Exhibit 4.2
RIGHTS AGREEMENT
Rights Agreement, dated as of September 19, 1991 (the
"Agreement"), between Xxxxxxxxxx Laboratories, Inc., a Texas
corporation (the "company"), and Ameritrust Company National
Association (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right")
for each Common Share (as hereinafter defined) of the Company
outstanding on October 15, 1991 (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a Preferred
Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and directed
the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date
(as such terms are hereinafter defined).
Accordingly, 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 with all
Affiliates and Associates (as such terms are hereinafter defined)
of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 20% or more of the Common Shares of the
Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to
the terms of any such plan. Notwithstanding the foregoing, no
Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 20% or more
of the Common Shares of the Company then outstanding; provided,
however, that if a Person shall become the Beneficial Owner of
20% or more of the Common Shares of the Company then outstanding
by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person".
(b) "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 of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding
(other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided however, that a
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or (B) the right to vote
pursuant to any agreement, arrangement or understanding;
provided, however that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not
also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of
such Persons Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or disposing
of any securities of the Company.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding", when used with reference to a Person's Beneficial
Ownership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the
number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder,
(d) "Business Day" shall mean any day other than a
Saturday. a Sunday or a day on which banking institutions in the
State of Texas are authorized or obligated by law or executive
order to close.
(e) "Close of business" on any given date shall
mean 5:00 P.M., Dallas, Texas time, on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 P.M., Dallas, Texas time, an the next succeeding Business
Day.
(f) "Common Shares" when used with reference to
the Company shall mean the shares of common stock, par value
$0.01 per share, of the Company. "Common Shares" when used with
reference 10 any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of
another person, the Person or Persons which ultimately control
such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(h) "Final Expiration Date" shall have the meaning
set forth in Section 7(a) hereof.
(i) "Flip-In Event" shall have the meaning set
forth in Section 11(a)(ii)(A) hereof.
(j) "Flip-Over Event" shall have the meaning set
forth in Section 13 hereof.
(k) "Person" shall mean any individual, firm,
corporation or other entity, and shall include any successor (by
merger or otherwise) of such entity,
(l) "Preferred Shares" shall mean shares of Series
D Preferred Stock, par value $100 per share, of the Company
having the rights and preferences set forth in the Form of
Statement of Resolution Establishing and Designating Series D
Preferred Stock of Xxxxxxxxxx Laboratories, Inc. attached to this
Agreement as Exhibit A.
(m) "Redemption Date" shall have the meaning set
forth iii Section 7(a) hereof.
(n) "Shares Acquisition Date" shall mean the
first date of public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such.
(o)"Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned, directly or indirectly, by such Person.
(p) "Triggering Event" shall mean any Flip-In Event or
any Flip-Over Event.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall, prior to the Distribution Date also be the holders of the
Common Shares) in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company may from
time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issuance of Right Certificates.
(a) Until the earlier of (i) the close of business on the
tenth day after the Shares Acquisition Date or (ii) the close of
business on the tenth business day (or such later date as may be
determined by action of the Board of Directors prior to such time as
any person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public
announcement of the intention 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 entity holding
Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would
result in any Person becoming the Beneficial Owner of Common Shares
aggregating 20% or more of the then outstanding Common Shares
(including any such date which is after the date of this Agreement and
prior to the issuance of the Rights; the earlier of such dates being
herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or cause to
be sent (and the Rights Agent will, if requested, send) by first-
class, postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held, As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to
Purchase Preferred Shares, in substantially the form of Exhibit C
hereto (the "Summary of Rights"), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown on
the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates registered in the
names of the holders thereof. Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares
outstanding on the Record Date shall also constitute the transfer of
the Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common Shares
referred to in the last sentence of this paragraph (c)) after the
Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them the following
legend:
This certificate also evidences and entities the holder
hereof to certain rights as set forth in a Rights Agreement between
Xxxxxxxxxx Laboratories, Inc. and Ameritrust Company National
Association, dated as of September 19, 1991 (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
Xxxxxxxxxx Laboratories, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate- Xxxxxxxxxx Laboratories, Inc. will mall to the holder of
this certificate a eon of the Rights Agreement without charge after
receipt of a written request therefor at the principal place of
business of Xxxxxxxxxx Laboratories, Inc. Under certain circumstances,
as set forth in the Rights Agreement, Rights issued to any Person who
becomes an Acquiring Person (as defined in the Rights Agreement) may
become null and void,
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with the
Common Shares represented by such certificates shall be evidenced by
such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In the event
that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding,
Section 4. Form of Right Certificates, The Right
Certificates (and the forms of election to purchase Preferred 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. Subject to the provisions of Section 11 and
Section 22 hereof, the Right Certificates shall entitle the holders
thereof to purchase such number of one one-hundredths of a Preferred
Share as shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "Purchase Price"), but the
number of such one one-hundredths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President, its Chief
Executive Officer, or any of its Vice Presidents, or its treasurer,
either manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature, The Right Certificates shall be
countersigned manually or by facsimile signature by the Rights Agent
and shall not be valid for any purpose unless countersigned. In case
any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate,
shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer,
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept. at its principal office, 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.
