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RIGHTS AGREEMENT
by and between
XXXXX MEDICAL CORP.
and
AMERICAN STOCK TRANSFER & TRUST CO.
as Rights Agent
Dated as of
November 18, 1998
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions
Section 2. Appointment of Rights Agent
Section 3. Issuance of Rights Certificates
Section 4. Form of Rights Certificates
Section 5. Countersignature and Registration
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights
Section 8. Cancellation and Destruction of Rights Certificates
Section 9. Reservation and Availability of Shares of Preferred Stock
Section 10. Preferred Stock Record Date
Section 11. Adjustment of Exercise Price or Number of Shares
Section 12. Certification of Adjusted Exercise Price or Number of Shares
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power
Section 14. Fractional Rights and Fractional Shares
Section 15. Rights of Action
Section 16. Agreement of Right Holders
Section 17. Rights Certificate Holder Not Deemed a Stockholder
Section 18. Concerning the Rights Agent
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent
Section 20. Duties of Rights Agent
Section 21. Change of Rights Agent
Section 22. Issuance of New Rights Certificates
Section 23. Redemption
Section 24. Notice of Proposed Actions
Section 25. Notices
Section 26. Supplements and Amendments
Section 27. Exchange
Section 28. Successors
Section 29. Benefits of this Rights Agreement
Section 30. Delaware Contract
Section 31. Counterparts
Section 32. Descriptive Headings
Section 33. Severability
Exhibit A Summary of Rights
Exhibit B Form of Rights Certificate
Exhibit C Form of Amended Certificate of Designations
Relating to the Terms of the Series I Junior Preferred Stock
RIGHTS AGREEMENT
Agreement, dated as of November 18, 1998, by and between Xxxxx Medical
Corp., a Delaware corporation (the "Company"), and American Stock Transfer &
Trust Co. (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on November 18, 1998, the Board of Directors of the Company
authorized the issuance of, and declared a dividend payable in, one right (a
"Right") for each share of Common Stock, $0.01 par value per share, of the
Company outstanding as of the close of business on March 17, 1999 (the "Record
Date"), each such Right representing the right to purchase one one-hundredth of
a share of Series I Junior Preferred Stock of the Company ("Preferred Stock")
having the rights and preferences set forth in the Amended Certificate of
Designations attached hereto as Exhibit C, authorized by the Board of Directors
on November 18, 1998, upon the terms and subject to the conditions hereinafter
set forth; and
WHEREAS, the Board of Directors of the Company further authorized the
issuance of one Right (subject to adjustment) with respect to each share of
Common Stock which may be issued between the Record Date and the earlier to
occur of the Distribution Date or the Expiration Date (as such terms are
hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is hereinafter
defined) and Associates (as such term is hereinafter defined) of such Person, is
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
Voting Stock (as such term is hereinafter defined) of the Company then
outstanding; provided, that, an Acquiring Person shall not include (i) an Exempt
Person (as such term is hereinafter defined) or (ii) any Person, together with
all Affiliates and Associates of such Person, who or which would be an Acquiring
Person solely by reason of (A) being the Beneficial Owner of shares of Voting
Stock of the Company then outstanding, the Beneficial Ownership of which was
acquired by such Person (or his or its predecessor through merger,
consolidation, amalgamation or other similar legal succession) pursuant to any
action or transaction or series of related actions or transactions approved by
the Board of Directors before such Person otherwise became an Acquiring Person
or (B) a reduction in the number of outstanding shares of Voting Stock of the
Company pursuant to a transaction or a series of related transactions approved
by the Board of Directors of the Company; provided, further, that in the event
such Person described in this clause (ii) does not become an Acquiring Person by
reason of subclause (A) or (B) of this clause (ii), such Person nonetheless
shall become an Acquiring Person in the event such Person thereafter acquires
Beneficial Ownership of an additional 1% or more of the Voting Stock of the
Company then outstanding, unless the acquisition of such additional Voting Stock
would not result in such Person becoming an Acquiring Person by reason of
subclause (A) or (B) of this clause (ii). Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person" as
defined pursuant to the foregoing provisions of this paragraph (a) has become
such inadvertently, and such Person divests as promptly as practicable (as
determined in good faith by the Board of Directors) a sufficient number of
shares of Common Stock so that such Person would no longer be an "Acquiring
Person" as defined pursuant to the foregoing provisions of this paragraph (a),
then such Person shall not be deemed an "Acquiring Person" for any purposes of
this Rights Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), as in effect on the date of this Rights Agreement.
(c) "Associate" of a Person (as such term is hereinafter defined) shall
mean (i) with respect to a corporation, any officer or director thereof or of
any Subsidiary (as such term is hereinafter defined) thereof, or any Beneficial
Owner (as such term is hereinafter defined) of 10% or more of any class of
equity security thereof, (ii) with respect to an association, joint venture, or
other unincorporated organization, any officer or director thereof or of a
Subsidiary thereof or any Beneficial Owner of a 10% or more ownership interest
therein, (iii) with respect to a partnership, any general partner thereof or any
limited partner thereof who is, directly or indirectly, the Beneficial Owner of
a 10% or greater ownership interest therein, (iv) with respect to a limited
liability company, any officer, director or manager thereof or of a Subsidiary
thereof or any member thereof who is directly or indirectly the Beneficial Owner
of a 10% or greater ownership interest therein, (v) with respect to a business
trust, any officer or trustee thereof or of any Subsidiary thereof, (vi) with
respect to any other trust or an estate, any trustee, executor or similar
fiduciary or any Person who has a 10% or greater interest as a beneficiary in
the income from or principal of such trust or estate,
(vii) with respect to a natural person, any relative or spouse of such person,
or any relative of such spouse, who has the same home as such person, and (viii)
any Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to "Beneficially
Own", any securities (and correlative terms shall have correlative meanings):
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly, for purposes of Section 13(d) of
the Exchange Act and Regulations 13D and 13G thereunder, in each case as in
effect on the date hereof; or
(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 or the fulfillment of a condition or
both) pursuant to any agreement, arrangement or understanding (whether or
not in writing), or upon the exercise of conversion rights, exchange
rights, other 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 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, alone or in
concert with others, pursuant to any agreement, arrangement, or
understanding (whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own",
any securities if the agreement, arrangement or understanding to vote such
security
(1) arises solely from a revocable proxy or consent given in response to a proxy
or consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) is not at the time
reportable by such Person on a Schedule 13D report under the Exchange Act (or
any comparable or successor report), other than by reference to a proxy or
consent solicitation being conducted by such Person; or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding, voting (except as
described in proviso in clause (B) of subparagraph (ii) of this paragraph
(d)) or disposing of any securities of the Company; provided, however, that
for purposes of determining Beneficial Ownership of securities under this
Rights Agreement, officers and directors of the Company solely by reason of
their status as such shall not constitute a group (notwithstanding that
they may be Associates of one another or may be deemed to constitute a
group for purposes of Section 13(d) of the Exchange Act) and shall not be
deemed to own shares owned by another officer or director of the Company.
Notwithstanding anything in this paragraph (d) to the contrary, a Person
engaged in the business of underwriting securities shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own," any securities acquired in good
faith in a firm commitment underwriting until the expiration of forty days after
the date of such acquisition.
(e) "Book-Entry" shall mean an uncertificated book-entry for the Company's
Common Stock in the Company's Direct Registration System, if any.
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business
Day.
(h) "Common Stock" when used with reference to the Company shall mean the
Common Stock, $0.01 par value, of the Company. "Common Stock" when used with
reference to any Person other than the Company which shall be organized in
corporate form shall mean the capital stock or other equity security with the
greatest voting power of such Person. "Common Stock" when used with reference to
any Person other than the Company which shall not be organized in corporate form
shall mean units of beneficial interest which shall represent the right to
participate in profits, losses, deductions and credits of such Person and which
shall be entitled to exercise the greatest voting power of such Person.
(i) "Continuing Director" shall mean any member of the Board of Directors,
while such person is a member of the Board of Directors, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
or nominee of an Acquiring Person or of any such Affiliate or Associate, and who
either (i) was a member of the Board of Directors prior to the time that any
Person became an Acquiring Person or (ii) subsequently became a member of the
Board of Directors, and whose nomination for
election or election to the Board of Directors was recommended or approved by a
majority of the Continuing Directors then on the Board of Directors.
(j) "Distribution Date" shall have the meaning set forth in Section 3(b)
hereof.
(k) "Exchange Act" shall have the meaning set forth in Section 1(b) hereof.
(l) "Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of the
Company or (iii) any employee benefit plan or employee stock plan of the Company
or any Subsidiary of the Company, or any trust or other entity organized,
appointed, established or holding Common Stock for or pursuant to the terms of
any such plan.
(m) "Exercise Price" shall have the meaning set forth in Sections 4 and
7(b) hereof.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(o) "Fair Market Value" of any property shall mean the fair market value of
such property as determined in accordance with Section 11(b) hereof.
(p) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System or any successor thereto or other comparable
quotation system.
(q) "Person" shall mean any individual, firm, corporation or other entity.
(r) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(s) "Record Date" shall have the meaning set forth in the first Recital.
(t) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(u) "Rights Certificate" shall have the meaning set forth in Section 3(d)
hereof.
(v) "Stock Acquisition Date" shall mean the first date on which there shall
be a public announcement by the Company or an Acquiring Person that an Acquiring
Person has become such (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) or such earlier date as a majority of the Board of Directors shall become
aware of the existence of an Acquiring Person.
