Exhibit 4
--------------------------------------------------------------------------------
RIGHTS AGREEMENT
between
PHARMACEUTICAL MARKETING SERVICES INC.
and
Xxxxxx Trust Company, Rights Agent
Dated as of [ ]
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions.......................................... 1
Section 2. Appointment of Rights Agent.................................. 7
Section 3. Issue of Right Certificates.................................. 7
Section 4. Form of Right Certificates................................... 9
Section 5. Execution, Authentication and Delivery....................... 11
Section 6. Registration, Registration of Transfer
and Exchange............................................... 11
Section 7. Mutilated, Destroyed, Lost and Stolen
Right Certificates ........................................ 12
Section 8. Exercise of Rights; Purchase Price;
Expiration Date of Rights ................................. 13
Section 9. Cancellation of Right Certificates .......................... 15
Section 10. Authorization of Shares...................................... 15
Section 11. Record Date.................................................. 16
Section 12. Adjustment of Purchase Price, Number of
Shares or Number of Rights................................. 16
Section 13. Certificate of Adjusted Purchase Price
or Number of Shares........................................ 23
Section 14. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power................................. 23
Section 15. Fractional Rights and Fractional Shares...................... 26
Section 16. Rights of Action............................................. 27
Section 17. Agreement of Right Holders................................... 28
Section 18. Right Certificate Holder Not Deemed a
Stockholder................................................ 28
Section 19. Concerning the Rights Agent.................................. 29
Section 20. Duties of Rights Agent....................................... 30
Section 21. Merger or Consolidation or Change of
Name of Rights Agent....................................... 33
Section 22. Change of Rights Agent....................................... 33
Section 23. Issuance of New Right Certificates........................... 34
Section 24. Redemption................................................... 34
Section 25. Mandatory Redemption and Exchange............................ 35
Section 26. Notice of Certain Events..................................... 36
Section 27. Securities Laws Registrations................................ 37
Section 28. Notices...................................................... 38
Section 29. Amendments, Supplements, Etc................................. 39
Section 30. Determinations and Actions by the
Board of Directors, etc.................................... 40
Section 31. Binding Effects; Benefits.................................... 40
Section 32. Benefits of this Agreement................................... 40
Section 33. Severability................................................. 40
Section 34. Governing Law................................................ 41
Section 35. Counterparts................................................. 41
Section 36. Headings..................................................... 41
RIGHTS AGREEMENT, dated as of [ ], between
PHARMACEUTICAL MARKETING SERVICES INC., a Delaware corporation (the "Company"),
and Xxxxxx Trust Company, as Rights Agent (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized
and declared a distribution of one Right for each share of Common Stock, $.01
par value (the "Common Stock"), of the Company outstanding on January 9, 1998
and has further authorized and directed the issuance of one Right with respect
to each Common Share that shall become outstanding between January 9, 1998 and
the earliest of the Distribution Date, the Redemption Date and the Final
Expiration Date;
WHEREAS, the Company desires to set forth certain terms
and conditions governing the Rights; and
WHEREAS, the Company desires to appoint the Rights Agent to
act as rights agent hereunder, in accordance with the terms and conditions
hereof;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall 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 Voting Shares of the Company then
outstanding, but shall not include the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any trustee of or fiduciary with respect to any such plan when acting in such
capacity. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Voting 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 Voting Shares
of the Company then outstanding; provided, however that, if a Person shall
become the Beneficial Owner of 15% or more of the Voting Shares of the Company
then outstanding by reason of share purchases by the Company and shall after
such share purchases by the Company and at a time when such Person is the
Beneficial Owner of 15% or more of the Voting Shares of the Company then
outstanding, become the Beneficial Owner of any additional Voting Shares of the
Company, then such Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the prior sentence of this
paragraph, has become such inadvertently, and such Person divests as promptly as
practicable a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the prior sentence of
this paragraph, then such Person shall not be deemed to be an "Acquiring Person"
for any purposes of this Agreement.
(b) "Agreement" shall mean this Rights Agreement as hereafter
amended from time to time.
(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 that (without duplication):
(i) such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, within the
meaning of either Section 13 or 16 of the Exchange Act;
(ii) 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
these Rights), warrants or options, or otherwise; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; or
(iii) are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (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 or disposing of any securities of the Company;
provided, however, that, for purposes of each clause of this
definition, a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange;
and provided,
2
further, that, for purposes of each clause of this definition, a Person shall
not be deemed the Beneficial Owner of, or to beneficially own, any security as a
result of any agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding (1) arises solely from a revocable
proxy or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report).
Notwithstanding anything in this definition to the contrary,
the phrase "then outstanding," when used with reference to a Person's Beneficial
Ownership of securities of the Company (or to the number of such securities
"beneficially owned"), shall mean the number of such securities then issued and
outstanding together with the number of such securities not then actually issued
and outstanding which such Person would be deemed to beneficially own hereunder.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York or the
state in which the principal office of the Rights Agent is located 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) "Closing Price," with respect to any security, shall mean
the last sale price, regular way, on a specific Trading Day or, in case no such
sale takes place on such Trading 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 such security is not then 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 or traded on the National
Market System of the National Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") on which such security is listed or admitted to
trading or, if such security is not then listed or admitted to trading on any
national securities exchange or the National Market System of NASDAQ, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use, or, if on any such Trading Day such security is not quoted
by any
3
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in such security selected by the
Board of Directors of the Company. If such security is not publicly held or so
listed or traded, "Closing Price" shall mean the fair value per unit of such
security as determined in good faith by the Board of Directors of the Company,
whose determination shall be described and the Closing Price set forth in a
statement filed with the Rights Agent.
(h) "Common Shares" when used with reference to the Company
shall mean shares of capital stock of the Company that have no preference over
any other class of stock with respect to dividends or assets, that are not
redeemable at the option of the Company and with respect to which no sinking,
purchase or similar fund is provided and shall initially mean the shares of
Common Stock of the Company. "Common Shares" when used with reference to any
Person other than the Company shall, if used with reference to a corporation,
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 that ultimately control such first-mentioned Person and,
if used with reference to any other Person, mean the equity interest in such
Person (or, if the net worth determined in accordance with generally accepted
accounting principles of another Person (other than an individual) that controls
such first-mentioned Person is greater than such first-mentioned Person, then
such other Person) with the greatest voting power or managerial power with
respect to the business and affairs of such Person.
(i) "Company" has the meaning set forth in the preamble to
this Agreement.
(j) "Company Order" means a written request or order signed in
the name of the Company by its Chairman of the Board, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Rights Agent.
(k) "Corporate Trust Office" means the principal office of the
Rights Agent at which it administers its corporate trust business, which, in the
case of Xxxxxx Trust Company shall, until hereafter changed, be its office at 00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx attention: [ ].
(l) "Distribution Date" shall mean the earlier of (i) the
tenth day after the Shares Acquisition Date and (ii) the tenth Business Day (or
such later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after the date of
commencement by any Person (other than the Company, any Subsidiary of the
4
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any trustee of or fiduciary with respect to any such plan when
acting in such capacity) of, or after the date of the first public announcement
of the intent of 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 trustee of or fiduciary with respect to any such plan when
acting in such capacity) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial Owner
of 15% or more of the then outstanding Voting Shares of the Company; provided,
however, that an occurrence described in clause (ii) above shall not cause the
occurrence of the Distribution Date if the Board of Directors of the Company
shall, prior to such tenth Business Day (or such later date as described in
clause (ii) above), determine that such tender or exchange offer is spurious,
unless, thereafter, the Board of Directors of the Company shall make a contrary
determination, in which event the Distribution Date shall occur on the later to
occur of such tenth Business Day (or such later date as described in clause (ii)
above) and the date of such latter determination.
(m) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and any successor statute thereto.
(n) "Final Expiration Date" shall mean the Close of Business
on January 8, 2008.
(o) "Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability company, trust or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(p) "Purchase Price" shall mean the initial price at which the
holder of a Right may, subject to the terms and conditions of this Agreement,
purchase one-third (1/3) of a Common Share (which initial price is set forth in
Section 8(b) hereof), as such price shall be adjusted pursuant to the terms of
this Agreement.