Section 6. Transfer- Split-up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of section 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 earlier of the Redemption Date
or the Final Expiration Date, any Right Certificate or Right
Certificates (other than Right Certificates representing Rights that
have become void pursuant to Section 11(a)(ii)(B) hereof or that have
been exchanged pursuant to Section 24 hereof) 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 one one-hundredths of a Preferred Share (or, following a
Flip-In Event. Common Shares, other securities, cash or other assets,
as the case may be) as the Right certificate or Right Certificates
entitled such holder 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
principal office or offices of the Rights Agent designated for such
purpose. Thereupon the Rights Agent shall, subject to Section 14
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 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.
(b) Upon receipt by the Company arid 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, and, at the Company's request. reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will execute and
deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated.
Section 7 Exercise of Rights: Purchase Price: Expiration
Date of Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights
Agent at the principal office or offices of the Rights Agent
designated for such purpose, together with payment of the Purchase
Price for each one one-hundredth of a Preferred Share (or other
securities, cash or other assets, as the case may be) as to which the
Rights are exercised, at or prior to the earliest of (i) the close of
business on October 15, 2001 (the "Final Expiration Date"). (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof
(the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share (or other securities, cash or other assets, as the
case may be) purchasable pursuant to the exercise of a Right shall
initially be $80, and shall be subject to adjustment from time to time
as provided in Section 11 or 13 hereof and shall be payable in lawful
money of the United States of America an accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one one-hundredth
of a Preferred Share (or other securities, cash or other assets, as
the case may be) to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 10 hereof by certified check,
cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the
Rights Agent is .a transfer agent for such shares) certificates for
the number of Preferred Shares to be purchased, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a Preferred
Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by
the transfer agent with the depositary agent), and the Company hereby
directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered
in such name or names as may be designated by such holder, and (iv)
when appropriate, after receipt, deliver such cash to or upon the
order of the registered holder of such Right Certificate. In the event
that the Company is obligated to issue other securities (including
stock of the Company), the Common Shares of the Company, pay cash
and/or distribute other property pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any 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.
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 Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other
Right Certificates 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, and in either
such case shall deliver a certificate of destruction thereof or a
certificate of cancellation thereof, as may be appropriate, to the
Company.
Section 9. Reservation and Availability 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
Preferred Shares (and, following the occurrence of a Triggering Event,
out of its authorized and unissued Common Shares and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of Preferred Shares (and following the
occurrence of a Triggering Event, Common Shares and/or other
securities) that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full
of all outstanding Rights.
(b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or securities)
issuable and deliverable upon the exercise of the Rights may be listed
on any national securities exchange or inter-dealer quotation system
of a registered national securities association on which the Preferred
Shares may from time to time be listed, traded or quoted, the Company
shall use reasonable efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange or quotation system upon official notice of
issuance upon such exercise.
(c) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-
hundredths of a Preferred Share (and, following the occurrence of a
Triggering Event, Common Shares 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.
Section 10. Preferred Shares Record Date. Each person in
whose name any certificate for Preferred Shares (or Common Shares
and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares (or Common Shares 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, provided,
however that if the date of such surrender and payment is a date upon
which the Preferred Shares (or Common Shares 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 Shares (or Common Shares 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
shareholder of Preferred Shares 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 II, Adjustment of Purchase Price. Number and Kind
of Shares or Number of Rights. The Purchase Price, the number and kind
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
Shares payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares into a
smaller number of Preferred Shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred Shares (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a) 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 capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of Preferred Shares or shares of capital
stock which, if such right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer books of
the Company were open, he 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) hereof, 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)) hereof.
