Exhibit 4.1
Anika Therapeutics, Inc.
and
Firstar Trust Company,
as Rights Agent
Shareholder Rights Agreement
Dated as of April 6, 1998
TABLE OF CONTENTS
Section Page
------- ----
1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . 7
3. Issue of Right Certificates. . . . . . . . . . . . . . . . . . . . . . . . 7
4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . 9
5. Countersignature and Registration. . . . . . . . . . . . . . . . . . . . .10
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated,
Destroyed, Lost or Stolen Right Certificates. . . . . . . . . . . . . . .11
7. Exercise of Rights; Exercise Price; Expiration Date of Rights. . . . . . .12
8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . .14
9. Reservation and Availability of Preferred Stock. . . . . . . . . . . . . .14
10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . .16
11. Adjustment of Exercise Price, Number and Kind of Shares or Number of
Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
12. Certificate of Adjusted Exercise Price or Number of Shares. . . . . . . .25
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power. . .26
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . .29
15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
16. Agreement of Right Holders. . . . . . . . . . . . . . . . . . . . . . . .30
17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . .31
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . .31
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . .32
(i)
20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . .32
21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . . . . . . . .34
22. Issuance of New Right Certificates. . . . . . . . . . . . . . . . . . . .35
23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
24. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
25. Notice of Certain Events. . . . . . . . . . . . . . . . . . . . . . . . .38
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
27. Supplements and Amendments. . . . . . . . . . . . . . . . . . . . . . . .40
28. Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
29. Determinations and Actions by the Board of Directors. . . . . . . . . . .41
30. Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . . . . .41
31. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
34. Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . . . . .42
Exhibit A -- Certificate of Designation of
Series B Junior Participating
Cumulative Preferred Stock
Exhibit B -- Form of Right Certificate
(ii)
SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of April 6, 1998, between Anika Therapeutics,
Inc., a Massachusetts corporation (the "Company"), and Firstar Trust
Company, a Wisconsin banking corporation (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company desires to provide
shareholders of the Company with the opportunity to benefit from the
long-term prospects and value of the Company and to ensure that
shareholders of the Company receive fair and equal treatment in the event
of any proposed takeover of the Company; and
WHEREAS, on April 6, 1998, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as such term
is hereinafter defined) for each outstanding share of Common Stock, par
value $0.01 per share, of the Company (the "Common Stock") outstanding as
of the close of business on April 23, 1998 (the "Record Date"), and
contemplates the issuance of one Right for each share of Common Stock of
the Company issued (whether originally issued or sold from the Company's
treasury, except in the case of treasury shares having associated Rights)
between the Record Date and the earlier of the Distribution Date or the
Expiration Date (as such terms are hereinafter defined), each Right
initially representing the right to purchase one one-thousandth of a share
of Series B Junior Participating Cumulative Preferred Stock of the Company
having the rights, powers and preferences set forth on Exhibit A hereto,
upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
WHEREAS, the Company desires to appoint the Rights Agent to act as
rights agent hereunder, in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such
term is hereinafter defined) and Associates (as such term is hereinafter
defined) of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the shares of Common Stock of the
Company then outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company, (iii) any
employee benefit plan or compensation arrangement of the Company or any
Subsidiary of the Company or (iv) any Person holding shares of Common Stock
of the Company organized, appointed or established by the Company
or any Subsidiary of the Company for or pursuant to the terms of any such
employee benefit plan or compensation arrangement (the Persons described in
clauses (i) through (iv) above are referred to herein as "Exempt Persons").
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition by the Company of Common Stock of
the Company which, by reducing the number of shares outstanding, increases
the proportionate number of shares beneficially owned by such Person to 15%
or more of the shares of Common Stock of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner of
15% or more of the shares of Common Stock of the Company then outstanding
by reason of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional
shares (other than pursuant to a stock split, stock dividend or similar
transaction) of Common Stock of the Company and immediately thereafter be
the Beneficial Owner of 15% or more of the shares of Common Stock of the
Company then outstanding, then such Person shall be deemed to be an
"Acquiring Person."
