EXHIBIT 10.3
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GENTIVA HEALTH SERVICES, INC.
and
, as Rights Agent
RIGHTS AGREEMENT
Dated as of
, 2000
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TABLE OF CONTENTS
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Section 1. Certain Definitions...................................................................1
Section 2. Appointment of Rights Agent...........................................................9
Section 3. Issue of Right Certificates...........................................................9
Section 4. Form of Right Certificates...........................................................11
Section 5. Countersignature and Registration....................................................13
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates..........................13
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights........................15
Section 8. Cancellation and Destruction of Right Certificates...................................17
Section 9. Reservation and Availability of Shares of Capital Stock..............................18
Section 10. Preferred Stock Record Holders.......................................................20
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights...................20
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...........................31
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.................31
Section 14. Fractional Rights and Fractional Shares..............................................35
Section 15. Rights of Action.....................................................................37
Section 16. Agreement of Right Holders...........................................................37
Section 17. Right Certificate Holder Not Deemed a Stockholder....................................38
Section 18. Concerning the Rights Agent..........................................................38
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Section 19. Merger or Consolidation or Change of Name of Rights Agent............................39
Section 20. Duties of Rights Agent...............................................................40
Section 21. Change of Rights Agent...............................................................43
Section 22. Issuance of New Right Certificates...................................................44
Section 23. Redemption and Termination...........................................................45
Section 24. Exchange.............................................................................46
Section 25. Notice of Certain Events.............................................................48
Section 26. Notices..............................................................................49
Section 27. Supplements and Amendments...........................................................49
Section 28. Successors...........................................................................50
Section 29. Determinations and Actions by the Board of Directors.................................50
Section 30. Benefits of This Agreement...........................................................51
Section 31. Severability.........................................................................51
Section 32. Governing Law........................................................................51
Section 33. Counterparts.........................................................................51
Section 34. Descriptive Headings.................................................................51
EXHIBIT A Certificate of Designation......................................................A-1
EXHIBIT B Form of Right Certificate.......................................................B-1
EXHIBIT C Summary of Rights to Purchase Preferred Stock...................................C-1
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RIGHTS AGREEMENT
Rights Agreement, dated as of , 2000 (the "Agreement"),
between Gentiva Health Services, Inc., a Delaware corporation (the "Company"),
and ___________________, a _______________ corporation, as Rights Agent (the
"Rights Agent").
W I T N E S S E T H :
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WHEREAS, the Board of Directors of the Company on , 2000 (the
"Rights Declaration Date") authorized and directed an issuance (the "Issuance")
of one Right in respect of each share of the Common Stock, par value $0.10 per
share, of the Company (the "Common Stock"), to be issued on the date (the
"Issuance Date") of the split-off of the shares of Common Stock of the Company
to the stockholders of Olsten Corporation (the "Split-Off"), and has authorized
and directed the issuance of one Right (as such number may hereafter be adjusted
pursuant to the provisions hereof) in respect of each share of Common Stock
issued (whether originally issued or delivered from the Company's treasury
stock) between the Issuance Date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined) (PROVIDED, HOWEVER, that
Rights may be issued with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the Expiration Date in
accordance with Section 22), each Right initially representing the right to
purchase, under certain circumstances, one one-thousandth of a share of Series A
Junior Participating Preferred Stock of the Company having the rights, powers
and preferences set forth in the Certificate of Designation attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set forth
(the "Rights");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together
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with all Affiliates (as such term is hereinafter defined) and
Associates (as such term is hereinafter defined) of such Person, shall
be the Beneficial Owner (as such term is hereinafter defined) of
securities of the Company constituting a Substantial Block (as such
term is hereinafter defined), but shall not include (i) the Company or
any Subsidiary of the Company, in each case, including, without
limitation, in its fiduciary capacity, any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person organized,
appointed or established by the Company or any Subsidiary of the
Company for or pursuant to the terms of any such plan; (ii) any Person
who or which, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of a Substantial Block solely as a
result of a change in the aggregate number of shares of Voting Stock
outstanding since the last date on which such Person acquired
Beneficial Ownership of any shares of the Voting Stock constituting all
or a portion of such Substantial Block; and (iii) any Person who or
which, together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of a Substantial Block in the good faith
belief that such acquisition would not (x) cause such Person and its
Affiliates and Associates to become the Beneficial Owner of a
Substantial Block and such Person relied in good faith in computing the
percentage of its voting power on publicly filed reports or documents
of the Company which are inaccurate or out-of-date or (y) otherwise
cause a Distribution Date or the adjustment provided for in Section
11(a) to occur; PROVIDED, HOWEVER, that the Olsten Stockholders shall
not be deemed to be an Acquiring Person unless and until the Olsten
Stockholders acquire beneficial ownership of shares of Voting Stock
after the date hereof that would make the Olsten Stockholders the
Beneficial Owner of the Grandfathered Percentage or more of shares of
Voting Stock then outstanding. Notwithstanding clause (ii) or (iii) of
the prior sentence, if any Person that is not an Acquiring Person due
to such clause (ii) or (iii) does not cease to be the Beneficial Owner
of a Substantial Block by the close of business on the fifth Business
Day after notice from the Company (the date of notice being the first
day) that such Person is the Beneficial Owner of a Substantial Block,
such Person shall, at the end of such five Business Day period, become
an Acquiring Person (and such clause (ii) or (iii) shall no longer
apply to such Person). For purposes of this definition, the
determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Com-
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pany, acting by a vote of those directors of the Company whose approval
would be required to redeem the Rights under Section 23.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as a result of an acquisition of Common Stock by the Company
which, by reducing the number of shares of Common Stock outstanding,
increases the proportionate number of shares of Common Stock
beneficially owned by such Person to 10% or more of the shares of
Common Stock of the Company then outstanding; provided, HOWEVER, that
if a Person shall become the Beneficial Owner of 10% or more of the
shares of Common Stock of the Company then outstanding as a result of
an acquisition of Common Stock by the Company and shall, after such
acquisition of Common Stock by the Company, become the Beneficial Owner
of any additional Common Stock of the Company (other than pursuant to a
stock split, stock dividend or similar transaction) and immediately
thereafter be the Beneficial Owner of 10% or more of the shares of
Common Stock then outstanding, then such Person shall be deemed to be
an "Acquiring Person".
(b) "Act" shall have the meaning set forth in Section 9(c)
hereof.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof.
(e) "Agreement" shall have the meaning set forth in the
introduction hereto.
(f) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates has, directly or indirectly, the
right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the
occurrence of an event) pursuant to any agreement, arrangement
or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights,
warrants or options,
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or otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own,"
(1) securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, (2) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering
Event or (3) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event, which Rights
were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) hereof ("Original Rights") or
pursuant to Section 11(i), Section 11(p) or Section 22 hereof
in connection with an adjustment made with respect to Original
Rights; or
(ii) which such Person or any of such Person's
Affiliates or Associates has, directly or indirectly, the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act) or has a "pecuniary
interest" or an "indirect pecuniary interest" in (as
determined pursuant to Rule 16a-1(a)(2) of the General Rules
and Regulations under the Exchange Act), in each case
including pursuant to any agreement, arrangement or
understanding (whether or not in writing); PROVIDED, HOWEVER,
that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph
(ii) if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy given
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not then reportable
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to subpara-
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graph (ii) of this paragraph (f)) or disposing of any
securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition
shall cause a Person ordinarily engaged in business as an underwriter
of securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired in a bona fide firm commitment
underwriting pursuant to an underwriting agreement with the Company.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(h) "Certification" shall have the meaning set forth in
Section 18 hereof.
