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XXXXXX XXXXXX VISIONCARE, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
Rights Agreement
Dated as of November 16, 1999
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Table of Contents
Page
Recitals Recitals......................................................... 1
Section 1. Certain Definitions.............................................. 1
Section 2. Appointment of Rights Agent...................................... 1
Section 3. Issuance of Rights Certificates.................................. 7
Section 4. Form of Rights Certificates...................................... 9
Section 5. Execution, Countersignature and Registration..................... 9
Section 6. Transfer, Division, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates....................................... 10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.... 11
Section 8. Cancellation and Destruction of Rights Certificates.............. 12
Section 9. Reservation and Availability of Preferred Stock.................. 13
Section 10. Preferred Stock Record Date...................................... 14
Section 11. Adjustments to Purchase Price, Number of Shares or
Number of Rights................................................. 14
Section 12. Certification of Adjustments..................................... 24
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.................................................... 24
Section 14. Fractional Rights and Fractional Shares.......................... 27
Section 15. Rights of Action................................................. 27
Section 16. Agreement of Rights Holders Concerning Transfer and
Ownership of Rights............................................. 28
Section 17. Rights Holder Not Deemed a Stockholder........................... 28
Section 18. Concerning the Rights Agent...................................... 28
Section 19. Merger or Consolidation or Change of Name of Rights Agent........ 29
Section 20. Duties of Rights Agent........................................... 00
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Xxxxxxx 00. Change of Rights Agent........................................... 31
Section 22. Issuance of New Rights Certificates.............................. 32
Section 23. Redemption and Termination....................................... 32
Section 24. Notice of Certain Events......................................... 33
Section 25. Notices.......................................................... 34
Section 26. Supplements and Amendments....................................... 34
Section 27. Successors....................................................... 35
Section 28. Benefits of this Agreement....................................... 35
Section 29. Severability..................................................... 36
Section 30. Governing Law.................................................... 36
Section 31. Counterparts..................................................... 36
Section 32. Descriptive Headings............................................. 36
Section 33. Grammatical Construction......................................... 36
Exhibit A -- Certificate of Designation, Preferences and Rights
of Junior Participating Preferred Stock, Series A
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
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RIGHTS AGREEMENT
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THIS RIGHTS AGREEMENT, dated as of November 16, 1999, is made between
Xxxxxx Xxxxxx VisionCare, Inc., a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Rights Agent").
RECITALS
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The Board of Directors of the Company has authorized and declared the
payment of a dividend of one preferred share purchase right (a "Right") for each
share of Common Stock (as defined in Section 1) outstanding on the Record Date
(as defined in Section 1) and has authorized the issuance of one Right for each
share of Common Stock issued after the Record Date and before the earliest of
the Distribution Date, the Redemption Date, the Exchange Date and the Expiration
Date (as such terms are defined in Section 1) and in certain cases following
the Distribution Date. Each Right will represent, as of the Record Date, the
right to purchase one one-thousandth of one share of Preferred Stock (as defined
in Section 1) upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth in this Agreement, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" means any Person who or which, together with
all Affiliates and Associates of such Person, is (or has previously been, at any
time after the date of this Agreement, whether or not such Person(s) continues
to be) the Beneficial Owner of 15% or more of the Common Stock then outstanding
(determined without taking into account any securities exercisable or
exchangeable for, or convertible into, Common Stock, other than any such
securities beneficially owned by the Acquiring Person and Affiliates and
Associates of such Person). However, "Acquiring Person" shall not include any
Exempt Person.
Notwithstanding the foregoing, a Person shall not become an "Acquiring
Person" solely as the result of an acquisition of Common Stock by the Company or
any Subsidiary which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person to 15% or
more of the Common Stock then outstanding as determined above; provided,
however, that if a Person becomes the Beneficial Owner of 15% or more of the
Common Stock then outstanding as determined above solely by reason of such a
share acquisition by the Company and such Person shall, after becoming the
Beneficial Owner of such Common Stock, become the Beneficial Owner of any
additional shares of Common Stock by any means whatsoever (other than as a
result of the subsequent occurrence of a stock dividend or a subdivision of the
Common Stock into a larger number of shares or a similar transaction), 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 foregoing provisions of this Section 1(a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this Section 1(a), then such Person
shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement. The determination of whether such Person's becoming an Acquiring
Person shall have been inadvertent and the determination of whether the
divestment of sufficient shares shall have been made as promptly as practicable
shall be made by a majority of the Board of Directors of the Company.
(b) "Adjustment Number" has the meaning set forth in, and shall be
calculated in accordance with, the Certificate of Designation, Preferences and
Rights of Junior Participating Preferred Stock, Series A, attached as Exhibit A
hereto.
(c) "Affiliate" has the meaning given to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement; provided that, for purposes of this Agreement, the term
"Affiliate" shall not include any Person that is an Exempt Person.
(d) "Associate" has the meaning given to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement; provided that, for purposes of this Agreement, the term
"Associate" shall not include any Person that is an Exempt Person. With respect
to such Rule 12b-2, the term "registrant" used therein shall refer to the
Company.
(e) Except as provided below, a Person shall be deemed to be the
"Beneficial Owner" of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any Affiliate or Associate of such
Person beneficially owns, directly or indirectly;
(ii) which such Person or any Affiliate or Associate of such
Person has, directly or indirectly, the right or obligation (whether
or not then exercisable or effective) to acquire pursuant to any
agreement, arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise;
provided, however, that a Person will 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
Affiliate or Associate of such Person until such tendered securities
are accepted for purchase or exchange;
(iii) which such Person or any Affiliate or Associate of such
Person has, directly or indirectly, the right (whether or not then
exercisable) to vote, or to direct the voting of, pursuant to any
agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security pursuant to this clause
(iii) if the agreement, arrangement or understanding to vote, or to
direct the voting of, such security (A) arises solely from a revocable
proxy or consent given in response to a
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public proxy or consent solicitation made pursuant to, and in
accordance with, the Exchange Act and applicable rules and regulations
thereunder and (B) is not also then reportable under Item 6 (or any
comparable or successor item) of Schedule 13D under the Exchange Act
(or any comparable or successor schedule or report);
(iv) which such Person or any Affiliate or Associate of such
Person has "beneficial ownership" of as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act or
any successor provision; or
(v) which are beneficially owned, directly or indirectly, by
any other Person or any Affiliate or Associate of such other Person
with whom such Person or any Affiliate or Associate of such Person has
any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (iii) of this
Section 1(d)) or disposing of any securities of the Company; provided,
however, that for purposes of determining "beneficial ownership" of
securities under this Agreement, officers and directors of the Company
solely by reason of their status as such shall not constitute a group
(notwithstanding that they may be Associates of one another or may be
deemed to constitute a group for purposes of Section 13(d) the
Exchange Act or any successor provision) and shall not be deemed to
own shares owned by another officer or director of the Company .
Nothing in the preceding sentence shall cause a Person engaged in
business as an underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the expiration of 40 days
after the date of such acquisition.
Notwithstanding anything in this Agreement to the contrary, for
purposes of this Agreement, no Person shall be treated as the "Beneficial Owner"
of, or be deemed to "beneficially own," any securities solely by reason of the
ownership of those securities by any other Person that is an Exempt Person.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially under the preceding provisions in this
definition.
(f) "Business Combination" has the meaning set forth in Section 13 of
this Agreement.
(g) "Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the State of Illinois are authorized or
obligated by law or executive order to close.
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(h) "Close of Business" on any given date means 5:00 p.m., Chicago,
Illinois time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m. Chicago, Illinois time, on the next
succeeding Business Day.
(i) "Common Equivalent Share" has the meaning set forth in Section
11(c)(1)(B) of this Agreement.
(j) "Common Share" has the meaning set forth in Section 11(c)(1)(B)
of this Agreement.
(k) "Common Stock" when used with reference to the Company means the
Common Stock, par value $.01 per share, of the Company (as the same may be
changed by reason of any combination, subdivision or reclassification of the
Common Stock). "Common Stock" when used with reference to any Person (other
than the Company prior to a Business Combination) means shares of capital stock
of such Person (if such Person is a corporation) of any class or series, or
units of equity interests in such Person (if such Person is not a corporation)
of any class or series, the terms of which shares or units do not limit (as a
fixed amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such shares or units or the amount of assets
distributable on such shares or units upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such shares or units are subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed; provided, however, that if at any
time there are more than one such class or series of capital stock of or equity
interests in such Person, "Common Stock" of such Person will include all such
classes and series substantially in the proportion of the total number of shares
or other units of each such class or series outstanding at such time.
(l) "Current Market Price" per share of Common Stock, Common
Equivalent Share or any other security on any date is the average of the daily
closing prices per share of such Common Stock, Common Equivalent Share or any
other security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date for the purpose of any computation under
this Agreement; provided, however, that in the event that the Current Market
Price per share of Common Stock, Common Equivalent Share or any other security
is determined during a period following the announcement by the issuer of such
Common Stock, Common Equivalent Share or any other security of (i) a dividend or
distribution on such Common Stock, Common Equivalent Share or any other security
other than a regular quarterly cash dividend, or (ii) any subdivision,
combination or reclassification of such Common Stock, Common Equivalent Share or
any other security, and prior to the expiration of 30 Trading Days after the
"ex-dividend" date for such dividend or distribution or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
"Current Market Price" must be appropriately adjusted to take into account such
dividend, distribution, subdivision, combination or reclassification. The
closing price for each Trading Day shall be the last sale price, regular way, on
such day, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, on such day, 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
("NYSE") or, if the Common Stock, Common Equivalent Share or any other security
is not listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction
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reporting system with respect to securities listed on the principal United
States national securities exchange on which the Common Stock, Common Equivalent
Share or any other security is listed or admitted to trading or, if the Common
Stock, Common Equivalent Share or any other security is not listed or admitted
to trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or such other system then in use,
or, if on any such date the Common Stock, Common Equivalent Share or any other
security is not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the security selected by a majority of the Board of Directors of the Company. If
no such market maker is making a market, the fair market value of such shares on
such day shall be determined in good faith by a majority of the Board of
Directors of the Company, which determination shall be described in a statement
filed with the Rights Agent and shall be binding and conclusive for all
purposes. The term "Trading Day" means a day on which the principal United
States national securities exchange on which the Common Stock, Common Equivalent
Share or any other security is listed or admitted to trading is open for the
transaction of business or, if the Common Stock, Common Equivalent Share or any
other security is not listed or admitted to trading on any United States
national securities exchange, but is traded in the over-the-counter market, then
any day for which the high bid and low asked prices in the over-the-counter
market are reported, or if the Common Stock, Common Equivalent Share or any
other security is not traded in the over-the-counter market, then a Business
Day. If the Preferred Stock is not publicly traded, the "Current Market Price"
of the Preferred Stock shall be conclusively deemed to be the Current Market
Price of the Common Shares as determined pursuant to this paragraph of Section 1
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by the Adjustment
Number.