(q) "Redemption Date" shall mean the time at which the Rights
are redeemed pursuant to Section 24 herein or the time at which all the Rights
are mandatorily redeemed and exchanged pursuant to Section 25 hereof.
(r) "Redemption Price" shall have the meaning specified in
Section 24(b) hereof.
(s) "Right" shall mean one Common Share purchase right which
initially represents the right of the registered holder thereof to purchase
one-third (1/3) of a Common Share upon the terms and subject to the conditions
herein set forth.
5
(t) "Right Certificate" shall mean a certificate, in
substantially the form of Exhibit A attached to this Agreement, evidencing the
Rights registered in the name of the holder thereof.
(u) "Rights Agent" shall mean Xxxxxx Trust Company and any
successor thereto appointed in accordance with the terms hereof, in its capacity
as agent for the Company and the holders of the Rights pursuant to this
Agreement.
(v) "Rights Register" and "Rights Registrar" shall have the
meanings specified in Section 6.
(w) "Section 14 Event" shall mean any event described in
clause (i), (ii) or (iii) of Section 14(a) hereof.
(x) "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) or Section 16(a) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
(y) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the outstanding capital stock or other
equity interests having ordinary voting power in the election of directors or
similar officials is owned, directly or indirectly, by such Person.
(z) "Summary of Rights" shall mean the Summary of Rights to
Purchase Common Shares in substantially the form attached as Exhibit B to this
Agreement.
(aa) "Trading Day" shall mean a day on which the principal
national securities exchange or the National Market System of NASDAQ on which
any of the Voting Shares of the Company are listed or admitted to trading is
open for the transaction of business or, if none of the Voting Shares of the
Company is so listed or admitted to trading, a Business Day.
(ab) A "Triggering Event" shall be deemed to have occurred
upon any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company, or any
entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becoming an
Acquiring Person.
(ac) "Voting Shares" shall mean (i) the Common Shares of the
Company and (ii) any other shares of capital stock of the Company entitled to
vote generally in the election of directors or entitled to vote together with
the Common Shares in respect of
6
any merger or consolidation of the Company, any sale of all or substantially all
the Company's assets or any liquidation, dissolution or winding up of the
Company. Whenever any provision of this Agreement requires a determination of
whether a number of Voting Shares comprising a specified percentage of such
Voting Shares is, was or will be beneficially owned or has been voted, tendered,
acquired, sold or otherwise disposed of or a determination of whether a Person
has offered or proposed to acquire a number of Voting Shares comprising such
specified percentage, the number of Voting Shares comprising such specified
percentage of Voting Shares shall in every such case be deemed to be the number
of Voting Shares comprising the specified percentage of all the Company's then
outstanding Voting Shares.
(ad) "Wholly-Owned Subsidiary" of a Person shall mean any
corporation or other entity all the outstanding capital stock or other equity
interests of which having ordinary voting power in the election of directors or
similar officials (other than directors' qualifying shares or similar interests)
are owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable upon prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issue of Right Certificates. (a) From and after
January 9, 1998 until the Distribution Date, (i) outstanding Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for outstanding Common Shares of the Company and not by separate
Right Certificates, and (ii) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Distribution Date, the Rights Agent
will send, by first-class, insured, postage-prepaid mail, to each record holder
of Common Shares of the Company as of the Close of Business on the Distribution
Date, at the address of such holder shown on the stock transfer records of the
Company, a Right Certificate evidencing one Right for each Common Share so held.
From and after the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) On January 16, 1998 or as soon thereafter as practicable,
the Company will send a copy of the Summary of Rights, by first-class,
postage-prepaid mail, to each record holder of Common Shares of the Company as
of the Close of
7
Business on January 9, 1998 at the address of such holder shown on the stock
transfer records of the Company. With respect to Common Shares outstanding on
January 9, 1998, the certificates evidencing such Common Shares shall thereafter
also evidence the outstanding Rights (as such Rights may be amended or
supplemented) distributed with respect thereto until the earlier of the
Distribution Date and the date of surrender thereof to the Company's transfer
agent for registration of transfer or exchange of Common Shares. Until the
Distribution Date (or, if earlier, the Redemption Date or Final Expiration
Date), the surrender for registration of transfer or exchange of any certificate
for Common Shares outstanding as of the Close of Business on January 9, 1998
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the surrender for registration of transfer or exchange of the
outstanding Rights associated with the Common Shares represented thereby.
(c) The Company agrees that, at any time after January 9, 1998
and prior to the Distribution Date (or, if earlier, the Redemption Date or Final
Expiration Date) at which it issues any of its Common Shares upon original issue
or out of treasury, it will concurrently distribute to the holder of such Common
Shares one Right for each such Common Share, which Right shall be subject to the
terms and provisions of this Agreement and will evidence the right to purchase
one-third (1/3) of a Common Share at the same Purchase Price as the Rights then
outstanding.
(d) Certificates for Common Shares issued after January 9,
1998 but prior to the earliest of the Distribution Date, the Redemption Date and
the Final Expiration Date, whether upon registration of transfer or exchange of
Common Shares outstanding on January 9, 1998 or upon original issue or out of
treasury thereafter, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of [ ]
(the "Rights Agreement"), between Pharmaceutical Marketing Services
Inc. and Xxxxxx Trust Company, the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Pharmaceutical marketing Services 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. Pharmaceutical Marketing Services Inc.
will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
As described in the Rights Agreement, Rights issued to or acquired by
any Acquiring Person or any Affiliate or Associate thereof (each as
defined in the Rights Agreement) shall, under certain circumstances,
become
8
null and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date, outstanding Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender of any such certificate for registration of transfer or
exchange of the Common Shares evidenced thereby shall also constitute surrender
for registration of transfer or exchange of outstanding Rights (as such Rights
may be amended or supplemented) associated with the Common Shares represented
thereby.
(e) If the Company purchases or acquires any of its Common
Shares after January 9, 1998 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 that are no longer outstanding.
Section 4. Form of Right Certificates. (a) The form of Right
Certificates (and the forms of election to purchase Common Shares (or other
securities) and of assignment to be printed on the reverse thereof) shall in
form and substance be substantially the same as Exhibit A 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, as may be required to comply
with any applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Rights may from
time to time be listed or admitted to trading or as may be necessary to conform
to usage. The Right Certificates shall be in a machine printable format and in a
form reasonably satisfactory to the Rights Agent. Subject to the provisions of
Section 23 hereof, the Right Certificates, whenever issued, shall be dated as of
the date of authentication thereof, but, regardless of any adjustments of the
Purchase Price or the number of Common Shares (or other securities) as to which
a Right is exercisable (whether pursuant to this Agreement or any future
amendments or supplements to this Agreement), or both, occurring after January
9, 1998 and prior to the date of such authentication, such Right Certificates
may, on their face, without invalidating or otherwise affecting any such
adjustment, expressly entitle the holders thereof to purchase such number of
Common Shares at the Purchase Price per one-third (1/3) of a Common Share as to
which a Right would be exercisable if the Distribution Date were January 9,
1998; no adjustment of the Purchase Price or the number of Common Shares (or
other securities) as to which a Right is exercisable, or both, effected
subsequent to the date of authentication of any Right Certificate shall be
invalidated or otherwise affected by the fact that such adjustment is not
expressly reflected on the face or in the
9
provisions of such Right Certificate.
(b) Pending the preparation of definitive Right Certificates,
the Company may execute, and upon Company Order the Rights Agent shall
authenticate and send, at the Company's expense, by first-class, insured,
postage-prepaid mail to each record holder of Common Shares of the Company as of
the Close of Business on the Distribution Date, temporary Right Certificates
which are printed, lithographed, typewritten, mimeographed or otherwise produced
substantially of the tenor of the definitive Right Certificates in lieu of which
they are issued and with such appropriate insertions, omissions, substitutions
and other variations as the officers executing such Right Certificates may
determine, as evidenced by their execution of such Right Certificates. If
temporary Right Certificates are issued, the Company will cause definitive Right
Certificates to be prepared without unreasonable delay. After the preparation of
definitive Right Certificates, the temporary Right Certificates shall be
exchangeable for definitive Right Certificates, upon surrender of the temporary
Right Certificates at the Corporate Trust Office of the Rights Agent, without
charge to the holder. Upon surrender for cancellation of any one or more
temporary Right Certificates, the Company shall execute and the Rights Agent
shall authenticate and deliver in exchange therefor one or more definitive Right
Certificates, evidencing a like number of Rights. Until so exchanged, the
temporary Right Certificates shall in all respects be entitled to the same
benefits under this Agreement as definitive Right Certificates.