(i) "close of business" on any given date shall mean 5:00
P.M., New York City time, on such date, PROVIDED, HOWEVER, if such date
is not a Business Day it shall mean 5:00 P.M. on the next succeeding
Business Day.
(j) "Common Stock" when used with reference to the Company
shall mean the Common Stock, par value $0.10 per share, of the Company.
"Common Stock" when used with reference to any Person other than the
Company shall mean either the capital stock with the greatest voting
power of such other Person or, if such Person is a Subsidiary of
another Person, the equity securities or other equity interest having
power to control or direct the management of such Person.
(k) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(l) "Company" shall have the meaning set forth in the
introduction hereto.
(m) "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
(n) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(o) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
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(p) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b) hereof.
(q) "Exchange Act" shall have the meaning set forth in the
definitions of "Affiliate" and "Associate" above.
(r) "Exchange Ratio" shall have the meaning set forth in
Section 24(a) hereof.
(s) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(t) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(u) "Grandfathered Percentage" shall mean, with respect to the
Olsten Stockholders, 20%; PROVIDED, HOWEVER, if the Olsten Stockholders
shall sell, transfer or otherwise dispose of any outstanding shares of
Voting Stock to anyone who is not an Olsten Stockholder, the
Grandfathered Percentage, subsequent to such sale, transfer or
disposition, shall mean the Grandfathered Percentage as in effect
immediately prior to such sale, transfer or disposition reduced by the
percentage (rounded to the nearest whole percentage) of the aggregate
outstanding shares of Voting Stock sold, transferred or otherwise
disposed of by such Olsten Stockholder.
(v) "Issuance" shall have the meaning set forth in the
recitals hereto.
(w) "Issuance Date" shall have the meaning set forth in the
recitals hereto.
(x) "NASDAQ" shall have the meaning set forth in Section
11(d)(i).
(y) "Olsten Stockholders" shall mean (i) Xxxxxx Xxxxxx, Xxxxxx
Xxxxxx and Xxxxxx Xxxxxx, and each of their spouses, their lineal
descendants and their estates, and the Affiliates and Associates of any
of the foregoing, and (ii) any one Person other than Persons identified
in subparagraph (i) above that is a direct transferee of any Person
identified in subparagraph (i) above (such one Person being the "Olsten
Assignee") if (A) such Person receives, from one or more Persons
identified in subparagraph (i) above in one transaction or a series of
related transactions, an aggregate number of shares of Voting
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Stock equal to not less than 10% of the then outstanding shares of
Voting Stock, (B) so long as such Person, after giving effect to such
transfer and any other acquisition of Voting Stock thereafter, does not
(individually or when taken together with shares beneficially owned by
any Olsten Stockholder referred to in subparagraph (i) above)
beneficially own the Grandfathered Percentage (as in effect immediately
prior to the transfer from any Person identified in subparagraph (i)
above) or more of shares of Voting Stock outstanding and (C) the
transferor(s) of such shares designate(s) at the time of the transfer,
in writing to the Rights Agent and the Company, that such Person is an
Olsten Assignee for purposes of this paragraph; provided that only one
Person may be designated as an Olsten Assignee during the term of this
Agreement. Notwithstanding any other provision of this Agreement, no
transferee of any of the Olsten Stockholders (except for a transferee
that is, by definition, an Olsten Stockholder pursuant to subparagraph
(i) above or is designated as an Olsten Assignee and continues to
satisfy the requirements set forth above for being an Olsten Assignee)
shall be excluded from the definition of an Acquiring Person. So long
as a Person is an Olsten Stockholder, such Person shall give written
notice to the Company immediately prior to any sale, transfer,
disposition or acquisition of shares of Voting Stock indicating the
number of shares of Voting Stock as well as the transferee or
transferor, as applicable, of such Voting Stock; PROVIDED, HOWEVER, any
sale, transfer, disposition or acquisition only between or among
Persons that constitute Olsten Stockholders pursuant to subparagraph
(i) above shall not be subject to this sentence.
(z) "Original Rights" shall have the meaning set forth in the
definition of "Beneficial Owner" above.
(aa) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(bb) "Preferred Stock" shall mean the shares of Series A
Junior Participating Preferred Stock, par value $0.01 per share, of the
Company.
(cc) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(dd) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
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(ee) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(ff) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(gg) "Rights" shall have the meaning set forth in the recitals
hereto.
(hh) "Rights Agent" shall have the meaning set forth in the
introduction hereto.
(ii) "Rights Declaration Date" shall have the meaning set
forth in the recitals hereto.
(jj) "Section 11(a)(ii) Event" shall mean any event in which
any Person, alone or together with its Affiliates and Associates,
becomes an Acquiring Person.
(kk) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(ll) "Section 13 Event" shall mean any event described in
Section 13(a) hereof.
(mm) "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, includes a
report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become
such.
(nn) "Split-Off" shall have the meaning set forth in the
recitals hereto.
(oo) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(pp) "Subsidiary" shall mean, with reference to any Person,
any corporation (or other entity) of which an amount of voting
securities (or comparable ownership interests) sufficient to elect at
least a majority of the directors (or comparable individuals) of such
corporation (or other entity) is beneficially owned or otherwise
controlled, directly or indirectly, by such Person.
(qq) "Substantial Block" shall mean a number of shares of the
Voting Stock which has 10% or more of the
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aggregate voting power of all outstanding shares of Voting Stock.
(rr) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ss) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(tt) "Trading Day" shall have the meaning set forth in Section
11(d) hereof.
(uu) "Triggering Event" shall mean any Section 11(a)(ii) Event
or Section 13 Event.
(vv) "Voting Stock" shall mean the outstanding shares of
Common Stock, $0.10 par value, and any other shares of capital stock of
the Company which are entitled to vote generally in the election of
directors.
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 other Co-Rights
Agents as it may deem necessary or desirable upon ten calendar days' written
notice to the Rights Agent. In no event shall the Rights Agent have any duty to
supervise or in any way be liable for such Co-Rights Agents.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the earlier
of (i) the close of business on the tenth calendar day after the Shares
Acquisition Date or (ii) the close of business on the tenth calendar day (or
such later date as may be determined by action of the Board of Directors prior
to such time as any Person becomes an Acquiring Person) after the date of the
commencement of, or first public announcement of the intent of any Person (other
than the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company or any Person organized,
appointed or established by the Company or any Subsidiary of the Company or any
Person organized, appointed or established by the Company or any Subsidiary of
the Company for or pursuant to the terms of such plan) to commence, a tender or
exchange offer if, upon consummation thereof, such Person would be an Acquiring
Person (the earlier of the dates in subsections (i) and (ii) hereof being herein
referred to as the "Distribution Date") (x) the Rights will be evidenced
(subject to the provisions of para-
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graph (b) of this Section 3) by the certificates for the Common Stock registered
in the names of the holders of the Common Stock (which certificates for the
Common Stock shall be deemed also to be Right Certificates) and not by separate
Right Certificates, and (y) the Rights will be transferable only in connection
with the transfer of Common Stock. As soon as practicable after receipt by the
Rights Agent of written notice from the Company of the Distribution Date, the
Rights Agent, at the Company's expense, will send by first-class, postage
prepaid mail, to each record holder of Common Stock as of the close of business
on the Distribution Date, at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit B hereto
(a "Right Certificate"), evidencing one Right for each share of the Common Stock
so held, subject to adjustment as provided herein. As of the Distribution Date,
the Rights will be evidenced solely by such Right Certificates.
(b) Prior to or as soon as practicable following the Issuance
Date, the Company will send or make available a copy of a Summary of Rights to
Purchase Preferred Stock, in substantially the form attached hereto as Exhibit C
(the "Summary of Rights"), to each record holder of Common Stock, at the address
of such holder shown on the records of the Company. The Summary of Rights may be
included as part of any other document delivered or made available to
stockholders, including a registration statement or proxy statement.