(m) "Distribution Date" means the earlier of (i) the tenth day after
the Trigger Date and (ii) the tenth Business Day after commencement of or public
disclosure of an intention to commence (including, without limitation, any such
commencement or public disclosure which occurs before or after the date of this
Agreement and prior to the issuance of the Rights) a tender offer or exchange
offer by a Person if, after acquiring the maximum number of securities sought
pursuant to such offer, such Person, or any Affiliate or Associate of such
Person, would be an Acquiring Person. A majority of the Board of Directors of
the Company may defer the date set forth in clause (ii) of the preceding
sentence to a specified later date or to an unspecified later date to be
determined by a subsequent action or event.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and any successor statute.
(o) "Exchange Date" means the time at which Rights are exchanged
pursuant to Section 11(c)(2).
(p) "Exempt Event" means with respect to any Person, the acquisition
by such Person of Beneficial Ownership of Common Stock solely as a result of the
occurrence of a Triggering Event and the effect of such Triggering Event on the
last proviso of clause (ii) of the definition of Beneficial Owner, other than a
Triggering Event in which such Person becomes an Acquiring Person.
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(q) "Exempt Person" means (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or of any Subsidiary of
the Company, and (iv) any Person holding Common Stock for any such employee
benefit plan or for employees of the Company or of any Subsidiary of the Company
pursuant to the terms of any such employee benefit plan.
(r) "Exercise Amount" means the amount payable by the holder as a
condition to the exercise of one Right. Until and unless it shall be adjusted
in accordance with this Agreement, the Exercise Amount shall be $0.001.
(s) "Expiration Date" means the Close of Business on November 26,
2009.
(t) "Person" means any individual, firm, corporation, limited
liability company, partnership, joint venture, association, trust,
unincorporated organization or other entity, and shall include any "group" as
that term is used in Rule 13d-5(b) under the Exchange Act (or any successor
provision).
(u) "Preferred Stock" means the Company's Junior Participating
Preferred Stock, Series A, par value $.01 per share, having the rights and
preferences set forth in the Certificate of Designation, Preferences and Rights
of Junior Participating Preferred Stock, Series A, attached hereto as Exhibit A.
(v) "Principal Party" means (i) in the case of any Business
Combination described in clause (i), (ii) or (iii) of the first sentence of
Section 13(a), (A) the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted or for which they are
exchanged in such Business Combination or, if there is more than one such
issuer, the issuer of the Common Stock which has the greatest aggregate market
value or (B) if no securities are so issued, the Person that survives or results
from the Business Combination or, if there is more than one such Person, the
Person the Common Stock of which has the greatest aggregate market value, and
(ii) in the case of any Business Combination described in clause (iv) of the
first sentence in Section 13(a), the Person that receives the greatest portion
of the assets or earning power transferred pursuant to such Business Combination
or, if each Person that is a party to such Business Combination receives the
same portion of the assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power cannot reasonably
be determined, whichever of such Persons is the issuer of the Common Stock which
has the greatest aggregate market value; provided, however, that in any such
case, if the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act and such Person is a direct or indirect Subsidiary of one or
more other Persons, then (x) "Principal Party" refers to whichever of such other
Persons has Common Stock that is and has been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act; (y) if the
Common Stocks of two or more of such other Persons are and have been so
registered, "Principal Party" refers to whichever of such other Persons is the
issuer of the Common Stock which has the greatest aggregate market value; or (z)
if the Common Stock of none of such other Persons has been so registered,
"Principal Party" refers to whichever of such other Persons (other than an
individual) is the Person which has the equity securities with the greatest
aggregate market value. In case such Person is owned, directly or indirectly, by
a joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth above apply
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to each of the chains of ownership having an interest in such joint venture as
if such Person were a Subsidiary of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set forth in
Section 13 in the same ratio as their direct or indirect interests in such
Person bear to the total of such interests.
(w) "Purchase Price:" Until the Trigger Date, the term Purchase Price
means the price at which one-one thousandth of a share of Preferred Stock shall
be purchasable with the Rights. The Purchase Price shall be $180.00 per one one-
thousandth of a share of Preferred Stock until and unless it shall be adjusted
pursuant to this Agreement. Immediately after the Trigger Date, the term
"Purchase Price" shall mean the price per Common Share for which Common Shares
shall be purchasable with the Rights. Thereafter the term "Purchase Price" as
applied with respect to each kind of stock or other property purchasable with
the Rights as a result of adjustments prescribed by this Agreement shall mean
the price at which each share of such stock or the smallest available unit of
such other property is purchasable with the Rights.
(x) "Record Date" means the Close of Business on November 26, 1999.
(y) "Redemption Date" means the time at which the Rights are
scheduled to be redeemed as provided in Section 23.
(z) "Redemption Price" has the meaning given to such term in Section
23.
(aa) "Securities Act" means the Securities Act of 1933, as amended,
and any successor statute.
(bb) "Stock Acquisition Date" means the first date of public
disclosure by the Company, an Acquiring Person or otherwise that an Acquiring
Person has become such.
(cc) "Subsidiary" has the meaning given to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date of this Agreement.
(dd) "Trigger Date" means the first date upon which a Person becomes
an Acquiring Person.
(ee) "Triggering Event" shall mean a Person becoming an Acquiring
Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. Issuance of Rights Certificates.
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(a) As soon as practicable after the Record Date, the Company or the
Rights Agent shall mail, by first class, postage prepaid mail, to each record
holder of the Common Stock as of the Close of Business on the Record Date, as
shown by the records of the Company, at the address of such holder shown on such
records, a copy of a Summary of Rights, in substantially the form of Exhibit A
hereto.
(b) Until the Distribution Date: (i) the Rights shall be issued in
respect of and shall be evidenced by the certificates representing the shares of
Common Stock issued and outstanding on the Record Date and shares of Common
Stock issued or which become outstanding after the Record Date and prior to the
earliest of the Distribution Date, the Redemption Date, the Exchange Date and
the Expiration Date (which certificates for Common Stock shall be deemed to also
be certificates evidencing the Rights), and not by separate certificates; (ii)
the registered holders of such shares of Common Stock shall also be the
registered holders of the Rights associated with such shares; and (iii) the
Rights shall be transferable only in connection with the transfer of shares of
Common Stock, and the surrender for transfer of any certificate for such shares
of Common Stock shall also constitute the surrender for transfer of the Rights
associated with such shares. As soon as practicable after the Company has
notified the Rights Agent of the occurrence of the Distribution Date, the Rights
Agent shall (except as otherwise provided in Section 7(e)) mail, by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Distribution Date, as shown by the records of the Company, at
the address of such holder shown on such records, one or more certificates
evidencing the Rights ("Rights Certificates"), in substantially the form of
Exhibit B hereto, evidencing one Right (as adjusted from time to time pursuant
to this Agreement) for each share of Common Stock so held. From and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(c) Rights shall be issued in respect of all shares of Common Stock
which are issued or sold by the Company after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date, the Exchange Date and
the Expiration Date. In addition, in connection with the issuance or sale of
Common Stock by the Company following the Distribution Date and prior to the
earliest of the Redemption Date, the Exchange Date and the Expiration Date, the
Company shall, with respect to Common Stock so issued or sold (i) pursuant to
the exercise of stock options issued prior to the Distribution Date or under any
employee plan or arrangement created prior to the Distribution Date, or (ii)
upon the exercise, conversion or exchange of securities issued by the Company
prior to the Distribution Date, issue Rights and Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (x) no such Rights and Rights Certificate shall
be issued if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights and Rights
Certificate would be issued and (y) no such Rights and Rights Certificates shall
be issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof. Certificates issued after the
Record Date representing shares of Common Stock outstanding on the Record Date
and shares of Common Stock issued after the Record Date but prior to the
earliest of the Distribution
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Date, the Redemption Date, the Exchange Date and the Expiration Date shall have
impressed, printed, or written on, or otherwise affixed to them a legend
substantially in the following form:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Xxxxxx
Xxxxxx VisionCare, Inc. and American Stock Transfer & Trust Company,
as Rights Agent, dated as of November 16, 1999 (the "Rights
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Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Rights Agent. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. The Rights Agent will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances,
Rights that were, are or become beneficially owned by Acquiring
Persons or their Associates or Affiliates (as such terms are defined
in the Rights Agreement) may become null and void and the holder of
any of such Rights (including any subsequent holder) shall not have
any right to exercise such Rights.
(d) Notwithstanding any other provision of this Agreement, neither
the Company, the Rights Agent nor anyone else shall have any obligation to issue
any Rights Certificate to an Acquiring Person or to anyone else in whose hands
the Rights nominally represented by such Certificate shall be null and void
either initially or in connection with a request to register a transfer of
Rights represented by a certificate previously issued. Furthermore, neither the
Company, the Rights Agent nor anyone else shall be obligated to issue Rights
Certificates to any person making a tender offer which if consummated could
render such person an Acquiring Person or to any Affiliate or Associate of such
person until and unless the tender offer is withdrawn and the person shall have
established to the Company's reasonable satisfaction that such person does not
intend to become an Acquiring Person. The Company shall be entitled to require
any person claiming the right to receive a Rights Certificate to present such
evidence as the Company shall require in good faith to establish to the
Company's satisfaction that the Rights represented by that Certificate have not
become null and void under the provisions in Section 7(e) or that the Company is
not entitled to withhold such Certificate under the provisions of the preceding
sentence.
Section 4. Form of Rights Certificates. The Rights Certificates (and
the form of election to purchase shares and form of assignment to be printed on
the reverse thereof) shall be in substantially the form of Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or automated quotation system on
which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of this Agreement, the Rights Certificates,
whenever issued, shall be dated as of the Distribution Date, and on their face
shall entitle the holders thereof to purchase such number of shares of Preferred
Stock as shall be set
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forth therein at the Purchase Price set forth therein, but the number and kind
of such securities and the Purchase Price shall be subject to adjustment as
provided in this Agreement.
Section 5. Execution, Countersignature and Registration.
(a) Each Rights Certificate shall be executed on behalf of the
Company by the Company's Chief Executive Officer, President, Chief Financial
Officer, Treasurer or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Company's Secretary or an Assistant
Secretary, either manually or by facsimile signature. Each Rights Certificate
shall be countersigned by the Rights Agent either manually or, if permitted by
the Company, by facsimile signature and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed a Rights Certificate shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificate nevertheless may be countersigned by the Rights Agent
and issued and delivered with the same force and effect as though the Person who
signed such Rights Certificate had not ceased to be such officer of the Company;
and any Rights Certificate may be signed on behalf of the Company by any Person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent shall keep or
cause to be kept, at its principal stock transfer office, books for registration
and transfer of the Rights Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Rights Certificates,
the number of Rights evidenced by each Rights Certificate, and the certificate
number and the date of issuance of each Rights Certificate.