(c) Any Rights Certificate issued pursuant to Section 3(a) or
Section 23 hereof that represents Rights beneficially owned by: (1) 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 of the Company has
determined is part of a plan, arrangement or understanding that has a primary
purpose or effect avoidance of Section 8(e) hereof, and any Rights Certificate
issued pursuant to Section 6, Section 7 or Section 12 hereof upon transfer,
exchange, replacement or adjustment of any other Right Certificate referred to
in this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
10
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 Right Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 8(e) of the Rights Agreement.
Section 5. Execution, Authentication and Delivery. (a) The
Right Certificates shall be executed on behalf of the Company by its Chairman of
the Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Right Certificates
may be manual or facsimile.
(b) Right Certificates bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Right Certificates or did not hold such offices at the date of
authentication of such Right Certificates. At any time and from time to time
after the execution and delivery of this Agreement and prior to the Distribution
Date, the Company may deliver Right Certificates executed by the Company to the
Rights Agent for authentication, together with a Company Order for the
authentication and delivery of such Right Certificates; and the Rights Agent in
accordance with such Company Order shall authenticate and deliver such Right
Certificates as in this Agreement provided and not otherwise.
(c) No Right Certificate shall be entitled to any benefit
under this Agreement or be valid or obligatory for any purpose unless there
appears on such Right Certificate a certificate of authentication substantially
in the form provided for herein executed by the Rights Agent by manual signature
of an authorized signatory, which need not be the same authorized signatory for
all the Right Certificates, and such certificate upon any Right Certificate
shall be conclusive evidence, and the only evidence, that such Right Certificate
has been authenticated and delivered hereunder.
Section 6. Registration, Registration of Transfer and
Exchange. (a) From and after the Distribution Date and prior to the earlier of
the Redemption Date and the Final Expiration Date, the Company shall cause to be
kept at the Corporate Trust Office of the Rights Agent a Rights Register (a
"Rights Register") in which, subject to such reasonable regulations as it may
prescribe, the Company shall provide for the registration of Right Certificates
and of transfers of Rights. The Rights Agent is hereby appointed the registrar
and transfer agent (the "Rights
11
Registrar") for the purpose of registering Right Certificates and transfers of
Rights as herein provided and the Rights Agent agrees to maintain such Rights
Register in accordance with such regulations so long as it continues to be
designated as Rights Registrar hereunder. Upon surrender to the Rights Agent for
registration of transfer of any Right Certificate, the Company shall execute,
and the Rights Agent shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Right Certificates
evidencing a like number of Rights.
(b) At the option of the holder, Right Certificates may be
exchanged for other Right Certificates upon surrender of the Right Certificates
to be exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
(c) All Right Certificates issued upon any registration of
transfer or exchange of Right Certificates shall be the valid obligations of the
Company, evidencing the same Rights, and entitled to the same benefits under
this Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
(d) Every Right Certificate presented or surrendered for
registration of transfer or exchange shall (if so required by the Company or the
Rights Agent) be duly endorsed, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Rights Registrar duly
executed, by the holder thereof or his attorney duly authorized in writing. No
service charge shall be made for any registration of transfer or exchange of
Right Certificates, but the Company may require payment by the holder of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer. The provisions of this Section
6 shall be subject to the provisions of Section 15.
Section 7. Mutilated, Destroyed, Lost and Stolen Right
Certificates. (a) If any mutilated Right Certificate is surrendered to the
Rights Agent, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request, the Company shall
execute and the Rights Agent shall authenticate and deliver in exchange therefor
a new Right Certificate of like tenor, for a like number of Rights and bearing a
registration number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Rights
Agent (i) evidence to their satisfaction of the destruction, loss or theft of a
Right Certificate and (ii) such
12
security or indemnity, if any, as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Rights Agent that such Right Certificate has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Rights
Agent shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Right Certificate, a new Right Certificate of like tenor, for a like
number of Rights and bearing a registration number not contemporaneously
outstanding.
(c) Upon the issuance of any new Right Certificate under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Rights Agent) connected
therewith.
(d) Every new Right Certificate issued pursuant to this
Section in lieu of any destroyed, lost or stolen Right Certificate shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Right Certificate shall be at any time enforceable
by anyone, and shall be entitled to all the benefits of this Agreement equally
and proportionately with any and all other Right Certificates duly issued
hereunder.
(e) The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Right
Certificates.
Section 8. Exercise of Rights; Purchase Price; Expiration Date
of Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at its Corporate Trust Office, together with
payment of the Purchase Price for each one-third (1/3) of a Common Share (or
other securities) as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on the Final Expiration Date, (ii) the
time of redemption on the Redemption Date and (iii) the time at which such
Rights are mandatorily redeemed and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one-third (1/3) of a Common
Share pursuant to the exercise of a Right shall initially be sixty dollars
($60), shall be subject to adjustment from time to time as provided in Sections
12 and 14 hereof and shall be payable (i) in lawful money of the United States
of America or (ii) by applying outstanding Common Shares owned by the holder of
such Right or Common Shares which would otherwise be issuable to
13
such holder upon such exercise (valued at the fair market value (as determined
in good faith by the Board of Directors of the Company) on the date of exercise
of the Right), in each case in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the securities to be purchased
and an amount equal to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with Section 10 in cash, or by
certified check or cashier's check payable to the order of the Company, or by
stock certificates representing Common Shares beneficially held by the holder of
the Right with duly executed stock powers attached thereto, the Rights Agent
shall thereupon promptly (i) requisition from any transfer agent of the Common
Shares (or other securities) certificates for such number of Common Shares (or
other securities) as are to be purchased and registered in such name or names as
may be designated by the registered holder of such Right Certificate or, if
appropriate, in the name of a depositary agent or its nominee, and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, (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
15, (iii) promptly after receipt of such certificates registered in such name or
names as may be designated by such holder, cause the same to be delivered to or
upon the order of the registered holder of such Right Certificate and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
such holder.
(d) If the registered holder of the Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equal to the Rights remaining unexercised shall be issued by
the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Triggering Event or a Section
14 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 an
Acquiring Person becomes such (a "Post 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
14
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company has determined is part of a plan, arrangement or
understanding which has the primary purpose or effect of avoidance of this
Section 8(e) (a "Prior Transferee") or (iv) any subsequent transferee receiving
transferred Rights from a Post Transferee or a Prior 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 provisions of this
Agreement or otherwise. The Company shall use all reasonable efforts to insure
that the provisions of this Section 8(e) and Section 4(c) hereof are complied
with, but shall have no liability to any holder of Right Certificates or to any
other Person as a result of its failure to make any determinations with respect
to an Acquiring Person or any such Acquiring Person's Affiliates, Associates or
transferees hereunder.
Section 9. Cancellation of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer or exchange
shall, if surrendered to the Company or to any of its other agents, be delivered
to the Rights Agent for such purpose and for cancellation or, if surrendered to
the Rights Agent for such purpose, shall be canceled by it. No Right
Certificates shall be authenticated in lieu of or in exchange for any Right
Certificates canceled as provided in this Section 9 except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation, and the Rights Agent shall so cancel, any
other Right Certificate purchased or acquired by the Company. The Rights Agent
shall deliver all canceled Right Certificates to the Company.