In addition, notwithstanding the foregoing, a Person shall not be an
"Acquiring Person" if (i) the Board of Directors of the Company determines
that a Person who would otherwise have been an "Acquiring Person," as
defined pursuant to the foregoing provisions of this Section 1(a), on the
date of this Agreement became such inadvertently, and, if the Board of
Directors of the Company so requests, such Person shall have taken or
agreed to take such action as the Board of Directors shall have deemed
appropriate (any such Person being referred to herein as an "Inadvertent
Grandfathered Person"), or (ii) the Board of Directors of the Company
determines that a Person (including an Inadvertent Grandfathered Person)
who would otherwise be an "Acquiring Person," has become such
inadvertently, and such Person divests as promptly as practicable (or
within such period of time as the Board of Directors of the Company
determines is reasonable) a sufficient number of shares of Common Stock of
the Company so that such Person would no longer be an "Acquiring Person,"
as defined pursuant to the foregoing provisions of this Section 1(a).
Notwithstanding the foregoing, (A) an Inadvertent Grandfathered Person
shall become an Acquiring Person if after the date of this Agreement such
Inadvertent Grandfathered Person becomes the Beneficial Owner of more than
the percentage of the outstanding shares of Common Stock of the Company
that such Inadvertent Grandfathered Person Beneficially Owned as of the
date of this Agreement plus an additional 1% (the "Inadvertent
Grandfathered Percentage"), (B) in the event any Inadvertent Grandfathered
Person shall sell, transfer, or otherwise dispose of any outstanding shares
of Common Stock of the Company after the date of this Agreement, the
Inadvertent Grandfathered Percentage applicable to such Inadvertent
Grandfathered Person shall, subsequent to such sale, transfer or
disposition, mean, with respect to such Inadvertent Grandfathered Person,
the lesser of (x) the Inadvertent Grandfathered Percentage as in effect
immediately prior to such sale, transfer or disposition or (y) the
percentage of outstanding shares of Common Stock of the Company that such
Inadvertent Grandfathered Person Beneficially Owns immediately following
such sale, transfer or disposition plus an additional 1%, and (C) any
Inadvertent Grandfathered Person who after the date of this Agreement
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becomes the Beneficial Owner of less than 15% of the shares of Common Stock
of the Company then outstanding shall cease to be an Inadvertent
Grandfathered Person. Any references in this Agreement to a 15% threshold
shall mean, solely with respect to any Inadvertent Grandfathered Person,
the Inadvertent Grandfathered Percentage applicable to such Inadvertent
Grandfathered Person.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Adverse Person" shall mean any Person declared to be an
Adverse Person by the Board of Directors upon a determination of the Board
of Directors that the criteria set forth in Section 11(a)(ii)(B) apply to
such Person.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations (the "Rules") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date of this Agreement;
provided, however, that no Person who is a director or officer of the
Company shall be deemed an Affiliate or an Associate of any other director
or officer of the Company solely as a result of his or her position as
director or officer of the Company.
(e) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, beneficially owns (as determined
pursuant to Rule 13d-3 of the Rules under the Exchange Act, as in
effect on the date of this Agreement);
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has:
(A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or upon
the satisfaction of any conditions or both) pursuant to any
agreement, arrangement or understanding (whether or not in
writing) (other than customary agreements with and between
underwriters and selling group members with respect to a bona
fide public offering of securities) or upon the exercise of
conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of, or
to "beneficially own," (1) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; (2) securities
issuable upon exercise of these Rights at any time prior to the
occurrence of a Triggering Event; or (3) securities issuable upon
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exercise of Rights from and after the occurrence of a Triggering
Event, which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution Date
or pursuant to Sections 3(a), 11(i) or 22 hereof; or
(B) the right to vote pursuant to any agreement,
arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this clause (B) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the Rules
of the Exchange Act and (2) is not also then reportable by such
person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(C) the right to dispose of pursuant to any agreement,
arrangement or understanding (whether or not in writing) (other
than customary arrangements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or
not in writing) (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause
(B) of Section 1(d)(ii) hereof) or disposing of any securities of the
Company;
provided, however, that (1) no Person engaged in business as an underwriter
of securities shall be deemed the Beneficial Owner of any securities
acquired through such Person's participation as an underwriter in good
faith in a firm commitment underwriting until the expiration of forty (40)
days after the date of such acquisition, and (2) no Person who is a
director or an officer of the Company shall be deemed, as a result of his
or her position as director or officer of the Company, the Beneficial Owner
of any securities of the Company that are beneficially owned by any other
director or officer of the Company.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order to
close.
