NEUROCRINE BIOSCIENCES, INC.
AND
AMERICAN STOCK TRANSFER
& TRUST COMPANY
RIGHTS AGENT
AMENDED AND RESTATED
PREFERRED SHARES RIGHTS AGREEMENT
DATED AS OF JANUARY 11, 2002
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions -1-
Section 2. Appointment of Rights Agent -7-
Section 3. Issuance of Rights Certificates -7-
Section 4. Form of Rights Certificates -9-
Section 5. Countersignature and Registration -10-
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates -11-
Section 7. Exercise of Rights; Exercise Price;
Expiration Date of Rights -11-
Section 8. Cancellation and Destruction of Rights Certificates -13-
Section 9. Reservation and Availability of Preferred Shares -14-
Section 10. Record Date -15-
Section 11. Adjustment of Exercise Price, Number of
Shares or Number of Rights -15-
Section 12. Certificate of Adjusted Exercise 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 -26-
Section 15. Rights of Action -27-
Section 16. Agreement of Rights Holders -28-
Section 17. Rights Certificate Holder Not Deemed a Stockholder -28-
Section 18. Concerning the Rights Agent -28-
Section 19. Merger or Consolidation or Change of Name of
Rights Agent -29-
Section 20. Duties of Rights Agent -29-
Section 21. Change of Rights Agent -31-
Section 22. Issuance of New Rights Certificates -32-
Section 23. Redemption -33-
Section 24. Exchange -33-
Section 25. Notice of Certain Events -35-
Section 26. Notices -35-
Section 27. Supplements and Amendments -36-
Section 28. Successors -37-
Section 29. Determinations and Actions by the
Board of Directors, etc. -37-
Section 30. Benefits of this Agreement -37-
Section 31. Severability -37-
Section 32. Governing Law -38-
Section 33. Counterparts -38-
Section 34. Descriptive Headings -38-
EXHIBITS
Exhibit A Form of Certificate of Designation
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights
AMENDED AND RESTATED
RIGHTS AGREEMENT
Amended and Restated Rights Agreement, dated as of January 11, 2002, by and
between NEUROCRINE BIOSCIENCES, INC., a Delaware corporation, and American Stock
Transfer & Trust Company (the "Agreement"), amending and restating the Rights
Agreement, dated as of May 27, 1997 as amended July 19, 1999, by and between
NEUROCRINE BIOSCIENCES, INC., a Delaware corporation, and American Stock
Transfer & Trust Company.
On April 10, 1997 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board of
Directors of the Company (the "Board of Directors") authorized and declared a
dividend of one Preferred Share Purchase Right (a "RIGHT") for each Common Share
(as hereinafter defined) of the Company outstanding as of the Close of Business
(as hereinafter defined) on June 15, 1997 (the "RECORD DATE"), each Right
representing the right to purchase one one-thousandth of a share of Series A
Participating Preferred Stock (as such number may be adjusted pursuant to the
provisions of this Agreement), having the rights, preferences and privileges set
forth in the form of Certificate of Designations of Rights, Preferences and
Privileges of Series A Participating Preferred Stock attached hereto as Exhibit
A, upon the terms and subject to the conditions herein set forth, and further
authorized and directed the issuance of one Right (as such number may be
adjusted pursuant to the provisions of this Agreement) with respect to each
Common Share that shall become outstanding between the Record Date and the
earlier of the Distribution Date and the Expiration Date (as such terms are
hereinafter defined), and in certain circumstances after the Distribution Date.
NOW, THEREFORE, in consideration of the promises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1 Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of
15% or more of the Common Shares then outstanding, but shall not include
the Company, any Subsidiary of the Company or any employee benefit plan of
the Company or of any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring
Person as the result of an acquisition of Common Shares by the Company
which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or
more of the Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of 15% or more
of the Common Shares of the Company then outstanding by reason of share
purchases by the Company and shall, after such share purchases by the
Company, become the Beneficial Owner of any additional Common Shares of the
Company (other than pursuant to a dividend or distribution paid or made by
the Company on the outstanding Common Shares in Common Shares or pursuant
to a split or subdivision of the outstanding Common Shares), then such
Person shall be deemed to be an Acquiring Person unless upon becoming the
Beneficial Owner of such additional Common Shares of the Company such
Person does not beneficially own 15% or more of the Common Shares of the
Company then outstanding. Notwithstanding the foregoing, (i) if the Board
of Directors determines in good faith that a Person who would otherwise be
an "Acquiring Person," as defined pursuant to the foregoing provisions of
this paragraph (a), has become such inadvertently (including, without
limitation, because (A) such Person was unaware that it beneficially owned
a percentage of the Common Shares that would otherwise cause such Person to
be an "Acquiring Person," or (B) such Person was aware of the extent of the
Common Shares it beneficially owned but had no actual knowledge of the
consequences of such beneficial ownership under this Agreement) and without
any intention of changing or influencing control of the Company, and if
such Person divested or divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an
"Acquiring Person," then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this Agreement; and (ii)
if, as of the date hereof, any Person is the Beneficial Owner of 15% or
more of the Common Shares outstanding, such Person shall not be or become
an "Acquiring Person," unless and until such time as such Person shall
become the Beneficial Owner of additional Common Shares (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Shares in Common Shares or pursuant to a split or
subdivision of the outstanding Common Shares), unless, upon becoming the
Beneficial Owner of such additional Common Shares, such Person is not then
the Beneficial Owner of 15% or more of the Common Shares then outstanding.
(b) "ADJUSTMENT FRACTION" shall have the meaning set forth in Section 11(a)(i)
hereof.
(c) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, as in effect on the date of this Agreement.
(d) A Person shall be deemed the "BENEFICIAL OWNER" of and shall be deemed to
"BENEFICIALLY OWN" any securities:
(I) which such person or any of such person's affiliates or associates
beneficially owns, directly or indirectly, for purposes of section
13(d) of the exchange act and rule 13d-3 thereunder (or any comparable
or successor law or regulation);
(ii) which such person or any of such person's affiliates or associates has
(a) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other than
the rights), warrants or options, or otherwise; provided, however,
that a person shall not be deemed pursuant to this section 1(d)(ii)(a)
to be 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, or (2)
securities which a person or any of such person's affiliates or
associates may be deemed to have the right to acquire pursuant to any
merger or other acquisition agreement between the company and such
person (or one or more of its affiliates or associates) if such
agreement has been approved by the board of directors prior to there
being an acquiring person; or (b) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however, that a
person shall not be deemed the beneficial owner of, or to beneficially
own, any security under this section 1(d)(ii)(b) if the agreement,
arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such person in response to
a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations 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
(iii)which are beneficially owned, directly or indirectly, by any other
person (or any affiliate or associate thereof) with which such person
or any of such person's affiliates or associates has any agreement,
arrangement or understanding, whether or not in writing (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for
the purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to section 1(d)(ii)(b)) or disposing of
any securities of the company; provided, however, that in no case
shall an officer or director of the company be deemed (x) the
beneficial owner of any securities beneficially owned by another
officer or director of the company solely by reason of actions
undertaken by such persons in their capacity as officers or directors
of the company or (y) the beneficial owner of securities held of
record by the trustee of any employee benefit plan of the company or
any subsidiary of the company for the benefit of any employee of the
company or any subsidiary of the company, other than the officer or
director, by reason of any influence that such officer or director may
have over the voting of the securities held in the plan.
(e) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in New York are authorized or obligated by law
or executive order to close.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., New York time,
on such date; provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., New York time, on the next succeeding Business Day.
(g) "COMMON SHARES" when used with reference to the Company shall mean the
shares of Common Stock of the Company, $0.001 par value. 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
other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(h) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in Section
11(a)(iii) hereof.
(i) "COMPANY" shall mean NEUROCRINE BIOSCIENCES, INC., a Delaware corporation,
subject to the terms of Section 13(a)(iii)(C) hereof.