(w) "Subsidiary" of a Person shall mean any corporation or other entity of
which securities or other ownership interests having voting power sufficient to
elect a majority of the board of directors or other persons performing similar
functions are beneficially owned, directly or indirectly, by such Person or by
any corporation or other entity that is otherwise controlled by such Person.
(x) "Summary of Rights" shall have the meaning set forth in Section 3(a)
hereof.
(y) "Trading Day" shall have the meaning set forth in Section 11(b) hereof.
(z) "Transfer Tax" shall mean any tax or charge, including any documentary
stamp tax, imposed or collected by any governmental or regulatory authority in
respect of any transfer of any security, instrument or right, including Rights,
shares of Common Stock and shares of Preferred Stock.
(aa)"Voting Stock" shall mean (i) the Common Stock of the Company and (ii)
any other shares of capital stock of the Company entitled to vote generally in
the election of
directors or entitled to vote together with the Common Stock in respect of any
merger, consolidation, sale of all or substantially all of the Company's assets,
liquidation, dissolution or winding up. For purposes of this Agreement, Voting
Stock shall include securities of the type referred to in clauses (i) and (ii)
above that trade on a "when issued" basis on a national securities exchange or
on the NASDAQ. For purposes of this Agreement, a stated percentage of the Voting
Stock shall mean a number of shares of the Voting Stock as shall equal in voting
power that stated percentage of the total voting power of the then outstanding
shares of Voting Stock in the election of a majority of the Board of Directors
or in respect of any merger, consolidation, sale of all or substantially all of
the Company's assets, liquidation, dissolution or winding up.
Any determination required to be made by the Board of Directors of the
Company for purposes of applying the definitions contained in this Section 1
shall be made by the Board of Directors in its good faith judgment, which
determination shall be binding on the Rights Agent and the holders of the
Rights.
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 in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) On the Record Date (or as soon as practicable thereafter), the Company
or the Rights Agent shall send a copy of a Summary of Rights, in substantially
the form attached hereto as Exhibit A or such other form as shall be acceptable
to the Company (the
"Summary of Rights"), by first class mail, postage prepaid,
to each record holder of the Common Stock as of the close of business on the
Record Date, at the address of such holder shown on the records of the Company.
(b) Until the close of business on the day which is the earlier of (i) the
tenth day after the Stock Acquisition Date or such earlier or later date (not
beyond the thirtieth day after the Stock Acquisition Date) as the Board of
Directors may from time to time fix by resolution adopted prior to the
Distribution Date that otherwise would have occurred or (ii) the tenth business
day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than an Exempt Person) of, or the first
public announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 15% or more of the then outstanding shares of Voting Stock
of the Company (irrespective of whether any shares are actually purchased
pursuant to any such offer) (the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights shall be evidenced by the same
Book-Entries or the same certificates as for Common Stock registered in the name
of the holders of Common Stock (together with, in the case of Book-Entries
representing or the certificates for Common Stock outstanding as of the Record
Date, the Summary of Rights) and not by separate Book-Entries or separate Right
certificates and the record holders of the Common Stock represented by such
Book-Entries or certificates shall be the record holders of the Rights
represented thereby and (y) each Right shall be transferable only simultaneously
and together with the transfer of a share of Common Stock (subject to adjustment
as hereinafter provided).
Until the Distribution Date (or, if earlier, the
Expiration Date), transfer on the Company's Direct Registration System of any
Common Stock represented by a Book-Entry or the surrender for transfer of any
certificate for Common Stock shall constitute the surrender for transfer of the
Right or Rights associated with the Common Stock evidenced thereby, whether or
not accompanied by a copy of the Summary of Rights.
(c) Rights certificates shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date and, in certain circumstances
provided in Section 22 hereof, may be issued in respect of shares of Common
Stock that become outstanding after the Distribution Date. Certificates for
Common Stock (including, without limitation, certificates issued upon original
issuance, disposition from the Company's treasury or transfer or exchange of
Common Stock) after the Record Date but prior to the earliest of the
Distribution Date or the Expiration Date (or, in certain circumstances as
provided in Section 22 hereof, after the Distribution Date) shall have
impressed, printed, written or stamped thereon or otherwise affixed thereto the
following legend:
This certificate also evidences and entitles the holder hereof to the
same number of Rights (subject to adjustment) as the number of shares of
Common Stock represented by this certificate, such Rights being on the
terms provided under the Rights Agreement between Xxxxx Medical Corp. (the
"Company") and American Stock Transfer & Trust Co. (the "Rights Agent"),
dated as of November 18, 1998, as it may be amended from time to time (the
"Rights Agreement"), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal executive offices
of the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. The Company shall mail to
the registered holder of this certificate a copy of the Rights Agreement
without charge within five days after receipt of a written request
therefor. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT,
RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR
AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID
AND MAY NOT BE TRANSFERRED TO ANY PERSON.
(d) 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 mail, postage prepaid, to each record holder of the Common Stock as
of the Close of Business on the Distribution Date, as shown by the records of
the Company, at the address of such holder shown on such records, a certificate
in the form provided by Section 4 hereof (a "Rights Certificate"), evidencing
one Right (subject to adjustment as provided herein) for each share of Common
Stock so held. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Rights Certificates and may be transferred by the
transfer of the Rights Certificate as permitted hereby, separately and apart
from any transfer of one or more shares of Common Stock.
(e) In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration Date,
the Company (i) shall, with respect to shares of Common Stock so issued or sold
(x) pursuant to the exercise of stock options or under any employee plan or
arrangement or (y) upon the exercise, conversion or exchange of other securities
issued by the Company prior to the Distribution Date and (ii) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Rights Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided that no such Rights
Certificate shall be issued if, and to the extent that, (i) the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued or (ii) appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase shares,
certificate and assignment to be printed on the reverse thereof), when, as and
if issued, shall be substantially in the form set forth in Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Common Stock or the Rights may from time to
time be listed or as the Company may deem appropriate to conform to usage or
otherwise and as are not inconsistent with the provisions of this Rights
Agreement. Subject to the provisions of Section 22 hereof, Rights Certificates
evidencing Rights whenever issued, (i) shall be dated as of the date of issuance
of the Rights they represent and (ii) subject to adjustment from time to time as
provided herein, on their face shall entitle the holders thereof to purchase
such number of shares (including fractional shares which are integral multiples
of one-hundredth of a share) of Preferred Stock as shall be set forth therein at
the price payable upon exercise of a Right provided by Section 7(b) hereof as
the same may from time to time be adjusted as provided herein (the "Exercise
Price").
(b) Notwithstanding any other provision of this Rights Agreement, any
Rights Certificate that represents Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof or any other Person whose Rights
shall become void pursuant to Section 7(e) shall have impressed on, printed on,
written on or otherwise affixed to it (if the
Company or the Rights Agent has knowledge that such Person is an Acquiring
Person or an Associate or Affiliate or a nominee of any of the foregoing) the
following legend:
The Beneficial Owner of the Rights represented by this Rights
Certificate is an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person. Accordingly, this Rights Certificate and the Rights
represented hereby shall become void in the circumstances specified in
Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) Each Rights Certificate shall be executed on behalf of the Company by
its Chairman of the Board, President or any Vice President, either manually or
by facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. Each Rights
Certificate shall be countersigned by the Rights Agent either manually or by
facsimile signature and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
Rights Certificate shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery of the
certificate by the Company, such Rights Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company. Any Rights Certificate may be signed
on behalf of the Company by any person who, on the date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or one or more offices designated as the
appropriate place for the surrender of Rights Certificates upon exercise or
transfer, and in such other locations as may be required by law, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates, the date of each of the Rights Certificates and any Rights
Certificates that have a legend printed thereon pursuant to Section 4(b).
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14(b) hereof, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Rights Certificate, may be
(i) transferred or (ii) split up, combined or exchanged for one or more other
Rights Certificates, entitling the registered holder to purchase a like number
of shares of Preferred Stock as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer any Rights Certificate shall surrender the Rights
Certificate at the office of the Rights Agent designated for the surrender of
Rights Certificates with the form of certificate and assignment on the reverse
side thereof duly endorsed (or enclosed with such Rights Certificate a written
instrument of transfer in form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Rights Certificate shall
make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate to be split up,
combined or exchanged at the office of the Rights Agent. Thereupon, the Rights
Agent shall countersign and deliver to the person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any Transfer Tax that
may be imposed in connection with any transfer, split up, combination or
exchange of any Rights Certificates.
(b) Subject to the provisions of Section 7(e), 7(f) and 14(b) hereof, upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Rights Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them and, if requested by the Company, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, or
upon surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company shall issue and deliver a new Rights Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights.