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(g) "Close of Business" on any given date shall mean 5:00 P.M.,
Boston, Massachusetts time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Boston, Massachusetts
time, on the next succeeding Business Day.
(h) "Common Stock" when used in reference to the Company shall
mean the common stock, par value $0.01 per share, of the Company or any
other shares of capital stock of the Company into which such stock shall be
reclassified or changed. "Common Stock" when used with reference to any
Person other than the Company organized in corporate form shall mean (i)
the capital stock or other equity interest of such Person with the greatest
voting power, (ii) the equity securities or other equity interest having
power to control or direct the management of such Person or (iii) if such
Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person and which have issued any
such outstanding capital stock, equity securities or equity interest.
"Common Stock" when used with reference to any Person not organized in
corporate form shall mean units of beneficial interest which (x) shall
represent the right to participate generally in the profits and losses of
such Person (including without limitation any flow-through tax benefits
resulting from an ownership interest in such Person) and (y) shall be
entitled to exercise the greatest voting power of such Person or, in the
case of a limited partnership, shall have the power to remove or otherwise
replace the general partner or partners.
(i) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(j) "Depositary Agent" shall have the meaning set forth in
Section 7(c) hereof.
(k) "Distribution Date" shall have the meaning defined in
Section 3(a) hereof.
(l) "Exercise Price" shall have the meaning defined in Section
4(a) hereof.
(m) "Expiration Date" and "Final Expiration Date" shall have the
meanings set forth in Section 7(a) hereof.
(n) "Fair Market Value" of any securities or other property
shall be as determined in accordance with Section 11(d) hereof.
(o) "Group" shall have the meaning set forth in clause (b) of
the definition of "Person."
(p) "Person" shall mean (a) an individual, a corporation, a
partnership, an association, a joint stock company, a trust, a business
trust, a government or political subdivision, any unincorporated
organization, or any other association or entity, and (b) a
5
"group" as that term is used for purposes of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended.
(q) "Preferred Stock" shall mean shares of Series B Junior
Participating Cumulative Preferred Stock, par value $0.01 per share, of the
Company having the rights and preferences set forth in the form of
Certificate of Designation attached hereto as Exhibit A.
(r) "Preferred Stock Equivalents" shall have the meaning set
forth in Section 11(b) hereof.
(s) "Principal Party" shall have the meaning defined in Section
13(b) hereof.
(t) "Redemption Price" shall have the meaning defined in
Section 23 hereof.
(u) "Registered Common Stock" shall have the meaning set forth
in Section 13(b) hereof.
(v) "Right Certificate" shall have the meaning set forth in
Section 3(a) hereof.
(w) "Section 11(a)(ii) Event" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(x) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(y) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
(z) "Section 24(a)(i) Exchange Ratio" shall have the meaning set
forth in Section 24(a)(i) hereof.
(aa) "Section 24(a)(ii) Exchange Ratio" shall have the meaning
set forth in Section 24(a)(ii) hereof.
(bb) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(cc) "Stock Acquisition Date" shall mean the date of the first
public announcement (which for purposes of this definition shall include,
without limitation, the issuance of a press release or the filing of a
publicly-available report or other document with the Securities and
Exchange Commission or any other governmental agency) by the Company,
acting pursuant to a resolution adopted by the Board of Directors of the
Company, or an Acquiring Person that an Acquiring Person has become such.
6
(dd) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions of such corporation or other entity
are at the time directly or indirectly beneficially owned or otherwise
controlled by such Person either alone or together with one or more
Affiliates of such Person.
(ee) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(ff) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date (as hereinafter defined in Section 3(a)) also be the
holders of the Common Stock of the Company) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable. In the event the Company
appoints one or more Co-Rights Agents, the respective duties of the Rights
Agent and any Co-Rights Agents shall be as the Company shall determine.
