED
---------------------------------------------------
hereby sells, assigns and transfers unto
----------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, _____
_________________________________
Signature
Signature Guaranteed:_______________________
Signatures must be guaranteed by a member firm of a registered United
States national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.
A-4
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
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 or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: _______________, _____
___________________________
Signature
Signature Guaranteed:_______________________
Signatures must be guaranteed by a member firm of a registered United
States national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
A-5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To: AmeriSource Health Corporation
The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Right Certificate to
purchase the Common Shares issuable upon the exercise of such Rights (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 print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
(Please insert social security or other identifying number)
Dated: _______________, _____
____________________________
Signature
Signature Guaranteed:_______________________
Signatures must be guaranteed by a member firm of a registered United
States national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.
A-6
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) Rights evidenced by this Rights Certificate [ ] are [ ] are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
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 Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: _______________, _____
_______________________
Signature
Signature Guaranteed:_____________________
Signatures must be guaranteed by a member firm of a registered United
States national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an office
or correspondent in the United States.
NOTICE
The signatures in the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
WARNING
In the event the Certificate set forth above in the Assignment and
Election to Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate of such Acquiring Person (as defined in the
Rights Agreement), and such Assignment or Election to Purchase will not be
honored.
A-7