Section 10. Authorization of Shares. (a) The Company shall not
be required, but covenants and agrees that it will use its best efforts, to
cause to be reserved and kept available out of and to the extent of its
authorized and unissued shares of Common Stock not reserved for another purpose
(and, following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Shares and/or other securities), the number of Common
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) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Common Shares of the Company
issued upon exercise of Rights shall (subject to payment of the Purchase Price)
be duly authorized, validly issued, fully paid and nonassessable. The Company
further covenants and agrees that it will pay when due and payable any and all
federal and state transfer taxes and charges
15
that may be payable in respect of the issuance or delivery of the Right
Certificates or of any Common Shares 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 Right Certificates to a Person
other than, or in respect of the issuance or delivery of certificates for Common
Shares of the Company upon exercise of Rights evidenced by Right Certificates in
a name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for transfer or exercise or to issue or deliver
any certificates for Common Shares 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 Right Certificate at the time of surrender thereof) or until
it has been established to the Company's satisfaction that no such tax is due.
Section 11. Record Date. Each Person in whose name any
certificate for Common Shares of the Company is issued upon the exercise of, or
upon mandatory redemption and exchange of, Rights shall for all purposes be
deemed to have become the holder of record of the Common Shares represented
thereby on, and such certificate shall be dated, (i) in the case of the exercise
of Rights, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made, or (ii) in the case of the mandatory redemption and exchange of
Rights, the date of such mandatory redemption and exchange; provided, however,
that, if the date of such surrender and mandatory redemption and exchange is a
date upon which the transfer books of the Company for its Common Shares 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 such transfer books of the Company are open. Prior to the exercise of
(or the mandatory redemption and exchange of) the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Common Shares of the Company for which the Rights shall be exercisable,
including without limitation the rights to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive my notice of any proceedings of the Company, except as provided herein.
Section 12. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number and kind of shares of capital
stock of the Company covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 12.
(a) (i) If the Company shall at any time (A) declare a
dividend on its Common Shares payable in Common Shares, (B) subdivide the
outstanding Common Shares, (C) combine the
16
outstanding Common Shares 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), except
as otherwise provided in this Section 12(a), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised thereafter shall be entitled to receive,
upon payment of the Purchase Price for the number of one-third Common Shares for
which a Right was exercisable immediately prior to such date, the aggregate
number and kind of shares of capital stock which, if such Right had been duly
exercised immediately prior to such date (at a time when the Common Shares
transfer books of the Company were open), such holder would have acquired upon
such exercise and been entitled to receive upon payment or effectuation of such
dividend, subdivision, combination or reclassification. If an event occurs that
would require an adjustment under both Section 12(a)(i) and Section 12(a)(ii),
the adjustment provided for in this Section 12(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
12(a)(ii).
(i) Subject to action of the Board of Directors of the
Company pursuant to Section 25 of this Agreement, if any Person shall
become an Acquiring Person, each holder of a Right shall thereafter
have a right to receive, upon exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one-third
Common Shares for which a Right is then exercisable, in accordance with
the terms of this Agreement, such number of Common Shares of the
Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one-third Common Shares for
which a Right is then exercisable and dividing that product by (y) 50%
of the then current per share market price of the Company's Common
Shares (determined pursuant to Section 12(d)) on the date such Person
became an Acquiring Person. If any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not
take any action that would eliminate or diminish the benefits intended
to be afforded by the Rights.
(ii) Notwithstanding any other provision of this
Agreement, from and after the time any Person shall become an Acquiring
Person, any Rights that are or were acquired or beneficially owned by
any such Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) shall be null and void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any
provision of
17
this Agreement. No Right Certificate shall be issued pursuant to this
Agreement that represents Rights beneficially owned by an Acquiring
Person whose Rights would be null and void pursuant to the preceding
sentence or by any Associate or Affiliate thereof; no Right Certificate
shall be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be null and void pursuant to the
preceding sentence or to any Associate or Affiliate thereof or to any
nominee (acting in its capacity as such) of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person whose Rights would be
null and void pursuant to the preceding sentence or to any Associate or
Affiliate thereof or to any nominee (acting in its capacity as such) of
such Acquiring Person, Associate or Affiliate shall be canceled.
(iii) In lieu of issuing Common Shares in accordance with
the foregoing subparagraph (i) or Section 25 hereof, the Company may,
if the Board of Directors determines that such action is necessary or
appropriate and not contrary to the interest of holder 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): either (i) call a meeting
of stockholders seeking approval to cause sufficient additional shares
to be authorized and take all such additional action as is within its
power to provide for the authorization of such additional shares
(provided that if such approval is not obtained the Company will take
the action specified in clause (ii) of this sentence) or (ii) take such
action as shall be necessary to ensure and provide, to the extent
permitted by applicable law and any agreements or instruments in effect
on the Shares Acquisition Date to which the Company is a party, that
each Right shall thereafter constitute the right to receive, in the
Company's discretion, either (x) in return for the Purchase Price, cash
or debt or equity securities (including, in the Company's discretion,
any available Common Shares or shares or units of shares of any series
of preferred stock which the Board of Directors of the Company has
deemed to have the same value as Common Shares) or other assets (or a
combination thereof) having a fair value equal to twice the Purchase
Price, or (y) if the Company elects to exchange the Rights in
accordance with Section 25, debt or equity securities (including, in
the Company's discretion, any available Common Shares or shares or
units of shares of any series of preferred stock which the Board of
Directors
18
of the Company has deemed to have the same value as Common Shares) or
other assets (or a combination thereof) having a fair value equal to
the product of the current per share market price of a Common Share as
of the Shares Acquisition Date (determined pursuant to Section 12(d))
multiplied by the number of Common Shares that the holder of the Rights
would be entitled to receive from the Company in mandatory redemption
of, and in exchange for, the outstanding Rights pursuant to Section 25,
where in any case set forth in (x) or (y) above the fair value of such
debt or equity securities or other assets shall be as determined in
good faith by the Board of Directors of the Company, after consultation
with a nationally recognized investment banking firm.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Common Shares entitling them (for
a period expiring within 45 calendar days after such record date) to subscribe
for or purchase Common Shares (or shares having the same rights, privileges and
preferences as the Common Shares ("equivalent common shares")) or securities
convertible into or exchangeable for Common Shares or equivalent common shares
at a price per Common Share or equivalent common share (together with any
additional consideration required upon conversion or exchange in the case of a
security convertible into or exchangeable for Common Shares or equivalent common
shares), less than the current per share market price of the Common Shares
(determined pursuant to Section 12(d) on such record date), the Purchase Price
to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Common Shares outstanding on such
record date plus the number of Common Shares which the aggregate offering price
of the total number of Common Shares and/or equivalent common shares so to be
offered (together with the aggregate of any additional consideration required
upon conversion or exchange in the case of any convertible or exchangeable
securities so to be offered) would purchase at such current market price and the
denominator of which shall be the number of Common Shares outstanding on such
record date plus the number of additional Common Shares and/or equivalent common
shares to be offered for subscription or purchase (or into or for which the
convertible or exchangeable securities so to be offered are initially
convertible or exchangeable). In case all or part of such subscription or
purchase price may be paid in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent. Common Shares owned by or held for the account of the Company
or any of its Subsidiaries shall not be deemed outstanding for the purpose of
any computation described in this Section 12(b). The
19
adjustment described in this Section 12(b) shall be made successively whenever
such a record date is fixed; and, if none of such rights, options or warrants is
so issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Common Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Common Shares) or subscription rights or warrants (excluding those referred to
in Section 12(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
then current per share market price of the Common Shares (determined pursuant to
Section 12(d)) on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Common Share and the denominator of which
shall be such current per share market price of the Common Shares. Such
adjustments shall be made successively whenever such a record date is fixed;
and, if such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d) For the purpose of any computation hereunder, the "current
per share market price" of the Common Shares on any date shall be deemed to be
the average of the daily Closing Prices per share of such Common Shares for the
30 consecutive Trading Days immediately prior to such date; provided, however,
that, if the issuer of such Common Shares shall announce (A) a dividend or
distribution on such Common Shares payable in such Common Shares or securities
convertible into such Common Shares or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, shall occur during such period of 30 Trading Days, then,
and in each such case, the current per share market price of the Common Shares
shall be appropriately adjusted to reflect the current market price per Common
Share equivalent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price, provided; however,
20
that any adjustments which by reason of this Section 12(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 12 shall be made to the nearest
cent or to the nearest ten-thousandth of a Common Share or other share, as the
case may be, and references herein to the "number of Common Shares" (or similar
phrases) shall be construed to include fractions of a Common Share.