Section 6. Transfer, Division, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 3(d) and Section 14, at any
time after the Close of Business on the Distribution Date and at or prior to the
Close of Business on the earliest of the Redemption Date, the Exchange Date and
the Expiration Date, any Rights Certificate or Rights Certificates may be
transferred, divided, combined or exchanged for another Rights Certificate or
Rights Certificates, entitling the registered holder to purchase a like number
of shares of Preferred Stock (or following a Triggering Event or a Business
Combination, other securities, cash or other property, as the case may be) as
the Rights Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, divide, combine
or exchange any Rights Certificate shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, divided, combined or exchanged at the principal
corporate office of the Rights Agent. Thereupon the Rights Agent shall
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. As a condition to
such transfer, division, combination or exchange, the Company may require
payment by the surrendering holder of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection therewith. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall
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have duly completed and executed the form of assignment on the reverse side of
such Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or such former or proposed Beneficial Owner)
thereof or such Beneficial Owner's Affiliates or Associates as the Company shall
reasonably request.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will make and deliver a new Rights Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Each Right shall entitle (except as otherwise provided in this
Agreement) the registered holder thereof, upon the exercise thereof as provided
in this Agreement, to purchase, for the Purchase Price, at any time after the
Distribution Date and prior to the earliest of the Expiration Date, the Exchange
Date and the Redemption Date, one one-thousandth (1/1000) of a share of
Preferred Stock, subject to adjustment from time to time as provided in Sections
11 and 13.
(b) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided in this Agreement) in
whole or in part (except that no fraction of a Right may be exercised) at any
time after the Distribution Date and prior to the earliest of the Expiration
Date, the Exchange Date and the Redemption Date, by surrendering the Rights
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal stock transfer office of the
Rights Agent, together with payment of the Exercise Amount for each Right
exercised.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Exercise Amount for each Right exercised and an amount equal to
any applicable transfer tax required to be paid by the surrendering holder
pursuant to Section 9(d), the Rights Agent shall, subject to the provisions of
this Agreement, thereupon promptly (i)(A) requisition from any transfer agent
for the Preferred Stock (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the Preferred Stock (or other
securities, as the case may be) to be purchased (and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests), or
(B) if the Company shall have elected to deposit the total number of shares of
Preferred Stock (or other securities, as the case may be) issuable upon exercise
of the Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such Preferred Stock (or other securities, as
the case may be) as are to be purchased (in which case certificates for the
Preferred Stock (or other securities, as the case may be) represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company shall direct the depositary agent to comply with such request; (ii)
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder; and (iii) if appropriate, requisition from the Company
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the amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 of this Agreement and, promptly after receipt
thereof, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate. In the event that the Company is obligated to
issue other securities (including shares of Common Stock) of the Company, pay
cash and/or distribute other property pursuant to this Agreement, the Company
will make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to the provisions of
Section 3(c) and Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, any
Rights that are or were formerly beneficially owned on or after the earlier of
the Distribution Date and the Trigger Date by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a direct or indirect
transferee of an Acquiring Person (or of an Associate or Affiliate of such
Acquiring Person) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a direct or indirect transferee of an Acquiring Person (or of an
Associate or Affiliate of such Acquiring Person) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a direct or indirect transfer (whether or not for
consideration) from the Acquiring Person (or from an Associate or Affiliate of
such Acquiring Person) to holders of equity interests in such Acquiring Person
(or to holders of equity interests in any Associate or Affiliate of such
Acquiring Person) or to any Person with whom the Acquiring Person (or an
Associate or Affiliate of such Acquiring Person) has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a direct or
indirect transfer which a majority of the Board of Directors of the Company
determines is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall, immediately
upon the occurrence of a Triggering Event and without any further action, be
null and void and no holder of such Rights shall have any rights whatsoever with
respect to such Rights whether under this Agreement or otherwise, provided,
however, that, in the case of transferees under clause (ii) or clause (iii)
above, any Rights beneficially owned by such transferee shall be null and void
only if and to the extent such Rights were formerly beneficially owned by a
Person who was, at the time such Person beneficially owned such Rights, or who
later became, an Acquiring Person or an Affiliate or Associate of such Acquiring
Person. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) are complied with, but shall have no liability
to any holder of a Rights Certificate or to any other Person as a result of the
Company's failure to make, or any delay in making (including any such failure or
delay by the Board of Directors of the Company) any determinations with respect
to an Acquiring Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to the registered holder of a Rights Certificate upon the
occurrence of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate contained
in the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered
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for such exercise and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former or proposed Beneficial Owner) thereof or the
Affiliates or Associates of such Beneficial Owner (or former or proposed
Beneficial Owner) as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, division,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
the provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available at all times out of its authorized and unissued
shares of Preferred Stock or its authorized and issued shares of Preferred Stock
held in its treasury (and, following the occurrence of a Triggering Event or a
Business Combination, out of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and issued shares of Common
Stock and/or other securities held in its treasury) free from preemptive rights
or any right of first refusal, a sufficient number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, shares of Common Stock
and/or other securities) to permit the exercise in full of all Rights from time
to time outstanding.
(b) The Company further covenants and agrees, so long as the
Preferred Stock (and, following the occurrence of a Triggering Event or a
Business Combination, shares of Common Stock and/or other securities) issuable
upon the exercise of Rights may be listed on any United States national
securities exchange or quoted on any automated quotation system, to use its best
efforts to cause, from and after the time that the Rights become exercisable,
all such shares and/or other securities reserved for such issuance to be listed
on such exchange or quoted on such automated quotation system upon official
notice of issuance upon such exercise.
(c) The Company further covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of Preferred Stock
(and, following the occurrence of a Triggering Event or a Business Combination,
shares of Common Stock and/or other securities) delivered upon the exercise of
Rights shall, at the time of delivery of the certificates for such shares and/or
such other securities (subject to payment of the Purchase Price), be duly and
validly authorized and issued, fully paid, nonassessable, freely tradeable, not
subject to liens or encumbrances, and free of preemptive rights, rights of first
refusal or any other restrictions or limitations on the transfer or ownership
thereof, of any kind or nature whatsoever.
(d) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges which
may be payable in respect of
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the original issuance or delivery of the Rights Certificates or of any
certificates for shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to (i) pay any transfer tax which may be payable in
respect of any transfer involved in the issuance or delivery of any Rights
Certificates or the issuance or delivery of any certificates for shares of
Preferred Stock (or Common Stock and/or other securities as the case may be) to
a Person other than, or in a name other than that of, the registered holder of
the Rights Certificate evidencing Rights surrendered for exercise or (ii)
transfer or deliver any Rights Certificate or issue or deliver any certificates
for shares of Preferred Stock (or Common Stock and/or other securities as the
case may be) upon the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Rights Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
(e) The Company shall (i) as soon as practicable following a
Triggering Event (or such earlier time following the Distribution Date as may be
required by law), prepare and file a registration statement on an appropriate
form under the Securities Act with respect to the securities purchasable upon
exercise of the Rights, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the earlier of (A) the
date as of which Rights are no longer exercisable for such securities and (B)
the Expiration Date. The Company shall also take such action as may be
necessary or appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercise of the
Rights. The Company may temporarily suspend, for a period of time not to exceed
90 days after the date of a Triggering Event, the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall make a public
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is no
longer in effect.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Stock (or Common Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (and/or such other securities, as the
case may be) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open.
Section 11. Adjustments to Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number and kind of securities, cash and other
property obtainable upon exercise of each Right and the number of Rights
outstanding shall be subject to adjustment from time to time as provided in this
Section 11.
-14-
(a) Adjustments Prior to Trigger Date:
(1) In the event the Company shall at any time after the date of
this Agreement and prior to the Trigger Date (i) pay a
dividend or make a distribution on the Common Stock payable
in shares of Common Stock, (ii) subdivide (by a stock split
or otherwise) the outstanding Common Stock into a larger
number of shares, (iii) combine (by a reverse stock split or
otherwise) the outstanding Common Stock into a smaller
number of shares (and any of the actions described in
clauses (i), (ii) or (iii) are herein called a "stock
split") then:
(A) The number of Rights outstanding shall be adjusted so
that after giving effect to such stock split the number
of Rights outstanding shall be exactly equal to the
number of shares of Common Stock outstanding (and so
that prior to the Distribution Date one Right shall be
associated with every share of Common Stock outstanding
after such stock split);
(B) The Exercise Amount shall be adjusted by multiplying
the Exercise Amount in effect immediately prior to such
stock split by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding
immediately prior to such stock split and the
denominator of which shall be the number of shares of
Common Stock outstanding immediately after such stock
split;
(C) The Purchase Price for each one one-thousandth of a
share of Preferred Stock shall not change; and
(D) The fraction of a share of Preferred Stock purchasable
with each Right immediately after such stock split
shall be equal to the product derived by multiplying
the fraction of a share of Preferred Stock purchasable
with each Right immediately prior to such stock split
times the fraction cited in clause (B) above.
The following example illustrates the intended operation of the
preceding provisions. Assume that initially, each Right would
(when and if it became exercisable) entitle its holder to
purchase one one-thousandth of a share of Preferred Stock for
$150 (and accordingly the initial Exercise Amount and the
initial Purchase Price per one one-thousandth of a share of
Preferred Stock are each $150). Assume further that prior to the
Distribution Date, the Company splits its Common Stock two for
one (thereby doubling the number of shares of Common Stock
outstanding). The intended operation of the preceding adjustment
provisions is that: (i) the number of Rights outstanding would
also double; (ii) one Right would be associated with each share
of Common Stock outstanding after the stock split; (iii) each
Right would have
-15-
an Exercise Amount equal to $75; (iv) each Right will entitle its
holder (when and if the Right becomes exercisable) to purchase
one two-thousandth of one share of Preferred Stock; and (v) the
Purchase Price for each one one-thousandth of a share of
Preferred Stock would remain $150 so that the price for each one
two-thousandth of a share of Preferred Stock purchasable with
each Right would be $75.
(2) Adjustment in Rights Certificates: In the event the
Distribution Date shall occur and the Company shall issue
separate certificates to represent the Rights, the following
provisions shall thereafter apply:
(A) In the event the number of Rights outstanding are
increased pursuant to Section 11(a)(1), the Company
shall as promptly as reasonably possible distribute to
the record holders of the Rights on the record date for
the stock split giving rise to the increase in the
number of Rights certificates representing the
additional Rights issuable by reason of such stock
split.