(c) Rights shall be issued in respect of all shares of Common
Stock issued or disposed of (including, without limitation, upon disposition of
Common Stock out of treasury stock or issuance or reissuance of Common Stock out
of authorized but unissued shares) on or after the Issuance Date but prior to
the earlier of the Distribution Date or the Expiration Date (as such term is
defined in Section 7), or, in certain circumstances provided in Section 22
hereof, after the Distribution Date. Certificates representing such shares of
Common Stock shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Gentiva
Health Services, Inc. and , as such may be amended from time to time
(the "Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
executive offices of Gentiva Health Services, Inc. Un-
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der 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. Gentiva Health Services, Inc. will mail
to the holder of this certificate a copy of the Rights Agreement as in
effect on the date of mailing without charge within five Business Days
after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights beneficially
owned by an Acquiring Person will become null and void.
After the due execution of any supplement or amendment to this Agreement in
accordance with the terms hereof, the reference to this Agreement in the
foregoing legend shall mean the Agreement as so supplemented or amended. Until
the Distribution Date, the Rights associated with the Common Stock represented
by certificates containing the foregoing legend shall be evidenced by such
certificates alone, and the surrender for transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate. In the event that the Company purchases
or acquires any shares of Common Stock after the Issuance Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of Common Stock which are no longer
outstanding. The failure to print the foregoing legend on any such Common Stock
certificate or any other defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of this Agreement
or the rights of any holder of the Rights.
Section 4. FORM OF RIGHT CERTIFICATES. (a) The Right
Certificates (and the forms of election to purchase shares and of assignment to
be printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. The Right Certificates shall be in machine-printable format and in a form
reasonably satisfactory to the Rights Agent. Subject to the provisions hereof,
the Right Certificates, whenever distributed, shall be dated as of the Issuance
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Date, shall show the date of countersignature, and on their face shall entitle
the holders thereof to purchase such number of shares of Preferred Stock (or
following a Triggering Event, Common Stock, other securities, cash or other
assets, as the case may be) as shall be set forth therein at the price per one
one-thousandth of a share of Preferred Stock set forth therein (the "Purchase
Price"), but the number of such shares and the Purchase Price shall be subject
to adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, (i)
any Right Certificate issued pursuant to Section 3(a) or Section 22 hereof that
represents Rights beneficially owned by: (x) an Acquiring Person or any
Associate or Affiliate thereof, (y) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person became such, or (z) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding (whether or not in writing) which has as a primary
purpose or effect avoidance of Section 7(e) hereof, (ii) any Right Certificate
issued at any time to any nominee of such Acquiring Person, Associate or
Affiliate, and (iii) any Right Certificate issued pursuant to Section 6 or
Section 11 hereof, upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall contain (to the
extent feasible following the written instruction of the Company to the Rights
Agent) the following legend, modified as applicable to apply to such Person:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or an Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
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Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by one of its authorized
officers either manually or by facsimile signature. The Right Certificates shall
be countersigned by an authorized signatory of the Rights Agent either manually
or 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 any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Agreement any such person was not such an officer.
In case any authorized signatory of the Rights Agent who shall
have countersigned any of the Right Certificates shall cease to be so authorized
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates not ceased to be so authorized;
and any Right Certificate may be countersigned on behalf of the Rights Agent by
any person who, at the actual date of the countersignature of such Right
Certificate, shall be properly authorized to countersign such Right Certificate,
although at the date of the execution of this Agreement any such person was not
so authorized.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such books
shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates, and the date of each of the Right Certificates and the date of
countersignature of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Section 14 hereof, at any time after the close of
business on the Distribution Date, and at or prior to the close of business on
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the Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock (or following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Right Certificate
or Right Certificates surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence, as the Company shall reasonably request,
of the identity of the Beneficial Owner, Affiliates or Associates thereof or of
the holder, or of any other Person with which such holder or any of such
holder's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting or disposing of securities of the Company. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e), Section 14 and Section 20(k)
hereof, countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment from a Right Certificate holder of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right Certificates.
Subject to the provisions of Section 14 hereof, at any time
after the close of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, upon receipt by the Company and the
Rights Agent of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, along
with a signature guarantee and such other further documentation as the Rights
Agent may reasonably request and reimbursement to the Company and the Rights
Agent
-15-
of all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS. (a) Subject to the provisions hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the designated
office of the Rights Agent, together with payment of the aggregate Purchase
Price for the total number of one one-thousandths of shares of Preferred Stock
(or shares of Common Stock, other securities, cash or other assets, as the case
may be) as to which the Rights are then exercisable, at or prior to the earliest
of (i) the close of business on , 2010 (the "Final Expiration Date"), (ii) the
time at which the Rights are exchanged as provided in Section 24, or (iii) the
time at which the Rights are redeemed as provided in Section 23 (such earliest
date being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a share
of Preferred Stock pursuant to the exercise of a Right shall initially be $75
(seventy-five dollars), shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in accordance with
paragraph (c) below.
(c) Except as provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed and completed accompanied by payment
of the Purchase Price for the number of one one-thousandths of shares of
Preferred Stock (or shares of Common Stock, other securities, cash or other
assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax, the Rights Agent shall thereupon, subject to Section
20(k), promptly (i) requisition from any transfer agent of Preferred Stock
certificates for the number of one one-thousandths of shares of Preferred Stock
to be purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, (ii) if the Company shall have elected to
deposit the total number of shares of Preferred Stock issuable upon exercise of
the Rights
-16-
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of shares of Preferred Stock as are
to be purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (iii) when appropriate, requisition from any transfer agent
of the Common Stock of the Company certificates for the total number of shares
of Common Stock to be paid in accordance with Section 11(a)(ii) and 11(a)(iii),
(iv) when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14, (v)
promptly after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (vi) when appropriate, after receipt promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate. The payment
of the then Purchase Price may be made in cash or by certified bank check or
bank draft or money order payable to the order of the Company or the Rights
Agent. In the event that the Company is obligated to issue securities,
distribute property or pay cash pursuant to Section 11(a)(iii) hereof, the
Company will make all arrangements necessary so that cash, property or
securities are available for issuance, distribution or payment by the Rights
Agent, if and when appropriate.