(a) The Rights shall not be exercisable until, and shall become exercisable
on, the Distribution Date (unless otherwise provided herein, including, without
limitation, the restrictions on exercisability set forth in Section 7(e) and
23(a) hereof). Except as otherwise provided herein, the Rights may be exercised,
in whole or in part, at any time commencing with the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
certificate on the reverse side thereof duly executed (with signatures duly
guaranteed), to the Rights Agent at the principal office of the Rights Agent in
New York, New
York, together with payment of the Exercise Price for each Right exercised,
subject to adjustment as hereinafter provided, at or prior to the Close of
Business on the earlier of (i) March 17, 2009 (or if the Distribution Date shall
have occurred before March 17, 2009, at the Close of Business on the 90th day
following the Distribution Date) or (ii) the date on which the Rights are
redeemed as provided in Section 23 hereof (such earlier date being herein
referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $70 for each one one-hundredth
(1/100) of a share of Preferred Stock issued pursuant to the exercise of a
Right. The Exercise Price and the number of shares of Preferred Stock or other
securities to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof. The
Exercise Price shall be payable in lawful money of the United States of America,
in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a Rights
Certificate representing exercisable Rights with the form of election to
purchase duly executed, accompanied by payment by certified check, cashier's
check, bank draft or money order payable to the Company or the Rights Agent of
the Exercise Price for the shares to be purchased and an amount equal to any
applicable Transfer Tax required to be paid by the holder of the Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall
thereupon promptly (i) requisition from any registrar or transfer agent, as may
be appropriate, of the Preferred Stock of the Company one or more certificates
representing the number of shares of Preferred Stock to be so purchased, and the
Company hereby authorizes and directs such registrar or transfer agent to comply
with all such requests, (ii) as provided in Section 14(b), at the election of
the Company, cause depositary receipts to be issued in lieu
of fractional shares of Preferred Stock, (iii) if the election provided for in
the immediately preceding clause (ii) has not been made, requisition from the
Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with Section 14(b) hereof, (iv) after receipt of such
Preferred Stock certificates and, if applicable, depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder and (v) when appropriate, after receipt, promptly deliver such cash
to or upon the order of the registered holder of such Rights Certificate;
provided, however, that in the case of a purchase of securities, other than
Preferred Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly
take the appropriate actions corresponding in such case to that referred to in
the foregoing clauses (i) through (v) of this Section 7(c). Notwithstanding the
foregoing provisions of this Section 7(c), the Company may suspend the issuance
of shares of Preferred Stock upon exercise of a Right for a reasonable period,
not in excess of 120 days, during which the Company seeks to register under the
Securities Act of 1933, as amended (the "Act"), and any applicable securities
law of any other jurisdiction, the shares of Preferred Stock to be issued
pursuant to the Rights; provided, however, that nothing contained in this
Section 7(c) shall relieve the Company of its obligations under Section 9(c)
hereof.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Rights Certificate or his assign,
subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to the contrary,
from and after the time (the "invalidation time") when any Person first becomes
an Acquiring
Person, any Rights that are beneficially owned by (x) such Acquiring Person (or
any Associate or Affiliate of such Acquiring Person), (y) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
after the invalidation time or (z) a transferee of such Acquiring Person (or any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the invalidation time pursuant to either (I) a transfer from the Acquiring
Person to holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of this Section 7(e), and subsequent transferees of the Persons
referred to in either clause (y) or (z) above, shall be void without any further
action and any holder of such Rights shall thereafter have no rights whatsoever
with respect to such Rights under any provision of this Rights Agreement. The
Company shall use all reasonable efforts to ensure that the provisions of this
Section 7(e) are complied with, but shall have no liability to any holder of a
Rights Certificate or any other Person as a result of the Company's failure to
make any determination with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. No Rights Certificate shall be issued
pursuant to Section 3 hereof that represents Rights beneficially owned by an
Acquiring Person or any other Person whose Rights would be void pursuant to the
provisions of this Section 7(e) or any Associate, Affiliate or nominee thereof;
no Rights Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person or any other Person whose Rights would be void
pursuant to the provisions of this Section 7(e) or any Associate, Affiliate or
nominee thereof; and any Rights Certificate delivered to the Rights
Agent for transfer to an Acquiring Person whose Rights would be void pursuant to
the provisions of this Section 7(e) shall be canceled.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate following the form of election to purchase
set forth on the reverse side of the Rights Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof or a Person referred to in clause (y) or (z) of Section 7(e) and such
other information as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall cancel
and retire, any Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock or
out of authorized and issued shares of Preferred Stock held in its treasury,
such number of shares of Preferred Stock as will from time to time be sufficient
to permit the exercise in full of all outstanding Rights. The Company shall take
such action as may be required for it to comply with the foregoing sentence of
this Section 9(a).
(b) The Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares of Preferred Stock issued or
reserved for issuance in accordance with this Rights Agreement to be listed,
upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation on NASDAQ or any successor thereto or other comparable
quotation system.
(c) The Company covenants and agrees that it will take all such action as
may be necessary to insure that all shares of Preferred Stock delivered upon
exercise of Rights shall, at the time of delivery of the certificates, for such
shares (subject to payment of the Exercise Price in respect thereof), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
shares of Preferred Stock purchasable upon exercise of the Rights on
an appropriate form, (ii) cause such registration statement to become effective
as soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for Preferred Stock, and (B) the Expiration
Date. The Company may temporarily suspend, for a period of time not to exceed
120 days, the issuance of shares of Preferred Stock upon exercise of a Right in
order to prepare and file a registration statement under the Act and permit it
to become effective. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the Rights.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Act (if required) shall have been declared effective.
(e) The Company covenants and agrees that it will pay when due and payable
any and all federal and state Transfer Taxes which may be payable in respect of
the original issuance or delivery of the Rights Certificates or of any shares of
Preferred Stock issued or delivered upon the exercise of Rights. The Company
shall not, however, be required to pay any Transfer Tax which may be payable in
respect of any transfer or delivery of a Rights Certificate to a Person other
than, or the issuance or delivery of certificates for Preferred Stock upon
exercise of Rights in a name other than that of, the registered holder of the
Rights Certificate, and the Company shall not be required to or issue or deliver
a Rights Certificate or certificate for Preferred Stock to a Person other than
such registered holder until any such Transfer Tax shall have been paid (any
such Transfer Tax being payable by the
holder of such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such Transfer Tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Stock represented thereby on, and such certificate shall be dated as
of, the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable Transfer
Taxes) was made; provided, however, that, if the date of such surrender and
payment is a date upon which the Preferred Stock 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 as of, the next succeeding
Business Day on which the Preferred Stock transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Exercise Price or Number of Shares. The Exercise
Price and the number of shares of Preferred Stock which may be purchased upon
exercise of a 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 Rights Agreement (A) declare or pay any dividend on Common Stock
payable in shares of Common Stock, (B) subdivide or split the
outstanding shares of Common Stock into a greater number of shares or
(C) combine or consolidate the outstanding shares of Common Stock into
a smaller number of shares or effect a reverse split of the outstanding
shares of Common Stock, then and in each such event the number of
shares of Preferred Stock issuable upon the exercise of a Right after
the record date for such event (if one shall have been established or,
if not, after the date of such event) shall be the number of shares of
Preferred Stock issuable immediately prior to such event multiplied by
a fraction the numerator of which is the number of Rights outstanding
immediately prior to such event and the denominator of which is the
number of Rights outstanding immediately after such event and the
Exercise Price after such date shall be the Exercise Price in effect
immediately prior to such event multiplied by such fraction. 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).
(ii) Subject to Section 27 of this Agreement, in the event that any
Person (other than an Exempt Person), alone or together with its
Affiliates and Associates, shall become an Acquiring Person, then,
subject to the last sentence of Section 23(a) and except as otherwise
provided in this Section 11, each holder
of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive upon exercise of such Right in accordance
with the terms of this Rights Agreement and payment of the Exercise
Price, the greater of (1) the number of one one-hundredths of a share
of Preferred Stock for which such Right was exercisable immediately
prior to the first occurrence of the event described in this Section
11(a)(ii) or (2) such number of one one-hundredths of a share of
Preferred Stock as shall equal the result obtained by dividing the
Exercise Price by 50% of the Fair Market Value of one one-hundreth of a
share of Preferred Stock (determined pursuant to Section 11(b) hereof)
on the date of such first occurrence; provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment
is also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 hereof shall apply and no adjustment shall be
made pursuant to this Section 11(a)(ii).
(iii) In the event that the Company does not have available
sufficient authorized but unissued Preferred Stock to permit the
adjustments required pursuant to the foregoing subparagraph (i) or the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be
necessary to authorize and reserve for issuance such number of
additional shares of Preferred Stock as may from time to time be
required to be issued upon the exercise in full of all Rights from time
to time outstanding and, if necessary, shall use its best efforts to
obtain stockholder approval thereof. In lieu of issuing shares of
Preferred Stock in accordance with
the foregoing subparagraphs (i) and (ii), the Company may, if the Board
of Directors determines that such action is necessary or appropriate
and not contrary to the interests of holders of Rights, elect to issue
or pay, upon the exercise of the Rights, cash, property, shares of
Preferred or Common Stock, debt securities, or any combination thereof,
having an aggregate Fair Market Value equal to the Fair Market Value of
the shares of Preferred Stock which otherwise would have been issuable
pursuant to Section 11(a)(ii), which Fair Market Value shall be
determined by an investment banking firm selected by the Board of
Directors. For purposes of the preceding sentence, the Fair Market
Value of the Preferred Stock shall be as determined pursuant to Section
11(b). Subject to Section 23 hereof, any such election by the Board of
Directors of the Company must be made and publicly announced within
thirty (30) days after the date on which the event described in Section
11(a)(ii) occurs.