(j) "CURRENT PER SHARE MARKET PRICE" of any security (a "Security" for purposes
of this definition), for all computations other than those made pursuant to
Section 11(a)(iii) hereof, shall mean the average of the daily closing
prices per share of such Security for the thirty (30) consecutive Trading
Days immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the Current Per Share Market Price
of any Security on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the ten (10) consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the Current Per Share Market Price of the Security is determined
during a period following the announcement by the issuer of such Security
of (i) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares or (ii) any
subdivision, combination or reclassification of such Security, and prior to
the expiration of the applicable thirty (30) Trading Day or ten (10)
Trading Day period, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Per Share Market
Price shall be appropriately adjusted to reflect the current market price
per share equivalent of such Security. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the last
sale price or, if such last sale price is not reported, the average of the
high bid and low asked prices in the over-the-counter market, as reported
by Nasdaq or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors. If on any such
date no market maker is making a market in the Security, the fair value of
such shares on such date as determined in good faith by the Board of
Directors shall be used. If the Preferred Shares are not publicly traded,
the Current Per Share Market Price of the Preferred Shares shall be
conclusively deemed to be the Current Per Share Market Price of the Common
Shares as determined pursuant to this Section 1(k), as appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof, multiplied by 1000. If the Security is not
publicly held or so listed or traded, Current Per Share Market Price shall
mean the fair value per share as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(k) "CURRENT VALUE" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(l) "DISTRIBUTION DATE" shall mean the earlier of (i) the Close of Business on
the tenth day (or such later date as may be determined by action of the
Board of Directors) after the Shares Acquisition Date or (ii) the Close of
Business on the tenth Business Day (or such later date as may be determined
by action of the Board of Directors) after the date that a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if, assuming the
successful consummation thereof, such Person would be an Acquiring Person.
(m) "EQUIVALENT SHARES" shall mean Preferred Shares and any other class or
series of capital stock of the Company which is entitled to the same
rights, privileges and preferences as the Preferred Shares.
(n) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
(o) "EXCHANGE RATIO" shall have the meaning set forth in Section 24(a) hereof.
(p) "EXERCISE PRICE" shall have the meaning set forth in Section 4(a) hereof.
(q) "EXPIRATION DATE" shall mean the earliest to occur of: (i) the Close of
Business on the Final Expiration Date, (ii) the Redemption Date, (iii)
consummation of any transaction contemplated by Section 13(f) hereof, or
(iv) the time at which the Board of Directors orders the exchange of the
Rights as provided in Section 24 hereof.
(r) "FINAL EXPIRATION DATE" shall mean April 10, 2007.
(s) "NASDAQ" shall mean the National Association of Securities Dealers, Inc.
Automated Quotations System.
(t) "PERMITTED OFFER" shall mean a tender offer for all outstanding Common
Shares made in the manner prescribed by Section 14(d) of the Exchange Act
and the rules and regulations promulgated thereunder; provided, however,
that such tender offer occurs at a time when the Board of Directors has
determined that the offer is both fair and otherwise in the best interests
of the Company and its stockholders (taking into account all factors that
the Board of Directors deems relevant).
(u) "PERSON" shall mean any individual, firm, corporation or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(v) "POST-EVENT TRANSFEREE" shall have the meaning set forth in Section 7(e)
hereof.
(w) "PREFERRED SHARES" shall mean shares of Series A Participating Preferred
Stock, $0.001 par value, of the Company.
(x) "PRE-EVENT TRANSFEREE" shall have the meaning set forth in Section 7(e)
hereof.
(y) "PRINCIPAL PARTY" shall have the meaning set forth in Section 13(b) hereof.
(z) "RECORD DATE" shall have the meaning set forth in the recitals at the
beginning of this Agreement.
(aa) "REDEMPTION DATE" shall have the meaning set forth in Section 23(a) hereof.
(bb) "REDEMPTION PRICE" shall have the meaning set forth in Section 23(a)
hereof.
(cc) "RIGHTS AGENT" shall mean American Stock Transfer & Trust Company or its
successor or replacement as provided in Sections 19 and 21 hereof.
(dd) "RIGHTS CERTIFICATE" shall mean a certificate substantially in the form
attached hereto as Exhibit B. ---------
(ee) "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(ff) "SECTION 11(A)(II) TRIGGER DATE" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(gg) "SECTION 13 EVENT" shall mean any event described in clause (i), (ii) or
(iii) of Section 13(a) hereof.
(hh) "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
(ii) "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 that, if such Person is determined not to have become an Acquiring
Person pursuant to Section 1(a) hereof, then no Shares Acquisition Date
shall be deemed to have occurred.
(jj) "SPREAD" shall have the meaning set forth in Section 11(a)(iii) hereof.
(kk) "SUBSIDIARY" of any Person shall mean any corporation or other entity of
which an amount of voting securities sufficient to elect a majority of the
directors or Persons having similar authority of such corporation or other
entity is beneficially owned, directly or indirectly, by such Person, or
any corporation or other entity otherwise controlled by such Person.
(ll) "SUBSTITUTION PERIOD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(mm) "SUMMARY OF RIGHTS" shall mean a summary of this Agreement substantially in
the form attached hereto as Exhibit C.
(nn) "TOTAL EXERCISE PRICE" shall have the meaning set forth in Section 4(a)
hereof.
(oo) "TRADING DAY" shall mean a day on which the principal national securities
exchange on which a referenced security is listed or admitted to trading is
open for the transaction of business or, if a referenced security is not
listed or admitted to trading on any national securities exchange, a
Business Day.
(pp) "TRIGGERING EVENT" shall be deemed to have occurred upon any Person
becoming an Acquiring Person.
Section 2 Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Shares)
in accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3 Issuance of Rights Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced (subject to
the provisions of Sections 3(b) and 3(c) hereof) by the certificates for
Common Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Rights Certificates) and not by
separate Rights Certificates and (ii) the right to receive Rights
Certificates will be transferable only in connection with the transfer of
Common Shares. Until the earlier of the Distribution Date or the Expiration
Date, the surrender for transfer of certificates for Common Shares shall
also constitute the surrender for transfer of the Rights associated with
the Common Shares represented thereby. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Close of Business on
the Distribution Date, at the address of such holder shown on the records
of the Company, a Rights Certificate evidencing one Right for each Common
Share so held, subject to adjustment as provided herein. In the event that
an adjustment in the number of Rights per Common Share has been made
pursuant to Section 11 hereof, then at the time of distribution of the
Rights Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates and may be transferred by the transfer of the Rights
Certificates as permitted hereby, separately and apart from any transfer of
Common Shares, and the holders of such Rights Certificates as listed in the
records of the Company or any transfer agent or registrar for the Rights
shall be the record holders thereof.
(b) On or about the Record Date, the Company sent a copy of the Summary of
Rights by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company's transfer agent
and registrar. With respect to certificates for Common Shares outstanding
as of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders
thereof together with the Summary of Rights. Until the Distribution Date
(or, if earlier, the Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, with or
without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Shares represented thereby.
(c) Unless the Board of Directors by resolution adopted at or before the time
of the issuance of any Common Shares specifies to the contrary, Rights
shall be issued in respect of all Common Shares that are issued after the
Record Date but prior to the earlier of the Distribution Date or the
Expiration Date or, in certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates representing such Common Shares
shall also be deemed to be certificates for Rights, and shall bear the
following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN NEUROCRINE
BIOSCIENCES, INC. AND AMERICAN STOCK TRANSFER & TRUST COMPANY, AS THE
RIGHTS AGENT (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 NEUROCRINE BIOSCIENCES, INC., UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH
RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE
EVIDENCED BY THIS CERTIFICATE. NEUROCRINE BIOSCIENCES, INC. WILL MAIL
TO THE HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT
WITHOUT CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER
CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED
TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON
OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH
PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(d) In the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled and retired so that the
Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
Section 4 Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase Common
Shares and of assignment to be printed on the reverse thereof) shall be
substantially in the form of Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or a
national market system, on which the Rights may from time to time be listed
or included, or to conform to usage. Subject to the provisions of Section
11 and Section 22 hereof, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date (or in the case of Rights issued with
respect to Common Shares issued by the Company after the Record Date, as of
the date of issuance of such Common Shares) and on their face shall entitle
the holders thereof to purchase such number of one- thousandths of a
Preferred Share as shall be set forth therein at the price set forth
therein (such exercise price per one one-thousandth of a Preferred Share
being hereinafter referred to as the "EXERCISE PRICE" and the aggregate
Exercise Price of all Preferred Shares issuable upon exercise of one Right
being hereinafter referred to as the "TOTAL EXERCISE PRICE"), but the
number and type of securities purchasable upon the exercise of each Right
and the Exercise Price shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section 22 hereof
that represents Rights beneficially owned by: (i) an Acquiring Person or
any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring Person
has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.