(d) Except as provided herein, in case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person became such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquir-
-17-
ing Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding (whether or not in writing) regarding
the transferred Rights or (B) a transfer which the Board of Directors of the
Company has determined is a part of a plan, arrangement or understanding
(whether or not in writing) which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner, Affiliates or Associates thereof or of the
holder, or of any other Person with which such holder or any of such holder's
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting or
disposing of any securities of the Company as the Company shall reasonably
request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates,
-18-
and in such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF CAPITAL
STOCK. (a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
(and following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities) or out of its
authorized and issued shares of Preferred Stock (and, following the occurrence
of a Triggering Event, out of its authorized and issued Common Stock and/or
other securities) held in its treasury, the number of shares of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that will be sufficient to permit the exercise in full of all
outstanding Rights (it being understood that any of the foregoing shares or
securities may also be reserved for other purposes) or will take such other
steps as are appropriate to assure that the number of such shares or securities
(or their equivalents) sufficient to permit the exercise in full of all
outstanding Rights will be available upon such exercise.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable upon the exercise of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable (but only to the extent that it is
reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) From and after such time as the Rights become exercisable,
the Company shall use its best efforts (X) (i) to file a registration statement
under the Securities Act of 1933, as amended (the "Act"), with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
to cause such registration statement to become effective as soon as practicable
after such filing, and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date and (Y) (i) to file
appropriate applications with any state or federal regulatory bodies having
jurisdiction over the issuance of the securities (or assets) purchasable upon
exercise of the Rights in order to obtain any approvals or orders
-19-
of such bodies as may be legally required, (ii) to cause such approvals to be
obtained or orders to be issued as soon as practicable after such filing and
(iii) to cause such approvals or orders to remain effective until the earlier of
(A) the date as of which the Rights are no longer exercisable for such
securities (or assets), and (B) the Expiration Date, to the extent not
previously obtained. The Company will also take such action as may be
appropriate under the blue sky laws of the various states. The Company may
temporarily suspend (X) for a period of time not to exceed ninety (90) days, the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective and (Y) for a period of time not in
excess of 180 days (or for such longer period as is required by any applicable
law, rule or regulation of any appropriate regulatory bodies), the
exercisability of the Rights in order to obtain any such required regulatory
body approvals or orders. Upon any such suspension, the Company shall issue a
public announcement and shall give simultaneous written notice to the Rights
Agent stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notice to the Rights Agent at
such time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualifications in such jurisdiction
shall have been obtained.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all shares of the Preferred Stock
(and following the occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares of the 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 (a) to pay any transfer tax which may be payable
in respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for the Preferred Stock
(or Common Stock and/or other securities, as the case may be) in a name other
than that of the registered holder of the Right Certifi-
-20-
cate evidencing Rights surrendered for exercise or (b) to issue or deliver any
certificates for shares of the 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 Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. PREFERRED STOCK RECORD HOLDERS. Each person in
whose name any certificate for any number of 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 such whole and/or fractional shares of 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 Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made and shall show the date of
countersignature; 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 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. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock payable in
shares of the Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of shares or
-21-
(D) issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive upon payment
of the Purchase Price then in effect the aggregate number and kind of shares of
capital stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock (or Common Stock and/or other
securities) transfer books of the Company were open, he or she would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii),
the adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any
Person, alone or together with its Affiliates and Associates, becomes an
Acquiring Person except as the result of a transaction set forth in 13(a)
hereof, then prior to the later of (x) the date on which the Company's rights of
redemption pursuant to Section 23(a) expire or (y) five (5) days after the date
of the first occurrence of a Section 11(a)(ii) Event, each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have a right to
receive, upon exercise thereof at the then current Purchase Price for the number
of one one-thousandth of a share of Preferred Stock for which such Right is then
exercisable in accordance with the terms of this Agreement, in lieu of shares of
Preferred Stock, such number of shares of the Common Stock of the Company as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-thousandths of a share of Preferred Stock
for which a Right is then exercisable and dividing that product by (y) 50% of
the Current Market Price per share of the Common Stock of the Company
(determined pursuant to Section 11(d)) on the date of the occurrence of the
event listed above in this subparagraph (ii) (such number of shares is
hereinafter referred to as the "Adjustment Shares") provided that the Purchase
Price and the number of Adjustment Shares
-22-
shall be further adjusted as provided in this Agreement to reflect any events
occurring after the date of such first occurrence. From and after the occurrence
of an event specified in Section 13(a) hereof, any Rights that theretofore have
not been exercised pursuant to this Section 11(a)(ii) shall thereafter be
exercisable only in accordance with Section 13 and not pursuant to this Section
11(a)(ii).
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's Restated Certificate of Incorporation but
not outstanding or reserved for issuance for purposes other than upon exercise
of the Rights is not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company shall, with respect
to such deficiency, (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess, the "Spread"), and (B) with respect to each Right,
make adequate provision to substitute for the Adjustment Shares, upon exercise
of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity securities of
the Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company has deemed, in good
faith, to have the same value as shares of Common Stock (such shares of
preferred stock, "Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company, in good faith, based upon
the advice of a nationally recognized investment banking firm selected by the
Board of Directors of the Company; PROVIDED, HOWEVER, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's rights of
redemption pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors of the Company
shall determine in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise in full of
the Rights, the thirty (30) day period set forth above
-23-
may be extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement and shall give simultaneous written notice to the Rights
Agent stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notice to the Rights Agent at
such time as the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of the Common Stock on
the Section 11(a)(ii) Trigger Date and the value of any Common Stock Equivalent
shall be deemed to have the same value as the Common Stock on such date. The
Company shall give the Rights Agent notice of the selection of any Common Stock
Equivalent under this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Stock (or securities having
substantially the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock") or convertible into the Preferred
Stock or Equivalent Preferred Stock) at a price per share of the Preferred Stock
or Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into the Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (as defined in Section 11(d) per share of the
Preferred Stock or Equivalent Preferred Stock, as the case may be) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, of which the numerator shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of shares of
Preferred Stock or Equivalent Preferred Stock which the aggregate
-24-
offering price of the total number of shares of Preferred Stock or Equivalent
Preferred Stock so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such Current
Market Price and of which the denominator shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable upon
exercise of one Right. In case such subscription price may be paid by delivery
of consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, of which the numerator shall be the
Current Market Price per share of Preferred Stock (as defined in Section 11(d))
on such record date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to one share of Preferred Stock and of which the denominator
shall be such Current Market Price per share of Preferred Stock; PROVIDED,
HOWEVER, that in no event shall the considera-
-25-
tion to be paid upon the exercise of one Right be less than the aggregate par
value of the shares of capital stock of the Company to be issued upon exercise
of one Right. Such adjustments shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii), the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the 30
consecutive Trading Days (as such term is hereinafter defined in this paragraph
(d)) immediately prior to such date and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; PROVIDED, HOWEVER, that in the event that the
Current Market Price per share of Common Stock is determined during the period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights)
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above after the ex-dividend date for such dividend or
distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price shall be
appropriately adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of the Common Stock are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of the Common Stock are listed or admitted to trading or, if the shares
of the Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid
-26-
and low asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or
such other system then in use, or, if on any such date the shares of the Common
Stock are not quoted by such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Common Stock selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the fair value of
such shares on such date shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of the Common Stock are not listed or
admitted to trading on any national securities exchange, a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the State of New
York are not authorized or obligated by law or executive order to close. If the
Common Stock is not publicly held or not so listed or traded, "Current Market
Price" per share shall mean the fair value per share as determined in good faith
by the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the Current Market
Price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in any
manner described in clause (i) of this Section 11(d), the "Current Market Price"
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 1,000 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the Current Market
Price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "Current Market Price"
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of
-27-
this Agreement, the "Current Market Price" of one one-thousandth of a share of
Preferred Stock shall be equal to the "Current Market Price" of one share of
Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price; PROVIDED, HOWEVER,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or one
millionth of a share of Preferred Stock as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than shares of
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares contained in Section
11(a) through (q), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Section 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of shares
(calculated to the nearest one-millionth) obtained by
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(i) multiplying (x) the number of shares covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of shares of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of shares of Preferred
Stock for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after the adjustment
of the Purchase Price. The Company shall make a public announcement and shall
give simultaneous written notice to the Rights Agent of its election to adjust