The Company shall give notice to the Rights Agent of the appointment of one
or more Co-Rights Agents and the respective duties of the Rights Agent and
any such Co-Rights Agents.
Section 3. Issue of Right Certificates.
(a) From the date hereof until the earlier of (i) the Close of
Business on the tenth calendar day after the Stock Acquisition Date, (ii)
the Close of Business on the tenth Business Day (or such later calendar
day, if any, as the Board of Directors of the Company may determine in its
sole discretion) after the date a tender or exchange offer by any Person,
other than an Exempt Person, is first published or sent or given within the
meaning of Rule 14d-4(a) of the Exchange Act, or any successor rule, if,
upon consummation thereof, such Person would be the Beneficial Owner of 15%
or more of the shares of Common Stock of the Company then outstanding or
(iii) the determination by the Board of Directors of the Company, pursuant
to the criteria set forth in Section 11(a)(ii)(B) hereof, that a Person is
an Adverse Person (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights) (the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for the Common Stock of the Company registered in the names of
the holders of the Common Stock of the Company (which certificates for
Common Stock of the Company shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares
of Common Stock of the Company. As soon as practicable after the
Distribution Date,
7
the Rights Agent will, at the Company's expense send, by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock of
the Company as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
certificates, in substantially the form of Exhibit B hereto (the "Right
Certificates"), evidencing one Right for each share of Common Stock of the
Company so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock of the
Company has been made pursuant to Section 11(o) hereof, the Company may
make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) at the time of distribution of the Right
Certificates, so that Right Certificates representing only whole numbers of
Rights are distributed and cash is paid in lieu of any fractional Rights.
As of and after the Close of Business on the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) With respect to certificates for the Common Stock of the
Company issued prior to the Close of Business on the Record Date, the
Rights will be evidenced by such certificates for the Common Stock of the
Company on or until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), and the registered holders of the
Common Stock of the Company also shall be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), the transfer of any of the
certificates for the Common Stock of the Company outstanding prior to the
date of this Agreement shall also constitute the transfer of the Rights
associated with the Common Stock of the Company represented by such
certificate.
(c) Certificates for the Common Stock of the Company issued
after the Record Date, but prior to the earlier of the Distribution Date or
the redemption, expiration or termination of the Rights, shall be deemed
also to be certificates for Rights, and shall bear a legend, substantially
in the form set forth below:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Shareholder
Rights Agreement between Anika Therapeutics, Inc. and
Firstar Trust Company, as Rights Agent, dated as of
April 6, 1998, as amended, restated, renewed or
extended from time to time (the "Rights Agreement"),
the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal offices of Anika Therapeutics, Inc. and the
stock transfer administration office of the Rights
Agent. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced
by this certificate. Anika Therapeutics, Inc. may
redeem the Rights at a redemption price of $0.01 per
Right, subject to adjustment, under the terms of the
Rights Agreement. Anika Therapeutics, Inc. will mail
to the holder of this certificate a copy of the Rights
8
Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under
certain circumstances, Rights issued to or held by Acquiring
Persons, Adverse Persons or any Affiliates or Associates thereof
(as defined in the Rights Agreement), and any subsequent holder
of such Rights, may become null and void. The Rights shall not
be exercisable, and shall be void so long as held, by a holder in
any jurisdiction where the requisite qualification, if any, to
the issuance to such holder, or the exercise by such holder, of
the Rights in such jurisdiction shall not have been obtained or
be obtainable.