Notwithstanding the first sentence of this Section 12(e), any adjustment
required by this Section 12 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment and (ii)
the thirtieth day preceding the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Common Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the shares
contained in this Section 12, and the provisions of this Agreement, including
without limitation Sections 8, 10, 11 and 14, with respect to the Common Shares
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall, whether or not the
Right Certificate evidencing such Rights reflects such adjusted Purchase Price,
evidence the right to purchase, at the adjusted Purchase Price, the number of
one-third Common Shares purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 12(i), upon each adjustment of the Purchase Price pursuant
to Section 12(b) or 12(c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price per one-third of a Common Share, that number of
one-third Common Shares obtained by (i) multiplying (x) the number of one-third
shares covered by a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights outstanding in
lieu of any adjustment in the number of one-third Common Shares purchasable upon
the exercise of a Right. Each Right outstanding after such adjustment of the
number of Rights
21
shall be exercisable for the number of one-third Common Shares for which a Right
was exercisable immediately prior to such adjustment of the Purchase Price. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten- thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement, along with simultaneous written notice to the Rights Agent, of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. Until such record
date, however, any adjustment in the number of one-third Common Shares for which
a Right shall be exercisable made as required by this Agreement shall remain in
effect. If Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 12(i), the Company shall, as promptly
as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 15 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
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and authenticated in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one-third Common Shares issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one-third Common Shares which were
expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the par or stated value, if any, of the number
of Common Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue as fully paid and
nonassessable shares such number of Common Shares at
22
such adjusted Purchase Price.
(l) In any case in which this Section 12 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Common Shares or other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Common Shares or other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided;
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 12 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 12, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any combination or subdivision of the Common
Shares, issuance wholly for cash of any of the Common Shares at less than the
current market price, issuance wholly for cash of Common Shares or securities
which by their terms are convertible into or exchangeable for Common Shares,
dividends on Common Shares payable in Common Shares or issuance of rights,
options or warrants referred to in subsection (b) of this Section 12, hereafter
effected by the Company to holders of its Common Shares shall not be taxable to
such stockholders.
Section 13. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Section 12 or 14
hereof, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Shares of the Company a copy of such certificate and (c) mail a brief
summary thereof to each holder of record of a Right Certificate in accordance
with Section 28 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein and shall not be deemed to
have knowledge of any such adjustment unless and until it shall have received
such a certificate.
Section 14. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event that, following the Distribution Date,
directly or indirectly:
(i) the Company shall consolidate with, or merge with
and into, any other Person;
23
(ii) any Person shall merge with and into the Company
and the Company shall be the continuing or surviving corporation of
such merger and, in connection with any such merger, all or part of the
Common Shares of the Company shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash
or any other property, or
(iii) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or a series of two or more transactions, assets of the Company
or its Subsidiaries which constitute more than 50% of the assets or
which produce more than 50% of the earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or any Affiliate or
Associate of such Person other than the Company or one or more of its
Wholly Owned Subsidiaries,
then, and in each such case, the Company agrees that, as a
condition to engaging in any such transaction, it will make or cause to be made
proper provision so that
(A) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof in accordance with the
terms of this Agreement, such number of Common Shares of such
other Person (including the Company as successor thereto or as
the surviving corporation) or, if such other Person is a
Subsidiary of another Person, of the Person or Persons (other
than individuals) which ultimately control such
first-mentioned Person, as shall be equal to the result
obtained by (X) multiplying the then current Purchase Price by
the number of Common Shares for which a Right is then
exercisable (without taking into account any adjustment
previously made pursuant to Section 12(a)(ii)) and dividing
that product by (Y) 50% of the current per share market price
of the Common Shares of such other Person (determined pursuant
to Section 12(d)) on the date of consummation of such
consolidation, merger, sale or transfer;
(B) the issuer of such Common Shares shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement;
(C) the term "Company," as used herein,
shall thereafter be deemed to refer to such issuer; and
(D) such issuer shall take such steps
24
(including without limitation the reservation of a sufficient
number of shares of its Common Shares in accordance with
Section 10) in connection with such consummation as may be
necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the
exercise of the Rights.
(b) "Principal Party" shall mean, in the case of any
transaction described in clause (i), (ii) or (iii) of Section 14(a), the Person
or Acquiring Person referred to therein (or such Person's or Acquiring Person's
successor, including, if applicable, the Company, if it is the surviving
corporation), provided, however, that in any such case, (i) if such Person is a
direct or indirect Subsidiary of another Person, "Principal Party" shall refer
to such other Person and (ii) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, "Principal Party" shall refer to whichever
of such Person is the issuer of the Common Shares having the greatest aggregate
value and provided, further, transactions described in clause (iii) hereof,
"Principal Party" shall refer to that person receiving the greatest portion of
the assets or earning power transferred pursuant to such transaction or
transactions.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such issuer shall
have excused and delivered to the Rights Agent an agreement supplemental to this
Agreement complying with the provisions of this Section 14.
(d) If, for any reason, the Rights cannot be exercised for
Common Shares of such Principal Party as provided in Section 14(a), then each
holder of Rights shall have the right to exchange its Rights for cash from such
Principal Party in an amount equal to the number of Common Shares that it would
otherwise be entitled to purchase multiplied by 50% of the current per share
market price, as determined pursuant to 12(d) hereof, of such Common Shares of
such Principal Party. If, for any reason, the foregoing formulation cannot be
applied to determine the cash amount into which Rights are exchangeable, then
the Board of Directors, based upon the advice of one or more nationally
recognized investment banking firms, and based upon the total value of the
Company, shall determine such amount reasonably and with good faith to the
holders of Rights. Any such determination shall be final and binding on the
Rights Agent.
(e) For the purposes of this Section 14, 50% of the assets of
the Company and its Subsidiaries shall be determined by reference to the book
value of such assets as set forth in the most recent consolidated balance sheet
of the Company and its
25
Subsidiaries (which need not be audited) and 50% of the earning power of the
Company and its Subsidiaries shall be determined by reference to the
mathematical average of the operating income resulting from the operations of
the Company and its Subsidiaries for the two most recent full fiscal years as
set forth in the consolidated and consolidating financial statements of the
Company and its Subsidiaries for such years; provided; however, that if the
Company has, during such period, engaged in one or more transactions to which
purchase accounting is applicable, such determination shall be made by reference
to the pro forma operating income of the Company and its Subsidiaries giving
effect to such transactions as if they had occurred at the commencement of such
two-year period.
(f) The provisions of this Section 14 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 15. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue or distribute Right Certificates which
evidence fractional Rights. If, on the Distribution Date or thereafter, as a
result of any adjustment effected pursuant to Section 12(i) or otherwise
hereunder, a Person would otherwise be entitled to receive a Right Certificate
evidencing a fractional Right, the Company shall, in lieu thereof, pay or cause
to be paid to such Person an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purpose of this Section 15(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.
(b) The Company shall not be required to issue fractions of
Common Shares (other than fractions which are integral multiples of one-third of
a Common Share) upon exercise of the Rights or to distribute scrip or
certificates which evidence fractional Common Shares (other than fractions which
are integral multiples of one-third of a Common Share). If, on the Distribution
Date or thereafter, a Person would otherwise be entitled to receive a fractional
Common Share (other than fractions which are integral multiples of one-third of
a Common Share), the Company shall, in lieu thereof, pay to such Person at the
time such Right is exercised as herein provided an amount in cash equal to the
same fraction (which is not an integral multiple of one-third of a Common Share)
of the current market value of one Common Share. For purposes of this Section
15(b), the current market value of a Common Share shall be the Closing Price of
a Common Share for the Trading Day immediately prior to the date of such
exercise.