(b) For the purpose of this Rights Agreement, the "Fair Market Value" of
any share of Preferred Stock, Common Stock or any other stock or any Right or
other security or any other property on any date shall be determined as provided
in this Section 11(b). In the case of a publicly-traded stock or other security,
the Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that the
Fair Market Value per share of any share of Common Stock is determined during a
period which includes any date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on such stock payable in shares
of Common Stock or securities convertible into
shares of Common Stock, or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or reclassification of such
stock, then, and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. 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 applicable transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange), or, if the securities are not listed or admitted to trading on the
New York Stock Exchange, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange on which such security is listed or admitted to trading; or, if 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 no bids for such security are 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 such 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 such security is listed or
admitted to trading is open for the transaction of business or, if such security
is not listed or admitted to trading on any national securities exchange, a
Business Day. If a security is not publicly held or not so listed or traded,
"Fair Market Value" shall mean the fair value per share of stock or per other
unit of such other security, as determined by an investment banking firm
experienced in the valuation of securities selected in
good faith by the Board of Directors of the Company, or, if no such investment
banking firm is, in the good faith judgment of the Board of Directors, available
to make such determination, in good faith by the Board of Directors of the
Company; provided, however, that for purposes of making the adjustment provided
for by Section 11(a)(ii) hereof, the Fair Market Value of a share of Preferred
Stock shall not be less than 100% of the product of the Fair Market Value of a
share of Common Stock multiplied by the higher of the then Dividend Multiple or
Vote Multiple applicable to the Preferred Stock (as defined in the provisions of
the Amended Certificate of Designations relating to the Preferred Stock) and
shall not exceed 105% of the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good faith by
the Board of Directors of the Company based upon such appraisals or valuation
reports of such independent experts as the Board of Directors of the Company
shall in good faith determine to be appropriate in accordance with good business
practices and the interests of the holders of Rights. Any such determination of
Fair Market Value shall be described in a statement filed with the Rights Agent
and shall be binding upon the Rights Agent.
(c) All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-hundredth of a share, as the case may be.
(d) Irrespective of any adjustment or change in the Exercise Price or the
number of shares of Preferred Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Exercise Price and
the number of shares to be issued upon exercise of the Rights as in the initial
Rights Certificates issued hereunder but, nevertheless, shall represent the
Rights as so adjusted.
(e) Before taking any action that would cause an adjustment reducing the
purchase price per whole share of Preferred Stock upon exercise of the Rights
below the then par value, if any, of the shares of Preferred Stock, the Company
shall use its best efforts to 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 non-assessable shares of such Preferred Stock at
such adjusted purchase price per share.
(f) Anything in this Section 11 to the contrary notwithstanding, in the
event of any reclassification of stock of the Company or any recapitalization,
reorganization or partial liquidation of the Company or similar transaction, the
Company shall be entitled to make such further adjustments in the number of
shares of Preferred Stock which may be acquired upon exercise of the Rights, and
such adjustments in the Exercise Price therefor, in addition to those
adjustments expressly required by the other paragraphs of this Section 11, as
the Board of Directors of the Company shall determine to be necessary or
appropriate in order for the holders of the Rights in such event to be treated
equitably and in accordance with the purpose and intent of this Rights Agreement
or in order that any such event shall not, but for such adjustment, in the
opinion of counsel to the Company, result in the stockholders of the Company
being subject to any United States federal income tax liability by reason
thereof.
(g) In the event the Company shall at any time after the Record Date make
any distribution on the shares of Common Stock of the Company, whether by way of
a dividend or a reclassification of stock, a recapitalization, reorganization or
partial liquidation of the Company or otherwise, in cash or any debt security,
debt instrument, real or personal
property or any other property (other than any shares of Common Stock or other
capital stock of the Company and other than any right or warrant to acquire any
such shares, including any debt security convertible into or exchangeable for
any such share, at less than the Fair Market Value of such shares) and the
amount of such cash dividend or the Fair Market Value of such debt security,
debt instrument or property exceeds 150% of the aggregate amount of the cash
dividends declared or paid on the Common Stock of the Company in the 15-month
period immediately preceding such distribution, then and in each such event,
unless such distribution is part of or is made in connection with a transaction
to which Section 11(a)(ii) or Section 13 hereof applies, the Exercise Price
shall be reduced by an amount equal to the cash or the Fair Market Value of such
distribution, as the case may be, per share of Common Stock of the Company. For
purposes hereof, the Fair Market Value of any property distributed to the
holders of shares of Common Stock of the Company shall be the Fair Market Value
of such property as determined by an investment banking firm experienced in the
valuation of securities or the other property so distributed, as the case may
be, selected in good faith by the Board of Directors of the Company, or, if no
such investment banking firm is in the good faith judgment of the Board of
Directors available to make such determination, in good faith by the Board of
Directors of the Company, whose determination shall be final and binding on the
Company, the Rights Agent and the holders of Rights.
Section 12. Certification of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11, 13 or 23(c), the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts giving rise to such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Preferred Stock
a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of or the force
or effect of the requirement for such adjustment. Any adjustment to be made
pursuant to Section 11, 13 or 23(c) of this Rights Agreement shall be effective
as of the date of the event giving rise to such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to have knowledge of any
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, at any time after the time that any Person becomes
an Acquiring Person, (x) the Company shall, directly or indirectly, consolidate
with, or merge with and into, any other Person or Persons (other than an Exempt
Person) and the Company shall not be the surviving or continuing corporation of
such consolidation or merger, or (y) any Person or Persons (other than an Exempt
Person) shall, directly or indirectly, consolidate with, or merge with and into,
the Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (other than
an Exempt Person) or of the Company or cash or any other property, or (z) the
Company or one or more of its Subsidiaries shall, directly or indirectly, sell
or otherwise transfer to any other Person or any Affiliate or Associate of such
Person, in one or more transactions, or the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any Persons in one or a series
of
related transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole),
then, on the first occurrence of any such event, proper provision shall be made
so that (i) each holder of record of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof
and payment of the Exercise Price in accordance with the terms of this Rights
Agreement, such number of shares of validly issued, fully paid, non-assessable
and freely tradable Common Stock of the Principal Party (as defined herein), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by dividing the Exercise Price by 50%
of the Fair Market Value of the Common Stock of the Principal Party on the date
of the consummation of such consolidation, merger, sale or transfer; (ii) such
Principal Party 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 Rights Agreement; (iii) the term "Company" for all
purposes of this Rights Agreement shall thereafter be deemed to refer to such
Principal Party; (iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares of its Common
Stock in accordance with the provisions of Section 9 hereof applicable to the
reservation of Preferred Stock) 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 its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; provided, however, that,
upon the subsequent occurrence of any merger, consolidation, sale of all or
substantially all of the assets, recapitalization, reclassification of shares,
reorganization or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Exercise Price, such cash, shares, rights, warrants and other property which
such holder would have been entitled to receive had it, at the time of such
transaction, owned the shares of Common Stock of the Principal Party purchasable
upon the exercise of a Right, and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property; and (v)
the provisions of Section 11(a)(ii) hereof shall be of no effect following the
occurrence of any event described in clause (x), (y) or (z) above of this
Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of the first
sentence of Section 13(a) hereof: (A) the Person that is the issuer of the
securities into which shares of Common Stock of the Company are changed or
otherwise exchanged or converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer of the Common Stock of which
has the greatest market value or (B) if no securities are so issued, (x)
the Person that is the other party to the merger or consolidation and that
survives such merger or
consolidation, or, if there is more than one such Person, the Person the
Common Stock of which has the greatest market value or (y) if the Person
that is the other party to the merger or consolidation does not survive the
merger or consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions, or, if each Person that is a party to
such transaction or transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever of
such Persons as is the issuer of Common Stock having the greatest market
value of shares outstanding; provided, however, that in any such case, if
the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the
term "Principal Party" shall refer to such other Person, or if such Person
is a Subsidiary, directly or indirectly, of more than one Person, the
Common Stocks of all of which are and have been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Stock having the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation, merger or sale or
transfer of assets or earning power referred to in Section 13(a) unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Stock that have not been issued
or reserved for issuance to permit exercise in full of all Rights in accordance
with this Section 13 and unless prior thereto the Company and the Principal
Party involved therein shall have executed and delivered to the Rights Agent an
agreement confirming that the Principal Party shall, upon consummation of such
consolidation, merger or sale or transfer of assets or earning power, assume
this Rights Agreement in accordance with Section 13(a) hereof and that all
rights of first refusal or preemptive rights in respect of the issuance of
shares of Common Stock of the Principal Party upon exercise of outstanding
Rights have been waived and that such transaction shall not result in a default
by the Principal Party under this Rights Agreement, and further providing that,
as soon as practicable after the date of any consolidation, merger or sale or
transfer of assets or earning power referred to in Section 13(a) hereof, the
Principal Party will:
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as practicable after
such filing and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the date of expiration of the Rights, and
similarly comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on a
national
securities exchange or to meet the eligibility requirements for quotation
on NASDAQ; and
(iii) deliver to holders of the Rights historical financial statements
for the Principal Party which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been
exercised shall, subject to the provisions of Section 7(e) hereof,
thereafter be exercisable in the manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-laws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Fair Market Value (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special tax or similar payment in connection with
the issuance to any holder of a Right of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the Company
shall not consummate any such transaction unless prior thereto the Company and
such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Rights Certificates which evidence fractional Rights (i.e., Rights to
acquire less than one one-hundredth of a share of Preferred Stock), unless such
fractional Rights result from a transaction referred to in Section 11(a)(i)
hereof. If the Company shall determine not to issue such fractional Rights,
then, in lieu of such fractional Rights, there shall be paid to the holders of
record of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
Fair Market Value of a whole Right.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of
one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one-hundredth of a share). In lieu of issuing fractions of
shares of Preferred Stock, the Company may, at its election, issue depositary
receipts evidencing fractions of shares 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 of the rights, privileges and preferences to which they would be entitled as
owners of the Preferred Stock. With respect to fractional
shares that are not integral multiples of one-hundredth of a share, if the
Company does not issue such fractional shares or depositary receipts in lieu
thereof, there shall be paid to the holders of record of Rights Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right expressly waives his
right to receive any fractional Right or any fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Rights Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and, in this Rights 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 Rights Agreement and will be entitled to specific
performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Rights Agreement.