With respect to such certificates containing the foregoing legend, the
Rights associated with the Common Stock of the Company represented by such
certificates shall be evidenced by such certificates alone until the
Distribution Date (or the earlier redemption, expiration or termination of
the Rights), and the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with the Common Stock of
the Company represented by such certificates. In the event that the
Company purchases or acquires any shares of Common Stock of the Company
after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock of the Company shall be deemed canceled
and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of Common Stock of the Company which are
no longer outstanding. The failure to print the foregoing legend on any
such certificate representing Common Stock of the Company or any defect
therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares and of assignment and certificate to be printed on the
reverse thereof) shall each be substantially in the form of Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law, rule or
regulation or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to customary
usage. The Right Certificates shall be in a machine printable format and
in a form reasonably satisfactory to the Rights Agent. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates,
whenever distributed, shall be dated as of the Record Date, shall show the
date of countersignature, and on their face shall entitle the holders
thereof to purchase such number of one one-thousandths of a share of
Preferred Stock as shall be set forth therein at the price set forth
therein (the "Exercise Price"), but the number of such shares and the
Exercise Price shall be subject to adjustment as provided herein.
9
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by (i) an
Acquiring Person, an Adverse Person or any Associate or Affiliate of an
Acquiring Person or an Adverse Person, (ii) a transferee of an Acquiring
Person or an Adverse Person (or of any Associate or Affiliate of an
Acquiring Person or an Adverse Person) who becomes a transferee after the
Acquiring Person or Adverse Person becomes such, or (iii) a transferee of
an Acquiring Person or an Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person or Adverse Person to holders of equity interests in
such Acquiring Person or Adverse Person or to any Person with whom the
Acquiring Person or Adverse Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights, the shares of Common Stock of the Company associated
with such Rights or the Company or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
Section 7(e) hereof, and any Right Certificate issued pursuant to
Section 6, Section 11 or Section 22 upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence,
shall have deleted therefrom the second sentence of the existing legend on
such Right Certificate and in substitution therefor shall contain the
following legend:
The Rights represented by this Right Certificate are or
were beneficially owned by a Person who was or became
an Acquiring Person, an Adverse Person or an Affiliate
or an Associate of an Acquiring Person or an Adverse
Person (as such terms are defined in the Rights
Agreement). This Right Certificate and the Rights
represented hereby may become null and void under
certain circumstances as specified in Section 7(e) of
the Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it becomes
aware of the existence and identity of any Acquiring Person or Adverse
Person or any Associate or Affiliate thereof. The Company shall instruct
the Rights Agent in writing of the Rights which should be so legended. The
failure to print the foregoing legend on any such Right Certificate or any
defect therein shall not affect in any manner whatsoever the application or
interpretation of the provisions of Section 7(e) hereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board of Directors, or its President or any
Vice President and by its Treasurer or any Assistant Treasurer, or by its
Clerk or any Assistant Clerk, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile thereof
10
which shall be attested to by the Clerk or any Assistant Clerk of the
Company, either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by an authorized signatory of the Rights
Agent and shall not be valid for any purpose unless so countersigned, and
such countersignature upon any Right Certificate shall be conclusive
evidence, and the only evidence, that such Right Certificate has been duly
countersigned as required hereunder. In case any officer of the Company
who shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by an authorized signatory of the Rights
Agent, and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificates may be
signed on behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at one of its offices designated as the appropriate
place for surrender of Right Certificates upon exercise or transfer, books
for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of
the Right Certificates, the number of Rights evidenced on its face by each
of the Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Right Certificate or Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or
Certificates, entitling the registered holder to purchase a like number of
one one-thousandths of a share of Preferred Stock (or following a
Triggering Event, preferred stock, cash, property, debt securities, Common
Stock of the Company or any combination thereof) as the Right Certificate
or Certificates surrendered then entitled such holder to purchase and at
the same Exercise Price. Any registered holder desiring to transfer, split
up, combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Certificates to be transferred, split up, combined or
exchanged, with the form of assignment and certificate duly executed, at
the office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
11
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the
Person entitled thereto a Right Certificate or Certificates, as the case
may be, as so requested. The Company may require payment by the registered
holder of a Right Certificate, of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate, if mutilated, the Company will
execute and deliver a new Right Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment of the aggregate
Exercise Price for the total number of one one-thousandths of a share of
Preferred Stock (or other securities, cash or other assets, as the case may
be) as to which such surrendered Rights are then exercised, at or prior to
the earlier of (i) the Close of Business on the tenth anniversary of the
date of this Agreement (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof or (iii) the
time at which such Rights are exchanged as provided in Section 24 hereof
(the earlier of (i), (ii) or (iii) being herein referred to as the
"Expiration Date"). Except as set forth in Section 7(e) hereof and
notwithstanding any other provision of this Agreement, any Person who prior
to the Distribution Date becomes a record holder of shares of Common Stock
of the Company may exercise all of the rights of a registered holder of a
Right Certificate with respect to the Rights associated with such shares of
Common Stock of the Company in accordance with the provisions of this
Agreement, as of the date such Person becomes a record holder of shares of
Common Stock of the Company.