Section 5 Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its Chief Financial
Officer, its President or any Vice President, either manually or by
facsimile signature, and by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal (if any) or a facsimile thereof. The Rights
Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any officer of
the Company who shall have signed any of the Rights Certificates shall
cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the Rights Agent and
issued and delivered by the Company with the same force and effect as
though the person who signed such Rights Certificates on behalf of the
Company had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at
the date of the execution of this Rights Agreement any such person was not
such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office designated for such purposes, books for registration
and transfer of the Rights Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the
Rights Certificates and the date of each of the Rights Certificates.
Section 6 Transfer, Split Up,
Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost
or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 14 and 24 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to
the Close of Business on the Expiration Date, any Rights Certificate or
Rights Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Rights Certificates, entitling the registered
holder to purchase a like number of one-thousandths of a Preferred Share
(or, following a Triggering Event, other securities, cash or other assets,
as the case may be) as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate
or Rights Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged at the
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 Rights Certificate until
the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request. Thereupon
the Rights Agent shall, subject to Sections 7(e), 14 and 24 hereof,
countersign and deliver to the person entitled thereto a Rights Certificate
or Rights Certificates, as the case may be, as so requested. The Company
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Rights Certificate if mutilated, the Company
will make and deliver a new Rights Certificate of like tenor to the Rights
Agent for delivery to the registered holder in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7 Exercise of Rights; Exercise Price; Expiration Date of Rights.
(a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date and prior to the Close of Business on the Expiration Date
by surrender of the Rights Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at
the office of the Rights Agent designated for such purpose, together with
payment of the Exercise Price for each one-thousandth of a Preferred Share
(or, following a Triggering Event, other securities, cash or other assets
as the case may be) as to which the Rights are exercised.
(b) The Exercise Price for each one-thousandth of a Preferred Share issuable
pursuant to the exercise of a Right shall initially be $350.00, shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable Rights, with
the form of election to purchase duly executed, accompanied by payment of
the Exercise Price for the number of one-thousandths of a Preferred Share
(or, following a Triggering Event, other securities, cash or other assets
as the case may be) to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Rights Certificate
in accordance with Section 9(e) hereof, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent for the Preferred Shares) a certificate or
certificates for the number of one-thousandths of a Preferred Share (or,
following a Triggering Event, other securities, cash or other assets as the
case may be) 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 one-thousandths of a
Preferred Share (or, following a Triggering Event, other securities, cash
or other assets as the case may be) issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one-thousandths of a
Preferred Share (or, following a Triggering Event, other securities, cash
or other assets as the case may be) as are to be purchased (in which case
certificates for the Preferred Shares (or, following a Triggering Event,
other securities, cash or other assets as the case may be) 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 shares in
accordance with Section 14 hereof, (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order
of the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder and (iv) when
appropriate, after receipt thereof, deliver such cash to or upon the order
of the registered holder of such Rights Certificate. The payment of the
Exercise Price (as such amount may be reduced (including to zero) pursuant
to Section 11(a)(iii) hereof) and an amount equal to any applicable
transfer tax required to be paid by the holder of such Rights Certificate
in accordance with Section 9(e) hereof, may be made in cash or by certified
bank check, cashier's check or bank draft payable to the order of the
Company. In the event that the Company is obligated to issue securities of
the Company other than Preferred Shares, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate shall exercise less
than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by
the Rights Agent to the registered holder of such Rights Certificate or to
his or her duly authorized assigns, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and after
the first occurrence of a Triggering Event, any Rights beneficially owned
by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring Person becomes
such (a "POST-EVENT TRANSFEREE"), (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which 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 this Section 7(e) (a "PRE-EVENT TRANSFEREE") or (iv) any
subsequent transferee receiving transferred Rights from a Post-Event
Transferee or a Pre-Event Transferee, either directly or through one or
more intermediate transferees, shall become null and void without any
further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or to any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of such Acquiring
Person's Affiliates, Associates or transferees hereunder.
(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
exercise as set forth in this Section 7 unless such registered holder
shall, in addition to having complied with the requirements of Section
7(a), have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall reasonably
request.
Section 8 Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9 Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will use its best efforts to cause
to be reserved and kept available out of its authorized and unissued
Preferred Shares not reserved for another purpose (and, following the
occurrence of a Triggering Event, out of its authorized and unissued Common
Shares and/or other securities), the number of Preferred Shares (and,
following the occurrence of the Triggering Event, Common Shares and/or
other securities) that will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) If the Company shall hereafter list any of its Preferred Shares on a
national securities exchange, then so long as the Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) issuable and deliverable upon exercise of the Rights may be
listed on such exchange, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable (but only to the
extent that it is reasonably likely that the Rights will be exercised), all
shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as 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 is described in Section 11(a)(ii) or Section
11(a)(iii) 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 with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement
to become effective as soon as practicable after such filing and (iii)
cause such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities and (B) the date of expiration of the Rights. The Company may
temporarily suspend, for a period 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. Upon any such
suspension, the Company shall issue a public announcement stating, and
notify the Rights Agent, that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement and notification to
the Rights Agent at such time as the suspension is no longer in effect. The
Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction, unless the requisite qualification in such
jurisdiction shall have been obtained, or an exemption therefrom shall be
available, and until a registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Preferred Shares (or other securities of
the Company) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such securities (subject to payment of the
Exercise Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may
be payable in respect of the original issuance or delivery of the Rights
Certificates or of any Preferred Shares (or other securities of the
Company) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the
Preferred Shares (or other securities of the Company) in a name other than
that of, the registered holder of the Rights Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any certificates or
depositary receipts for Preferred Shares (or other securities of the
Company) upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10 Record Date.
Each Person in whose name any certificate for a number of one-thousandths
of a Preferred Share (or other securities of the Company) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of Preferred Shares (or other securities of the Company) represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the Total
Exercise Price with respect to which the Rights have been exercised (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a holder of Preferred Shares (or other securities of
the Company) 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 Exercise Price, Number of Shares or Number of Rights.
The Exercise Price, the number and kind of shares or other property 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) anything in this agreement to the contrary notwithstanding, in the
event the company shall at any time after the date of this agreement
(a) declare a dividend on the preferred shares payable in preferred
shares, (b) subdivide the outstanding preferred shares, (c) combine
the outstanding preferred shares (by reverse stock split or otherwise)
into a smaller number of preferred shares, or (d) issue any shares of
its capital stock in a reclassification of the preferred shares
(including any such reclassification in connection with a
consolidation or merger in which the company is the continuing or
surviving corporation), then, in each such event, except as otherwise
provided in this section 11 and section 7(e) hereof: (1) the exercise
price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or
reclassification shall be adjusted so that the exercise price
thereafter shall equal the result obtained by dividing the exercise
price in effect immediately prior to such time by a fraction (the
"adjustment fraction"), the numerator of which shall be the total
number of preferred shares (or shares of capital stock issued in such
reclassification of the preferred shares) outstanding immediately
following such time and the denominator of which shall be the total
number of preferred shares outstanding immediately prior to such time;
provided, however, that in no event shall the consideration to be paid
upon the exercise of one right be less than the aggregate par value of
the shares of capital stock of the company issuable upon exercise of
such right; and (2) the number of one-thousandths of a preferred share
(or share of such other capital stock) issuable upon the exercise of
each right shall equal the number of one-thousandths of a preferred
share (or share of such other capital stock) as was issuable upon
exercise of a right immediately prior to the occurrence of the event
described in clauses (a)-(d) of this section 11(a)(i), multiplied by
the adjustment fraction; provided, however, that, no such adjustment
shall be made pursuant to this section 11(a)(i) to the extent that
there shall have simultaneously occurred an event described in clause
(a), (b), (c) or (d) of section 11(n) with a proportionate adjustment
being made thereunder. each common share that shall become outstanding
after an adjustment has been made pursuant to this section 11(a)(i)
shall have associated with it the number of rights, exercisable at the
exercise price and for the number of one-thousandths of a preferred
share (or shares of such other capital stock) as one common share has
associated with it immediately following the adjustment made pursuant
to this section 11(a)(i).