Section 16. Agreement of Right Holders. Each 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 shall be evidenced by the
Book-Entries representing, or the certificates for, Common Stock registered in
the name of the holders of Common Stock (together, as applicable, with the
Summary of Rights), which Book-Entries representing, or certificates for, Common
Stock shall also constitute certificates for Rights, and not by separate Rights
Certificates, and each Right shall be transferable only simultaneously and
together with the transfer of shares of Common Stock;
(b) After the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the person in whose
name the Rights Certificate (or, prior to the Distribution Date, the associated
Book-Entry representing, or certificate for, Common Stock) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the associated
Common Stock 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.
(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 a beneficial
interest in a Right or other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible; and
(e) Rights beneficially owned by certain persons will under certain
circumstances set forth in this Agreement become null and void pursuant to
Section 7(e) hereof; and
(f) This Agreement may be supplemented or amended from time to time
pursuant to Section 26 hereof.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of Preferred Stock or any other
securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof (except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in Section 7(f)
hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
to be done by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and expenses of
defending against any claim of liability relating to the Rights or this Rights
Agreement.
(b) The Rights Agent shall be protected against, 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 Rights Agreement in reliance upon any
Rights Certificate or certificate for Preferred Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
Section 19. Merger or Consolidation of, or Change in Name of, the Rights
Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Rights
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 Rights Agreement any of the Rights Certificates
shall have been countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Rights 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 Rights Certificates so countersigned; in case at that time any of
the Rights Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its
prior name or in its changed name; in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this Rights
Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Rights Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates
by their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights 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 the Chairman of the Board, the President
or any Vice President and by the Treasurer or the Secretary of the Company and
delivered to the Rights Agent. Any 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 Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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 Rights Agreement or in the
Rights Certificates
(except its countersignature thereof) or be required to verify the same, but all
such statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Rights
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate describing any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued pursuant to this Rights Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of the Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President or any Vice President or 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 to be taken by it in
good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Rights 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 Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) 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 Stock and the Preferred Stock by registered or certified
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. Notwithstanding the
foregoing provisions of this Section 21, in no event shall the resignation or
removal of a Rights Agent be effective until a successor Rights Agent shall have
been appointed and have accepted such appointment. If the Company shall fail to
make such appointment within a period of 30 days after such removal or after it
has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by the
Company), then the incumbent Rights Agent or the holder of record of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state thereof, in good
standing, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination in the
conduct of its corporate trust or stock transfer business by federal or state
authorities and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $5,000,000 or (b) an Affiliate
controlled by a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed, but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for 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
Stock and Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Company shall have the authority to act
as the Rights Agent until a successor Rights Agent shall have assumed the duties
of the Rights Agent hereunder.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Exercise Price per share and the number or kind or class of
shares of stock or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Rights Agreement.
Section 23. Redemption.
(a) The Company may, at its option, but only by the vote of a majority of
the Board of Directors, redeem all but not less than all of the then outstanding
Rights, at any time prior to the Close of Business on the earlier of (i) the
tenth day following the Stock Acquisition Date (subject to extension by the
Company as provided in Section 26 hereof) or (ii) the Expiration Date, at a
redemption price of $0.01 per Right, subject to adjustments as provided in
subsection (c) below (the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the Company's right of
redemption hereunder.
(b) Without any further action and without any notice, the right to
exercise the Rights will terminate effective at the time so designated by action
of the Board of Directors ordering the redemption of the Rights and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within 10 days after the effective time of the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each notice of redemption will state the method by
which the payment of the Redemption Price will be made. At the option of the
Board of Directors, the Redemption Price may be paid in cash to each Rights
holder or by the issuance of shares (and, at the Company's election pursuant to
Section 14(b) hereof, cash or depositary receipts in lieu of fractions of shares
other than fractions which are integral multiples of one one-hundredth (1/100)
of a share) of Preferred Stock or Common Stock having a Fair Market Value equal
to such cash payment.
(c) In the event the Company shall at any time after the date of this
Rights Agreement (A) pay any dividend on Common Stock in shares of Common Stock,
(B) subdivide or split the outstanding shares of Common Stock into a greater
number of shares or (C) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, or (D) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, and in each such event, the Redemption Price
shall be appropriately adjusted to reflect the foregoing.
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall propose (i) to
effect any of the transactions referred to in Section 11(a)(i) or 11(g) or (ii)
to offer to the holders of record of its Common Stock options, warrants, or
other rights to subscribe for or to purchase shares of Common Stock (including
any security convertible into or exchangeable for Common Stock) or shares of
stock of any class or any other securities, options, warrants, convertible or
exchangeable securities or other rights, or (iii) to effect any reclassification
of its Preferred Stock or Common Stock or any recapitalization or reorganization
of the Company, or (iv) to effect any consolidation or merger with or into, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of record of a Rights
Certificate, in accordance with Section 25, notice of such proposed action,
which shall specify the record date for the purposes of such transaction
referred to in Section 11(a)(i) or such dividend or distribution, or the date on
which such reclassification, recapitalization, reorganization, consolidation,
merger, sale or transfer of assets, liquidation, dissolution, or winding up is
to take place and the record date for determining participation therein by the
holders of record of Common Stock or Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 days prior to the record
date for determining holders of record of the Preferred Stock 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 record of Common Stock or Preferred Stock, whichever
shall be the earlier. The failure to give notice required by this Section 24 or
any defect therein shall not affect the legality or validity of the action taken
by the Company or the vote upon any such action.
(b) In case any of the transactions referred to in Section 11(a)(i), 11(g)
or 13 of this Rights Agreement are proposed, then, in any such case, the Company
shall give to each holder of Rights, in accordance with Section 25 hereof,
notice of the proposal of such transaction at least 10 days prior to
consummating such transaction, which notice shall specify the proposed event and
the consequences of the event to holders of Rights under Section 11(a)(i), 11(g)
or 13 hereof, as the case may be, and, upon consummating such transaction, shall
similarly give notice thereof to each holder of Rights.
Section 25. Notices. Notices or demands authorized by this Rights Agreement
to be given or made by the Rights Agent or by the holder of record of any Rights
Certificate or Right 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:
Xxxxx Medical Corp.
X.X. Xxx 0000
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
(000) 000-0000
Attention: Corporate Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this Rights Agreement to be given or made by the Company or by the holder of
record of any Rights Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Co.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Re: Xxxxx Medical Corp.
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Rights
Certificate or Right 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 26. Supplements and Amendments. For as long as the Rights are then
redeemable and except as provided in the last sentence of this Section 26, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of the Rights. At any time when the Rights
are not then redeemable, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend this Rights Agreement without the
approval of any holders of Rights Certificates (i) to cure any ambiguity, (ii)
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein or (iii) to change or
supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable, provided that no
such supplement or amendment pursuant to this clause (iii) shall materially
adversely affect the interest of the holders of Rights Certificates. Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Rights Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price or the
Expiration Date and supplements or amendments may be made after the time that
any Person becomes an Acquiring Person only if at the time of the action of the
Board of Directors approving such supplement or amendment there are then in
office not less than two Continuing Directors and such supplement or amendment
is approved by a majority of the Continuing Directors then in office.
Section 27. 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 7(e) hereof)
for shares of Common Stock at an exchange ratio of one 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 an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Stock 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 27
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. 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 shares of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 27, the Company shall use
its best efforts to cause additional shares of Common Stock to be authorized for
issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares. In
lieu of such
fractional shares, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional shares of Common Stock would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this
paragraph (d), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock for the Trading Day immediately
prior to the date of exchange pursuant to this Section 27.
Section 28. Successors. All of the covenants and provisions of this Rights
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 Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, the holders of Common Stock in their
capacity as holders of the Rights) any legal or equitable right, remedy or claim
under this Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of record of
the Rights Certificates (and, prior to the Distribution Date, the holders of
Common Stock in their capacity as holders of the Rights).
Section 30. Delaware Contract. This Rights Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 31. Counterparts. This Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 33. Severability. If any term, provision, covenant or restriction
of this Rights 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 rights agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed, all as of the day and year first above written.
XXXXX MEDICAL CORP.
By /s/ Xxxx X. Xxxx
--------------------------------
Name: Xxxx X. Xxxx
Title: President
AMERICAN STOCK TRANSFER & TRUST CO.
By /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
TO RIGHTS AGREEMENT
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN
THE RIGHTS AGREEMENT (AS REFERREDTO BELOW),
RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY
NOT BE TRANSFERRED TO ANY PERSON.
XXXXX MEDICAL CORP.
SUMMARY OF RIGHTS TO PURCHASE
SERIES I JUNIOR PREFERRED STOCK
On November 18, 1998, the Board of Directors of XXXXX MEDICAL CORP. (the
"Company") declared a dividend distribution of one preferred stock purchase
right for each outstanding share of Common Stock, par value $0.01 per share (the
"Common Stock"), of the Company held by stockholders of record on March 17, 1999
(the "Record Date"). Each Right entitles the registered holder to purchase from
the Company one one-hundredth (1/100) of a share of preferred stock of the
Company, designated as Series I Junior Preferred Stock (the " Preferred Stock")
at a price of $70 per one one-hundredth (1/100) of a share (the "Exercise
Price"). The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement"), dated as of November 18, 1998, between the
Company and American Stock Transfer & Trust Co., as Rights Agent (the "Rights
Agent").