(b) The Exercise Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
forty-five dollars ($45.00), shall be subject to adjustment from time to
time as provided in Section 11 and Section 13 hereof and shall be payable
in lawful money of the United States of America in accordance with Section
7(c) below.
12
(c) As promptly as practicable following the Distribution Date,
the Company shall deposit with a corporation, trust, bank or similar
institution in good standing organized under the laws of the United States
or any State of the United States, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination by a federal or state authority (such
institution is hereinafter referred to as the "Depositary Agent"),
certificates representing the shares of Preferred Stock that may be
acquired upon exercise of the Rights and the Company shall cause such
Depositary Agent to enter into an agreement pursuant to which the
Depositary Agent shall issue receipts representing interests in the shares
of Preferred Stock so deposited. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, accompanied by
payment of the Exercise Price for the shares to be purchased and an amount
equal to any applicable transfer tax (as determined by the Rights Agent) by
certified check or bank draft payable to the order of the Company or by
money order, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) requisition from the Depositary Agent (or make
available, if the Rights Agent is the Depositary Agent) depository receipts
or certificates for the number of one one-thousandths of a share of
Preferred Stock to be purchased and the Company hereby irrevocably
authorizes the Depositary Agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash, if any, to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is
obligated to issue other securities (including Common Stock) of the
Company, pay cash or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash or other property are available for distribution by the
Rights Agent, if and when appropriate. The payment of the Exercise Price
may be made by certified or bank check payable to the order of the Company,
or by money order or wire transfer of immediately available funds to the
account of the Company (provided that notice of such wire transfer shall be
given by the holder of the related Right to the Rights Agent).
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event or Section
13 Event, any Rights beneficially owned by (i) an Acquiring Person, an
Adverse Person or any Associate or Affiliate of an Acquiring Person or an
Adverse Person, (ii) a transferee of an Acquiring Person
13
or an Adverse Person (or of any Associate or Affiliate of an Acquiring
Person or an Adverse Person) who becomes a transferee after the Acquiring
Person or Adverse Person becomes such or (iii) a transferee of an Acquiring
Person or an Adverse Person (or of any Associate or Affiliate of an
Acquiring Person or an Adverse Person) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to holders of
equity interests in such Acquiring Person or Adverse Person or to any
Person with whom the Acquiring Person or Adverse Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights,
the shares of Common Stock of the Company associated with such Rights or
the Company, or (B) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 7(e), shall be
null and void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or Adverse
Person or any Affiliates or Associates of an Acquiring Person or an Adverse
Person or any transferee of any of them hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of Rights upon the
occurrence of any purported exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of
its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company.
Section 9. Reservation and Availability of Preferred Stock.
14
(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 any authorized and issued shares of Preferred Stock held
in its treasury, the number of shares of Preferred Stock that will be
sufficient to permit the exercise in full of all outstanding and
exercisable Rights. Upon the occurrence of any events resulting in an
increase in the aggregate number of shares of Preferred Stock issuable upon
exercise of all outstanding Rights in excess of the number then reserved,
the Company shall make appropriate increases in the number of shares so
reserved.
(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 to be listed, upon official notice of
issuance, upon the principal national securities exchange, if any, upon
which the Common Stock of the Company is listed or, if the principal market
for the Common Stock of the Company is not on any national securities
exchange, to be eligible for quotation on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or any successor
thereto or other comparable quotation system.