(ii) subject to section 24 of this agreement, in the event a triggering
event shall have occurred, then promptly following such triggering
event each holder of a right, except as provided in section 7(e)
hereof, shall thereafter have the right to receive for each right,
upon exercise thereof in accordance with the terms of this agreement
and payment of the exercise price in effect immediately prior to the
occurrence of the triggering event, in lieu of a number of
one-thousandths of a preferred share, such number of common shares of
the company as shall equal the result obtained by multiplying the
exercise price in effect immediately prior to the occurrence of the
triggering event by the number of one-thousandths of a preferred share
for which a right was exercisable (or would have been exercisable if
the distribution date had occurred) immediately prior to the first
occurrence of a triggering event, and dividing that product by 50% of
the current per share market price for common shares on the date of
occurrence of the triggering event; provided, however, that the
exercise price and the number of common shares of the company so
receivable upon exercise of a right shall be subject to further
adjustment as appropriate in accordance with section 11(e) hereof to
reflect any events occurring in respect of the common shares of the
company after the occurrence of the triggering event. notwithstanding
the foregoing provisions of this section 11(a)(ii), the right to buy
common shares of the company pursuant to section 11(a)(ii) hereof
shall not arise as a result of any person becoming an acquiring person
through an acquisition of common shares pursuant to a permitted offer.
(iii)in lieu of issuing common shares in accordance with section 11(a)(ii)
hereof, the company may, if the board of directors determines that
such action is necessary or appropriate and not contrary to the
interest of holders of rights and, in the event that the number of
common shares which are authorized by the company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the rights are not sufficient to
permit the exercise in full of the rights, or if any necessary
regulatory approval for such issuance has not been obtained by the
company, the company shall: (a) determine the excess of (1) the value
of the common shares issuable upon the exercise of a right (the
"current value") over (2) the exercise price (such excess, the
"spread") and (b) with respect to each right, make adequate provision
to substitute for such common shares, upon exercise of the rights, (1)
cash, (2) a reduction in the exercise price, (3) other equity
securities of the company (including, without limitation, shares or
units of shares of any series of preferred stock which the board of
directors has deemed to have the same value as common shares (such
shares or units of shares of preferred stock are herein called "common
stock equivalents")), except to the extent that the company has not
obtained any necessary stockholder or regulatory approval for such
issuance, (4) debt securities of the company, except to the extent
that the company has not obtained any necessary stockholder or
regulatory approval for such issuance, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the
current value, where such aggregate value has been determined by the
board 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 later of (x) the first occurrence of a triggering 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 exercise price, common
shares (to the extent available), except to the extent that the
company has not obtained any necessary stockholder or regulatory
approval for such issuance, 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 or that any necessary regulatory
approval for such issuance will be obtained, the thirty (30) day
period set forth above may be extended to the extent necessary, but
not more than ninety (90) days after the section 11(a)(ii) trigger
date, in order that the company may seek stockholder approval for the
authorization of such additional shares or take action to obtain such
regulatory approval (such period, as it may be extended, the
"substitution period"). to the extent that the company determines that
some action need 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 shares, to take any action to
obtain any required regulatory approval and/or to decide the
appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. in the event of any such
suspension, the company shall issue a public announcement stating that
the exercisability of the rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect. for purposes of this section 11(a)(iii), the value
of the common shares shall be the current per share market price of
the common shares on the section 11(a)(ii) trigger date and the value
of any common stock equivalent shall be deemed to have the same value
as the common shares on such date.
(b) In case the Company shall, at any time after the date of this Agreement,
fix a record date for the issuance of rights, options or warrants to all
holders of Preferred Shares entitling such holders (for a period expiring
within forty-five (45) calendar days after such record date) to subscribe
for or purchase Preferred Shares or Equivalent Shares or securities
convertible into Preferred Shares or Equivalent Shares at a price per share
(or having a conversion price per share, if a security convertible into
Preferred Shares or Equivalent Shares) less than the then Current Per Share
Market Price of the Preferred Shares or Equivalent Shares on such record
date, then, in each such case, the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction, the numerator
of which shall be the number of Preferred Shares and Equivalent Shares (if
any) outstanding on such record date, plus the number of Preferred Shares
or Equivalent Shares, as the case may be, which the aggregate offering
price of the total number of Preferred Shares or Equivalent Shares, as the
case may be, to be offered or issued (and/or the aggregate initial
conversion price of the convertible securities to be offered or issued)
would purchase at such current market price, and the denominator of which
shall be the number of Preferred Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of additional Preferred
Shares or Equivalent Shares, as the case may be, to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be
paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith
by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Preferred Shares and Equivalent Shares
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed, and in the event
that such rights, options or warrants are not so issued, the Exercise Price
shall be adjusted to be the Exercise Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall, at any time after the date of this Agreement,
fix a record date for the making of a distribution to all holders of the
Preferred Shares or of any class or series of Equivalent Shares (including
any such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of evidences
of indebtedness or assets (other than a regular quarterly cash dividend, if
any, or a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)), then,
in each such case, the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise 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 a Preferred Share or an
Equivalent Share on such record date, less the fair market value per
Preferred Share or Equivalent Share (as determined in good faith by the
Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a Preferred Share or Equivalent Share, as
the case may be, and the denominator of which shall be such Current Per
Share Market Price of a Preferred Share or Equivalent Share on such record
date; provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one
Right. Such adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so made, the
Exercise Price shall be adjusted to be the Exercise Price which would have
been in effect if such record date had not been fixed.
(d) Anything herein to the contrary notwithstanding, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; provided,
however, that any adjustments which by reason of this Section 11(d) 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 ten-thousandth of a Common Share or
other share or one hundred-thousandth of a Preferred Share, as the case may
be. Notwithstanding the first sentence of this Section 11(d), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which
requires such adjustment or (ii) the Expiration Date.
(e) If as a result of an adjustment made pursuant to Section 11(a) or 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of
any Right and, if required, the Exercise Price thereof, shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Preferred Shares
contained in Sections 11(a), 11(b), 11(c), 11(d), 11(g), 11(h), 11(i),
11(j), 11(k) and 11(l), and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
(f) All Rights originally issued by the Company subsequent to any adjustment
made to the Exercise Price hereunder shall evidence the right to purchase,
at the adjusted Exercise Price, the number of one-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(g) Unless the Company shall have exercised its election as provided in Section
11(h), upon each adjustment of the Exercise Price as a result of the
calculations made in Section 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 Exercise Price, that number
of Preferred Shares (calculated to the nearest one hundred-thousandth of a
share) obtained by (i) multiplying (x) the number of Preferred Shares
covered by a Right immediately prior to this adjustment, by (y) the
Exercise Price in effect immediately prior to such adjustment of the
Exercise Price, and (ii) dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment of the Exercise Price.
(h) The Company may elect on or after the date of any adjustment of the
Exercise Price as a result of the calculations made in Section 11(b) or (c)
to adjust the number of Rights, in substitution for any adjustment in the
number of Preferred 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 one-thousandths of a Preferred Share
for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one
hundred-thousandth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise Price
in effect immediately after adjustment of the Exercise Price. The Company
shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Exercise Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(h), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Exercise
Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public
announcement.
(i) Irrespective of any adjustment or change in the Exercise Price or the
number of Preferred Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to
express the Exercise Price per one one-thousandth of a Preferred Share and
the number of one-thousandths of a Preferred Share which were expressed in
the initial Rights Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment reducing the
Exercise Price below the par or stated value, if any, of the number of
one-thousandths of a Preferred Share issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue as fully paid and nonassessable shares such number of one-thousandths
of a Preferred Share at such adjusted Exercise Price.