AS DISCUSSED BELOW, INITIALLY THE RIGHTS WILL NOT BE EXERCISABLE,
CERTIFICATES WILL NOT BE SENT TO STOCKHOLDERS AND THE RIGHTS WILL AUTOMATICALLY
TRADE WITH THE COMMON STOCK.
The Rights, unless earlier redeemed by the Board of Directors, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following the first date (the "Stock
Acquisition Date") on which there is a public announcement that a person or
group of affiliated or associated persons, with certain exceptions set forth
below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of the Company (an "Acquiring Person") or such earlier or later
date (not beyond the thirtieth day after the Stock Acquisition Date) as the
Board of Directors may determine and (ii) the tenth business day (or such later
date as may be determined by the Board of Directors prior to such time as any
person or group of affiliated or associated persons becomes an Acquiring Person)
after the date of the commencement or announcement of a person's or group's
intention to commence a tender or exchange offer the consummation of which would
result in the ownership of 15% or more of the Company's outstanding voting stock
(even if no shares are actually purchased pursuant to such offer); prior
thereto, the Rights will not be exercisable, will not be represented by a
separate certificate, and will not be transferable apart from the Common Stock,
but will instead be evidenced, (i) with respect to any of the shares of Common
Stock held in uncertificated book-entry form (a "Book-Entry") outstanding as of
the Record Date, by such Book-Entry and (ii) with respect to the shares of
Common Stock evidenced by Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate, together with a copy of this Summary of
Rights. An Acquiring Person does not include (A) the Company, (B) any subsidiary
of the Company, (C) any employee benefit plan or employee stock plan of the
Company or of any subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding
Common Stock for or pursuant to the terms of any such plan or (D) any person or
group whose ownership of 15% or more of the shares of voting stock of the
Company then outstanding results solely from (i) any action or transaction or
transactions approved by the Board of Directors before such person or group
became an Acquiring Person or (ii) a reduction in the number of outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of an additional 1% or more of the
Company's voting stock unless such acquisition of additional voting stock will
not result in such person or group becoming an Acquiring Person by reason of
such clause (i) or (ii)). For purposes of the foregoing, outstanding voting
stock of the Company includes voting stock that trades on a "when issued" basis
on a national securities exchange or on the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ").
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after March 17, 1999 will contain
a legend incorporating the Rights Agreement by reference. Until the Distribution
Date (or earlier redemption or expiration of the Rights), transfer on the
Company's Direct Registration System of any Common Stock represented by a
Book-Entry or a certificate outstanding as of March 17, 1999, and, in each case,
with or without a copy of this Summary of Rights attached thereto, will also
constitute the transfer of the Rights associated with the Common Stock
represented by such Book-Entry or certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the
Distribution Date and such separate Rights Certificates alone will evidence the
Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. Unless earlier
redeemed by the Company as described below, the Rights will expire at the close
of business on March 17, 2009 (the "Expiration Date") (or, if the Distribution
Date shall have occurred before March 17, 2009, at the close of business on the
90th day following the Distribution Date).
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Company's preferred stock. The Preferred
Stock may not be issued except upon exercise of Rights. Each share of Preferred
Stock will be entitled to receive when, as and if declared, a quarterly dividend
in an amount equal to (i) 100 times the cash dividends declared on the Company's
Common Stock, and (ii) a preferential cash dividend, if any, in preference to
holders of Common Stock in an amount equal to $1.00 per share of Preferred Stock
less the per share amount of all cash dividends declared on the Preferred Stock
pursuant to clause (i) since the immediately preceding quarterly dividend
payment date. In addition, Preferred Stock is entitled to 100 times any non-cash
dividends (other than dividends payable in equity securities) declared on the
Common Stock, in like kind. In the event of the liquidation of the Company, the
holders of Preferred Stock will be entitled to receive, for each share of
Preferred Stock, a payment in an amount equal to the greater of $70 per one
one-hundredth share plus accrued and unpaid dividends and distributions thereon
or 100 times the payment made per share of Common Stock. Each share of Preferred
Stock will have 100 votes, voting together with the Common Stock. In the event
of any merger, consolidation or other transaction in which Common Stock is
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount received per share of Common Stock. The rights of Preferred Stock as
to dividends, liquidation and voting are protected by anti-dilution provisions.
If the dividends accrued on the Preferred Stock for four or more quarterly
dividend periods, whether consecutive or not, shall not have been declared and
paid or irrevocably set aside for payment, the holders of record of the
Preferred Stock of the Company of all series (including the Preferred Stock)
will have the right to elect two members to the Company's Board of Directors.
The number of shares of Preferred Stock issuable upon exercise of the
Rights is subject to certain adjustments from time to time in the event of a
stock dividend on, or a subdivision or combination of, the Common Stock. The
Exercise Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, in the event that, after the time
that a Person becomes an Acquiring Person, the Company were to be acquired in a
merger or other business combination (in which any shares of Common Stock are
changed into or exchanged for other securities or assets) or more than 50% of
the assets or earning power of the Company and its subsidiaries (taken as a
whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record, other than the Acquiring Person, of a Right will
from and after such date have the right to receive, upon payment of the Exercise
Price, that number of shares of common stock of the acquiring company as shall
equal the result obtained by dividing the Exercise Price by 50% of the market
value of the common stock of the acquiring company.
In addition, unless the Rights are earlier redeemed, in the event that a
person or group becomes an Acquiring Person, the Rights Agreement provides that
proper provision will be made so that each holder of record of a Right, other
than the Acquiring Person (whose Rights will thereupon become null and void),
will thereafter have the right to receive, upon payment of the Exercise Price,
that number of one one-hundredths of a share of Preferred Stock as shall equal
the result obtained by dividing the Exercise Price by 50% of the market value of
the Preferred Stock (such market value to be determined with reference to the
market value of the Company's Common Stock as provided in the Rights Agreement).
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding
voting stock, the Board of 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 share of Common Stock per Right
(subject to adjustment).
Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share) may, at the election of the
Company, be evidenced by depositary receipts. The Company may also issue cash in
lieu of fractional shares which are not integral multiples of one one-hundredth
of a share.
At any time on or prior to the close of business on the earlier of (i) the
tenth day after the Stock Acquisition Date (or such later date as a majority of
the Board of Directors may determine) or (ii) the Expiration Date, the Company
may redeem the Rights in whole, but not in part, at a price of $0.01 per Right
(the "Redemption Price"). Immediately upon the effective time of the action of
the Board of Directors of the Company authorizing 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.
For as long as the Rights are then redeemable, the Company may, except with
respect to the redemption price or date of expiration of the Rights, amend the
Rights in any manner, including an amendment to extend the time period in which
the Rights may be redeemed. At any time when the Rights are not then redeemable,
the Company may amend the Rights in any manner that does not materially
adversely affect the interests of holders of the Rights as such. Amendments to
the Rights Agreement from and after the time that any Person becomes an
Acquiring Person and amendments to the redemption price or expiration date of
the Rights require the approval of a majority of the Continuing Directors (as
defined and provided in the Rights Agreement).
Until a Right is exercised, the holder, as such, will have no rights as a
stockholder 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 the Company's report on Form 8-K dated
December [ ], 1998. 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 incorporated in this summary description herein by reference.
EXHIBIT B
TO RIGHTS AGREEMENT
[Form of Rights Certificate]
Certificate No. W - ________ Rights
NOT EXERCISABLE AFTER (I) MARCH 17, 2009, OR (II) IF THE DISTRIBUTION
DATE (AS DEFINED BELOW) SHALL HAVE OCCURRED BEFORE THE DATE SPECIFIED
IN CLAUSE (I), THE DATE WHICH IS NINETY (90) DAYS AFTER MARCH 17, 2009,
OR EARLIER IF REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $0.01
PER RIGHT (SUBJECT TO ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED
TO IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN
THE RIGHTS AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED TO OR
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT BE
TRANSFERRED TO ANY PERSON.
Rights 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 November 18, 1998 (the "Rights Agreement") between Xxxxx
Medical Corp. (the "Company"), and American Stock Transfer & Trust Co., (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.
(New York City time) on March 17, 2009 (or if the Distribution Date shall have
occurred before March 17, 2009, at the close of business on the 90th day
following the Distribution Date) at the office of the Rights Agent designated in
the Rights Agreement for such purpose, or its successor as Rights Agent, in New
York, NY, one one-hundredth (1/100)
of a fully paid nonassessable share of Series I Junior Preferred Stock (the "
Preferred Stock") of the Company at a purchase price of $70, as the same may
from time to time be adjusted in accordance with the Rights Agreement (the
"Exercise Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and the number of
shares of Preferred Stock which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification and adjustment
upon the happening of certain events and, upon the happening of certain events,
securities other than shares of Preferred Stock, or other property, may be
acquired upon exercise of the Rights evidenced by this Rights Certificate, as
provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 of the Rights Agent,
the Company and the holders of record of Rights Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated in the Rights Agreement
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof, another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option or under certain
other circumstances at a redemption price of $0.01 per Right. No fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth (1/100) of a share) are required to be issued upon the
exercise of any Right or Rights evidenced hereby, and in lieu thereof the
Company may cause depositary receipts to be issued and/or a cash payment may be
made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at meeting thereof, or to give or
withhold consent to any corporate action or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement. This Rights Certificate shall not
be valid or obligatory for any purpose until it shall have been countersigned by
the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ______________________, ____.