(ii) (A) Subject to Sections 23 and 24 of this Agreement,
in the event any Person becomes an Acquiring Person other than
pursuant to a Flip-Over Event at any time after September 19, 1991 (a
"Flip-In Event"), each holder of a Right shall thereafter have a right
to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of Preferred Shares, such
number of Common Shares of the Company (such number of Common Shares
to be referred to hereinafter as the "Adjustment Shares") as shall
equal the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable and dividing that product by (y))
50% of the then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the date of
the occurrence of such event. In the event that any Person shall
become an Acquiring Person and the Rights shall then be outstanding,
the Company shall not take any action which would eliminate or
diminish the benefits intended to be afforded by the Rights.
(B) From and after the occurrence of a Flip-In
Event, any Rights that are or were acquired or beneficially owned by
any Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be void, and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of this
Agreement. No Right Certificate shall be issued pursuant to Section 3
that represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would
be void pursuant to the preceding sentence shall be canceled.
(iii) In the event that the number of Common Shares which
is authorized by the Company's Articles of Incorporation but not
outstanding or not 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) of
this Section 11(a), the Company shall, to the extent permitted by
applicable law and regulation: (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 to be
referred to hereinafter as the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (I) cash, (2) a
reduction in the Purchase Price, (3) Common Shares or other equity
securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock which the Board of Directors has
deemed to have the same value as the Common Shares (such shares of
preferred stock, "common share 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 based
upon the advice of an investment banking firm selected by the Board of
Directors; provided, however, if the Company shall not have made
adequate provisions to deliver value pursuant to clause above within
30 days following the first occurrence of a Flip-In Event (the "Flip-in
Trigger Date", then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Board of Directors determines in good faith that
it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the 30-day
period set forth above may be extended to the extent necessary, but not
more than 90 days after the Flip-In Trigger Date, in order that the
Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or second sentences
of this Section 11 (a)(iii), the Company (x) shall provide 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 stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Shares shall be the current per
share market price (as determined pursuant to Section 11(d) hereof) of
the Common Shares on the Flip-In Trigger Date, and the value of any
common share equivalent shall be deemed to have the same value as the
Common Shares on such date,
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase
Preferred Shares (or shares having the same rights, privileges and
preferences as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred
shares at a price per Preferred Share or equivalent preferred share (or
having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then
current per share market price of the Preferred Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares
which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares 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 the
denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible); provided however that in no
event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Preferred Shares 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 ate 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 the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets (other
than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share
market price of the Preferred Shares 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 Preferred Share and the
denominator of which shall be such current per share market price of
the Preferred Shares; 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
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) hereof,
the "current per share market price" of any security (a "Security"
for the purpose of this Section 11(d)(i) on any date shall be deemed
to be the average of the daily closing prices per share of such
Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for purposes
of computations made pursuant to Section 11(a)(iii) hereof, the
"current per share market price" of a Security on any date shall be
deemed to be the average of the daily closing prices per share of
such Security for the ten consecutive Trading Days immediately
following such date; provided, however,. that in the event that the
current per share market price of the Security is determined during a
period following the announcement by the issuer of such Security of
(A) a dividend or distribution on such Security payable in shares of
such Security or securities convertible into shares of such Security
(other than the Rights), or (B) any subdivision, combination or
reclassification of such Security, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, then, and in each such case,
the "current per share market price" shall be properly 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 Security is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system on which the Security is listed or admitted to
trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-
the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or
such other system then in use, or, if on any such date the Security
is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker
making a market in the Security selected by the Board of Directors of
the company. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security is
listed or admitted to trading is open for the transaction of business
or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by 100. If neither the
Common Shares nor the Preferred Shares are publicly held or so listed
or traded, "current per share market price" shall mean the fair value
per share as determined in good faith by the Board of Directors 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 this Agreement, the "current per share market price" of
1/100 of a Preferred Share shall be equal to the "current per share
market price" of one Preferred Share divided by 100.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments 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 one one-millionth of a Preferred Share or one ten-
thousandth of any other share or security, 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
requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the
Companyother than Preferred Shares, thereafter the number of such
other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive,
and the provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence
the right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b)
and (c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase, at
the adjusted Purchase Price, that number of one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth of a
Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share 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 one one-
hundredths of a Preferred Share purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one one-
hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior
to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be
at least 10 days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company shall,
as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to
which such holders shall be entitled as a result of such adjustment.
or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the 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 shall be registered in the names of the
holders of record of Right Certificates on the record date specified
in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a Preferred
Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to
express the Purchase Price and the number of one one-hundredths of a
Preferred Share 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-hundredth of the
then par value, if any, of the Preferred Shares issuable upon
exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuance to the holder
of any Right exercised after such record date of the Preferred Shares
and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided however. that the Company shall deliver
to such holder a due xxxx or other appropriate instrument evidencing
such holder's right to receive such additional shares or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that it
in its sole discretion shall determine to be advisable in order that
any (i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the
current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to hereinabove in
this Section 11, hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such shareholders.