the number of Rights, indicating the record date for the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Preferred Stock issu-
-29-
able upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price per share and the
number of shares which were expressed in the initial Right Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the then par value, if
any, of a share of Preferred Stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable such number of one one-thousandth of a share of
such Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such holder's right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) 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 the Board of Directors of the Company
shall determine to be advisable in order that any consolidation or subdivision
of shares of Preferred Stock, issuance wholly for cash of any of shares of
Preferred Stock at less than the Current Market Price, issuance wholly for cash
of the Preferred Stock or securities which by their terms are convertible into
or exchangeable for Preferred Stock, stock dividends or issuance of rights,
options or warrants referred to hereinabove in this Section 11, hereafter made
by the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23, 24 and 27
hereof, take (nor will it permit any of its Sub-
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sidiaries to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(n)), (ii) merge with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(n)), or (iii) sell or
transfer (or permit any of its Subsidiaries to sell or transfer), in one or more
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(n)) if (x) at
the time of or immediately after such consolidation, merger or sale there are
any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale, the stockholders
of the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates or (z)
the form or nature of organization of the Principal Party would preclude or
limit the exercisability of the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Issuance Date and prior to the Distribution Date (i) declare and pay a dividend
on the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of
-31-
which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
(q) Notwithstanding anything in this Agreement to the
contrary, prior to the Distribution Date, the Company may, in lieu of making any
adjustment to the Purchase Price, the number of shares of Preferred Stock
eligible for purchase on exercise of each Right or the number of Rights
outstanding, which adjustment would otherwise be required by Section 11(a)(i),
11(b), 11(c), 11(h) or 11(i), make such other equitable adjustment or
adjustments thereto as the Board of Directors (whose determination shall be
conclusive) deems appropriate in the circumstances and not inconsistent with the
objectives of the Board of Directors in adopting this Agreement and such
Sections.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. 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 and the
adjusted Purchase Price, (b) promptly file with the Rights Agent and with each
transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate in accordance with Section 26. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER. (a) In the event that, following the Shares Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(n)) and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(n)) shall consolidate, merge with and into the Company and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part of
the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (or of the Company) or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and
-32-
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(n) hereof), then, and in each such case proper
provision shall be made so that (i) each holder of a Right (except as provided
in Section 7(e)) shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement, such number of validly issued, fully paid, non-assessable and freely
tradable shares of Common Stock of the Principal Party (as hereinafter defined),
not subject to any liens, encumbrances, rights of call or first refusal, or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of such one one-thousandth of a share for which
a Right was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to such first
occurrence), and dividing that product (which, following the first occurrence of
a Section 13 Event, shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by (2) 50% of the Current Market Price
per share of the Common Stock of such Principal Party (determined in the manner
described in Section 11(d)) on the date of consummation of such consolidation,
merger, sale or transfer; PROVIDED, HOWEVER, that the Purchase Price (as
theretofore adjusted in accordance with Section 11(a)(ii) hereof) and the number
of shares of Common Stock of such Principal Party so receivable upon exercise of
a Right shall be subject to further adjustment as appropriate in accordance with
Section 11(f) hereof to reflect any events occurring in respect of the Common
Stock of such Principal Party after the occurrence of such consolidation,
merger, sale or transfer; (ii) the Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 shall thereafter apply
to such Principal Party; (iv) such Principal Party shall take such 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
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares
-33-
of its Common Stock thereafter deliverable upon the exercise of the Rights;
PROVIDED that, upon the subsequent occurrence of any consolidation, merger, sale
or transfer of assets or other extraordinary transaction in respect of such
Principal Party, each holder of a Right shall thereupon be entitled to receive,
upon exercise of a Right and payment of the Purchase Price as provided in this
Section 13(a), such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had such holder, at the time of such
transaction, owned the Common Stock of the Principal Party receivable upon the
exercise of a Right pursuant to this Section 13(a), and such Principal Party
shall take such steps (including, but not limited to, reservation of shares of
stock) as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(1) in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation and, if no securities are so
issued, the Person that is the other party to the merger or
consolidation or, if the Person that is the other party to the merger
does not survive the merger, the Person that does survive the merger
(including the Company if it survives); and
(2) in the case of any transaction described in (z) of the
first sentence in this Section 13, the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in either such case, (x) 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 another corporation the Common Stock of
which is and has been so registered, "Principal Party" shall refer to such other
corporation; (y) if such Person is a Subsidiary, directly or indirectly, of more
than one corporation, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such
-34-
corporations is the issuer of the Common Stock having the greatest market value.
(c) The Company shall not consummate any Section 13 Event
unless all regulatory approvals for the consummation of such Section 13 Event
and the exercise of the Rights in accordance with the terms of this Agreement
have been obtained and the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which are neither outstanding nor reserved
for issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, use its best efforts to cause
such registration statement to become effective as soon as practicable
after such filing and use its best efforts to cause such registration
statement to remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Expiration Date and similarly
comply with applicable state securities laws;
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act;
(iii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange or on another national securities exchange, to list or
admit to trading (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on the New York
Stock Exchange or such securities exchange, or, if the Common Stock of
the Principal Party shall not be listed or admitted to trading on the
New York Stock Exchange or a national securities exchange, to cause the
Rights and the securities receivable upon exercise of the Rights to be
authorized for quotation on NASDAQ or on such other system then in use;
and
-35-
(iv) 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.
The provisions of this Section 13 shall similarly apply to successive Section 13
Events. In the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights (except prior to the
Distribution Date in accordance with Section 11(p) hereof). In lieu of such
fractional Rights, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
-36-
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock). Interests in fractions of Preferred Stock in integral
multiples of one one-thousandth of a share 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 represented by such
depositary receipts. In lieu of fractional shares that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company may
pay to the registered holders of Right Certificates at the time the Rights
evidenced thereby are exercised or exchanged as herein provided an amount in
cash equal to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii)) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event the Company
shall not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as otherwise permitted by this Section
14.
-37-
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate (or, prior to the
Distribution Date, such Common Stock) in the manner provided therein and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates fully
executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request;
(c) subject to Section 6 and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the Person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated
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 Right Certificates or the associated Common
Stock certificate made by anyone
-38-
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by
any governmental authority, prohibiting or otherwise restraining
performance of such obligation; PROVIDED, HOWEVER, the Company must use
its best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the
-39-
Rights Agent (including the reasonable fees and expenses of counsel), 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. Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for
special, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage.
The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, instruction, adjustment notice,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement in
reliance upon (i) the proper execution of the certification concerning
beneficial ownership appended to the Form of Assignment and the Form of Election
to Purchase included as part of Exhibit B hereto (the "Certification"), unless
the Rights Agent shall have actual knowledge that, as executed, the
Certification is untrue or (ii) the non-execution or failure to complete the
Certification including, without limitation, any refusal to honor any otherwise
permissible assignment or election by reason of such non-execution or failure.
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 business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligi-
-40-
ble for appointment as a successor Rights Agent under the provisions of Section
21. In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with the 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 be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights
-41-
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 its
own negligence, bad faith or willful misconduct. The issuance or
non-issuance of a Right Certificate or Preferred Stock or other
security issued in lieu of Preferred Stock in accordance with
instructions given to the Rights Agent by the Company pursuant to
Section 20(k) hereof or in accordance with the terms hereof shall not
constitute negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for
any adjustment required under the provisions of Sections 11 or 13 or
responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Preferred Stock or Common Stock to be issued pursuant to this Agreement
or any Right Certificate or as to whether any shares of Preferred Stock
or Common Stock 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
-42-
be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder and certificates delivered pursuant to any provision hereof
from any one of the Chairman of the Board, the President, any Vice
President, the Secretary or the Treasurer of the Company, and is
authorized 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. An application by the Rights Agent
for instructions may set forth in writing any action proposed to be
taken or omitted by the Rights Agent with respect to its duties and
obligations under this Agreement and the date on and/or after which
such action shall be taken, and the Rights Agent shall not be liable
for any action taken or omitted in accordance with a proposal included
in any such application on or after the date specified therein (which
date shall not be less than one Business Day after the Company receives
such application) without the consent of the Company unless prior to
taking or omitting such action, the Rights Agent has received written
instructions in response to application specifying the actions to be
taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other 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 by itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, default, ne-
-43-
glect or misconduct; PROVIDED, HOWEVER, reasonable care was exercised
in the selection thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any 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,
the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting the Company.
The Company shall give the Rights Agent prompt written instructions as
to the action to be taken regarding the Rights Certificates involved.