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or as soon as required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
the securities 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 that at all times meets the
requirements of the Securities Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities or (B) the
Expiration Date. The Company will also take such action as may be
appropriate under, and which will ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the exercisability
of the Rights. The Company may temporarily suspend, for a period of time
not to exceed ninety (90) days after the date determined in accordance with
the provisions of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon such suspension, the
Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect, in each
case with prompt written notice to the Rights Agent. Notwithstanding any
such 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.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock
delivered upon the exercise of the Rights shall, at the time of delivery of
the certificates or depositary receipts for such shares
15
(subject to payment of the Exercise Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Right Certificates or of any certificates for shares of Preferred Stock
upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a person other than, or in respect of the
issuance or delivery of securities in a name other than that of, the
registered holder of the Right Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for securities in a
name other than that of the registered holder upon the exercise of any
Rights until such tax shall have been paid (any such tax being payable by
the holder of such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose name
any certificate for Preferred Stock (including any fraction of a share 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 shares of
Preferred Stock represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the 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,
the next succeeding Business Day on which the Preferred Stock transfer
books of the Company are open; and further provided, however, that if
delivery of shares of Preferred Stock is delayed pursuant to Section 9(c),
such Person shall be deemed to have become the record holder of such shares
of Preferred Stock only when such shares first become deliverable. Prior
to the exercise of the Right evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a shareholder 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, Number and Kind of Shares
or Number of Rights. The Exercise Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a
smaller number of shares or (D) issue any shares of its capital
16
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Exercise Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books of the Company
were open, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event
shall the consideration to be paid upon the exercise of a Right be
less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of a Right. If an event occurs
which would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to the provisions of Section 24 hereof, in the
event
(A) any Person, alone or together with its Affiliates
and Associates, shall become an Acquiring Person, or
(B) the Board of Directors of the Company, by majority
vote, shall declare any Person to be an Adverse Person, after
(x) a determination that such Person, alone or together with its
Affiliates and Associates, has become the Beneficial Owner of 10%
or more of the outstanding shares of Common Stock of the Company
and (y) a determination by the Board of Directors, after
reasonable inquiry and investigation, including such
consultation, if any, with such persons as such directors shall
deem appropriate, that (a) such Beneficial Ownership by such
Person is intended to cause, is reasonably likely to cause or
will cause the Company to repurchase the Common Stock of the
Company beneficially owned by such Person or to cause pressure on
the Company to take action or enter into a transaction or series
of transactions which would provide such Person with short-term
financial gain under circumstances where the Board of Directors
determines that the best long-term interests of the Company and
its shareholders, but for the actions and possible actions of
such Person, would not be served by taking such action or
entering into such transactions or series of transactions at that
time or (b) such Beneficial Ownership is causing or reasonably
likely to cause a material adverse impact (including, but not
limited to, impairment of relationships with customers or
impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the
17
Company. No delay or failure by the Board of Directors to
declare a Person to be an Adverse Person shall in any way waive
or otherwise affect the power of the Board of Directors
subsequently to declare a Person to be an Adverse Person. In the
event that the Board of Directors should at any time determine,
upon reasonable inquiry and investigation, including consultation
with such Persons as the Board of Directors shall deem
appropriate, that such Person has not met or complied with any
condition specified by the Board of Directors, the Board of
Directors may at any time thereafter declare such Person to be an
Adverse Person pursuant to the provisions of this
Section 11(a)(ii)(B),
then, and in each such case, promptly following any such occurrence (a
"Section 11(a)(ii) Event"), proper provision shall be made so that
each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have a right to receive, upon exercise thereof at the
then current Exercise Price in accordance with the terms of this
Agreement, such number of shares of Preferred Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Exercise Price by the then number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event, whether or not such
Right was then exercisable, and dividing that product by (y) 50% of
the Fair Market Value per one one-thousandth of a share of the
Preferred Stock (determined pursuant to Section 11(d)) on the date of
the occurrence of a Section 11(a)(ii) Event (such number of shares
being referred to as the "Adjustment Shares").