(n) Anything herein to the contrary notwithstanding,
in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Shares payable in Common
Shares or (ii) effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment
of dividends in Common Shares) into a greater or lesser number of
Common Shares, then in any such case (A) the number of one one-
hundredths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying the
number of one one-hundredths of a Preferred Share so purchasable
immediately prior to such event by a fraction, the numerator of which
is the number of Common Shares outstanding immediately before such
event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (B) each Common Share
outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect
to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or
such a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or Section 13 hereof, the Company shall promptly (a)
prepare a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common Shares
or the Preferred Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate (or, if
prior to the Distribution Date, to each holder of a Certificate
representing Common Shares) in accordance with Section 25 hereof.
Section 13. Consolidation. Merger or Sale or Transfer
of Assets or Earning Power. In the event that at any time on or after
the Distribution Date, directly or indirectly, (a) the Company shall
consolidate with, or merge with and into, any other Person other than
a Subsidiary of the Company, (b) any Person other than a Subsidiary
of the Company shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all
or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or
cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person
other than the Company or one or more of its wholly-owned
Subsidiaries (any such event described in clauses (a), (b) or (c)
being referred to herein as a "Flip-Over Event"), then, and in each
such case, proper provision shall be made so that (i) each holder of
a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof at a price equal to
the then current Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-
hundredths of a Preferred Share for which a Right is then exercisable
and dividing that product by (B) 50% of the then current per share
market price of the Common Shares of such other Person (determined
pursuant to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) the issuer of such
Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer. all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
issuer; and (iv) such issuer shall take such steps (including, but
not limited to, the reservation of a sufficient number of its Common
Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the
exercise of the Rights. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing. The Company shall
not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such
transaction, would eliminate or substantially diminish the benefits
intended to be afforded by the Rights. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
Section 14 Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section
14(a), the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular
way. or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading 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.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may. at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary receipts
shall have all the rights, privileges and preferences to which they
are entitled as beneficial owners of the Preferred Shares represented
by such depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market
value of one Preferred Share. For the purposes of this Section 14(b),
the current market value of a Preferred Share shall be the closing
price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(ii) hereof) 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 Common Shares
upon exercise of the Rights or to distribute certificates which
evidence fractional Common Shares. In lieu of fractional Common
Shares 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 Common Share. For purposes of this Section 14(c), the
current market value of one Common Share shall be the closing price
of one Common Share (as determined pursuant to the second sentence of
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 Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided
above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and
any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of the Common Shares), may, in his
own behalf and for his own benefit. enforce, and may institute and
maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of. his right to exercise the
Rights evidenced by such Right Certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations hereunder, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly
endorsed or accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed;
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Shares certificate made
by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission or
any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligations; provided, however, the
Company must use reasonable 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
Shareholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of the Preferred Shares or any other securities of the Company
which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning, the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnity the Rights Agent for, and to hold it harmless against, any
loss, liability or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted
by it in connection with, its administration of this Agreement in
reliance upon any Right Certificate or certificate for the Preferred
Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons, or otherwise upon the
advice of counsel as set forth in section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the stock transfer
or corporate trust powers of the Rights Agent or any successor Rights
Agent, shall he the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided that such
corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case, at the time
such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates
either in the name of the predecessor Rights Agent or In the name of
the successor Rights Agent; and in all such uses such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in
its changed name; and in all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes 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 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 Chief
Executive Officer, the President, any Vice President, the Treasurer
or the Secretary of the Company and delivered to the Rights Agent and
such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own negligence, bad faith
or willful misconduct,
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this
Agreement or in the 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 change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii)(B)
hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Section 3, 11. 13,
23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to
whether any Preferred Shares will, when issued, be validly authorized
and issued, fully paid and nonassessable,
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary
or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal
in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act.
default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, default, neglect
or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
Section 21. Change of Rights Agent. the Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Common Shares or Preferred
Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent If
the Company shall fail to make such appointment within a period of 30
days after giving notice of such removal or after it has been
notified in writing of such 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 registered
holder of any Right 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 Texas (or of any other state of
the United States so long as such corporation is authorized to do
business as a banking institution in the State of Texas in good
standing), having an office in the State of Texas, which is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $50 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 Common Shares or Preferred
Shares, 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
Section 23 Redemption.