(k) In any case in which this Section 11 shall require that an adjustment in
the Exercise Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event
the issuing to the holder of any Right exercised after such record date of
the number of one-thousandths of a Preferred Share and other capital stock
or securities of the Company, if any, issuable upon such exercise over and
above the number of one-thousandths of a Preferred Share and other capital
stock or securities of the Company, if any, issuable upon such exercise on
the basis of the Exercise 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) upon the occurrence of the
event requiring such adjustment.
(l) Anything in this Section 11 to the contrary notwithstanding, prior to the
Distribution Date, the Company shall be entitled to make such reductions in
the Exercise Price, in addition to those adjustments expressly required by
this Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred or Common Shares, (ii) issuance wholly for
cash of any Preferred or Common Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred or Common Shares or
securities which by their terms are convertible into or exchangeable for
Preferred or Common Shares, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter made by the
Company to holders of its Preferred or Common Shares shall not be taxable
to such stockholders.
(m) The Company covenants and agrees that, after the Distribution Date, it will
not, except as permitted by Sections 23, 24 or 27 hereof, take (or permit
to be taken) 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.
(n) In the event the Company shall at any time after the date of this Agreement
(A) declare a dividend on the Common Shares payable in Common Shares, (B)
subdivide the outstanding Common Shares, (C) combine the outstanding Common
Shares (by reverse stock split or otherwise) into a smaller number of
Common Shares, or (D) issue any shares of its capital stock in a
reclassification of the Common Shares (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, in each such event, except as
otherwise provided in this Section 11(a) and Section 7(e) hereof: (1) each
Common Share (or shares of capital stock issued in such reclassification of
the Common Shares) outstanding immediately following such time shall have
associated with it the number of Rights as were associated with one Common
Share immediately prior to the occurrence of the event described in clauses
(A)-(D) above; (2) the Exercise Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision,
combination or reclassification shall be adjusted so that the Exercise
Price thereafter shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to such time by a fraction, the
numerator of which shall be the total number of Common Shares outstanding
immediately prior to the event described in clauses (A)-(D) above, and the
denominator of which shall be the total number of Common Shares outstanding
immediately after such event; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of one-thousandths of a
Preferred Share (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number
of one- thousandths of a Preferred Share (or shares of such other capital
stock) as were issuable with respect to one Right immediately prior to such
event. Each Common Share that shall become outstanding after an adjustment
has been made pursuant to this Section 11(n) shall have associated with it
the number of Rights, exercisable at the Exercise Price and for the number
of one-thousandths of a Preferred Share (or shares of such other capital
stock) as one Common Share has associated with it immediately following the
adjustment made pursuant to this Section 11(n). If an event occurs which
would require an adjustment under both this Section 11(n) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(n) shall
be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
Section 12 Certificate of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Preferred
Shares a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Rights Certificate in accordance with Section 26 hereof.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of such
adjustment or the force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
such 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 a Triggering Event, directly or indirectly:
(i) the company shall consolidate with, or merge with and into, any other
person (other than a wholly-owned subsidiary of the company in a
transaction the principal purpose of which is to change the state of
incorporation of the company and which complies with section 11(m)
hereof);
(ii) any person shall consolidate with the company, or merge with and into
the company and the company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with
such merger, all or part of the common shares shall be changed into or
exchanged for stock or other securities of any other person (or the
company); or
(iii)the company shall sell or otherwise transfer (or one or more of its
subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the company and its subsidiaries (taken as
a whole) to any other person or persons (other than the company or one
or more of its wholly owned subsidiaries in one or more transactions,
each of which individually (and together) complies with section 11(m)
hereof),then, concurrent with and in each such case,
(A) 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 a price equal to the Total Exercise Price
applicable immediately prior to the occurrence of the Section 13
Event in accordance with the terms of this Agreement, such number
of validly authorized and issued, fully paid, nonassessable and
freely tradable Common Shares of the Principal Party (as
hereinafter defined), free of any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the
result obtained by dividing such Total Exercise Price by 50% of
the Current Per Share Market Price of the Common Shares of such
Principal Party on the date of consummation of such Section 13
Event, provided, however, that the Exercise Price and the number
of Common Shares of such Principal Party so receivable upon
exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11(e) hereof;
(B) 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;
(C) 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;
(D) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common
Shares) in connection with the consummation of any such
transaction as may be necessary to ensure 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
(E) upon the subsequent occurrence of any consolidation, merger, sale
or transfer of assets or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and
payment of the Total Exercise Price as provided in this Section
13(a), such cash, shares, rights, warrants and other property
which such holder would have been entitled to receive had such
holder, at the time of such transaction, owned the Common Shares
of the Principal Party receivable upon the exercise of such Right
pursuant to this Section 13(a), and such Principal Party shall
take such steps (including, but not limited to, reservation of
shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for
such cash, shares, rights, warrants and other property.
(F) For purposes hereof, the "earning power" of the Company and its
Subsidiaries shall be determined in good faith by the Company's
Board of Directors on the basis of the operating earnings of each
business operated by the Company and its Subsidiaries during the
three fiscal years preceding the date of such determination (or,
in the case of any business not operated by the Company or any
Subsidiary during three full fiscal years preceding such date,
during the period such business was operated by the Company or
any Subsidiary).
(b) For purposes of this Agreement, the term "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in clause (i) or (ii) of
section 13(a) hereof: (a) the person that is the issuer of the
securities into which the common shares are converted in such merger
or consolidation, or, if there is more than one such issuer, the
issuer the common shares of which have the greatest aggregate market
value of shares outstanding, or (b) if no securities are so issued,
(x) the person that is the other party to the merger, if such person
survives said merger, or, if there is more than one such person, the
person the common shares of which have the greatest aggregate market
value of shares outstanding or (y) if the person that is the other
party to the merger does not survive the merger, the person that does
survive the merger (including the company if it survives) or (z) the
person resulting from the consolidation; and
(ii) in the case of any transaction described in clause (iii) of section
13(a) hereof, the person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if more than one person that is a
party to such transaction or transactions receives the same portion of
the assets or earning power so transferred and each such portion
would, were it not for the other equal portions, constitute the
greatest portion of the assets or earning power so transferred, or if
the person receiving the greatest portion of the assets or earning
power cannot be determined, whichever of such persons is the issuer of
common shares having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case described in the
foregoing clause (b)(i) or (b)(ii), if the common shares of such
person are not at such time or have not been continuously over the
preceding 12-month period registered under section 12 of the exchange
act, then (1) if such person is a direct or indirect subsidiary of
another person the common shares of which are and have been so
registered, the term "principal party" shall refer to such other
person, or (2) if such person is a subsidiary, directly or indirectly,
of more than one person, the common shares of which are and have been
so registered, the term "principal party" shall refer to whichever of
such persons is the issuer of common shares having the greatest
aggregate market value of shares outstanding, or (3) if such person is
owned, directly or indirectly, by a joint venture formed by two or
more persons that are not owned, directly or indirectly by the same
person, the rules set forth in clauses (1) and (2) above shall apply
to each of the owners having an interest in the venture as if the
person owned by the joint venture was a subsidiary of both or all of
such joint venturers, and the principal party in each such case shall
bear the obligations set forth in this section 13 in the same ratio as
its interest in such person bears to the total of such interests.
(c) The Company shall not consummate any Section 13 Event unless the Principal
Party shall have a sufficient number of authorized Common Shares that 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 issuer shall have executed and delivered to the Rights
Agent a supplemental agreement confirming that such Principal Party shall,
upon consummation of such Section 13 Event, assume this Agreement in
accordance with Sections 13(a) and 13(b) hereof, that all rights of first
refusal or preemptive rights in respect of the issuance of Common Shares of
such Principal Party upon exercise of outstanding Rights have been waived,
that there are no rights, warrants, instruments or securities outstanding
or any agreements or arrangements which, as a result of the consummation of
such transaction, would eliminate or substantially diminish the benefits
intended to be afforded by the Rights and that such transaction shall not
result in a default by such Principal Party under this Agreement, and
further providing that, as soon as practicable after the date of such
Section 13 Event, such 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, use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all
times meeting the requirements of the securities act) until the
expiration date, and similarly comply with applicable state securities
laws;
(ii) use its best efforts to list (or continue the listing of) the rights
and the securities purchasable upon exercise of the rights on a
national securities exchange or to meet the eligibility requirements
for quotation on nasdaq and list (or continue the listing of) the
rights and the securities purchasable upon exercise of the rights on
nasdaq; and
(iii)deliver to holders of the rights historical financial statements for
such principal party which comply in all respects with the
requirements for registration on form 10 (or any successor form) under
the exchange act.