(B) In the event the number of Rights outstanding are
reduced pursuant to Section 11(a) by reason of the
occurrence of a reverse stock split or its functional
equivalent, then each Rights certificate outstanding
prior to such reverse stock split shall thereafter
represent the reduced number of Rights into which the
Rights represented by such certificate immediately
prior to such reverse stock split shall have been
converted by reason of the occurrence of that reverse
stock split.
(b) Basic Triggering Event Adjustments: Upon the first occurrence of
a Triggering Event (except as otherwise provided in this Agreement), each Right
shall be changed so that immediately after the Triggering Event:
(1) it shall no longer be exercisable for Preferred Stock but
rather shall be exercisable for Common Stock;
(2) the number of shares of Common Stock which may be acquired
upon exercise of each Right shall be equal to the result
obtained by dividing (x) 50% of the Current Market Price per
share of Common Stock on the date of the occurrence of the
Triggering Event into (y) the Exercise Amount in effect
immediately prior to the Triggering Event; and
(3) the Purchase Price per Common Share purchasable with
each Right shall be equal to 50% of the Current Market
Price per share of Common Stock on the date of the
occurrence of the Triggering Event.
(c) Other Post Triggering Event Adjustments.
-16-
(1) Use of Common Equivalent Shares or Cash: In the event that
the number of shares of Common Stock which are authorized by
the Company's certificate of incorporation, but which are
not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights ("Available Common Stock")
is not sufficient to permit the exercise in full of the
Rights after the adjustment made in accordance with Section
11(b), then:
(A) First, the Available Common Stock shall be allocated
among the outstanding Rights so that each Right shall
entitle its holder to purchase the same quantity of
Available Common Stock; and second, each Right shall
additionally entitle its holder to (x) purchase a
fraction of a share of Preferred Stock which when
multiplied times the Adjustment Number then in effect
under the terms of the Preferred Stock produces a
product equal to the remainder derived by subtracting
the number of shares of Common Stock purchasable with
each Right after the allocation specified in clause (i)
from the number of shares of Common Stock which would
have been purchasable with such Right if the
Corporation had a sufficient number of shares of Common
Stock to permit the Right to be exercisable entirely
for Common Stock (such remainder being referred to
herein as the "Unallocated Shares") or (y) receive cash
in an amount equal to the Current Value of the
Unallocated Shares or (z) receive any combination of
the foregoing so long as each Right entitles its holder
to receive the same amount of fractional shares of
Preferred Stock and cash. For purposes of the preceding
sentence, the "Current Value" of a particular number of
Unallocated Shares shall be equal to the product
derived by multiplying that particular number times the
greater of (i) the Current Market Price (calculated as
prescribed in Section 1) or (ii) the closing price per
share (calculated as prescribed in Section 1) for the
Common Stock on the Trading Day immediately prior to
the day on which the Board of Directors of the Company
determines that a substitution of cash for such
Unallocated Shares shall be made.
(B) The fraction of a share of Preferred Stock equal to the
reciprocal of the Adjustment Number in effect at the
time the term shall be applied shall be deemed to be a
"Common Equivalent Share" for purposes of this
Agreement. The Company shall take all actions
reasonably necessary so that as nearly as possible each
Common Equivalent Share represents substantially the
same interest in the Company, has the same dividend
rate, and has other characteristics as similar as
possible to one share of Common Stock. The term
-17-
"Common Share" whenever it is used in this Agreement
means both a share of Common Stock and a Common
Equivalent Share.
(C) If circumstances after the initial Trigger Date require
the use of Common Equivalent Shares, the Company shall
use its best efforts to obtain authorization to issue a
sufficient quantity of Common Stock to permit Common
Stock to be issued upon exercise of the Rights and/or
any exercise of the exchange right under the following
Section. Each time the Company's authorized Common
Stock shall be increased, the adjustment required under
the preceding paragraphs shall be redone to maximize
the amount of Common Stock issuable upon exercise of
the Rights. To the extent excess authorized Common
Stock remains after the readjustment required by the
preceding sentence, the holder of any outstanding
Common Equivalent Share shall have the right at any
time to require the Company to exchange that share for
a share of Common Stock.
(D) In no event, however, shall the Company be obligated to
reserve any Common Stock for issuance under the Rights
until and unless a Triggering Event actually occurs.
(E) In no event shall the Company issue any Preferred Stock
except for issuances caused by exercise of the Rights
and except for issuances required by this Section
11(c)(1) or Section 11(d)(6).
(2) Exchange Option:
(A) At any time after the occurrence of a Triggering Event
and prior to the earlier of (i) the time any Person
(other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock
then outstanding and (ii) the occurrence of a Business
Combination (the earlier of such time and occurrence
begin referred to herein as the "Exchange Option
Exercise Deadline"), the Board of Directors of the
Company may, at its option, cause the Company to
exchange for all or part of the then-outstanding and
exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section
7(e) hereof), shares of Common Stock at an exchange
ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after
the date of this Agreement (such exchange ratio being
referred to
-18-
herein as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors of the Company may
exercise its option to effect an exchange pursuant to
this Section 11(c)(2) prior to the Trigger Date
effective upon the Trigger Date, even if the Trigger
Date coincides with the Exchange Option Exercise
Deadline. Any partial exchange shall be effected on a
pro rata basis based on the number of Rights (other
than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder
of Rights.
(B) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any particular
Rights pursuant to this Section 11(c)(2) and without
any further action and without any notice, the right to
exercise those particular Rights shall terminate and
the only right a holder shall have thereafter with
respect to any of those particular Rights shall be to
receive the number of shares of Common Stock equal to
the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange and in
addition, the Company shall promptly mail a notice of
any such exchange to all of the holders of such Rights
in accordance with Section 25 of this Agreement;
provided, however, that the failure to give, any delay
in giving or any defect in, such notice shall not
affect the validity of such exchange. Each such notice
of exchange will state the method by which the exchange
of the shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. The Company
shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of
such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Rights
Certificates with regard to which such fractional
shares of Common Stock would otherwise be issuable an
amount in cash equal to the product derived by
multiplying (x) the subject fraction, by (y) the last
sale price of the Company's Common Stock on the fifth
Trading Day following the public announcement of the
exchange by the Company, or, in case no such sale takes
place on such day, the average of the closing bid and
asked prices on such day, in either case on a when
issued basis (taking into account the exchange), as
reported in the principal consolidated transaction
reporting system with respect to securities listed or
admitted to trading on the NYSE (or, if the Company's
Common Stock is not so
-19-
listed or traded, then as determined in the manner
provided under the definition of "Current Market
Price," adjusted to take into account the exchange). In
determining whether any particular holder shall be
obligated to receive cash in lieu of a fractional
share, the holder shall be entitled to have all Rights
beneficially owned by such holder aggregated so that
only one fractional share shall be attributable to all
the Rights so beneficially owned.
(d) Antidilution Adjustments After the Trigger Date:
(1) In the event the Company shall at any time after the Trigger
Date effect any stock split with respect to its Common
Stock, then the Purchase Price to be in effect after such
stock split shall be determined by multiplying the Purchase
Price in effect immediately prior to such action by a
fraction, the numerator of which shall be the number of
Common Shares outstanding immediately prior to such stock
split and the denominator of which shall be the number of
Common Shares outstanding immediately after such stock
split.
(2) In case the Company shall at any time after the Trigger Date
fix a record date for the making of a distribution to
holders of Common Stock (including any such distribution
made in connection with a reclassification of the Common
Stock or a consolidation or merger in which the Company is
the surviving corporation) of securities (other than Common
Stock and rights, options or warrants referred to in Section
11(d)(3)), cash (other than a regular periodic cash dividend
at an annual rate not in excess of (x) 125% of the annual
rate of the regular cash dividend paid on the Common Stock
during the immediately preceding fiscal year or (y) in the
event that a regular cash dividend was not paid on the
Common Stock during such preceding fiscal year, 5% of the
Current Market Price of the Common Stock on the date such
regular cash dividend was first declared), property,
evidences of indebtedness or assets, the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which
shall be the Current Market Price per share of Common Stock
on such record date, less the fair market value (as
determined in good faith by a majority of the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of
such securities, cash, property, evidences of indebtedness
or assets to be so distributed in respect of one share of
Common Stock, and the denominator of which shall be such
Current Market Price per share of Common Stock on such
record date. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that
such distribution is not made following such adjustment, the
Purchase
-20-
Price shall be readjusted to be the Purchase Price which
would have been in effect if such record date had not been
fixed.
(3) If the Company shall at any time after the Trigger Date fix
a record date for the issuance of rights, options or
warrants to holders of Common Shares entitling them to
subscribe for or purchase Common Shares (or securities
convertible into Common Shares) at a price per Common Share
(or, in the case of a convertible security, having a
conversion price per Common Share) less than the Current
Market Price per share of Common Stock on such record date
and requiring that the conversion or purchase right be
exercised within 45 calendar days after 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 exercise and/or conversion price
for the total number of Common Shares which are obtainable
upon exercise and/or conversion of such rights, options,
warrants or convertible securities would purchase at such
Current Market Price, and the denominator of which shall be
the number of shares of Common Shares outstanding on such
record date, plus the number of additional Common Shares
which may be obtained upon exercise and/or conversion of
such rights, options, warrants or convertible securities. In
case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good
faith by a majority of the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding
on the Rights Agent. Common Shares owned by or held for the
account of the Company or any Subsidiary of the Company
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that
such rights, options or warrants are not issued following
such adjustment, the Purchase Price shall be readjusted to
be the Purchase Price which would have been in effect if
such record date had not been fixed.
(4) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in
its sole discretion shall determine to be advisable in order
that any combination or subdivision of the Common Stock,
issuance wholly for cash of any Common Stock at less than
the Current Market Price, issuance wholly for cash of Common
Stock or securities which by their terms are convertible
into or exchangeable or exercisable for Common
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Shares, stock dividends or issuance of rights, options or
warrants referred to in this Section 11, hereafter made by
the Company to holders of its Common Shares, shall not be
taxable to such stockholders.
(5) After each adjustment of the Purchase Price pursuant to any
of subsections (1) - (4) immediately above, the number of
Common Shares purchasable with each Right shall be adjusted
to the quotient derived by dividing the Purchase Price as
constituted after giving effect to such adjustment into the
Exercise Amount.
(6) The Company shall not take any of the actions described in
any of subsections (1) - (3) above at a time when any Common
Equivalent Shares are outstanding unless the Company shall
take substantively identical actions with respect to the
outstanding Common Stock and outstanding Common Equivalent
Shares. Conversely, the Company shall not take any actions
with respect to outstanding Common Equivalent Shares
analogous to those described in any of subsections (1) - (3)
above unless the Company shall take substantively identical
actions with respect to the outstanding Common Stock and
outstanding Common Equivalent Shares.
(e) Recapitalizations.