(a) The Board of Directors of the Company may at its
option, at any time prior to the close of business on the seventh day
following a Shares Acquisition Date, redeem all but not less than all
the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock spilt, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"). The
redemption of the Rights by the Board of
Directors may be made effective at such time. on such basis
and with such conditions as the Board of Directors in its sole
discretion may establish. Notwithstanding anything in this Agreement
to the contrary, the Rights shall not be exercisable after the
occurrence of a Flip-In Event until such time as the Company's right
of redemption hereunder has expired.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
pursuant to paragraph (a) of this Section 23. and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price, The Company shall promptly
give public notice of any such redemption, provided however that the
failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action of
the Board of Directors ordering the redemption of the Rights, the
Company shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof,
and other than in connection with the purchase of Common Shares prior
to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii)(B) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect
such exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common Shares
for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (a) of this Section 24 and without any further action
and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such exchange;
provided, however that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Shares for Rights will
be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section
1l(a)(ii)(B) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24. the
Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section 11(b)
hereof) for Common Shares exchangeable for Rights, at the initial
rate of one one-hundredth of a Preferred Share (or equivalent
preferred share) for each Common Share, as appropriately adjusted to
reflect adjustments in the voting rights of the Preferred Shares
pursuant to the terms thereof, so that the fraction of a Preferred
Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) In the event that the number of Common or Preferred
Shares which are authorized by the Company's Articles of
Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company may, at its option, take all such action as
may be necessary to authorize additional Common or Preferred Shares.
(e) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Common Share. For the purposes of
this paragraph (e), the current market value of a whole Common Share
shall be the closing price of a Common Share (as determined pursuant
to the second sentence of Section l1(d)(i) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this
Section 24, which date shall be fixed by or in the manner determined
by the Board of Directors of the Company.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any
dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the holders of
its Preferred Shares (other than a regular quarterly cash dividend),
(ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common
Shares or to effect a subdivision, combination or consolidation of
the Common Shares (by reclassification or otherwise than by payment
of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate, In accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend or
distribution of rights or warrants. or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or
(ii) above at least 10 days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, and in
the case of any such other action, at least 10 days prior to the date
of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares,
whichever shall be the earlier.
(b) In case a Flip-In Event shall occur, then the
Company shall as soon as practicable thereafter give to each holder
of a Right Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe
such event and the consequences of such event to holders of Rights
under Section 1l(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by
this Agreement to be given or made by the Rights Agent or by the
holder of any 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:
Xxxxxxxxxx Laboratories, Inc.
0000 Xxxxxx Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Agreement to be given or made by
the Company or by the holder of any 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:
Ameritrust Company National Association
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Corporate Trust Department
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. The Company
may from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions
herein, or to make any other provisions with respect to the Rights
which the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however that from and after
such time as any Person becomes an Acquiring Person, this Agreement
shall not be amended in any manner which would adversely affect the
interests of the holders of Rights. Without limiting the foregoing,
the Company may at any time prior to such time as any Person becomes
an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 3(a) to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding Common
Shares then known by the Company to be beneficially owned by any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the
terms of any such plan) and (ii) 10%.
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. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right.
remedy or claim under this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).
Section 30. 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.
Section 31. 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 TEXAS AND FOR ALL PURPOSES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE
APPLICABLE TO CONTRACT TO BE MADE AND PERFORMED ENTIRELY WITHIN SUCH
STATE.
Section 32. Counterparts. This Agreement may be
executed in any number of counterparts, each of which shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings
of the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day
and year first above written.
XXXXXXXXXX LABORATORIES, INC
Attest:
By: /s/ By: /s/
----------------------- ------------------------
Title: Executive Vice President Title: President and Chief
and Secretary Executive Officer
Name: Xxxxxx F- Xxxxxxx Name: Xxxx XX. Xxxxxxx
AMERITRUST COMPANY NATIONAL
ASSOCIATION
Attest:
By: /s/ By: /s/
Title: Vice President Title: Vice President
Name: Xxxx Xxxxxx Name: Xxxx Xxxxxx
Exhibit A
STATEMENT OF RESOLUTION
ESTABLISHING AND DESIGNATING
SERIES D PREFERRED STOCK
of
XXXXXXXXXX LABORATORIES, INC.