ATTEST:
_________________________________ By:_______________________________
Secretary Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST CO.
By:______________________________
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificates.)
FOR VALUE RECEIVED _____________________________________ hereby sells,
assigns and transfers unto __________________________
________________________________________________________________(Please print
name and address of transferee) _______________________________________________
Rights evidenced by this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
____________________________ Attorney to transfer the within Rights Certificate
on the books of the within-named Company, with full power of substitution.
Dated: _________, ____-
________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Associate or an Affiliate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
Dated: _______________, ____ ________________________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Rights Certificate.)
TO:_________________
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such share(s) be issued in the following name:
Please insert social security
or other identifying number: ______________________________
________________________________________________________________________________
(Please print name and address)
_______________________________________________________ If such number of Rights
shall not be all the Rights evidenced by this Rights Certificate, a new Rights
Certificate for the balance remaining of such Rights shall be registered in the
name of and delivered to:
Please insert social security
or other identifying number: ______________________________
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Dated: ________________, ____
___________________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the fact of this Rights
Certificate)
Signature Guaranteed
EXHIBIT C
TO RIGHTS AGREEMENT
FORM OF AMENDED
CERTIFICATE OF DESIGNATIONS
OF
SERIES I JUNIOR PREFERRED STOCK
OF
XXXXX MEDICAL CORP.
Pursuant to Section 151 of the Delaware
General Corporation Law
I, [name], [title] of Xxxxx Medical Corp., a corporation organized and
existing under the Delaware General Corporation Law (the "Company"), in
accordance with the provisions of Section 151 of such law, DO HEREBY CERTIFY
that:
1. No shares of the Company's Series I Junior Preferred Stock have been
issued.
2. The original Certificate of Designations of Series I Junior Preferred
Stock of Xxxxx Medical Corp. was filed with the Secretary of State of Delaware
on March 17, 1989 (the "Original Certificate of Designations").
3. Pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Company and pursuant to Section 151 of the
Delaware General Corporation Law the Board of Directors on November 18, 1998
adopted the following resolution which amends the Original Certificate of
Designations, as follows:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Company in accordance with the provisions of its Certificate of
Incorporation, a series of Preferred Stock of the Company be, and hereby is,
created and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional or other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series I Junior Preferred Stock" (the "Series I Preferred Stock")
and the number of shares constituting such series shall be 70,000.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series I Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, (i) cash dividends in an amount per share (rounded to
the nearest cent) equal to 100 times the aggregate per share amount of all cash
dividends declared or paid on the Common Stock, $0.01 par value per share, of
the Company (the "Common Stock") and (ii) a preferential cash dividend (the
"Preferential Dividends"), if any, on the first day of February, May, August and
November of each year (each a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series I Preferred Stock, in an amount (except in the
case of the first Quarterly Dividend Payment Date if the date of the first
issuance of Series I Preferred Stock is a date other than a Quarterly Dividend
Payment Date, in which case such payment shall be a prorated amount of such
amount) equal to $1.00 per share of Series I Preferred Stock less the per share
amount of all cash dividends declared on the Series I Preferred Stock pursuant
to clause (i) of this sentence since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series I
Preferred Stock. In the event the Company shall, at any time after the issuance
of any
share or fraction of a share of Series I Preferred Stock, make any distribution
on the shares of Common Stock of the Company, whether by way of a dividend or a
reclassification of stock, a recapitalization, reorganization or partial
liquidation of the Company or otherwise, which is payable in cash or any debt
security, debt instrument, real or personal property or any other property
(other than cash dividends subject to the immediately preceding sentence, a
distribution of shares of Common Stock or other capital stock of the Company or
a distribution of rights or warrants to acquire any such share, including any
debt security convertible into or exchangeable for any such share, at a price
less than the Fair Market Value (as hereinafter defined) of such share), then,
and in each such event the Company shall simultaneously pay on each then
outstanding share of Series I Preferred Stock of the Company a distribution, in
like kind, of 100 times such distribution paid on a share of Common Stock
(subject to the provisions for adjustment hereinafter set forth). The dividends
and distributions on the Series I Preferred Stock to which holders thereof are
entitled pursuant to clause (i) of the first sentence of this paragraph and
pursuant to the second sentence of this paragraph are hereinafter referred to as
"Participating Dividends" and the multiple of such cash and non-cash dividends
on the Common Stock applicable to the determination of the Participating
Dividends, which shall be 100 initially but shall be adjusted from time to time
as hereinafter provided, is hereinafter referred to as the "Dividend Multiple".
In the event the Company shall at any time after March 17, 1999 (the "Effective
Date") declare or pay any dividend or make any distribution on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, or issue any of
its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then in each such case the Dividend Multiple
thereafter applicable to the determination of the amount of Participating
Dividends which holders of shares of Series I Preferred Stock shall be entitled
to receive shall be the Dividend Multiple applicable immediately prior to such
event multiplied by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Company shall declare each Participating Dividend at the same time
it declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Participating Dividend is required to be paid. No cash or
non-cash dividend or distribution on the Common Stock in respect of which a
Participating Dividend is required to be paid shall be paid or set aside for
payment on the Common Stock unless a Participating Dividend in respect of such
dividend or distribution on the Common Stock shall be simultaneously paid, or
set aside for payment, on the Series I Preferred Stock.
(C) Preferential Dividends shall begin to accrue on outstanding shares of
Series I Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issuance of any shares of Series I Preferred Stock. Accrued but
unpaid Preferential Dividends shall cumulate but shall not bear interest.
Preferential Dividends paid on the shares of Series I Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
Section 3. Voting Rights. The holders of shares of Series I Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth, each
share of Series I Preferred Stock shall entitle the holder thereof to 100 votes
on all matters submitted to a vote of the stockholders of the Company. The
number of votes which a holder of Series I Preferred Stock is entitled to cast,
as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple". In the event the Company shall
at any time after the Effective Date declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, or issue any of
its capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation, then in each such case the
Vote Multiple thereafter applicable to the determination of the number of votes
per share to which holders of shares of Series I Preferred Stock shall be
entitled after such event shall be the Vote Multiple immediately prior to such
event multiplied 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 the Certificate of
Incorporation or By-laws, the holders of shares of Series I Preferred Stock and
the holders of shares of Common Stock shall vote together as one class on all
matters submitted to a vote of stockholders of the Company.
(C) In the event that the Preferential Dividends accrued on the Series I
Preferred Stock for four or more quarterly dividend periods, whether consecutive
or not, shall not have been declared and paid or set apart for payment, the
holders of record of Preferred Stock of the Company of all series (including the
Series I Preferred Stock), other than any series in respect of which such right
is expressly withheld by the Certificate of Incorporation or the authorizing
resolutions included in the Certificate of Designations therefor, shall have the
right, at the next meeting of stockholders called for the election of directors,
to elect two members to the Board of Directors, which directors shall be in
addition to the number required by the By-laws prior to such event, to serve
until the next Annual Meeting and until their successors are elected and
qualified or their earlier resignation, removal or incapacity or until such
earlier time as all accrued and unpaid Preferential Dividends upon the
outstanding shares of Series I Preferred Stock shall have been paid (or
irrevocably set aside for payment) in full. The holders of shares of Series I
Preferred Stock shall continue to have the right to elect directors as provided
by the immediately preceding sentence until all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series I Preferred Stock shall have
been paid (or set aside for payment) in full. Such directors may be removed and
replaced by such stockholders, and vacancies in such directorships may be filled
only by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted by law; provided,
however, that any such action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto.
(D) Except as otherwise required by the Certificate of incorporation or
By-laws or set forth herein, holders of Series I 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 the taking of any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Participating Dividends are in
arrears or the Company shall be in default of payment thereof, thereafter and
until all accrued and unpaid Preferential Dividends and Participating Dividends,
whether or not declared, on shares of Series I Preferred Stock outstanding shall
have been paid or set aside for payment in full, and in addition to any and all
other rights which any holder of shares of Series I Preferred Stock may have in
such circumstances, the Company shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration, any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series I Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity as to dividends with the Series I
Preferred Stock, unless dividends are paid ratably on the Series I
Preferred Stock and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of all
such shares are then entitled if the full dividends accrued thereon were to
be paid;
(iii) except as permitted by subparagraph (iv) of this paragraph 4(A),
redeem or purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the
Series I Preferred Stock, provided that the Company may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Company ranking junior (both as to dividends
and upon liquidation, dissolution or winding up) to the Series I Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series I Preferred Stock, or any shares of stock ranking on a parity with
the Series I Preferred Stock (either as to dividends or upon liquidation,
dissolution or winding up), except in accordance with a purchase offer made
to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Company shall not permit any Subsidiary (as hereinafter defined) of
the Company to purchase or otherwise acquire for consideration any shares of
stock of the Company unless the Company could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in such
manner. A "Subsidiary" of the Company shall mean any corporation or other entity
of which securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly, by
the Company or by any corporation or other entity that is otherwise controlled
by the Company.