The Rights Agent shall not be liable for acting in accordance with such
instructions.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company and to
each transfer agent of the Preferred Stock and the Common Stock by registered or
certified mail, and, following the Distribution Date, at the Company's expense,
to the holders of the Right Certificates by first class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Preferred Stock and the Common
Stock by registered or certified mail, and, following the Distribution Date, to
the holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of thirty (30) days after giving notice
of such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the Company shall become the temporary Rights
Agent and the registered holder of any Right
-44-
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of the State of New York (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking or trust institution in the State of New York), in good
standing, having a principal office in the State of New York, which is
authorized under such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority or which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $25 million. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Stock and the Common Stock, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connec-
-45-
tion with such issuance or sale; PROVIDED, HOWEVER, that (i) no such Right
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
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
(x) the close of business on the tenth calendar day following the Shares
Acquisition Date or (y) the Final Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of $.001 per Right as
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), and the Company may, at its
option, pay the Redemption Price either in shares of its Common Stock (valued at
their Current Market Price as defined in Section 11(d)(i) on the date of the
redemption), other securities, cash or other assets. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights (or at such later time as the
Board of Directors may establish for the effectiveness of such redemption), and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right held. Within 10 days
after the action of the Board of Directors ordering the redemption of the Rights
(or such later time as the Board of Directors may establish for the
effectiveness of such redemption), the Company shall give notice of such
redemption to the holders of the then outstanding Rights by mailing such notice
to the Rights Agent and to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein
-46-
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23, and other
than in connection with the repurchase of Common Stock prior to the Distribution
Date.
Section 24. EXCHANGE. (a) The Board of Directors of the
Company may, at its option, at any time and from time to time on or after a
Section 11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 7(e) hereof) for 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 hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). The exchange of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the
Board of Directors of the Company ordering the exchange of any Rights pursuant
to Section 24(a) and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. Promptly after the effectiveness of the action of the Board of
Directors ordering an exchange of the Rights, the Company shall give notice of
any such exchange to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each holder's last address
as it appears upon the registry books of the Rights Agent; provided, HOWEVER,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
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. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become
-47-
void pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute shares of Preferred Stock (or Equivalent Preferred
Stock, as such term is defined in Section 11(b) hereof) for shares of Common
Stock exchangeable for the Rights, at the initial rate of one one-thousandth of
a share of Preferred Stock (or Equivalent Preferred Stock) for each share of
Common Stock, as appropriately adjusted to reflect adjustments in the dividend
rights of the Preferred Stock pursuant to the terms thereof.
(d) In the event that there shall not be sufficient shares of
Common Stock or Preferred Stock issued, but not outstanding, or authorized but
unissued, to permit any exchange of Rights as contemplated in accordance with
this Section 24 or that any regulatory actions or approvals are required in
connection therewith, the Company shall take all such action as may be necessary
to authorize additional Common Stock or Preferred Stock for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractional
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock pursuant to this Section 24. In lieu of such fractional
shares of Common Stock, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional shares of Common Stock
would otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this
Section 24(e), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
(f) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute for any share of Common Stock exchangeable for a
Right (i) Common Stock Equivalents (ii) cash, (iii) debt securities of the
Company, (iv) other assets, or (v) any combination of the foregoing, having an
aggregate value which the Board of Directors of the Company shall have
determined in good faith to be equal to the Current Market Price of one share of
Common Stock (determined pursuant to Section 11(d) hereof) on the Trading Date
immediately preceding the date of exchange pursuant to this Section 24.
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Section 25. NOTICE OF CERTAIN EVENTS. In case the Company
shall propose at any time following the Issuance Date (a) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
periodic cash dividend), or (b) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities, rights
or options, or (c) to effect any reclassification of Preferred Stock (other than
a reclassification involving only the subdivision of outstanding Preferred
Stock), or (d) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(n) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other transfer), in
one or more transactions, of more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to, any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(n) hereof), or (e) to effect
the liquidation, dissolution or winding up of the Company, or (f) to pay any
dividend on the Common Stock payable in Common Stock or to effect a subdivision,
combination or consolidation of the Common Stock (by reclassification or
otherwise than by payment of dividends in Common Stock), then, in each such
case, the Company shall give to the Rights Agent and to each holder of a Right,
in accordance with Section 26, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or Rights, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the Preferred Stock, 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 twenty (20) days prior to
the record date for determining holders of the Preferred Stock for purposes of
such action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Stock, whichever shall be
the earlier.
In case a Section 11(a)(ii) Event shall occur, then, in any
such case, the Company shall as soon as practicable thereafter give to the
Rights Agent and to each holder of a Right Certificate (or if occurring prior to
the Distribution Date, the holders of the Common Stock), to the extent feasible
-49-
and in accordance with Section 26, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) and all references in the preceding paragraph to
Preferred Stock shall be deemed to thereafter refer to Common Stock and/or other
securities, as the case may be.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Gentiva Health Services, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
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 Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
[name]
[address]
Attention: [ ]
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. For as long as the
Rights are redeemable, the Company may, and the Rights Agent shall if the
Company so directs, from time to time supplement or amend this Agreement without
the approval of any holders of Right Certificates. At any time when the Rights
are no longer redeemable, the Company may, and the Rights Agent shall if the
Company so directs, from time to time supplement or amend this Agreement without
the approval of any holders of Right Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein,
-50-
or (iii) to lengthen the time period during which the Rights may be redeemed
following the Shares Acquisition Date for up to an additional twenty days beyond
the time period set forth in Section 23(a), or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of
Right Certificates (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment unless the Rights Agent shall have determined in
good faith that such supplement or amendment would adversely affect its
interests under this Agreement, PROVIDED that any supplement or amendment that
does not amend Section 18, 19, 20 or 21 hereof in a manner adverse to the Rights
Agent shall become effective immediately upon execution by the Company, whether
or not also executed by the Rights Agent.
Section 28. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the provisions of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. 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 or the Company,
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement, and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for the purpose of
clause (ii) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (i) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Right Certificates and all
other parties,
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and (ii) not subject the Board to any liability to the holders of the Right
Certificates.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Section 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State except that the rights, duties
and obligations of the Rights Agent under this Agreement shall be governed by
the laws of the State of New York.
Section 33. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for
-52-
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
S-1
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.
[SEAL]
GENTIVA HEALTH SERVICES, INC.
Attest
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
[SEAL]
[ ],
as Rights Agent
Attest:
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
EXHIBIT A TO
RIGHTS AGREEMENT
Series A Junior Participating Preferred Stock
(Liquidation Preference $1.00 Per Share)
CERTIFICATE OF DESIGNATION
GENTIVA HEALTH SERVICES, INC.
----------------------------
Certificate of Designation of Board of Directors
Designating a Series of Preferred Stock as
Series A Junior Participating Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
----------------------------
Dated as of [ ], 2000
GENTIVA HEALTH SERVICES, INC.
----------
Certificate of Designation of
Board of Directors Designating a
Series of Preferred Stock as
Series A Junior Participating Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
----------
GENTIVA HEALTH SERVICES, INC., a Delaware corporation, having
its principal office in the State of New York in the City of New York (the
"Company"), hereby certifies that:
Pursuant to authority conferred upon the Board of Directors by
the Restated Certificate of Incorporation ("Charter") and Bylaws of the Company,
the Board of Directors pursuant to resolutions adopted on [ ], 2000 (i)
authorized the creation and issuance of up to [ ] shares of Series A Junior
Participating Preferred Stock which stock was previously authorized but not
issued and (ii) determined the voting powers, designations, preferences and
relative, participating, optional or other special rights, qualifications,
limitations or restrictions, and terms and conditions of redemption of the
shares of such series and the dividend rate payable on such series. Such voting
powers, designations, preferences and relative, participating, optional or other
special rights, qualifications, limitations or restrictions, and terms and
conditions of redemption, number of shares and dividend rate are as follows:
Section 1. NUMBER OF SHARES AND DESIGNATION. This series of
Preferred Stock shall be designated the Series A Junior Participating Preferred
Stock (the "Series A Preferred Shares") and the number of shares which shall
constitute such series shall be [ ] shares, par value $0.01 per share. 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 Series A
Preferred Shares 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
A-1
of any outstanding securities issued by the Company convertible into Series A
Preferred Shares.