To the Secretary of State
of the State of Texas:
Pursuant to the provisions of Article 2.13 of the Texas
Business Corporation Act, and pursuant to Article Four of its
Articles of Incorporation, the undersigned, Xxxxxxxxxx
Laboratories, Inc., a corporation organized and existing under
the Texas Business Corporation Act, as amended (the "Company"),
hereby submits the following statement for the purpose of
establishing and designating 300,000 shares of its Preferred
Stock, par value $100 per share, as "Series D Preferred Stock"
(the Series D Shares) and fixing and determining the relative
rights thereof:
1. The name of the corporation is
Xxxxxxxxxx Laboratories. Inc.
2, Attached hereto as Annex I is a true and correct copy
of the resolution establishing and designating the
Series 1) Shares and fixing and determining the
relative rights and preferences thereof,
3. Such resolution was duly adopted by the Board of
Directors of the Company on September 19, 1991,
Dated: September 19. 1991.
XXXXXXXXXX LABORATORIES, INC.
By:________________
Xxxxxx X. Xxxxxxx,
Executive Vice President
and Secretary
Annex I
RESOLUTION OF THE BOARD OF DIRECTORS
OF XXXXXXXXXX LABORATORIES, INC.
RESOLVED, that pursuant to the authority vested in the
Board of Directors of the Company in accordance with provisions
of its Articles of Incorporation, (a) the Board of Directors
does hereby create, authorize and provide for the issuance, upon
the exercise of the Rights, of a series Of Preferred Stock of
the Company to be designated "Series D Preferred Stock"
(hereinafter referred to as the Series I) "Preferred Stock"),
initially consisting of 300,000 shares, and (b) the Board of
Directors does also hereby (to the extent that the designations,
preferences, limitations and relative rights (collectively, the
"Terms") of the Series I) Preferred Stock are not stated and
expressed in the Articles of Incorporation and to the extent
that if such Terms are stated or expressed in the Articles of
Incorporation but the Articles of Incorporation permit the Board
of Directors to otherwise fix and state such Terms) fix and
state such designations, preferences, limitations and relative
rights thereof, as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series I) Preferred Stock", par
value $100 per share (the "Series D Preferred Stock"), and the
number of shares constituting the Series I) Preferred Stock
shall be 300,000. Notwithstanding the provisions of Section 9
hereof, such number of shares may be increased or decreased by
resolution of the Board of Directors; provided that no decrease
shall reduce the number of shares of Series D Preferred Stock to
a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Company convertible
into Series D Preferred Stock
Section 2. Dividends, Subject to the prior and superior
fights of the holders of any shares of any series of Preferred
Stock ranking prior and superior to the shares of Series D
Preferred Stock with respect to dividends, the holders of Series
D Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally
available therefor, dividends payable in ash, stock or
otherwise.
Section 3. Voting Rights The holders of shares of Series I)
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series D Preferred
Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the shareholders of the
Company- In the event the Company shall at any time declare
or pay any dividend on the Common Stock payable in shares
of Common Stock, or erect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the
number of votes per share to which holders of shares of
Series D Preferred Stock 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
(B) Except as otherwise provided herein, in any other
Statement of Resolution creating a series of Preferred
Stock or any similar stock, or by law, the holders of
shares of Series b Preferred Stock and the holders of
shares of Common Stock and any other capital stock of
theCompany having general voting rights shall vote together
as one class on all matters submitted to a vote of
shareholders of the Company.
(C) Except as set forth herein, or as otherwise
provided by law, holders of Series D Preferred Stock shall
have no special voting rights, and their consent shall not
be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Reacquired Shares. Any shares of Series D
Preferred Stock purchased or otherwise acquired by the Company
in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as pan of a new series of Preferred
Stock subject. to the conditions and restrictions on issuance
set forth herein, in the Articles of Incorporation, or in any
other Statement of Resolution creating a series of Preferred
Stock or any similar stock or as otherwise required by law.