(1) In the event that after the Trigger Date, the Company shall
issue any securities in a reclassification of the Common
Stock or in any other recapitalization (including any such
reclassification in connection with a consolidation or
merger in which the Company is the surviving corporation),
then in each such event:
(A) the property purchasable with each Right shall be
adjusted to be whatever the owner of that Right would
have owned by reason of both (i) the exercise of that
Right immediately prior to such recapitalization or
reclassification and (ii) the effect of that
recapitalization or reclassification on the property
assumed to have been received in such exercise.
(B) The Exercise Amount shall be allocated among the shares
of stock and/or other units of property for which the
Right shall be exercisable after giving effect to the
adjustment cited in clause (A) based on the fair market
value of such property to determine the Purchase Price
for each such share and/or unit.
(2) To illustrate the intended operation of this provision,
assume that: (i) immediately prior to a reclassification,
each Right were exercisable for 10 Common Shares and the
Exercise Amount were $150 (resulting in a purchase price of
$15 per Common Share); (ii) as a
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result of the Reclassification, each outstanding Common
Share is reclassified into two New Common Shares and one
Series B Share; and (iii) immediately after the
reclassification, the market value of each New Common Share
was $30 and the market value of each Series B share was $15.
Immediately after the assumed reclassification, each Right
would be exercisable for 20 New Common Shares at a purchase
price of $6 per share and ten Series B Shares at a purchase
price of $3 per share.
(f) In the event a Triggering Event shall occur, or in the event
there shall be a recapitalization or reclassification pursuant to Section 11(e),
or in the event there shall be any merger or other action which shall cause a
change in the property purchasable with the Rights under Section 13, or in the
event there shall be any other occurrence or development which shall cause the
property purchasable with the Rights to consist in whole or in part of anything
other than Preferred Stock, then and in any such event:
(1) The certificates representing the Rights shall automatically
be deemed to represent the adjusted terms of the Rights
without the need to replace such certificates. The Company
shall thereafter make arrangements for the production of
certificates representing the revised terms of the Rights
resulting from such adjustment and shall use such
certificates to represent Rights for which new certificates
shall be issuable by reason of a transfer of record
ownership or by reason of a request by the existing record
owner for a replacement certificate representing the revised
terms of the Rights.
(2) The principles underlying the adjustment provisions in this
Section 11 and elsewhere in this Agreement shall be applied
to fairly and proportionately adjust the shares or other
property purchasable with the Rights and the purchase price
for each share or other property unit purchasable with the
Rights after giving effect to the adjustments required by
reason of such event to reflect any subsequent capital
changes or other events. Without limiting by implication the
generality of the preceding sentence, the provisions of
Sections 7, 9, 10, 12, 13, 14 and 24 of this Agreement which
related to the Preferred Stock shall after the occurrence of
any such event apply in a substantively identical manner to
the shares or other property purchasable with the Rights
after giving effect to such event.
(g) Before taking any action that would cause an adjustment reducing
the Purchase Price per share at which shares are purchasable with the Rights
below the par value of those shares, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable shares at
such adjusted Purchase Price.
(h) In any case in which this Section 11 shall require that an
adjustment be made effective as of a record date for a specified event, the
Company may elect to defer until the
-23-
occurrence of such event the issuance to the holder of any Right exercised after
such record date the shares of Common Stock and other securities, cash or
property of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock and other securities, cash or property of the Company, if
any, issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such holder's
right to receive such additional shares (fractional or otherwise) or other
securities, cash or property upon the occurrence of the event requiring such
adjustment.
(i) The Company covenants and agrees that on and after the Trigger
Date neither it nor any combination of it and its subsidiaries shall (i)
consolidate with any other Person, or (ii) merge with or into any other Person
or (iii) directly or indirectly sell, lease, or otherwise transfer or dispose of
(in one transaction or a series of related transactions) assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries taken as a whole to any other Person if (A) at the time of or
immediately after such consolidation, merger, sale, lease, transfer, or
disposition there are any rights, warrants, securities or other instruments
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (B)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, lease, transfer, or disposition the stockholders (or equity holders) of
the Person who constitutes, or would constitute, the Principal Party in such
transaction shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (C) the form or nature of
organization of the Principal Party would preclude or limit the exercisability
of the Rights. The Company shall not consummate any such consolidation, merger,
sale, lease, transfer, or disposition unless prior thereto the Company and such
other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this Section 11(i).
(j) The Company covenants and agrees that, after the Trigger Date it
will not, except as permitted by Section 11(c)(2) of this Agreement, take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will, directly or indirectly,
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
Section 12. Certification of Adjustments. Whenever an adjustment
is made as provided in Sections 11 and 13, 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 stock then purchasable with the Rights a
copy of such certificate and (c) mail a brief summary thereof to each holder of
a Rights Certificate (or, if no Rights Certificates have been issued, to each
holder of a certificate representing shares of Common Stock) in accordance with
Section 25. Notwithstanding the foregoing sentence, the failure of the Company
to give such notice shall not affect the validity of or the force or effect of
or the requirement for such adjustment. Any adjustment to be made pursuant to
Sections 11 and 13 of this Agreement shall be effective as of the date of the
event giving rise to such adjustment.
-24-
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) A "Business Combination" shall be deemed to occur in the event
that, in or following a Triggering Event, (i) the Company shall, directly or
indirectly, consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(i) and Section 11(j) of this Agreement) in a transaction in which the Company
is not the continuing, resulting or surviving corporation of such merger or
consolidation, (ii) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(i) and Section 11(j) of this
Agreement) shall, directly or indirectly, consolidate with the Company, or shall
merge with and into the Company, in a transaction in which the Company is the
continuing, resulting or surviving corporation of such merger or consolidation
and, in connection with such merger or consolidation, all or part of the Common
Stock shall be changed (including, without limitation, any conversion into or
exchange for securities of the Company or of any other Person, cash or any other
property), (iii) the Company shall, directly or indirectly, effect a share
exchange in which all or part of the Common Stock shall be changed (including,
without limitation, any conversion into or exchange for securities of any other
Person, cash or any other property) or (iv) the Company shall, directly or
indirectly, sell, lease, exchange, mortgage, pledge or otherwise transfer or
dispose of (or one or more of its Subsidiaries shall directly or indirectly
sell, lease, exchange, mortgage, pledge or otherwise transfer or dispose of), in
one transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person (other than the Company or
any of its Subsidiaries in one or more transactions each and all of which comply
with Section 11(i) and Section 11(j) of this Agreement).
In the event of a Business Combination, proper provision shall be made
so that each holder of a Right (except as otherwise provided in this Agreement)
shall thereafter have the right to receive, upon the exercise of each Right,
such number of shares of Common Stock of the Principal Party as shall be equal
to the result obtained by dividing the Exercise Amount in effect prior to the
Business Combination by 50% of the Current Market Price per share of the Common
Stock of such Principal Party immediately prior to the consummation of such
Business Combination. All shares of Common Stock of any Person for which any
Right may be exercised after consummation of a Business Combination as provided
in this Section 13(a) shall, when issued upon exercise thereof in accordance
with this Agreement, be duly and validly authorized and issued, fully paid,
nonassessable, freely tradeable, not subject to liens or encumbrances, and free
of preemptive rights, rights of first refusal or any other restrictions or
limitations on the transfer or ownership thereof of any kind or nature
whatsoever. The Purchase Price per share for such Common Stock immediately
after such Business Combination shall be equal to 50% of the Current Market
Price per share of the Common Stock of such Principal Party immediately prior to
the consummation of such Business Combination.
(b) After consummation of any Business Combination, (i) the Principal
Party shall be liable for, and shall assume, by virtue of such Business
Combination and without the necessity of any further act, all the obligations
and duties of the Company pursuant to this Agreement, (ii) the term "Company" as
used in this Agreement shall thereafter be deemed to refer to such Principal
Party and (iii) such Principal Party shall take all steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common Stock
in accordance with Section 9) in connection with such Business Combination as
necessary to ensure that the provisions
-25-
of this Agreement shall thereafter be applicable, as nearly as reasonably may
be, in relation to the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights.
(c) The Company shall not consummate any Business Combination unless
prior thereto (i) the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance (other than shares reserved for issuance pursuant to this Agreement to
the holders of Rights) to permit the exercise in full of the Rights in
accordance with this Section 13, (ii) the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the fulfillment of the Principal Party's obligations and the terms
as set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable on or after the date of such Business Combination,
the Principal Party, at its own expense, shall (A) prepare and file, if
necessary, a registration statement on an appropriate form under the Securities
Act with respect to the Rights and the securities purchasable upon exercise of
the Rights, (B) use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and remain effective
(with a prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date, (C) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act, (D) use its best efforts to qualify or
register the Rights and the securities purchasable upon exercise of the Rights
under the state securities or "blue sky" laws of such jurisdictions as may be
necessary or appropriate, (E) use its best efforts to list the Rights and the
securities purchasable upon exercise of the Rights on a United States national
securities exchange and (F) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights, (iii) the Company and the
Principal Party shall have furnished to the Rights Agent an opinion of
independent counsel stating that such supplemental agreement is a legal, valid
and binding agreement of the Principal Party enforceable against the Principal
Party in accordance with its terms, and (iv) the Company and the Principal Party
shall have filed with the Rights Agent a certificate of a nationally recognized
firm of independent accountants setting forth the number of shares of Common
Stock of such issuer which may be purchased upon the exercise of each Right
after the consummation of such Business Combination.
(d) The provisions of this Section 13 shall similarly apply to
successive Business Combinations. In the event a Business Combination shall be
consummated at any time after the occurrence of a Triggering Event, the Rights
which have not theretofore been exercised shall thereafter be exercisable for
the consideration and in the manner described in Section 13(a). The provisions
of Section 11(b) of this Agreement shall be applicable to events which occur
after a Business Combination.
(e) Notwithstanding any other provision of this Agreement, no
adjustment to the number or kind of shares (or fractions of a share), cash or
other property for which a Right is exercisable or the number of Rights
outstanding or associated with each share of Common Stock or any similar or
other adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the Rights would have
had absent such adjustment, including, without limitation, the benefits under
Sections 11 and 13, unless the terms of this Agreement are amended so as to
preserve such benefits, provided that this paragraph shall not prevent any
change prior to the Trigger Date permitted by Section 26(a) and provided that
this
-26-
Section 13(e) shall not be deemed to limit or impair the right to engage in
an exchange pursuant to Section 11(c)(2).
(f) The Company covenants and agrees that it shall not effect any
Business Combination if at the time of, or immediately after such Business
Combination, there are any rights, options, warrants or other instruments
outstanding which would diminish or otherwise eliminate the benefits intended to
be afforded by the Rights.