In the event that at any time after the occurrence of a Triggering Event
some or all of the Rights shall not have been exercised at the time of a
transaction described in this Section 13, the Rights which have not theretofore
been exercised shall thereafter be exercisable in the manner described in
Section 13(a) (without taking into account any prior adjustment required by
Section 11(a)(ii)).
(d) In case the "Principal Party" for purposes of Section 13(b) hereof has
provision in any of its authorized securities or in its certificate of
incorporation or by-laws or other instrument governing its corporate
affairs, which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights pursuant to
Section 13 hereof), in connection with, or as a consequence of, the
consummation of a Section 13 Event, Common Shares or Equivalent Shares of
such Principal Party at less than the then Current Per Share Market Price
thereof or securities exercisable for, or convertible into, Common Shares
or Equivalent Shares of such Principal Party at less than such then Current
Per Share Market Price, or (ii) providing for any special payment, tax or
similar provision in connection with the issuance of the Common Shares of
such Principal Party pursuant to the provisions of Section 13 hereof, then,
in such event, the Company hereby agrees with each holder of Rights that it
shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing that the provision in question of
such Principal Party shall have been canceled, waived or amended, or that
the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with or as a consequence of,
the consummation of the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time after the
Distribution Date, effect or permit to occur any Section 13 Event, if (i)
at the time or immediately after such Section 13 Event 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, (ii) prior
to, simultaneously with or immediately after such Section 13 Event, the
stockholders of the Person who constitutes, or
would constitute, the "Principal Party" for purposes of Section 13(b)
hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (iii) the form or
nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights.
(f) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in clauses (i) and (ii)
of Section 13(a) if: (i) such transaction is consummated with a Person or
Persons who acquired Common Shares pursuant to a Permitted Offer (or a
wholly-owned Subsidiary of any such Person or Persons); (ii) the price per
share of Common Shares offered in such transaction is not less than the
price per share of Common Shares paid to all holders of Common Shares whose
shares were purchased pursuant to such Permitted Offer; and (iii) the form
of consideration being offered to the remaining holders of Common Shares
pursuant to such transaction is the same form as the form of consideration
paid pursuant to such Permitted Offer. Upon consummation of any such
transaction contemplated by this Section 13(f), all Rights hereunder shall
expire.
(g) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14 Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable, as determined
pursuant to the second sentence of Section 1(k) hereof.
(b) The Company shall not be required to issue fractions of Preferred Shares
(other than fractions that are integral multiples of one one-thousandth of
a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share). Interests in fractions of Preferred Shares in integral multiples of
one one-thousandth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; provided,
that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented
by such depositary receipts. In lieu of fractional Preferred Shares that
are not integral multiples of one one-thousandth of a Preferred Share, the
Company shall pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of a Preferred Share. For
purposes of this Section 14(b), the current market value of a Preferred
Share shall be one thousand times the closing price of a Common Share (as
determined pursuant to the second sentence of Section 1(k) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The Company shall not be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Common Shares upon the
exercise or exchange of Rights. In lieu of such fractional Common Shares,
the Company shall pay to the registered holders of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of a Common Share.
For purposes of this Section 14(c), the current market value of a Common
Share shall be the closing price of a Common Share (as determined pursuant
to the second sentence of Section 1(k) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly waives his
or her right to receive any fractional Rights or any fractional shares
(other than fractions that are integral multiples of one one-thousandth of
a Preferred Share) upon exercise of a Right.
Section 15 Rights of Action.
All rights of action in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in his or her own behalf and for his or her 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 or her right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
Section 16 Agreement of Rights Holders.
Every holder of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates are transferable only
on the registry books of the Rights Agent if surrendered at the principal
office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed; and
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent
may deem and treat the person in whose name the Rights Certificate (or,
prior to the Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary.
Section 17 Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose to be the holder of the Preferred
Shares or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
Section 18 Concerning the Rights Agent.
(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 and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
In no event will the Rights Agent be liable for special, indirect,
incidental or consequential loss or damage of any kind whatsoever, even if
the Rights Agent has been advised of the possibility of such loss or
damage.
(b) The Rights Agent shall be protected and shall incur no liability for, or in
respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Rights
Certificate or certificate for the Preferred Shares or Common Shares or for
other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement or other paper or document reasonably
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 19 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties hereto; provided, however, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either in its
prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.
Section 20 Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal counsel
for the Company), and the written advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
written 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 of any Acquiring Person and
the determination of Current Per Share Market Price) be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant
or condition contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any change in the exercisability of the Rights
or any adjustment in the terms of the Rights (including the manner, method
or amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt by the Rights Agent of a certificate
furnished pursuant to Section 12 describing such change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares to
be issued pursuant to this Agreement or any Rights Certificate or as to
whether any Preferred Shares will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting
for those instructions. 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 or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken 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 or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(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 there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights Agent
for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action with respect
to such requested exercise or transfer without first consulting with the
Company.
Section 21 Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days' notice in writing
mailed to the Company and to each transfer agent of the Preferred Shares and the
Common Shares by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Preferred Shares and the Common Shares by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Rights Certificate (who shall, with such notice, submit his
or her Rights Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state of the United States, in good standing, which is authorized under
such laws to exercise corporate trust or stockholder services powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100 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
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Shares and the Common Shares, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22 Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. 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 pursuant to
the exercise of stock options or under any employee plan or arrangement or upon
the exercise, conversion or exchange of other securities of the Company
outstanding at the date hereof or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued and this sentence shall be null and void ab initio if, and to
the extent that, such issuance or this sentence would create a significant risk
of or result in material adverse tax consequences to the Company or the Person
to whom such Rights Certificate would be issued or would create a significant
risk of or result in such options' or employee plans' or arrangements' failing
to qualify for otherwise available special tax treatment and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23 Redemption.
(a) The Company may, at its option and with the approval of the Board of
Directors, at any time prior to (i) the Shares Acquisition Date and (ii)
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being herein
referred to as the "REDEMPTION PRICE") and the Company may, at its option,
pay the Redemption Price either in Common Shares (based on the Current Per
Share Market Price thereof at the time of redemption) or cash. Such
redemption of the Rights by the Company may be made effective at such time,
on such basis and with such conditions as the Board of Directors in its
sole discretion may establish. The date on which the Board of Directors
elects to make the redemption effective shall be referred to as the
"REDEMPTION DATE."
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price. The
Company shall promptly give public notice of any such redemption; provided,
however, that the failure to give or any defect in, any such notice shall
not affect the validity of such redemption. Within ten (10) days after the
action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method
by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24 Exchange.
(a) Subject to applicable laws, rules and regulations, and subject to
subsection 24(c) below, the Company may, at its option, by the Board of
Directors, at any time after the occurrence of a Triggering Event, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of Section
7(e) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "EXCHANGE RATIO"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
such Subsidiary, or any entity holding Common Shares for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the exchange
of any Rights pursuant to subsection 24(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 that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not affect
the validity of such exchange. The Company shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Shares for Rights will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) 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 Section 24(a), the Company shall either
take such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights or alternatively, at the option of
a majority of the Board of Directors, with respect to each Right (i) pay
cash in an amount equal to the Current Value (as hereinafter defined), in
lieu of issuing Common Shares in exchange therefor, or (ii) issue debt or
equity securities or a combination thereof, having a value equal to the
Current Value, in lieu of issuing Common Shares in exchange for each such
Right, where the value of such securities shall be determined by a
nationally recognized investment banking firm selected by majority vote of
the Board of Directors, or (iii) deliver any combination of cash, property,
Common Shares and/or other securities having a value equal to the Current
Value in exchange for each Right. For purposes of this Section 24(c) only,
the Current Value shall mean the product of the Current Per Share Market
Price of Common Shares on the date of the occurrence of the event described
above in subparagraph (a), multiplied by the number of Common Shares for
which the Right otherwise would be exchangeable if there were sufficient
shares available. To the extent that the Company determines that some
action need be taken pursuant to clauses (i), (ii) or (iii) of this Section
24(c), the Board of Directors may temporarily suspend the exercisability of
the Rights for a period of up to sixty (60) days following the date on
which the event described in Section 24(a) shall have occurred, in order to
seek any authorization of additional Common Shares and/or to decide the
appropriate form of distribution to be made pursuant to the above provision
and to determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(d) 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, there shall be paid to the registered
holders of the Rights 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 (as
determined pursuant to the second sentence of Section 1(k) hereof).