Section 5. Liquidation. Dissolution or Winding Up Upon any
liquidation, dissolution or winding up of the Company, no
distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding tip) to the Series I) Preferred Stock
unless, prior thereto, the holders of shares of Series fl
Preferred Stock shall have received $100 per share. provided
that the holders of shares of Series I) Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to
holders of shares of Common Stock, or (2) to the holders of
shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the series I)
Preferred Stock, except distributions made ratably on the Series
D Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up. In
the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock
or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such ease the aggregate amount to which
holders of shares of Series V Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1)
of the preceding sentence 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 6 Consolidation. Merger, etc. In case the Company
shall enter into any consolidation. merger, combination or other
transaction in which the shares of Common Stock are exchanged
for or changed into other stock or securities, cash and/or any
other property, then in any such case each share of Series P
Preferred Stock 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 100 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 declare or pay any
dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) Into a greater or lesser number of shares of Common
Stock, then in each such ease the amount set forth in the
preceding sentence with respect to the exchange or change of
shares of Series P Preferred Stock 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 7. No Redemption. The shares of Series P Preferred
Stock shall not be redeemable.
Section 8. Rank. The Series P Preferred Stock shall rank
junior to all other series of the Company's Preferred Stock as
to payment of dividends and the distribution of assets on
liquidation or otherwise, unless the terms of any such series
shall provide otherwise. The Series P Preferred Stock shall rank
senior to the Company's Common Stock as to the distribution of
assets on liquidation or otherwise.
Section 9, Amendment. The Articles of Incorporation of the
Company shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the
Series 1) Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series 1) Preferred Stock, voting together
as a single class.
Section 10. Fractional Shares. Series D Preferred Stock may
be issued in fractions of a share which shall entitle the holder
thereof, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in
distributions and have the benefit of all of the rights of
holders of shares of Series D Preferred Stock.
Exhibit B
Form of Right Certificate
Certificate No. R- ____ Rights
NOT EXERCISABLE AFTER OCTOBER 15, 2001 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT.
XXXXXXXXXX LABORATORIES, 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
September 19, 1991 (the "Rights Agreement"), between Xxxxxxxxxx
Laboratories, Inc., a Texas corporation (the "Company"), and
Ameritrust Company National Association (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 S:00 P.M., Dallas, Texas time, on October 15, 2001 at the
principal office or offices of the Rights Agent designated for
such purpose, or at the designated office of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series D Preferred Stock, par value $100 per share (the
"Preferred Shares"), of the Company, at a purchase price of $80
per one one-hundredth of a Preferred Share (the Purchase Price),
upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of
one one-hundredths of a Preferred Share which may be purchased
upon exercise hereof), and the Purchase Price set forth above,
are the number and Purchase Price as of ___________. based on
the Preferred Shares as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of one
one-hundredths of a Preferred Share 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.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent,
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office or office
of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of Preferred Shares as the
Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in pan, the holder shall be
entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate (0 may be redeemed by the
Company at a redemption price of 3,01 per Right or (ii) may be
exchanged in whole or in pan for Preferred Shares or shares of
the Company/s Common Stock, par value 50.01 per share.
No fractional Preferred Shares will be issued upon The
exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts), 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 Shares or of any other securities of the
Company which may at any time he issuable on the exercise hereof
nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of
the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold
consent to any Corporate action, or to receive notice Of
meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as
provided in the Rights Agreement
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent,
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of ______________
Attest: XXXXXXXXXX LABORATORIES. INC.
___________________________ By:__________________________
Name: _____________________ Name: _______________________
Title: ____________________ Title:_______________________
Countersigned:
AMERITRUST COMPANY NATIONAL ASSOCIATION
By: ______________________
Name:__________________
Title:_________________
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to transfer Rights evidenced by this Right Certificate.)
FOR VALUE RECEIVED _________________ hereby sells, assigns and
transfers unto _____________________________________________________
(Please print name and address of transferee)
____________________________________________________________________
_____________________________ of the Rights evidenced by this Right
Certificate, together with all right title and interest therein, and
does hereby irrevocably constitute and appoint ___________________
Attorney, to transfer such Rights on the books of the within-named
Company, with full power of substitution.
Dated: _________________
_________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having
an office or correspondent in the United States.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement).
_________________________________________
Signature
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Right Certificate.)
To XXXXXXXXXX LABORATORIES, INC.
The undersigned hereby irrevocably elects to exercise
__________________________ Rights represented by this Right
Certificate to purchase the Preferred Shares issuable upon the
exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other indentifying number
_______________________________________________________________
(Please print name and address)
_______________________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the name
of and delivered to:
Please insert social security
or other identifying number
_______________________________________________________________
(Please print name and address)
_______________________________________________________________
Dated: ________________
______________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers. Inc., or a
commercial bank or trust company having an office or
correspondent in the United States.