(g) Without limiting the generality of this Section 13, in the event
the nature of the organization of any Principal Party shall preclude or limit
the acquisition of Common Stock of such Principal Party upon exercise of the
Rights as required by Section 13(a) as a result of a Business Combination, it
shall be a condition to such Business Combination that such Principal Party
shall take such steps (including, but not limited to, a reorganization) as may
be necessary to ensure that the benefits intended to be derived under this
Section 13 upon the exercise of the Rights are assured to the holders thereof.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractional Rights or
to distribute Rights Certificates which evidence fractional Rights.
(b) The Company shall permit the issuance and trading of Preferred
Stock in fractional shares such that the smallest fractional share tradeable at
any particular time shall equal the reciprocal of the Adjustment Number in
effect at that particular time. The Company shall not be required to issue
fractions of shares of Preferred Stock (other than fractions which are integral
multiples of the reciprocal of the Adjustment Number) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of the
reciprocal of the Adjustment Number). Fractions of shares of Preferred Stock
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, provided that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the Preferred Stock. In lieu
of fractional shares of Preferred Stock that are not integral multiples of the
reciprocal of the Adjustment Number, the Company may at its option (i) issue
scrip or warrants in registered form (either represented by a certificate or
uncertificated) or in bearer form (represented by a certificate) which shall
entitle the holder to receive the reciprocal of the Adjustment Number of one
share of Preferred Stock upon the surrender of such scrip or warrants
aggregating the reciprocal of the Adjustment Number of one share of Preferred
Stock, or (ii) pay to the registered holders of Rights Certificates at the time
such Rights Certificates are exercised as provided in this Agreement an amount
in cash equal to the same fraction of the relevant closing price of a share of
Preferred Stock. For purposes of this Section 14(b), the relevant closing price
of a share of Preferred Stock shall be the closing price of a share of Preferred
Stock (as determined pursuant to the second sentence of the definition of
"Current Market Price" in Section 1) for the Trading Day immediately prior to
the date of such exercise.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or Common Equivalent Shares or to distribute certificates which
evidence fractional shares
-27-
of Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Rights Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the product derived by multiplying (x) the subject
fraction, by (y) the closing price of a share of Common Stock (as determined
pursuant to the second sentence of the definition of "Current Market Price" in
Section 1) for the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by his acceptance thereof expressly waives
any right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as otherwise provided in this Agreement).
Section 15. Rights of Action. Except as otherwise provided, all
rights of action in respect of this Agreement are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution
Date, any registered holders of associated Common Stock); and any registered
holder of any Rights Certificate (or, prior to the Distribution Date, any share
of associated Common Stock), without the consent of the Rights Agent or of the
holder of any other Right, may, on his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his rights pursuant to
this Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Rights Holders Concerning Transfer and
Ownership of Rights. 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 Common Stock;
(b) after the Distribution Date, the Rights Certificates will be
transferable on the registry books of the Rights Agent only if surrendered at
the principal stock transfer office of the Rights Agent, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificate or the associated Common Stock certificate
made by anyone other than the Company, the transfer agent for the stock
purchasable with such Right or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary.
Section 17. Rights Holder Not Deemed a Stockholder. No holder, as
such, of any Rights Certificate shall be entitled to vote or to receive
dividends or distributions or shall be deemed for any purpose the holder of
Preferred Stock or any other securities, cash or other property which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything
-28-
contained in this Agreement or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company, including, without limitation, any right (i) to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, (ii) to give or withhold consent to any corporate action,
(iii) to receive notice of meetings or other actions affecting stockholders
(except as provided in Section 24), (iv) to receive dividends, distributions or
subscription rights, (v) to institute, as a holder of Preferred Stock or other
securities issuable on exercise of the Rights represented by any Rights
Certificate, any derivative action on behalf of the Company, or otherwise, until
and only to the extent that the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions of this
Agreement.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith, willful misconduct or breach of this Agreement on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises.
The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Preferred Stock or Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document reasonably believed by it to be genuine and to be signed,
executed and, when necessary, verified or acknowledged, by the proper Person or
Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer 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 document or any further act on the part
of any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificate so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificate either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
-29-
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the 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 opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or any
Affiliate or Associate of an Acquiring Person or the determination of Current
Market Price) be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be specifically prescribed in this Agreement) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman,
the Chief Executive Officer, the President, the Chief Financial Officer, the
General Counsel, the Treasurer, any Vice President or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for the
negligence, bad faith, willful misconduct or breach of this Agreement by it or
its attorneys or agent.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery of this
Agreement (except the due execution and delivery of this Agreement by the Rights
Agent) or in respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any change or
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13 or 23 or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Rights Certificates after actual
notice of any change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as
-30-
to the authorization or reservation of any shares of Preferred Stock, Common
Stock or other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock, Common Stock or
other securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performance 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 the
Chairman, the Chief Executive Officer, the President, the Chief Financial
Officer, the General Counsel, the Treasurer, any Vice President or the 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.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though the Rights Agent were not
serving as such under this Agreement. Nothing in this Agreement shall preclude
the Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon notice of 30 days in writing mailed to the Company and to each
transfer agent of the Common Stock or Preferred Stock by registered or certified
mail and to the holders of the Rights Certificates by either (i) first-class
mail or (ii) by disclosure in a periodic report of the Company required to be
filed under the Exchange Act, any permitted report under the Exchange Act, a
press release of the Company or in any proxy or other communication of the
Company with its stockholders. The Company may remove the Rights Agent or any
successor Rights Agent upon notice of 30 days in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail, and to
the holders of the Rights Certificates by either (i) first-class mail or (ii) by
disclosure in a periodic report of the Company required to be filed under the
Exchange Act, any permitted report under the Exchange Act, a press release of
the Company or in any proxy or other communication of the Company with its
stockholders. If the Rights Agent shall resign or be removed or shall otherwise
become incapable
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of acting, the Company shall appoint a successor to the Rights Agent.
Notwithstanding any other provision of this Agreement, in no event shall the
resignation or removal of a Rights Agent be effective until a successor Rights
Agent shall have been appointed and have accepted such appointment. If the
Company shall fail to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by any holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the incumbent Rights Agent or the
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (i) a
corporation organized and doing business under the laws of the United States or
of the State of New York (or of any other state of the United States so long as
such corporation is authorized to conduct a banking, corporate trust or stock
transfer business in the State of New York) in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (ii) a subsidiary of a corporation described
in clause (i) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for such purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock or Preferred Stock; the Company shall also either (i) mail a
notice thereof in writing to the registered holders of the Rights Certificates
or (ii) make a disclosure with respect thereto in a periodic report of the
Company required to be filed under the Exchange Act, any permitted report under
the Exchange Act, a press release of the Company or in any proxy or other
communication of the Company with its stockholders. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights Certificates to the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by a majority of the Board of
Directors of the Company to reflect any adjustment or change in the Purchase
Price per share and the number or kind or class of securities, cash or other
property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the tenth day after the Stock Acquisition Date
and (ii) the Expiration Date, redeem all but not less than all of the then-
outstanding Rights at a redemption price of $.001 per Right (the "Redemption
Price") appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement. The Company
may, at its option, pay the Redemption Price in cash, shares (including
fractional shares) of Common Stock (based on the Current Market Price of the
Common Stock at the time of redemption) or any other form of
-32-
consideration deemed appropriate by the Board of Directors. The redemption of
the Rights by the Board of Directors of the Company may be made effective at
such time, on such basis and with such conditions as the Board of Directors of
the Company in its sole discretion may establish.
(b) At the time and date of effectiveness set forth in any resolution
of the Board of Directors of the Company ordering the redemption of the Rights,
without any further action and without any further notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price; provided, however, that such
resolution of the Board of Directors of the Company may be revoked, rescinded or
otherwise modified at any time prior to the time and date of effectiveness set
forth in such resolution, in which event the right to exercise will not
terminate at the time and date originally set for such termination by the Board
of Directors of the Company. The Company shall promptly give public notice of
any such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. The
Company shall also give notice of such redemption to the Rights Agent. The
Company may elect to give notice of such redemption 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 issuance of Rights Certificates, on the registry books of the transfer
agent for the Common Stock. Any notice which is mailed in the manner provided
in this Agreement shall be deemed given, whether or not the holder receives the
notice. In connection with any redemption permitted under this Section 23, the
Company may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the
Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the issuance of the Rights Certificates,
on the registry books of the transfer agent for the Common Stock, and upon such
action, all outstanding Rights Certificates shall be null and void without any
further action by the Company. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23, and other
than in connection with the purchase of shares of Common Stock prior to the
earlier of the tenth day after the Stock Acquisition Date and the Expiration
Date.
Section 24. Notice of Certain Events. In case the Company, on or
after the Distribution Date, shall propose to (a) pay any dividend payable in
stock of any class to the holders of its Common Shares or to make any other
distribution to the holders of its Common Shares (other than a regular periodic
cash dividend at an annual rate not in excess of 125% of the annualized rate of
the cash dividend paid on the Common Shares during the immediately preceding
fiscal year), or (b) offer to the holders of its Common Shares rights, options
or warrants to subscribe for or to purchase any additional shares of Common
Shares or shares of stock of any class or any other securities, rights or
options, or (c) effect any reclassification of the Common Shares (other than a
reclassification involving only the subdivision of outstanding shares of Common
Shares, a change in the par value of such Common Shares or a change from par
value to no par value), or (d) directly or indirectly effect any consolidation
or merger into or with, or effect any sale, lease, exchange, or other transfer
or disposition (or to permit one or more of its Subsidiaries to effect any sale,
lease, exchange or other transfer or disposition), in one transaction or a
series of related transactions, of more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to, any other Person, or
(e) effect the liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to each holder of a Right, in accordance
with
-33-
Section 25, a notice of such proposed action, which shall specify any
record date for the purposes of such stock dividend or distribution of rights,
or the date on which such reclassification, consolidation, merger, sale, lease,
exchange, transfer, disposition, liquidation, dissolution or winding up is to
take place and if such holders will or may participate therein, the date of
participation therein by the holders of Common Shares, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (a) or (b) above at least 20 days prior to the record date for
determining holders of the Common Shares for purposes of such action, and in the
case of any such other action, at least 20 days prior to the date of the taking
of such proposed action or the date of participation therein, if any, by the
holders of Common Shares, whichever shall be the earlier. The failure to give
notice as required by this Section 24 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
In case any Triggering Event or Business Combination shall occur,
then, in any such case, the Company shall as soon as practicable thereafter give
to each holder of a Rights Certificate, in accordance with Section 25, notice of
the occurrence of such Triggering Event or Business Combination, which shall
specify the Triggering Event or Business Combination and include a description
of the consequences of such event to holders of Rights under Section 11 or 13.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Xxxxxx Xxxxxx VisionCare, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
With a copy to: Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx, Esq.