Section 2. DIVIDEND RIGHTS. (1) Subject to the rights of
holders of any shares of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred Shares with respect to
dividends, the holders of Series A Preferred Shares shall be entitled prior to
the payment of any dividends on shares ranking junior to the Series A Preferred
Shares to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of [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 Shares, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions (other than a dividend payable in shares of common stock, par
value $0.10 per share, of the Company (the "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 Shares. In the event the Company shall at any time (i) declare or pay
any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the amount to which holders
of Series A Preferred Shares were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount, which initially shall be 1,000, 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 (such number, as so adjusted from
time to time pursuant to the terms hereof, the "Adjustment Number").
(2) The Company shall declare a dividend or distribution on
the Series A Preferred Shares as provided in subparagraph (1) above 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
A-2
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Preferred Shares shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative on
outstanding Series A Preferred Shares from the Quarterly Dividend Payment Date
next preceding the date of issue of such Series A Preferred Shares, unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of Series A Preferred Shares 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 Series A Preferred Shares 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 Series A Preferred Shares 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. LIQUIDATION. (1) Upon any liquidation, dissolution
or winding up of the Company, no distribution shall be made 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 Shares unless, prior
thereto, the holders of Series A Preferred Shares shall have received an amount
per share (the "Series A Liquidation Preference") equal to the greater of (i)
$1.00 plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, or (ii) the
Adjustment Number times the per share amount of all cash and other property to
be distributed in respect of the Common Stock upon such liquidation, dissolution
or winding up of the Company.
(2) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of Preferred
Stock, if any, which rank on a parity with the Series A Preferred Shares, then
such remaining assets shall be distributed ratably to the holders of such parity
A-3
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(3) In the event the Company shall at any time (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the 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.
(4) Neither the merger or consolidation of the Company into or
with another corporation nor the merger or consolidation of any other
corporation into or with the Company shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this Section 3.
Section 4. NO REDEMPTION. The Series A Preferred Shares shall
not be redeemable.
Section 5. VOTING RIGHTS. The holders of Series A Preferred
Shares shall have the following voting rights:
(1) Subject to the provision for adjustment hereinafter set
forth, each Series A Preferred Share shall entitle the holder thereof
to 1,000 votes on all matters voted on at a meeting of the stockholders
of the Company. In the event the Company shall at any time (i) declare
or pay any dividend on Common Stock payable in shares of Common Stock,
or (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of Series A
Preferred Shares were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(2) Except as otherwise provided herein or by law, the holders
of Series A Preferred Shares and the holders of shares of Common Stock
and any other capital stock of the Company having general voting rights
shall vote to-
A-4
gether as one voting group on all matters submitted to a vote of
stockholders of the Company.
(3) Except as set forth herein or as otherwise provided by
law, holders of Series A Preferred Shares 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 6. CERTAIN RESTRICTIONS. (1) 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 Series A
Preferred Shares outstanding shall have been paid in full, the Company shall
not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Shares;
(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 Shares, except dividends paid ratably on the Series
A Preferred Shares and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Shares, provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series
A Preferred Shares; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Shares or any shares of stock ranking on a
parity with the Series A Preferred Shares, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights
A-5
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.
(2) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under subparagraph (1) of this Section 6,
purchase or otherwise acquire such shares at such time and in such manner.
Section 7. REACQUIRED SHARES. Any Series A Preferred Shares
purchased or otherwise acquired by the Company in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock to be
created by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein or in the Charter.
Section 8. MERGER, CONSOLIDATION, ETC. In case the Company
shall enter into any merger, consolidation, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each Series
A Preferred Share shall at the same time be similarly exchanged or changed into
an amount per share (subject to the provision for adjustment hereinafter set
forth) equal to 1,000 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged. In the event the
Company shall at any time (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of Series A Preferred Shares shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 9. RANKING. The Series A Preferred Shares shall rank,
with respect to the payment of dividends and distribution of assets, junior to
all other series of the Company's Preferred Stock unless the terms of any such
series shall provide otherwise.
Section 10. AMENDMENT. The Charter, including this Certificate
of Designation establishing the rights and prefer-
A-6
ences of the Series A Preferred Shares, shall not be amended in any manner which
would materially alter or change the powers, preferences or special rights of
the Series A Preferred Shares so as to affect them adversely without the
affirmative vote of the holders of a majority of the outstanding Series A
Preferred Shares, voting separately as one voting group, or such greater
percentage as required by law or by the principal national securities exchange
on which the Series A Preferred Shares may be listed or admitted to trading, or
NASDAQ.
Section 11. FRACTIONAL SHARES. Series A Preferred Shares may
be issued in fractions of a share which shall entitle the holder, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series A Preferred Shares.
A-7
IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation to be signed in its name and on its behalf and attested to by the
undersigned on this [ ] day of [ ], 2000 and the undersigned acknowledges under
the penalties of perjury that this Certificate of Designation is the corporate
act of said Company and that to the best of his knowledge, information and
belief, the matters and facts set forth herein are true in all material
respects.
GENTIVA HEALTH SERVICES, INC.
By:
------------------------------------
Name:
Title:
Attest:
---------------------------------
Name:
Title:
A-8
EXHIBIT B TO
RIGHTS AGREEMENT
[Form of Right Certificate]
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER , 2010 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER WILL BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY
A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR
AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY WILL BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]1
GENTIVA HEALTH SERVICES, INC.
Right Certificate
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 [ ], 2000 (the "Rights Agreement") between GENTIVA HEALTH
SERVICES, INC., a Delaware corporation (the "Company"), and [ ], a [ ] (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(New York City time) on [ ], 2010 at the designated office of the Rights Agent,
or its successors as Rights Agent, in New York, New York, one one-thousandth of
a fully paid non-assessable share of the Series A Junior Participating Preferred
Stock, par value
----------
1 The portion of the legend in brackets shall be inserted only if
applicable.
B-1
$0.01 per share (the "Preferred Stock"), of the Company, at a purchase price of
$75 per one one-thousandth of a share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
and related certificate duly executed, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably request. The
number of Rights evidenced by this Right Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of [ ],
2000, based on the Preferred Stock of the Company as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who after such transfer, became an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, such Rights shall
become null and void and no holder hereof shall have any right with respect to
such Rights from and after the occurrence of such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock (or, in certain circumstances,
common stock and/or other securities) which may be purchased upon the exercise
of the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events, including Triggering
Events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right Certificates.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent, and at the executive offices of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the designated office of the Rights Agent, along
with a signature guarantee and such other and further documentation as the
Rights Agent may reasonably request, may be exchanged for another Right
Certificate or
B-2
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one one-thousandth of a share of
Preferred Stock as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof, along with a signature guarantee and such other
and further documentation as the Rights Agent may reasonably request, another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be (i) redeemed by the Company at a redemption
price of $.001 per Right or (ii) exchanged by the Company in whole or in part
for shares of common stock or Preferred Stock.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-thousandth of a share of Preferred Stock), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
B-3
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of [ ], 2000.
[SEAL]
ATTEST: GENTIVA HEALTH SERVICES, INC.