(c) Should any adjustment contemplated by Section 12(a)(ii) or
any mandatory redemption and exchange contemplated
26
by Section 25 occur, the Company shall not be required to issue fractions of
Common Shares upon exercise of the Rights or to distribute scrip or certificates
which evidence fractional Common Shares. If after any such adjustment or
mandatory redemption and exchange, a Person would otherwise be entitled to
receive a fractional Common Share of the Company upon exercise of any Right
Certificate or upon mandatory redemption and exchange as contemplated by Section
25, the Company shall, in lieu thereof, pay to such Person at the time such
Right is exercised as herein provided or upon such mandatory redemption and
exchange an amount in cash equal to the same fraction of the current market
value of one Common Share. For purposes of this Section 15(c), the current
market value of a Common Share shall be the Closing Price of a Common Share for
the Trading Day immediately prior to the date of such exercise or the date of
such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise or mandatory redemption and exchange of a Right (except as provided
above).
Section 16. Rights of Action. (a) All rights of action in
respect of the obligations and duties owed to the holders of the Rights under
this Agreement are vested in the registered holders of the Rights; and, without
the consent of the Rights Agent or of the holder of any other Rights, any
registered holder of any Rights may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding, judicial
or otherwise, against the Company to enforce, or otherwise to act in respect of,
such holder's right to exercise such Rights in the manner provided in the Right
Certificate evidencing such Rights 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.
(b) No right or remedy herein conferred upon or reserved to
the registered holder of Rights is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy, whether hereunder or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or
remedy.
(c) No delay or omission of any registered holder of
27
Rights to exercise any right or remedy accruing hereunder shall impair any such
right or remedy or constitute a waiver of any default hereunder or an
acquiescence therein. Every right and remedy given hereunder or by law to such
holders may be exercised from time to time, and as often as may be deemed
expedient, by such holders.
Section 17. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares of the
Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the Corporate Trust Office of the Rights Agent duly endorsed or accompanied by a
proper instrument of transfer, along with such other and further documentation
as the Rights Agent may reasonably request;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
Certificate made by anyone other than the Company or the Rights Agent) for all
purposes, and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as practicable.
Section 18. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of
28
Common Shares of the Company or any other securities of the Company which may at
any time be issuable on the exercise (or mandatory redemption and exchange) of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon any such holder, as such, any of
the rights of a stockholder of the Company, including without limitation any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 26) or to receive dividends or
subscription rights until the Right or Rights evidenced by such Right
Certificate shall have been exercised (or mandatorily redeemed and exchanged) in
accordance with the provisions hereof.
Section 19. Concerning the Rights Agent. (a) The Company
agrees to pay to the Rights Agent such compensation as shall be agreed to in
writing between the Company and the Rights Agent 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 expenses 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,
its directors, officers, employees and agents for, and to hold each of them
harmless against, any loss, liability or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent or
such other indemnified party, for anything done or omitted by the Rights Agent
or such other indemnified party in connection with the acceptance and
administration of this Agreement or the exercise or performance of its duties
hereunder, including the costs and expenses of defending against any claim of
liability in the premises.
(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 or the exercise or
performance of its duties hereunder in reliance upon any Right Certificate or
certificate for Common Shares of the Company or other securities of the Company,
Company Order, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
executed by the proper person or persons and, where necessary, verified or
acknowledged, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
(c) The provisions of this Section 19 shall survive the
expiration of the Rights and the termination of this Agreement.
29
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations expressly imposed by this Agreement, and
no implied duties or obligations shall be read into this Agreement against the
Rights Agent, upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel of its
selection (who may be legal counsel for the Company), and the advice or opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter 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 a person reasonably believed by the
Rights Agent to be any one of the Chairman of the Board, the President, any Vice
President, the Treasurer, any Assistant Treasurer, 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
or any other Person only for its own gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its authentication 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 have any responsibility with
respect to the validity of any provision of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or with
respect to the validity or execution of any Right Certificate (except its
authentication thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming void pursuant to Section 12(a)(ii)
hereof) or any
30
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in this Agreement, or the ascertainment of the existence
of facts that would require any such change or adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Common Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Common Shares will, when issued, be duly
authorized, validly issued, fully paid and nonassessable; nor shall the Rights
Agent be responsible for the legality of the terms hereof in its capacity as an
administrative agent.
(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 person reasonably believed by the Rights Agent to be any one of the Chairman
of the Board, the President, any Vice President, the Treasurer, any Assistant
Treasurer, 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 to be taken by it in
good faith in accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions. 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 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 such application on or after the date
specified in such application (which date shall not be less than three Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to any
other 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
31
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.
(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 as long as the Rights Agent was not grossly
negligent in the selection 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 Right Certificate surrendered to
the Rights Agent for exercise or transfer, the portion of the form of assignment
or form of election to purchase (as the case may be) certifying that the Rights
are not beneficially owned by an Acquiring Person or an Affiliate or Associate
thereof has not been completed or indicates that such Rights are beneficially
owned by such Person, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without the written consent of
the Company.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the form of assignment
and the form of election to exercise attached to any Right Certificate unless
the Rights Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution of such certification
including, without limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or transfer
of the Right Certificates.
(n) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for
32
special, indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage and regardless of the form of
the action.
Section 21. 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 that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 22. If at the time
such successor Rights Agent shall succeed to the agency created by this
Agreement any of the Right Certificates shall have been authenticated but not
delivered, any such successor Rights Agent may adopt the authentication of the
predecessor Rights Agent and deliver such Right Certificates so authenticated,
and, if at that time any of the Right Certificates shall not have been
authenticated, any successor Rights Agent may authenticate such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
authenticated but not delivered, the Rights Agent may adopt the authentication
under its prior name and deliver Right Certificates so authenticated; and, in
case at that time any of the Right Certificates shall not have been
authenticated, the Rights Agent may authenticate such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
33
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the registered holder of a Right
Certificate (or, prior to the Distribution Date, of Common Shares), then the
Rights Agent or any registered holder of a Right Certificate (or, prior to the
Distribution Date, of Common Shares) 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, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties, and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent for the Common Shares of the
Company and mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this Section 22,
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 23. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price per share and the number
or kind or class of shares or other securities purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 24. Redemption. (a) The Rights may be redeemed by
action of the Board of Directors of the Company pursuant to paragraph (b) of
this Section 24, or may be redeemed and exchanged by action of the Board of
Directors of the Company pursuant to Section 25 herein, but shall not be
redeemed in any other manner.
(b) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the Close of Business on the tenth
Business Day after such time any Person
34
becomes an Acquiring Person and (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of one cent
($.01) per Right then outstanding, appropriately adjusted to reflect any
adjustment in the number of Rights outstanding pursuant to Section 12(i) herein
(such redemption price being hereinafter referred to as the "Redemption Price").
Any such redemption of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(c) The right of the registered holders of Right Certificates
to exercise the Rights evidenced thereby or, if the Distribution Date has not
theretofore occurred, the inchoate right of the registered holders of Rights to
exercise the same shall, without notice to such holders or to the Rights Agent
and without further action, terminate and be of no further force or effect
effective as of the time of adoption by the Board of Directors of the Company of
a resolution authorizing and directing the redemption of the Rights pursuant to
paragraph (b) of this Section 24 (or, alternatively, if the Board of Directors
qualified such action as to time, basis or conditions, then at such time, on
such basis and with such conditions as the Board of Directors may have
established pursuant to such paragraph (b)); thereafter, the only right of the
holders of Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any redemption resolution pursuant to paragraph
(b) of this Section 24; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after the adoption of any redemption resolution pursuant to
paragraph (b) of this Section 24, the Company shall give notice of such
redemption to the Rights Agent and to 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 agents 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
shall state the method by which the payment of the Redemption Price will be
made.
(d) Neither the Company nor any of its Affiliates or
Associates may acquire (other than, in the case of such Affiliates and
Associates, in their capacity as holders of Common Shares of the Company),
redeem or purchase for value any Rights at any time in any manner other than as
specifically set forth in this Section 24 or in Section 25 herein, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.