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company (or, if no Rights Certificates have been issued, if sent by
-34-
first-class mail, postage prepaid, addressed to each holder of a certificate
representing shares of Common Stock at the address of such holder as shown on
the Company's Common Stock registry books).
Section 26. Supplements and Amendments.
(a) At any time prior to the Stock Acquisition Date, a majority of
the Board of Directors of the Company may, and the Rights Agent shall, if so
directed, supplement or amend any provision of this Agreement, including,
without limitation, the Beneficial Ownership percent as set forth in Section 1
at which a Person becomes an Acquiring Person and the definition of Exempt
Person as set forth in Section 1 to include any Person in addition to the
Persons described therein, without the approval of any holders of Rights.
(b) Except as otherwise provided in Section 26(c):
(1) 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 or the Company, or as may be
necessary or advisable in the administration of this
Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and
(ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a
determination to redeem or not redeem the Rights, to
exchange or not exchange the Rights for Common Stock, or to
amend or supplement this Agreement).
(2) All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done
or made by the Board of Directors of the Company in good
faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all
other Persons and (y) not subject the Board of Directors of
the Company to any liability to the holders of the Rights.
(c) From and after the Stock Acquisition Date:
(1) No amendment or other change shall be made in this Agreement
or the terms of the Rights which is inconsistent with the
provisions set forth in Section 11(j) or Section 13(f) or
which would otherwise adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring
Person or any other Person in whose hands the Rights are
void under the provisions of Section 7(e)). Notwithstanding
the foregoing, a majority of the Board of Directors may, and
the Rights Agent shall, if so directed, amend
-35-
this Agreement prior to the Stock Acquisition Date effective
upon the Stock Acquisition Date.
(2) The Board of Directors of the Company shall not be entitled
to exercise the powers specified in Section 26(b) after the
Stock Acquisition Date unless the Board of Directors can
establish by clear and convincing evidence that its action
satisfies the requirement in Section 26(c)(1).
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of Rights any legal or equitable right, remedy
or claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights.
Section 29. Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be valid and
enforceable under applicable law, but if any provision of this Agreement shall
be held to be prohibited by or unenforceable under applicable law, (i) such
provision shall be applied to accomplish the objectives of the provision as
originally written to the fullest extent permitted by law and (ii) all other
provisions of this Agreement shall remain in full force and effect. No rule of
strict construction, rule resolving ambiguities against the person who drafted
the provision giving rise to such ambiguities, or other such rule of
interpretation shall be applied against any party with respect to this
Agreement.
Section 30. Governing Law. This Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the internal laws of Delaware applicable to
contracts to be made and performed entirely within Delaware.
Section 31. Counterparts. This Agreement may be executed in
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and both such counterparts shall together constitute but one and
the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Agreement.
Section 33. Grammatical Construction. Throughout this Agreement,
where such meanings would be appropriate, (a) any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms (e.g., references
to "he" shall also include "she" and "it" and references to "who" and "whom"
shall also include "which") and (b) the plural form of nouns and pronouns shall
include the singular and vice-versa.
-36-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
XXXXXX XXXXXX VISIONCARE, INC.
By:
------------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President, Finance, and
Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
By:
------------------------------------------------
Name:
Title:
-38-
Exhibit A
---------
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF JUNIOR PARTICIPATING PREFERRED STOCK, SERIES A
OF
XXXXXX XXXXXX VISIONCARE, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
Xxxxxx Xxxxxx VisionCare, Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware, in accordance with
the provisions of Section 151 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, the Board of Directors
on November 16, 1999, adopted the following resolution creating a series of
50,000 shares of Preferred Stock designated as Junior Participating Preferred
Stock, Series A:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by ARTICLE FOUR of the Certificate of Incorporation and out of the
Preferred Stock authorized therein, the Board hereby authorizes that a series of
Preferred Stock of the Corporation be, and it hereby is, created and approved
for issuance in accordance with the Rights Agreement dated as of November 16,
1999, between the Corporation and American Stock Transfer & Trust Company,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof be, and hereby are,
as follows:
Section 1. Designation and Amount. The shares of such series
----------------------
shall be designated as "Junior Participating Preferred Stock, Series A" (the
"Series A Preferred Stock") and the number of shares constituting such series
shall be 50,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series A Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior
to the shares of Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock, in preference to
the holders of Common Stock and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the fifteenth day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a)
$25.00 or (b) the Adjustment Number (as defined below) times the
aggregate per share amount of all cash dividends, and the Adjustment
Number times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. The "Adjustment Number" shall initially be
1000. In the event the Corporation shall at any time after November
26, 1999 (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock
into a greater number of shares or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $25.00 per share on the Series A
Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Series A Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend
-2-
Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be no more than 30 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
-------------
Preferred Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the
holder thereof to a number of votes equal to the Adjustment Number (as
adjusted from time to time pursuant to Section 2(A) hereof) on all
matters submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, by law or in the
Certificate of Incorporation or By-Laws, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock and
any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(i) If at any time dividends on any Series A Preferred
Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall xxxx the
beginning of a period (herein called a "default period") that shall
extend until such time when all accrued and unpaid dividends for all
previous quarterly dividend periods and for the current quarterly
period on all shares of Series A Preferred Stock then outstanding
shall have been declared and paid or set apart for payment. During
each default period, (1) the number of Directors shall be increased by
two, effective as of the time of election of such Directors as herein
provided, and (2) the holders of Series A Preferred Stock and the
holders of other Preferred Stock upon which these or like voting
rights have been conferred and are exercisable (the "Voting Preferred
Stock") with dividends in arrears equal to six quarterly dividends
thereon, voting as a class, irrespective of series, shall have the
right to elect such two Directors.
-3-
(ii) During any default period, such voting right of the
holders of Series A Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section
3(C) or at any annual meeting of stockholders, and thereafter at
annual meetings of stockholders, provided that such voting right shall
not be exercised unless the holders of at least one-third in number of
the shares of Voting Preferred Stock outstanding shall be present in
person or by proxy. The absence of a quorum of the holders of Common
Stock shall not affect the exercise by the holders of Voting Preferred
Stock of such voting right.
(iii) Unless the holders of Voting Preferred Stock shall,
during an existing default period, have previously exercised their
right to elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than 10%
of the total number of shares of Voting Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting
of the holders of Voting Preferred Stock, which meeting shall
thereupon be called by the Chairman of the Board, the President, an
Executive Vice President, a Vice President or the Secretary of the
Corporation. Notice of such meeting and of any annual meeting at
which holders of Voting Preferred Stock are entitled to vote pursuant
to this paragraph (C)(iii) shall be given to each holder of record of
Voting Preferred Stock by mailing a copy of such notice to him at his
last address as the same appears on the books of the Corporation.
Such meeting shall be called for a time not earlier than 10 days and
not later than 60 days after such order or request or, in default of
the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than 10%
of the total number of shares of Voting Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no such
special meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual meeting of
the stockholders.
(iv) In any default period, after the holders of Voting
Preferred Stock shall have exercised their right to elect Directors
voting as a class, (x) the Directors so elected by the holders of
Voting Preferred Stock shall continue in office until their successors
shall have been elected by such holders or until the expiration of the
default period, and (y) any vacancy in the Board of Directors may be
filled by vote of a majority of the remaining Directors theretofore
elected by the holders of the class or classes of stock which elected
the Director whose office shall have become vacant. References in this
paragraph (C) to Directors elected by the holders of a particular
class or classes of stock shall include Directors elected by such
Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Voting Preferred Stock as a class to
elect Directors shall cease, (y) the term of any Directors elected by
the holders of Voting Preferred Stock as a class shall terminate and
(z) the number of Directors shall be such number as may be
-4-
provided for in the Certificate of Incorporation or By-Laws
irrespective of any increase made pursuant to the provisions of
paragraph (C) of this Section 3 (such number being subject, however,
to change thereafter in any manner provided by law or in the
Certificate of Incorporation or By-Laws). Any vacancies in the Board
of Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining
Directors.
(C) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
--------------------
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on
a parity with the Series A Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective
-5-
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred
-----------------
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of preferred stock and may be reissued as part of a new series
of preferred stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation or By-laws or otherwise required by
law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
--------------------------------------
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (A) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the greater of (i) $100 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, and (ii) an aggregate amount per
share, equal to the Adjustment Number (as adjusted from time to time pursuant to
Section 2(A) hereof) times the aggregate amount to be distributed per share to
holders of Common Stock, or (B) to the holders of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
Section 7. Consolidation, Merger, etc. In case the Corporation
---------------------------
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Series A Preferred Stock then outstanding shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment Number (as
adjusted from time to time pursuant to Section 2(A) hereof) times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged.
Section 8. No Redemption. The shares of Series A Preferred Stock
-------------
shall not be redeemable.
-6-
Section 9. Amendment. The Certificate of Incorporation of the
---------
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury this ___ day
of November, 1999.
__________________________________________
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Exhibit B
---------
[Form of Rights Certificate]
Certificate No. R- __________Rights
NOT EXERCISABLE AFTER NOVEMBER 26, 2009, OR EARLIER IF NOTICE OF
REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION
OR EXCHANGE, AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT.
Rights Certificate
XXXXXX XXXXXX VISIONCARE, 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 November 26, 1999 (the "Rights Agreement")
between Xxxxxx Xxxxxx VisionCare, Inc. a Delaware corporation (the "Company"),
and American Stock Transfer & Trust Company (the "Rights Agent"), unless notice
of redemption or exchange shall have been previously given by the Company, to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M. Chicago, Illinois
time) on November 26, 2009, at the principal corporate trust office of the
Rights Agent, or at the office of its successor as Rights Agent, one one-
thousandth of a fully paid nonassessable share of the Junior Participating
Preferred Stock, Series A, par value $.01 per share, of the Company (the
"Preferred Stock"), at a purchase price (the "Purchase Price") of $180.00 per
one one-thousandth share, upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase duly executed. The Purchase
Price may be paid in cash or by certified bank check or bank draft payable to
the order of the Company.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates.