_______________________________________________________________
The undersigned hereby certifies that the Rights evidenced
by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
______________________________________
Signature
_______________________________________________________________
[Form of Reverse Side of Right Certificate -- continued]
NOTICE
The signature in the Form of Assignment or Form of Election
to Purchase, as the case may be, must conform to the name as
written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form
of Assignment or the Form of Election to Purchase, as the case
may be, is not completed, the Company and the Rights Agent will
deem the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On September 19, 1991, the Board of Directors of Xxxxxxxxxx
Laboratories, Inc. (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $0.01 per share (the "Common
Shares"), of the Company. the dividend is payable on October 15,
1991 (the "Record Date") to the shareholders of record on that
date. Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series D Preferred
Stock, par value $100 per share (the "Preferred Shares"), of the
Company at a price of $80 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and
Ameritrust Company National Association; as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired
beneficial ownership of 20% or more of the outstanding Common
Shares or (ii) 10 business days (or such later date as may be
determined by action of the hoard of Directors prior to such
time as any person or group of affiliated persons becomes all
Acquiring Person) following the commencement of. or announcement
of an intention to make. * tender offer or exchange offer the
consummation of which would result in the beneficial ownership
by a person or group of 20% or more of the outstanding Common
Shares (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by
such Common Share certificate.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued after the
Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by
reference. Until the Distribution Date (or earlier redemption Or
expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record
Date, even without such notation, will also constitute the
transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of
business on the Distribution bate, and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire On October 15, 2001 (the "Final
Expiration Date"), unless the Final Expiration Date is extended
or unless the Rights are earlier redeemed or exchanged by the
Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise
of the Rights are subject to adjustment from time to time to
prevent dilution (I) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares
of certain rights or warrants to subscribe for or purchase
Preferred Shares at a price, or securities convertible into
Preferred Shares with a conversion price, less than the then-
current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends
payable in Preferred Shares) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-
hundredths of a Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock
split of the Common Shares or a stock dividend on the Common
Shares payable in Common Shares or subdivisions, consolidations
or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights
will not be redeemable. Each Preferred Share will be entitled to
receive a dividend payable in cash, stock or otherwise when, as
and if declared by the Board of Directors. In the event of
liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100
per share but will be entitled to an aggregate payment of 100
times the payment made per Common Share. each Preferred Share
Will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation Or other
transaction in which Common Shares are exchanged, each Preferred
Share will be entitled to receive 100 times. the amount received
per Common Share, These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of one one-hundredth
interest in a Preferred Share purchasable upon exercise of each
Right should approximate the value of one Common Share.
In the event that the Company is acquired in a merger or
other business combination transaction or 50% or more of its
consolidated assets or earning power are sold (a "Flip-Over
Event"), proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring
company which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the event
that any person or group of affiliated or associated persons
becomes an Acquiring Person other than pursuant to a Flip-Over
Event, proper provision shall be made so that each holder of a
Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares (or,
in certain circumstances, cash, property or other securities of
the Company) having a market value of two times, the exercise
price of the Right.
At any time after any Person becomes an Acquiring Person
and prior to the acquisition by such person or group of 50% or
more of the outstanding Common Shares, the hoard or Directors of
the Company may exchange the Rights (other than Rights owned by
such person or group which will have become void). in whole or
in part, at an exchange ratio of one Common Share, or one one-
hundredth of a Preferred Share (or of a share of a class or
series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
Preferred Shares will be issued (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share,
which may, at the election of the Company, be evidenced by
depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares
on the last trading day prior to the date of exercise.
At any time prior to the dose of business on the Seventh
day following the first date of public announcement that a
person or group became an Acquiring Person, the Board of
Directors of the Company may redeem the Rights in whole, but not
in part, at a price of $0.01 per Right (the "Redemption Print).
The redemption of the Rights may be made effective at such time,
on such basis and with such conditions as the Board of Directors
in its sole discretion may establish. Immediately upon any
redemption of the Rights, the right to exercise the Rights will
terminate, and the only right of the holders of Rights will be
to receive the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of
the Rights, including an amendment to tower certain thresholds
described above to not less than the greater of (i) the sum of
.001% and the largest percentage of the outstanding Common
Shares then known to the Company to be beneficially owned by any
person or group of affiliated or associated persons and (ii)
10%, except that from and after such time as any person or group
of affiliated or associated persons becomes an Acquiring Person
no such amendment may adversely affect the interests of the
holders of the Rights.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a shareholder of the Company, including,
without limitation, the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A. dated September ___, 1991. A
copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated
herein by reference.