Section 25. Mandatory Redemption and Exchange. (a)
35
The Board of Directors of the Company may, at its option, at any time after any
Person becomes an Acquiring Person, issue Common Shares of the Company in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to the provisions of Section 12(a)(ii) hereof) at
an exchange ratio of one Common Share for each two Common Shares for which each
Right is then exercisable pursuant to the provisions of Section 12(a)(ii)
hereof. Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such redemption and exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any such Subsidiary, or any trustee of or fiduciary
with respect to any such plan when acting in such capacity), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the mandatory redemption and exchange of any Rights
pursuant to subsection (a) of this Section 25 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 such number
of Common Shares as is provided in paragraph (a) of this Section 25. The Company
shall promptly give public notice of any such redemption and exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such redemption and exchange. The Company promptly shall
mail a notice of any such redemption and exchange, to the Rights Agent and to
all 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 mandatory redemption and exchange shall state the
method by which the redemption and exchange of the Common Shares for Rights will
be effected and, in the event of any partial redemption and exchange, the number
of Rights which will be redeemed and exchanged. Any partial redemption and
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
12(a)(ii) hereof) held by each holder of Rights.
Section 26. Notice of Certain Events. If the Company shall, on
or after the Distribution Date, propose (a) to pay any dividend or other
distribution payable in stock of any class of the Company or any Subsidiary of
the Company to the holders of its Common Shares, (b) to offer to the holders of
its Common Shares rights, options or warrants to subscribe for or to purchase
any additional Common Shares or shares of stock of any class or any other
securities, rights, options or warrants, (c)
36
to make any other distribution to the holders of its Common Shares (other than a
regular quarterly cash dividend), (d) to effect any reclassification of its
Common Shares (other than a reclassification involving only the subdivision of
outstanding Common Shares), (e) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (determined as provided in Section 14 hereof) to, any other Person
(other than the Company or a Wholly-Owned Subsidiary or Wholly-Owned
Subsidiaries), (f) to effect the liquidation, dissolution or winding up of the
Company or (g) if the Rights have theretofore become exercisable with respect to
Common Shares pursuant to Section 12(a)(ii) herein, to declare or pay any
dividend or other distribution on the Common Shares payable in Common Shares or
in stock of any other class of the Company or any Subsidiary of the Company or
to effect a subdivision or combination of the Common Shares (by reclassification
or otherwise than by payment of dividends in Common Shares) then, in each such
case, the Company shall give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 28 hereof, notice of such proposed
action, which shall specify the date of authorization by the Board of Directors
of the Company of, and record date for, such stock dividend or such distribution
of rights or warrants or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, winding up, subdivision or
combination is to take place and the date of participation therein by the
holders of the Common Shares of the Company if any such date is to be fixed.
Such notice shall be so given in the case of any action covered by clause (a),
(b), (c) or (g) above at least 20 days prior to the record date for determining
holders of the Common Shares of the Company, for purposes of such action, and in
the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares of the Company, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(ii) of this
Agreement shall occur, then, in any such case, the Company shall as soon as
practicable thereafter give to the Rights Agent and to each holder of a Right
Certificate, in accordance with Section 28 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 Section 12(a)(ii) hereof.
Section 27. Securities Laws Registrations. To the extent
legally required, the Company agrees that it will prepare and file, no later
than the Distribution Date, and will use its best efforts to cause to be
declared effective, a registration statement under the Securities Act Of 1933,
as amended,
37
registering the offering, sale and delivery of the Common Shares issuable upon
exercise of the Rights, and the Company will, thereafter, use its best efforts
to maintain such registration statement (or another) continuously in effect so
long as any Rights remain outstanding and exercisable with respect to Common
Shares. Should the Rights become exercisable with respect to securities of the
Company or one of its Subsidiaries other than Common Shares, the Company agrees
that it will, to the extent legally required, promptly thereafter prepare and
file, or cause to be prepared and filed, and will use its best efforts to cause
to be declared effective, a registration statement under such Act registering
the offering, sale and delivery of such other securities and the Company will,
thereafter, use its best efforts to maintain such registration statement (or
another) continuously in effect so long as any outstanding Rights are
exercisable with respect to such securities. The Company further agrees to use
its best efforts, from and after the Distribution Date, to qualify or register
for sale the Common Shares or other securities of the Company or one of its
Subsidiaries issuable upon exercise of the Rights under the securities or "blue
sky" laws (to the extent legally required thereunder) of all jurisdictions in
which registered holders of Right Certificates reside determined by reference to
the Rights Register.
Section 28. Notices. All notices or demands which are required
or may be given pursuant to the terms of this Agreement shall be in writing and
shall be sufficient in all respects if given in writing and delivered or mailed
by nationally recognized overnight courier, or registered or certified mail
postage prepaid, as follows:
If to the Company, to it at:
Pharmaceutical Marketing Services Inc.
00 Xxxxxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Secretary
with a copy to:
Reboul, MacMurray, Xxxxxx, Xxxxxxx & Kristol
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
If to the Rights Agent, to it at:
Xxxxxx Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
38
Attention: [ ]
or such other address or addresses as the Company, on the one hand, or the
Rights Agent, on the other hand, shall have designated by notice to the other in
writing.
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
Rights Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. Amendments, Supplements, Etc. The Company may from
time to time supplement or amend this Agreement (which supplement or amendment
shall be evidenced by a writing signed by the Company and the Rights Agent)
without the approval of any holders of Right Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein or (iii)
to make any other provisions in regard to matters or questions arising
hereunder, or to add, delete, modify or otherwise amend any provision, which the
Company may deem necessary or desirable, including without limitation changing
the Final Expiration Date and, provided that at the time of such amendment or
supplement the Distribution Date has not occurred, the period during which the
Rights may be redeemed; provided, however, that, from and after such time as any
Person becomes an Acquiring Person, any such amendment or supplement shall not
materially and adversely affect the interests of the holders of Right
Certificates. Without limiting the foregoing, the Board of Directors of the
Company may by resolution adopted at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the threshold set
forth in the definitions of Acquiring Person and Distribution Date herein from
15% to a percentage not less than the greater of (i) any percentage greater than
the largest percentage of the outstanding Voting Shares then known to the
Company to be beneficially owned 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 trustee of or fiduciary with respect to any
such plan when acting in such capacity), and (ii) 10% if the Board of Directors
shall determine that a Person whose interests are adverse to the Company and is
stockholders may seek to acquire control of the Company.
Notwithstanding any other provision hereof, the Rights Agent's
consent must be obtained regarding any amendment or supplement pursuant to this
Section 29 which alters the Rights Agent's rights or duties.
39
Section 30. Determinations and Actions by the Board of
Directors, Etc. For all purposes of this Agreement, any calculation of the
number of Voting Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding Voting
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 Exchange Act Regulations as
in effect on the date hereof. Except as otherwise specifically provided herein,
the Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors of the Company or to the Company,
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power (i) to interpret the
provisions of this Agreement and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors of the Company or any
member thereof to any liability to the holders of the Rights.
Section 31. Binding Effect; Benefits. This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns. Notwithstanding anything contained in this
Agreement to the contrary, nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties hereto or their
respective successors and assignees any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
Section 32. Benefits of this Agreement. Nothing expressed by
or mentioned in this Agreement is intended or shall be construed to give any
person other than the Company, the Rights Agent and the registered holders of
Right Certificates (and, prior to the Distribution Date, registered holders of
Common Shares) any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained. This Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights.
Section 33. Severability. In the event that any one or more of
the provisions contained in this Agreement or in any other instrument referred
to herein shall, for any reason, be held to be invalid, illegal or
unenforceable, such illegality, invalidity or unenforceability shall not affect
any other provisions of this Agreement.
40
Section 34. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be governed by and construed in accordance
with the laws of the State of Delaware.
Section 35. Counterparts. This Agreement may be executed in
any number of counterparts, and each such counterpart hereof shall be deemed to
be an original instrument, but all such counterparts shall together constitute
but one agreement.
Section 36. Headings. Headings of articles, sections and
paragraphs of this Agreement are inserted for convenience of reference only and
shall not affect the interpretation or be deemed to constitute a part hereof.
41
IN WITNESS WHEREOF, this Rights Agreement has been duly
executed and delivered by the parties hereto as of the date first above written.
PHARMACEUTICAL MARKETING SERVICES INC.
ATTEST:
By By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
XXXXXX TRUST COMPANY
As Rights Agent
Attest:
By By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
EXHIBIT A
Form of Right Certificate
Certificate No. R- __________Rights
NOT EXERCISABLE AFTER JANUARY 8, 2008 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.O1 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID.