Capitalized terms used but not defined in this Rights Certificate that are
defined in the Rights Agreement shall have the same meanings ascribed to them in
the Rights Agreement. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned office of the
Rights Agent.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Preferred Stock or other securities, cash or other property which
may be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
If the Rights evidenced by this Rights Certificate are or were
formerly beneficially owned, on or after the earlier of the Distribution Date
and the Trigger Date, by (i) an Acquiring Person or any Associate or Affiliate
of an Acquiring Person, (ii) a direct or indirect transferee of an Acquiring
Person (or of any Associate or Affiliate of an Acquiring Person) who becomes or
becomes entitled to be a transferee after the Acquiring Person becomes such, or
(iii) a direct or indirect transferee of an Acquiring Person (or of an Associate
or Affiliate of such Acquiring Person) who becomes or becomes entitled to be a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a direct or indirect transfer
(whether or not for consideration) from the Acquiring Person (or from an
Associate or Affiliate of such Acquiring Person) to holders of equity interests
in such Acquiring Person (or to holders of equity interests in any Associate or
Affiliate of such Acquiring Person) or to any Person with whom the Acquiring
Person (or an Associate or Affiliate of such Acquiring Person) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a direct or indirect transfer which a majority of the Board of
Directors of the Company determines is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of Section
7(e) of the Rights Agreement, such Rights shall, immediately upon the occurrence
of a Triggering Event and without any further action, be null and void and no
holder of such Rights (including any subsequent holder) shall have any rights
whatsoever with respect to such Rights whether under the Rights Agreement or
otherwise, provided, however, that, in the case of transferees under clause (ii)
or clause (iii) above, any Rights beneficially owned by such transferee shall be
null and void only if and to the extent such Rights were formerly beneficially
owned by a Person who was, at the time such Person beneficially owned such
Rights, or who later became, an Acquiring Person or an Affiliate or Associate of
such Acquiring Person.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal corporate trust office of the Rights Agent, may
be exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of shares of Preferred Stock or other property as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered entitled such holder
to purchase. If this Rights Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (a) may be redeemed by the Board of Directors of
the Company at its option at a redemption price of $0.001 per Right, subject to
adjustment, payable, at the election of the Company, in cash or shares
(including fractional shares) of Common Stock or such other consideration as the
Board of Directors of the Company may determine, at any time prior to the
earlier of (i) the tenth day after the Stock Acquisition Date and (ii) the
Expiration Date, or (b) may be exchanged by the Board
-2-
of Directors of the Company, at its option, in whole or in part, for shares of
the Company's Common Stock on a one-for-one basis, at any time after the Trigger
Date and prior to (i) any Person (other than an Exempt Person), together with
all Affiliates and Associates of such Person, becoming the Beneficial Owner of
50% or more of the Common Stock then outstanding and (ii) the occurrence of a
Business Combination.
No fractional shares of Preferred Stock (other than fractions that are
integral multiples of one one-thousandth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depository receipts) are
required to be issued upon the exercise of any Right or Rights evidenced hereby,
but in lieu thereof the Company may elect to (i) evidence fractional shares by
depositary receipts, (ii) issue scrip or warrants in registered form (either
represented by a certificate or uncertificated) or in bearer form (represented
by a certificate) which shall entitle the holder to receive a full share upon
the surrender of such scrip or warrants aggregating a full share, or (iii) make
a cash payment, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or to receive dividends on, or shall be deemed for any purpose the holder
of, Preferred Stock or any other securities, cash or property which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or this Certificate be construed to confer upon the holder
hereof, 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, 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 to institute, as a holder of
Preferred Stock or other securities issuable on the exercise of the Rights
represented by this Certificate, any derivative action, or otherwise, until and
only to the extent the Right or Rights evidenced by this Rights Certificate
shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
* * * * *
-3-
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _______ __, _____.
XXXXXX XXXXXX VISIONCARE, INC.
By: ________________________________
Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
As Rights Agent
By: __________________________
Authorized Officer
-4-
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED the undersigned ________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
_________ Rights evidenced by this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
________________________ with a power of Attorney to transfer the said Rights
and a Rights Certificate evidencing such Rights on the books of
________________, with full power of substitution.
A new Rights Certificate evidencing the remaining balance, if any, of such
Rights not hereby sold, assigned and transferred shall be mailed to and
registered in the name of the undersigned unless such person requests that such
Rights Certificate be registered in the name of and mailed to (complete only if
a Rights Certificate evidencing any remaining balance of Rights is to be
registered in a name other than the undersigned):
Please insert Social Security or
other identifying number of transferee: ________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate or any Rights evidenced hereby [_] are [_]
are not being sold, assigned and transferred by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [_] did [_] did not acquire any of the Rights evidenced by this
Rights Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________________________ ____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution with
membership in a recognized signature guarantee medallion program as approved by
the Stock Transfer Association.
NOTICE
The signature on the foregoing Form of Assignment must correspond to
the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an assignment or other transfer of this Rights Certificate or any Rights
evidenced hereby, will affix a legend to that effect on any Rights Certificate
issued in whole or partial exchange for this Rights Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights represented by this Rights Certificate)
To: Xxxxxx Xxxxxx VisionCare, Inc.
The undersigned hereby irrevocably elects to exercise ____________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock or other securities, cash or other property issuable upon the
exercise of such Rights and requests that certificates for such shares or other
securities be issued in the name of, and such cash or other property be paid to:
Please insert social security
or other identifying number: ________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
A new Rights Certificate evidencing the remaining balance, if any, of
such Rights not hereby exercised shall be mailed to and registered in the name
of the undersigned unless such person requests that such Rights Certificate be
registered in the name of and mailed to (complete only if Rights Certificate
evidencing any remaining balance of Rights is to be registered in a name other
than the undersigned):
Please insert social security
or other identifying number: ________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [_] are [_] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned [_] did [_] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________________________ ____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution with
membership in a recognized signature guarantee medallion program as approved by
the Stock Transfer Association.
NOTICE
The signature on the foregoing Form of Election to Purchase must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Election
to Purchase is not completed, the Company will deem the beneficial owner of the
Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and, in the
case of an assignment or other transfer of this Rights Certificate or any Rights
evidenced hereby, will affix a legend to that effect on any Rights Certificate
issued in whole or partial exchange for this Rights Certificate.
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On November 16, 1999, the Board of Directors of Xxxxxx Xxxxxx
VisionCare, Inc. (the "Company") authorized the issuance of one preferred share
purchase right (a "Right") for each outstanding share of common stock, par value
$.01 per share (the "Common Shares"), of the Company. The distribution is
payable to stockholders of record at the close of business on November 26, 1999
(the "Record Date"), and with respect to all Common Shares that become
outstanding after the Record Date and prior to the earliest of the Distribution
Date (as defined below), the redemption of the Rights, the exchange of the
Rights, and the expiration of the Rights (and, in certain cases, following the
Distribution Date). Each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share of Junior Participating Preferred
Stock, Series A, par value $.01 per share, of the Company (the "Preferred
Shares") at a price of $180.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
The Rights will be evidenced by Common Share certificates and not by
separate certificates until the earlier to occur of (i) the tenth day after a
person or group other than certain exempt persons (an "Acquiring Person"),
together with persons affiliated or associated with such Acquiring Person, has
acquired, or obtained the right to acquire, beneficial ownership of 15% or more
of the outstanding Common Shares (a "Triggering Event") and (ii) the tenth
business day after the commencement or public disclosure of an intention to
commence a tender offer or exchange offer by a person other than an exempt
person if, upon consummation of the offer, such person could acquire beneficial
ownership of 15% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date").
Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), the Rights will be transferred with and only with the
Common Shares, and the surrender for transfer of any certificate for Common
Shares will also constitute the transfer of the Rights associated with such
Common Shares. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights will first become exercisable after the Distribution Date
(unless sooner redeemed or exchanged). 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. The
Rights will expire at the close of business on November 26, 2009 (the
"Expiration Date"), unless earlier redeemed or exchanged by the Company as
described below.
In the event that a person becomes an Acquiring Person, each Right
(other than Rights that are or were beneficially owned by the Acquiring Person
and certain related persons and transferees, which will thereafter be void)
shall thereafter be exercisable not for Preferred Shares, but for a number of
Common Shares having a market value of two times the exercise price of the
Right. In the event that, at the time or after a person becomes an Acquiring
Person, the Company is involved in a merger or other business combination in
which (i) the Company is not the surviving corporation, (ii) Common Stock is
changed or exchanged, or (iii) 50% or more of the Company's consolidated assets
or earning power are sold, then each Right (other than Rights that are or were
owned by the Acquiring Person and certain related persons and transferees, which
will thereafter be void) shall thereafter be exercisable for a number of shares
of common stock of the acquiring company having a market value of two times the
exercise price of the Right.
In addition, at any time after a person has become an Acquiring
Person, but before a person has acquired beneficial ownership of 50% or more of
the outstanding Common Shares, the Company may elect to exchange all or part of
the Rights (excluding void Rights held by an Acquiring Person and certain
related persons and transferees) for Common Shares on a one-for-one basis.
The Purchase Price payable, and the number and kind of securities,
cash or other property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend or distribution on, or a subdivision or combination of, the Common
Shares, (ii) upon the grant to holders of the Common Shares of rights, options
or warrants to subscribe for Common Shares or securities convertible into Common
Shares at less than the current market price, (iii) upon the distribution to
holders of the Common Shares of securities, cash, evidences of indebtedness or
assets (excluding regular periodic cash dividends out of earnings or retained
earnings) and (iv) in connection with recapitalizations of the Company or
reclassifications of the Common Shares.
No fractional Preferred Shares will be issued (other than fractions
which are integral multiples of one one-thousandth of a Preferred Share, which
may, at the election of the Company, be evidenced by depositary receipts) and in
lieu thereof, an adjustment in cash will be made based on the market price of
the Preferred Shares on the last trading date prior to the date of exercise.
At any time prior to the earlier of (i) the tenth day after the public
announcement that a person has become an Acquiring Person and (ii) the
Expiration Date, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $0.001 per Right (the "Redemption Price").
The Redemption Price will be payable in cash, shares (including fractional
shares) of Common Stock or any other form of consideration deemed appropriate by
the Board of Directors. Immediately upon action of the Board of Directors
ordering redemption of the Rights, the ability of holders to exercise the Rights
will terminate and the only rights of such holders will be to receive the
Redemption Price.
At any time prior to the public announcement that a person has become
an Acquiring Person, the Board of Directors of the Company may amend or
supplement the Rights Agreement
-2-
without the approval of the Rights Agent or any holder of the Rights.
Thereafter, the Rights Agreement may not be amended or changed in any manner
which would adversely affect the interests of the holders of the Rights (other
than an Acquiring Person or an affiliate or associate thereof).
The Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment equal to the greater of $25 per share and 1,000 times
the dividend declared per Common Share. In the event of liquidation, the
holders of the Preferred Shares will be entitled to a minimum preferential
liquidation payment equal to the greater of $100 per share and 1,000 times the
payment made per Common Share. Each Preferred Share will have 1,000 votes per
share, voting together with the Common Shares. In the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 1,000 times the amount received per
Common Share.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board of Directors, except pursuant to an offer
conditioned on a substantial number of Rights being acquired. The Rights should
not interfere with any merger or other business combination approved by the
Board of Directors prior to the tenth day after the public announcement that a
person has become an Acquiring Person, because until such time the Rights may
generally be redeemed by the Company at $0.001 per Right.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to an Application for Registration on Form 8-A
and as an Exhibit to the Company's Current Report on Form 8-K. A copy of the
Rights Agreement is available free of charge from the Company. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
-3-