(e) The Company may, at its option, by majority vote of the Board of Directors,
at any time before any Person has become an Acquiring Person, exchange all
or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by the Board
of Directors, based upon the advice of one or more nationally recognized
investment banking firms.
(f) Immediately upon the action of the Board of Directors ordering the exchange
of any Rights pursuant to subsection 24(e) 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 that number of rights in exchange therefor as
has been determined by the Board of Directors in accordance with subsection
24(e) above. The Company shall give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company 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 transfer agent
for the Common Shares of the Company. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Rights will be effected.
Section 25 Notice of Certain Events.
(a) In case the Company shall propose to effect or permit to occur any
Triggering Event or Section 13 Event, the Company shall give notice thereof
to each holder of Rights in accordance with Section 26 hereof at least
twenty (20) days prior to occurrence of such Triggering Event or such
Section 13 Event.
(b) In case any Triggering Event or Section 13 Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under Sections 11(a)(ii)
and 13 hereof.
Section 26 Notices. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Rights Certificate to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
NEUROCRINE BIOSCIENCES, INC.
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxx
with a copy to:
Xxxxxx & Xxxxxxx
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
0000 00xx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27 Supplements and Amendments. Prior to the occurrence of a Distribution
Date, the Company may supplement or amend this Agreement in any respect without
the approval of any holders of Rights and the Rights Agent shall, if the Company
so directs, execute such supplement or amendment. From and after the occurrence
of a Distribution Date, the Company and the Rights Agent may from time to time
supplement or amend this Agreement without the approval of any holders of Rights
in order to (i) cure any ambiguity, (ii) correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) shorten or lengthen any time period hereunder or (iv)
to change or supplement the provisions hereunder in any manner that the Company
may deem necessary or desirable and that shall not adversely affect the
interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, this Agreement may not
be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (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 an Affiliate or Associate of an Acquiring Person). Upon the
delivery of a certificate from an appropriate officer of the Company that states
that the proposed supplement or amendment is in compliance with the terms of
this Section 27, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of 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, etc.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-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, or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board of Directors in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights Certificates and all other parties and
(y) not subject the Board of Directors to any liability to the holders of the
Rights. All determinations and actions requiring the vote of, or permitted to be
taken by, the Board of Directors shall be by the affirmative vote of a majority
of such Board of Directors to be valid and binding.
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 Rights
Certificates (and, prior to the Distribution Date, the Common Shares) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the Common Shares).
Section 31 Severability.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; 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 from 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 and each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed entirely
within such State.
Section 33 Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 34 Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
"COMPANY"
NEUROCRINE BIOSCIENCES, INC.
By:
--------------------------------------
Name: Xxxx Xxxxx
Title: CEO
"RIGHTS AGENT"
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
--------------------------------------
Name:
Title: Vice President
A-5
EXHIBIT A
CERTIFICATE OF DESIGNATIONS OF RIGHTS, PREFERENCES AND PRIVILEGES OF SERIES
A PARTICIPATING PREFERRED STOCK OF NEUROCRINE BIOSCIENCES, INC.
The undersigned, Xxxx X. Xxxxx and Xxxxxxxx-Valeur-Xxxxxx do hereby
certify:
1. That they are the duly elected and acting President and Secretary,
respectively, of Neurocrine Biosciences, Inc., a Delaware corporation (the
"CORPORATION").
2. That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the said Corporation, the said Board of
Directors on April 10, 1997 adopted the following resolution creating a series
of 50,000 shares of Preferred Stock designated as Series A Participating
Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the Board of Directors
of the corporation by the Restated Certificate of Incorporation, the Board of
Directors does hereby provide for the issue of a series of Preferred Stock of
the Corporation and does hereby fix and herein state and express the
designations, powers, preferences and relative and other special rights and the
qualifications, limitations and restrictions of such series of Preferred Stock
as follows:
Section 1. Designation and Amount.
The shares of such series shall be designated as "SERIES A PARTICIPATING
PREFERRED STOCK." The Series A Participating Preferred Stock shall have a par
value of $0.001 per share, and the number of shares constituting such series
shall be 50,000.
Section 2. Proportional Adjustment.
In the event the Corporation shall at any time after the issuance of any
share or shares of Series A Participating Preferred Stock (i) declare any
dividend on Common Stock of the Corporation ("COMMON STOCK") payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each such
case the Corporation shall simultaneously effect a proportional adjustment to
the number of outstanding shares of Series A Participating Preferred Stock.
Section 3. Dividends and Distributions.
(a) Subject to the prior and superior right of the holders of any shares of any
series of Preferred Stock ranking prior and superior to the shares of
Series A Participating Preferred Stock with respect to dividends, the
holders of shares of Series A Participating Preferred Stock shall be
entitled to receive when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in
cash on the last day of January, April, July and October in each year (each
such date being referred to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal
to 1,000 times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Participating
Preferred Stock.
(b) The Corporation shall declare a dividend or distribution on the Series A
Participating Preferred Stock as provided in paragraph (a) above
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock).
(c) Dividends shall begin to accrue on outstanding shares of Series A
Participating Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Participating
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Series A Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A Participating
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Participating Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which
record date shall be no more than 30 days prior to the date fixed for the
payment thereof.
Section 4. Voting Rights.
The holders of shares of Series A Participating Preferred Stock shall have
the following voting rights:
(a) Each share of Series A Participating Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation.
(b) Except as otherwise provided herein or by law, the holders of shares of
Series A Participating Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(c) Except as required by law, holders of Series A Participating Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 5. Certain Restrictions.
(a) The Corporation shall not declare any dividend on, make any distribution
on, or redeem or purchase or otherwise acquire for consideration any shares
of Common Stock after the first issuance of a share or fraction of a share
of Series A Participating Preferred Stock unless concurrently therewith it
shall declare a dividend on the Series A Participating Preferred Stock as
required by Section 3 hereof.
(b) Whenever quarterly dividends or other dividends or distributions payable on
the Series A Participating Preferred Stock as provided in Section 3 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Participating
Preferred Stock outstanding shall have been paid in full, the Corporation
shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Participating Preferred
Stock;
(ii) declare or pay dividends on, make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with Series A Participating
Preferred Stock, except dividends paid ratably on the Series A
Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii)redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Participating Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Corporation
ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Participating Preferred
Stock;
(iv) purchase or otherwise acquire for consideration any shares of Series A
Participating Preferred Stock, or any shares of stock ranking on a
parity with the Series A Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(c) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this
Section 5, purchase or otherwise acquire such shares at such time and in
such manner.
Section 6. Reacquired Shares.
Any shares of Series A Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein and, in the Restated Certificate
of Incorporation, as then amended.
Section 7. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corporation, the
holders of shares of Series A Participating Preferred Stock shall be entitled to
receive an aggregate amount per share equal to 1000 times the aggregate amount
to be distributed per share to holders of shares of Common Stock plus an amount
equal to any accrued and unpaid dividends on such shares of Series A
Participating Preferred Stock.
Section 8. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Participating Preferred
Stock shall at the same time be similarly exchanged or changed in an amount per
share equal to 1,000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged.
Section 9. No Redemption.
The shares of Series A Participating Preferred Stock shall not be
redeemable.
Section 10. Ranking.
The Series A Participating Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series shall provide
otherwise.
Section 11. Amendment.
The Restated Certificate of Incorporation of the Corporation shall not be
further amended in any manner which would materially alter or change the powers,
preference or special rights of the Series A Participating Preferred Stock so as
to affect them adversely without the affirmative vote of the holders of a
majority of the outstanding shares of Series A Participating Preferred Stock,
voting separately as a class.