By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
Countersigned:
[ ],
as Rights Agent
By:
-----------------------------
Authorized Signature
Date:
B-4
[FORM OF REVERSE SIDE OF RIGHT CERTIFICATE]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to transfer the within
Right Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ______________, ____
-----------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
(Signatures must be guaranteed by a participant in a Securities Transfer
Association Inc. recognized signature guarantee medallion program.)
B-5
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _______________, ____
---------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
(Signatures must be guaranteed by a participant in a Securities Transfer
Association Inc. recognized signature guarantee medallion program.)
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
GENTIVA HEALTH SERVICES, INC.:
The undersigned hereby irrevocably elects to exercise
______________ Rights represented by this Right Certificate to purchase the
shares of the Preferred Stock issuable upon the exercise of such Rights (or such
other securities of the Company or of any other Person which may be issuable
upon the exercise of the Rights) and requests that certificates for such shares
be issued in the name of:
Please insert social security or
other taxpayer identifying number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security or
other taxpayer identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: ______________, ____
-----------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
(Signatures must be guaranteed by a participant in a Securities Transfer
Association Inc. recognized signature guarantee medallion program.)
B-7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ______________, ____ ----------------------------------------
Signature
Signature Guaranteed:
----------------------------------------------------------
(Signatures must be guaranteed by a participant in a Securities Transfer
Association Inc. recognized signature guarantee medallion program.)
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
B-8
EXHIBIT C TO
RIGHTS AGREEMENT
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
Stockholders of Olsten Corporation will receive one right for
every share of common stock (the "Common Stock") of Gentiva Health Services,
Inc. (the "Company") issued to them on the date of the split-off. The right will
be evidenced by each stock certificate of the Company. After an event causing
the exercisability as described below, each right entitles the holder to
purchase from the Company, one one-thousandth of a share of Series A Junior
Participating Preferred Stock (the "preferred stock"), at a price of $75 per one
one-thousandth of a share, subject to adjustments. The rights also entitle
holders to acquire Common Stock or common stock of an acquirer in the events
described below. The rights agreement serves as an anti-takeover mechanism. It
provides the Company's board of directors with a tool to deter hostile takeover
tactics and encourages third parties interested in acquiring the Company to
negotiate directly with the Company's board of directors.
The terms of the rights are in a rights agreement between the
Company and [ ], as rights agent. The description below is a summary of some of
the provisions of the rights agreement. You are encouraged to read the rights
agreement. A copy of the rights agreement is filed with the Securities and
Exchange Commission as an exhibit to the Registration Statement on Form S-4
dated [ ], 2000, of which this prospectus is a part. A copy of the rights
agreement is also available free of charge from the Company.
EVENTS CAUSING THE EXERCISABILITY OF THE RIGHTS
Events which will trigger the exercisability of the rights
include:
1. ten days after the public announcement of the acquisition
by a person or group of persons of 10% or more of the Common Stock (the
"acquirer"), or
2. 10 days after the commencement (or announcement of
commencement) of a tender offer or exchange offer that would result in
a person or group becoming an acquirer.
Once the rights are exercisable, stockholders may purchase the
preferred stock at $75 per one one-thousandth of a preferred share.
C-1
Persons who acquire 10% of the Company as a result of the
Company buying back the Common Stock are excluded from the term acquirer and
would not trigger the exercisablility of the rights.
The Olsten family, including Xxxxxx Xxxxxx, Xxxxxx Xxxxxx,
Xxxxxx Xxxxxx and some of their relatives and affiliates, are also excluded from
the term acquirer so long as the Olsten family does not acquire 20% or more of
the Common Stock of the Company. The 20% ownership of the Company that the
Olsten family is permitted to own without triggering the agreement is referred
to as the grandfathered percentage. In the event the Olsten family's ownership
in the Company decreases as a result of sales by the family of the Common Stock,
the 20% grandfathered percentage will decrease by the same percentage as the
Olstens' ownership interest in the Company decreases.
The exclusion of the Olsten family from the definition of
acquirer extends to any person
1. who acquires 10% or more of the Common Stock directly from
a member or members of the Olsten family,
2. who, after giving effect to the transfer from the Olsten
family and any other acquisition of the Common Stock, does not,
individually or together with the Olsten family, own the grandfathered
percentage or more of the shares of Common Stock as in effect
immediately prior to the transfer from the Olsten family and
3. who is designated an "Olsten Assignee" for purposes of the
exclusion from the term acquirer. The Olsten family will only have the
ability to designate one person as an "Olsten Assignee."
THE BOARD OF DIRECTORS MAY REDEEM OR EXCHANGE THE RIGHTS
The board of directors of the Company may redeem the rights at
a price of $.001 per right at any time prior the public announcement that a
person has become an acquirer and for 10-business-days afterwards. This period
may be extended by the board of directors once for an additional 20 business
days to give the directors of the Company further time to negotiate with the
acquirer.
The board of directors may exchange the rights (other than
rights owned by the acquirer which shall have become void), at any time after
the public announcement that a person has become an acquirer, in whole or in
part, at an exchange ratio of one share of the common stock per right.
C-2
Until a right is exercised or exchanged, the holder of the
right, by virtue of being a right holder, will have no rights as a stockholder
of the Company, including, without limitation, the right to vote or to receive
dividends.
EXERCISE OF RIGHTS FOR THE COMMON STOCK
After the rights become exercisable and after the time period
when the board of directors' right to redeem the rights has expired, each right
holder will have the right to receive, upon exercise of the rights, the Common
Stock, or, in some circumstances, cash, property or other securities of the
Company having a value equal to two times the exercise price of $75 per share
per right. Upon a person becoming an acquirer, all rights that are, or, under
some circumstances specified in the rights agreement, were, owned by any
acquirer will be void.
EXERCISE OF RIGHTS FOR SHARES OF THE ACQUIRING COMPANY
If, after the date the rights become exercisable, (1) the
Company is acquired in a merger or other business combination transaction, or
(2) 50% or more of the Company's assets or earning power is sold, each right
holder, except the acquirer, shall afterwards have the right to receive, upon
exercise, common stock of the acquirer having a value equal to two times the
exercise price of the right.
ADJUSTMENTS TO EXERCISE PRICE
The exercise price for each right, and the number of shares of
preferred stock (or common stock or other securities) issuable, upon exercise of
the rights are subject to adjustment from time to time to prevent dilution.
TERMS OF PREFERRED STOCK
The preferred stock will rank junior to all other series of
preferred stock which may be issued in the future with respect to payment of
dividends and as to distributions of assets in liquidation. Each share of
preferred stock will have a quarterly dividend rate per share. The preferred
stock will not be redeemable. In the event of liquidation, the holders of the
preferred stock will be entitled to receive a liquidation payment per share of
$1.00 (plus accrued and unpaid dividends) or, if greater, an amount equal to
1,000 times the payment to be made per share of the Common Stock, subject
adjustments. Generally, each share of preferred stock will vote together with
the Common Stock and any other series of cumulative preferred stock entitled to
vote in such manner and will be entitled to 1,000 votes, subject to adjustments.
Because of the nature of the preferred stock's dividend, voting, liquidation and
other
C-3
rights, the value of the one one-thousandth of a share of preferred stock
purchasable with each right is intended to approximate the value of one share
the Common Stock.
AMENDMENTS TO TERMS OF THE RIGHTS
Any of the provisions of the rights agreement may be amended
by the board of directors of the Company so long as the rights are redeemable.
After the rights are no longer redeemable, the provisions of the rights
agreement may be amended by the board of directors in order to cure any
ambiguity, defect or inconsistency, or to make changes which do not adversely
affect the interests of holders of rights (excluding the interests of any
acquirer).
TERM
The rights will expire at the close of business on [ ], 2010,
unless earlier redeemed, exercised or exchanged by the Company as described.
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