(C) The Company shall not issue any shares of Series I Preferred Stock
except upon exercise of Rights issued pursuant to either the Rights Agreement
dated as of
November 18, 1998 between the Company and American Stock Transfer & Trust Co. or
the Rights Agreement dated as of March 8, 1989 between the Company and American
Stock Transfer and Trust Co., copies of which are on file with the Secretary of
the Company at its principal executive office and shall be made available to
stockholders of record without charge upon written request therefor addressed to
said Secretary. Notwithstanding the foregoing sentence, nothing contained in the
provisions hereof shall prohibit or restrict the Company from issuing for any
purpose any series of Preferred Stock with rights and privileges similar to,
different from, or greater than, those of the Series I Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series I 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
upon their retirement and cancellation shall become authorized but unissued
shares of Preferred Stock, without designation as to series, and such shares may
be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Company, no
distribution shall be made (i) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series I Preferred Stock unless the holders of shares of Series I Preferred
Stock shall have received, subject to adjustment as hereinafter provided, (A)
$70 per one-hundredth share plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
or (B) if greater than the amount specified in clause (i)(A) of this sentence,
an amount equal to 100 times the aggregate amount to be distributed per share to
holders of Common Stock, as the
same may be adjusted as hereinafter provided, and (ii) to the holders of stock
ranking on a parity upon liquidation, dissolution or winding up with the Series
I Preferred Stock, unless simultaneously therewith distributions are made
ratably on the Series I Preferred Stock and all other shares of such parity
stock in proportion to the total amounts to which the holders of shares of
Series I Preferred Stock are entitled under clause (i)(A) of this sentence and
to which the holders of such parity shares are entitled, in each case upon such
liquidation, dissolution or winding up. The amount to which holders of Series I
Preferred Stock may be entitled upon liquidation, dissolution or winding up of
the Company pursuant to clause (i)(B) of the foregoing sentence is hereinafter
referred to as the "Participating Liquidation Amount" and the multiple of the
amount to be distributed to holders of shares of Common Stock upon the
liquidation, dissolution or winding up of the Company applicable pursuant to
said clause to the determination of the Participating Liquidation Amount, as
said multiple may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Liquidation Multiple". In this event the Company
shall at any time after the Effective Date declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or split or a
combination, consolidation or reverse split of the outstanding shares of Common
Stock into a greater or lesser number of shares of Common Stock, or issue any of
its capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation, then in each such case the
Liquidation Multiple thereafter applicable to the determination of the
Participating Liquidation Amount to which holders of Series I Preferred Stock
shall be entitled after such event shall be the Liquidation Multiple applicable
immediately
prior to such event multiplied 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. Certain Reclassifications and Other Events.
(A) In the event that holders of shares of Common Stock of the Company
receive after the Effective Date, in respect of their shares of Common Stock any
share of capital stock of the Company (other than any share of Common Stock of
the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event the dividend rights, voting rights and rights upon
the liquidation, dissolution or winding up of the Company of the shares of
Series I Preferred Stock shall be adjusted so that after such event the holders
of Series I Preferred Stock shall be entitled, in respect of each share of
Series I Preferred stock held, in addition to such rights in respect thereof to
which such holder was entitled immediately prior to such adjustment, to (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such Transaction multiplied by the additional dividends which the holder of a
share of Common Stock shall be entitled to receive by virtue of the receipt in
the Transaction of such capital stock, (ii) such additional voting rights as
equal the Vote Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights which the holder of a share of Common
Stock shall be entitled to receive by virtue of the receipt in the Transaction
of such capital stock and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Company as equal the Liquidation Multiple in
effect immediately prior to such Transaction multiplied by the additional amount
which the holder of a share of Common Stock shall be entitled to receive
upon liquidation, dissolution or winding up of the Company by virtue of the
receipt in the Transaction of such capital stock, as the case may be, all as
provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the Company
receive after the Effective Date, in respect of their shares of Common Stock any
right or warrant to purchase Common Stock (including as such a right, for all
purposes of this paragraph, any security convertible into or exchangeable for
Common Stock) at a purchase price per share less than the Fair Market Value (as
hereinafter defined) of a share of Common Stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon the liquidation, dissolution or winding up of the Company of the
shares of Series I Preferred Stock shall each be adjusted so that after such
event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of the Company
receive after the Effective Date in respect of their shares of Common Stock any
right or
warrant to purchase capital stock of the Company (other than shares of Common
Stock), including as such a right, for all purposes of this paragraph, any
security convertible into or exchangeable for capital stock of the Company,
(other than Common Stock), at a purchase price per share less than the Fair
Market Value of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon liquidation, dissolution or winding up of the Company of the
shares of Series I Preferred Stock shall each be adjusted so that after such
event each holder of a share of Series I Preferred Stock shall be entitled, in
respect of each share of Series I Preferred Stock held, in addition to such
rights in respect thereof to which such holder was entitled immediately prior to
such event, to receive (i) such additional dividends as equal the Dividend
Multiple in effect immediately prior to such event multiplied, first, by the
additional dividends to which the holder of a share of Common Stock shall be
entitled upon exercise of such right or warrant by virtue of the capital
stock which could be acquired upon such exercise and multiplied again by the
Discount Fraction (as hereinafter defined) and (ii) such additional voting
rights as equal the Vote Multiple in effect immediately prior to such event
multiplied, first, by the additional voting rights to which the holder of a
share of Common Stock shall be entitled upon exercise of such right or warrant
by virtue of the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction and (iii) such additional distribution
upon liquidation, dissolution or winding up of the Company as equal the
Liquidation Multiple in effect immediately prior to such event multiplied,
first, by the additional amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation, dissolution or winding up of the
Company upon exercise of such right or warrant by virtue of the capital stock
which could be acquired upon such exercise and multiplied again by the Discount
Fraction. For purposes of this paragraph, the "Discount Fraction" shall be a
fraction the numerator of which shall be the difference between the Fair Market
Value of a share of the capital stock subject to a right or warrant distributed
to holders of shares of Common Stock of the Company as contemplated by this
paragraph immediately after the distribution thereof and the purchase price per
share for such share of capital stock pursuant to such right or warrant and the
denominator of which shall be the Fair Market Value of a share of such capital
stock immediately after the distribution of such right or warrant.
(D) For purposes of this Certificate of Designations, the "Fair Market
Value" of a share of capital stock of the Company (including a share of Common
Stock) on any date shall be deemed to be the average of the daily closing price
per share thereof over the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided, however, that, in
the event that such Fair Market Value of any such share of capital stock is
determined during a period which includes any date that is within 30 Trading
Days after (i) the ex-dividend date for a dividend or distribution on stock
payable in shares of such stock or securities convertible into shares of such
stock, or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then, and
in each such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Company to take into account ex-dividend or
post-effective date trading. 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 applicable transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange), or, if
the shares are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the applicable transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares are listed or
admitted to trading or, if the shares 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 the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use, or if on any such
date the shares 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 shares selected by the Board of Directors of the Company. The
term "Trading Day" shall mean a day in which the principal national securities
exchange on which the shares are listed or admitted to trading is open for the
transaction of business or, if the shares are not listed or admitted to trading
on any national securities exchange, on which the New York Stock Exchange or
such other national securities exchange as may be selected by the Board of
Directors of the Company is open. If the shares are not publicly held or not so
listed or traded on any day within the period of 30 Trading Days applicable to
the determination of Fair Market Value thereof as aforesaid, "Fair Market Value"
shall mean the fair market value thereof per share as determined in good faith
by the Board of Directors of the Company. In either case referred to in the
foregoing sentence, the determination of Fair Market Value shall be described in
a statement filed with the Secretary of the Company.
Section 8. 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
outstanding share of Series I Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other
property (payable in like kind), as the case may be, for which or into which
each share of Common Stock is changed or exchanged multiplied by the highest of
the Vote Multiple, the Dividend Multiple or the Liquidation Multiple in effect
immediately prior to such event.
Section 9. Effective Time of Adjustments.
(A) Adjustments to the Series I Preferred Stock required by the provisions
hereof shall be effective as of the time at which the event requiring such
adjustments occurs.
(B) The Company shall give prompt written notice to each holder of a share
of Series I Preferred Stock of the effect of any adjustment to the voting
rights, dividend rights or rights upon liquidation, dissolution or winding up of
the Company of such shares required by the provisions hereof. Notwithstanding
the foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment.
Section 10. No Redemption. The shares of Series I Preferred Stock shall
not be redeemable at the option of the Company or any holder thereof.
Notwithstanding the foregoing sentence of this Section, the Company may acquire
shares of Series I Preferred Stock in any other manner permitted by law, the
provisions hereof and the Certificate of Incorporation of the Company.
Section 11. Ranking. Unless otherwise provided in the Certificate of
Incorporation of the Company or a Certificate of Designations relating to a
subsequent series of preferred stock of the Company, the Series I Preferred
Stock shall rank junior to all other
series of the Company's preferred stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and senior to
the Common Stock.
Section 12. Amendment. The provisions hereof and the Certificate of
Incorporation of the Company shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series I Preferred
Stock without, in addition to any other vote of stockholders required by law,
the affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series I Preferred Stock, voting together as a single class.
Section 13. Fractional Shares. Series I Preferred Stock may be issued in
fractions of a share (in one one-hundredths (1/100) of a share and integral
multiples thereof) that 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 other rights of holders
of shares of Series I Preferred Stock.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate to
Designations and do affirm the foregoing as true under the penalties of perjury
this ___ day of December, 1998.
--------------------------------
Name:
Title:
ATTEST:
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Secretary