Right Certificate
PHARMACEUTICAL MARKETING SERVICES INC.
This certifies that ---------------------------, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of [ ] (the "Rights Agreement"),
between PHARMACEUTICAL MARKETING SERVICES INC., a Delaware corporation (the
"Company"), and XXXXXX 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, New York time, on January 8,
2008 at the Corporate Trust Office of the Rights Agent (or at the office of its
successor as Rights Agent), one-third (1/3) of a fully paid nonassessable share
of Common Stock, $.01 par value (the "Common Shares"), of the Company, at a
purchase price of Sixty Dollars ($60.00) per one-third (1/3) of a Common Share
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one-third of a
Common Share which may be purchased upon exercise hereof) set forth above, and
the Purchase Price set forth above, are the number and Purchase Price as of
January 9, 1998 based on the Common Shares as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the number of one-third
of a Common Share which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon that happening of certain events.
This Right Certificate is subject to all the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Right Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and the
Corporate Trust Office of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the Corporate Trust Office of the Rights Agent,
may be exchanged for another Right Certificate or Right Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificate
surrendered. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive, upon surrender hereof, another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be exchanged by the Company in whole or in
part for Common Shares.
No fractional Common Shares will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are integral
multiples on one-third of a Common Share), but in lieu thereof a cash payment
will be made as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Common Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit
under the Rights Agreement or be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
WITNESS the facsimile signatures of the proper officers of the
Company and its corporate seal.
Dated as of
ATTEST: PHARMACEUTICAL MARKETING SERVICES INC.
By By:
------------------------------ --------------------------------
Name: Name:
Title: Title:
Countersigned:
XXXXXX TRUST COMPANY, as
Rights Agent
By:------------------------------
Name:
Title:
Form of Reverse Side of Right Certificate)
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, ____________________________ hereby sells,
assigns and transfers unto______________________________________________________
--------------------------------------------------------------------------------
(Please print name and address of transferee)
____________________________________________________________ this
Right Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint_______________________________________
_____________________ Attorney, to transfer the Right Certificate on the books
of the within-named Company, with full power of substitution.
Dated as of ________________, ____.
--------------------------
Signature
Signature Guarantee:
Signatures must be guaranteed.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
--------------------------
Signature
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise the Right Certificate)
TO PHARMACEUTICAL MARKETING SERVICES INC.:
The undersigned hereby irrevocably elects to exercise Rights
______________ represented by this Right Certificate to purchase the Common
Shares (or other securities) issuable upon the exercise of such Rights and
requests that certificates for such Common Shares (or other securities) be
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 Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated as of ____________, ____.
--------------------------
Signature
Form of Reverse Side of Right Certificate -- continued
Signature Guaranteed:
Signature must be guaranteed.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
--------------------------
Signature
The signature in the foregoing Form of Assignment or Form of
Election to Purchase must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
EXHIBIT B
PHARMACEUTICAL MARKETING SERVICES INC.
STOCKHOLDER RIGHTS PLAN
SUMMARY OF RIGHTS TO PURCHASE COMMON SHARES
On December 30, 1997 the Board of Directors of Pharmaceutical
Marketing Services Inc. (the "Company"), authorized the issuance of one common
share purchase right (a "Right") with respect to each outstanding share of
common stock, $.01 par value (the "Common Shares"), of the Company. The rights
were issued on January 9, 1998 to the holders of record of Common Shares on that
date. Each Right entitles the registered holder to purchase from the Company
one-third of a Common Share at a price of $60.00 per one-third of a Common Share
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") dated as of
[ ], between the Company and Xxxxxx Trust Company, as Rights Agent (the "Rights
Agent").
Detachment of Rights: Exercise. Initially, the Rights will
attach to all Common Share certificates representing outstanding shares and no
separate Right Certificate will be distributed. The Rights will separate from
the Common Shares and a Distribution Date will occur upon the earlier of (i) 10
days following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired beneficial ownership of
15% or more of the outstanding Voting Shares (as defined in the Rights
Agreement) of the Company, and (ii) 10 business days following the commencement
or announcement of an intention to commence a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Voting Shares.
Until the Distribution Date (or earlier redemption or
expiration of the Rights) (i) the Rights will be evidenced, with respect to any
of the Common Shares outstanding on January 9, 1998 by the certificates
representing such Common Shares, (ii) the Rights will be transferred with and
only with the Common Shares, (iii) new Common Share certificates issued after
January 9, 1998 upon transfer or new issuance of the Common Shares will contain
a notation incorporating the Rights Agreement by reference, and (iv) the
surrender for transfer of any certificates for Common Shares outstanding as of
January 9, 1998, even without such notation or a copy of this Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights (the "Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on January 8, 2008 (the "Final Expiration Date"), unless
the Final Expiration Date is changed or the Rights are earlier redeemed or
exchanged by the Company as described below.
If a person or group were to acquire 15% or more of the Voting
Shares of the Company, each Right then outstanding (other than Rights
beneficially owned by the Acquiring Person which would become null and void)
would become a right to buy that number of Common Shares that at the time of
such acquisition would have a market value of two times the Purchase Price of
the Right.
If the Company were acquired in a merger or other business
combination transaction or more than 50% of its consolidated assets or earning
power were sold, proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction would have a market
value of two times the Purchase Price of the Right.
Registration and Listing of Common Shares. The offer and sale
of the Common Shares issuable upon exercise of the Rights will be registered
with the Securities and Exchange Commission but such registration will not be
effective until the Rights become exercisable. The Rights themselves are listed
on the NASDAQ National Market System. As described above, however, the Rights
will not be transferable separately from the Common Stock until the Distribution
Date.
Antidilution and Other Adjustments. The number of Common
Shares or other securities or property issuable upon exercise of the Rights, and
the Purchase Price payable, are subject to customary adjustments from time to
time to prevent dilution.
The number of outstanding Rights and the number of Common
Shares issuable upon exercise of each Right are also subject to adjustment in
the event of a stock split of the Common Shares or a stock dividend on the
Common Shares payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case, prior to the
Distribution Date.
Exchange Option. At any time after the acquisition by a person
or group of affiliated or associated persons of beneficial ownership of 15% or
more of the outstanding Voting Shares of the Company and before the acquisition
by a person or group of 50% or more of the outstanding Voting Shares of the
Company, the Board of Directors may, at its option, issue Common Shares in
mandatory redemption of, or in exchange for, all or part of the then outstanding
and exercisable Rights (other than Rights owned by such Acquiring Person or
group which would become null and void) at an exchange ratio of one Common Share
for each two Common Shares for which each Right is then exercisable, subject to
adjustment.
Redemption of Rights. At any time prior to the tenth business
day after the first public announcement that a person or group has become the
beneficial owner of 15% or more of the outstanding Voting Shares, the Board of
Directors of the Company may redeem all, but not less than all, the then
outstanding Rights at a price of $.01 per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the right to exercise the rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
No Rights as Stockholder. Until a Right is exercised, the
holder thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
Amendment of Rights. The terms of the Rights may be amended by
the Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to change the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during which
the Rights may be redeemed, except that after the Distribution Date no such
amendment may materially and adversely affect the interests of the holders of
the Rights.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE
COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT,
WHICH IS HEREBY INCORPORATED HEREIN BY REFERENCE.
A copy of the form of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A dated December 31, 1997. A copy of the Rights Agreement is available
free of charge from the Company.
Legend for Stock Certificates
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF
TO CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN PHARMACEUTICAL
MARKETING SERVICES INC. AND XXXXXX TRUST COMPANY, AS RIGHTS AGENT, DATED AS OF
[ ] (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 PHARMACEUTICAL MARKETING SERVICES 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. PHARMACEUTICAL MARKETING SERVICES INC. WILL MAIL TO THE HOLDER OF
THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER RECEIPT OF
A WRITTEN REQUEST THEREFOR. AS DESCRIBED IN THE RIGHTS AGREEMENT, RIGHTS ISSUED
TO OR ACQUIRED BY ANY ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF
(EACH AS DEFINED IN THE RIGHTS AGREEMENT) SHALL, UNDER CERTAIN CIRCUMSTANCES,
BECOME NULL AND VOID.