Section 12. Fractional Shares.
Series A Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Participating Preferred Stock.
RESOLVED FURTHER, that the President or any Vice President and the
Secretary or any Assistant Secretary of this corporation be, and they hereby
are, authorized and directed to prepare and file a Certificate of Designation of
Rights, Preferences and Privileges in accordance with the foregoing resolution
and the provisions of Delaware law and to take such actions as they may deem
necessary or appropriate to carry out the intent of the foregoing resolution."
We further declare under penalty of perjury that the matters set forth in
the foregoing Certificate of Designation are true and correct of our own
knowledge.
Executed at _______________ on ________________, 20.
/s/ Xxxx X. Xxxxx
--------------------------------------------
Xxxx X. Xxxxx, President
/s/ Xxxxxxxx Valeur-Xxxxxx
--------------------------------------------
Xxxxxxxx Valeur-Xxxxxx, Secretary
B-3
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R - Series A Preferred Purchase Rights
NOT EXERCISABLE AFTER THE EARLIER OF (i) APRIL 10, 2007 (ii) THE DATE
TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE
RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH RIGHTS
AGREEMENT.]1
RIGHTS CERTIFICATE
NEUROCRINE BIOSCIENCES, INC.
This certifies that ______________________________, or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Amended and Restated Rights Agreement dated as of January 11, 2002, (the
"RIGHTS AGREEMENT"), by and between NEUROCRINE BIOSCIENCES, INC., a Delaware
corporation (the "COMPANY"), and American Stock Transfer & Trust Company ( the
"RIGHTS AGENT"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
New York time, on April 10, 2007 at the office of the Rights Agent designated
for such purpose, or at the office of its successor as Rights Agent, one
one-thousandth (1/1,000) of a fully paid non-assessable share of Series A
Participating Preferred Stock, no par value, (the "PREFERRED SHARES"), of the
_________________
1 The portion of the legend in bracket shall be inserted only if applicable
and shall replace the preceding sentence.
Company, at a Exercise Price of $350.00 per one thousandth of a Preferred Share
(the "EXERCISE PRICE"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of one-thousandths of a Preferred Share which may be purchased upon
exercise hereof) set forth above are the number and Exercise Price as of January
11, 2002 based on the Preferred Shares as constituted at such date. As provided
in the Rights Agreement, the Exercise Price and the number and kind of Preferred
Shares or other securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned office of the Rights Agent.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Rights Certificate (i) may be redeemed by the Company, at its option, at a
redemption price of $0.01 per Right or (ii) may be exchanged by the Company in
whole or in part for Common Shares, substantially equivalent rights or other
consideration as determined by the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
amount of securities as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
No fractional portion of less than one one-thousandth of a Preferred Share
will be issued upon the exercise of any Right or Rights evidenced hereby but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _______________, 20____.
ATTEST:
NEUROCRINE BIOSCIENCES, INC.
___________________________________
By: Xxxxxxxx Valeur-Xxxxxx
Its: Secretary
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
By: ______________________________
Its: ______________________________
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED ___________________________ hereby sells, assigns and
transfers unto _________________________________________________ (Please print
name and address of transferee) __________________________________ this Rights
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint __________________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________, 20____
_________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person, or an
Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.
Dated: _______________, 20____
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE - CONTINUED
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate)
To: ___________________________
The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Rights Certificate to
purchase the number of one-thousandths of a Preferred Share issuable upon the
exercise of such Rights and requests that certificates for such number of one-
thousandths of a Preferred Share issued in the name of:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Dated: _______________, 20____
___________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.
Dated: _______________, 20____
_____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -
CONTINUED NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
C-2
EXHIBIT C
STOCKHOLDER RIGHTS PLAN
NEUROCRINE BIOSCIENCES, INC.
SUMMARY OF RIGHTS1
Distribution and Transfer of Rights: The Board of Directors has declared a
Transfer of Rights dividend of one Right for Rights Certificate: each share of
NEUROCRINE BIOSCIENCES, INC. Common Stock outstanding. Prior to the Distribution
Date referred to below, the Rights will be evidenced by and trade with the
certificates for the Common Stock. After the Distribution Date, NEUROCRINE
BIOSCIENCES, INC. (the "COMPANY") will mail Rights certificates to the Company's
stockholders and the Rights will become transferable apart from the Common
Stock.
Distribution Date: Rights will separate from the Common Stock and become
exercisable following (a) the tenth day (or such later date as may be determined
by a majority of the Board of Directors) after a person or group acquires
beneficial ownership of 15% or more of the Company's Common Stock or (b) the
tenth business day (or such later date as may be determined by the Board of
Directors) after a person or group announces a tender or exchange offer, the
consummation of which would result in ownership by a person or group of 15% or
more of the Company's Common Stock.
Preferred Stock Purchasable Upon Exercise of Rights: After the Distribution
Date, each Right will entitle the holder to purchase for $350.00 (the "EXERCISE
PRICE"), a fraction of a share of the Company's Preferred Stock with economic
terms similar to that of one share of the Company's Common Stock.
Flip-In: If an acquiror (an "ACQUIRING PERSON") obtains 15% or more of the
Company's Common Stock (other than pursuant to a tender offer deemed adequate
and in the best interests of the Company and its stockholders by the Board of
Directors (a "PERMITTED OFFER")), then each Right (other than Rights owned by an
Acquiring Person or its affiliates) will entitle the holder thereof to purchase,
for the Exercise Price, a number of shares of the Company's Common Stock having
a then current market value of twice the Exercise Price.
Flip-Over: If, after an Acquiring Person obtains 15% or more of the
Company's Common Stock, (a) the Company merges into another entity, (b) an
acquiring entity merges into the Company or (c) the Company sells more than 50%
of the Company's assets or earning power, then each Right (other than Rights
owned by an Acquiring Person or its affiliates) will entitle the holder thereof
to purchase, for the Exercise Price, a number of shares of Common Stock of the
person engaging in the transaction having a then current market value of twice
the Exercise Price (unless the transaction satisfies certain conditions and is
consummated with a person who acquired shares pursuant to a Permitted Offer, in
which case the Rights will expire).
Exchange Provision: At any time after the date an Acquiring Person obtains
15% or more of the Company's Common Stock and prior to the acquisition by the
Acquiring Person of 50% of the outstanding Common Stock, a majority of the Board
of Directors may exchange the Rights (other than Rights owned by the Acquiring
Person or its affiliates), in whole or in part, for shares of Common Stock of
the Company at an exchange ratio of one share of Common Stock per Right (subject
to adjustment).
Redemption of Rights: Rights will be redeemable at the Company's option for
$0.01 per Right at any time prior to a public announcement that a Person has
acquired beneficial ownership of 15% or more of the Company's Common Stock (the
"SHARES ACQUISITION DATE").
Expiration of the Rights: The Rights expire on the earliest of (a) ten
years after the date of adoption of the Plan, (b) exchange or redemption of the
Rights as described above, or (c) consummation of a merger, consolidation or
asset sale resulting in expiration of the Rights as described above.
Amendment of Rights: The terms of the Rights and the Rights Agreement may
be amended in any respect without the consent of the Rights holders on or prior
to the Distribution Date; thereafter, the terms of the Rights and the Rights
Agreement may be amended without the consent of the Rights holders in order to
cure any ambiguities or to make changes which do not adversely affect the
interests of Rights holders (other than the Acquiring Person).
Voting Rights: Rights will not have any voting rights.
Anti-Dilution Provisions: Rights will have the benefit of certain customary
anti-dilution provisions.
Taxes: The Rights distribution should not be taxable for federal income tax
purposes. However, following an event which renders the Rights exercisable or
upon redemption of the Rights, stockholders may recognize taxable income.
The foregoing is a summary of certain principal terms of the Plan only and
is qualified in its entirety by reference to the detailed terms of the Preferred
Shares Rights Agreement between the Company and the Rights Agent.
_________________
1 The portion of the legend in bracket shall be inserted only if applicable
and shall replace the preceding sentence.
1