(iii) In lieu of issuing any shares of Preferred Stock
in accordance with Section 11(a)(ii) hereof, the Company, acting
by or pursuant to a resolution of the Board of Directors of the
Company, may, and in the event that the number of shares of
Preferred Stock which are authorized by the Company's Articles of
Organization but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not sufficient
to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by or pursuant to a resolution of the Board of
Directors of the Company, shall: (A) determine the excess of (X)
the Fair Market Value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (Y) the Exercise
Price attributable to each Right (such excess being referred to
as the "Spread") and (B) with respect to all or a portion of each
Right (subject to Section 7(e) hereof), make adequate provision
to substitute for the Adjustment Shares, upon payment of the
applicable Exercise Price, (1) cash, (2) a reduction in the
Exercise Price, (3) Preferred Stock Equivalents which the Board
of Directors of the Company has deemed to have the same value as
shares of Common Stock of the Company, (4) debt securities of the
Company, (5) other assets of the Company or (6) any combination
of the foregoing which, when added to any shares of Preferred
Stock issued upon such exercise, has an aggregate value equal to
the Current
18
Value, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a
nationally recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, that if the
Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"), then
the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Exercise
Price, shares of Preferred Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board of Directors
of the Company shall determine in good faith that it is likely
that sufficient additional shares of Preferred Stock could be
authorized for issuance upon exercise in full of the Rights, the
30-day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional
shares (such period, as it may be extended, being referred to
herein as the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that
such action shall apply uniformly to all outstanding Rights and
(y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended and a public announcement at such time
as the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Preferred Stock shall be the
Fair Market Value (as determined pursuant to Section 11(d)
hereof) per share of the Preferred Stock on the Section 11(a)(ii)
Trigger Date and the value of any Preferred Stock Equivalent
shall be deemed to have the same value as the Preferred Stock on
such date.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling
them (for a period expiring within forty-five (45) calendar days after such
record date) to subscribe for or purchase Preferred Stock (or securities
having the same or more favorable rights, privileges and preferences as the
shares of Preferred Stock ("Preferred Stock Equivalents")) or securities
convertible into Preferred Stock or Preferred Stock Equivalents at a price
per share of Preferred Stock or per share of Preferred Stock Equivalents
(or having a conversion price per share, if a security convertible into
Preferred Stock or Preferred Stock Equivalents) less than the Fair Market
Value (as determined
19
pursuant to Section 11(d) hereof) per share of Preferred Stock on such
record date, the Exercise Price to be in effect after such record date
shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be
the number of shares of Preferred Stock outstanding on such record date,
plus the number of shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock and/or Preferred
Stock Equivalents to be offered (and the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such Fair
Market Value and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and Preferred Stock Equivalents to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of a
Right be less than the aggregate par value of the shares of stock of the
Company issuable upon exercise of a Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a form
other than cash, the value of such consideration shall be the Fair Market
Value thereof determined in accordance with Section 11(d) hereof. Shares
of Preferred Stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
adjustments shall be made successively whenever such a record date is
fixed; and in the event that such rights or warrants are not so issued, the
Exercise Price shall be adjusted to be the Exercise Price which would then
be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), of evidences of
indebtedness, cash (other than a regular periodic cash dividend out of the
earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or convertible securities, subscription
rights or warrants (excluding those referred to in Section 11(b)), the
Exercise Price to be in effect after such record date shall be determined
by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Fair Market
Value (as determined pursuant to Section 11(d) hereof) per one
one-thousandth of a share of Preferred Stock on such record date, less the
Fair Market Value (as determined pursuant to Section 11(d) hereof) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such convertible securities, subscription rights or
warrants applicable to one one-thousandth of a share of Preferred Stock and
the denominator of which shall be the Fair Market Value (as determined
pursuant to Section 11(d) hereof) per one one-thousandth of a share of
Preferred Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of a Right be less than the
aggregate par value of the shares of stock of the Company issuable upon
exercise of a Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not
so made, the Exercise Price shall again be adjusted to be the Exercise
Price which would be in effect if such record date had not been fixed.
20
(d) For the purpose of this 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 shall be determined as
provided in this Section 11(d).
(i) 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 stock is determined during
a period following the announcement by the issuer of such stock
of (x) a dividend or distribution on such stock payable in shares
of such stock or securities convertible into shares of such stock
or (y) any subdivision, combination or reclassification of such
stock, and prior to the expiration of the 30 Trading Day period
after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification, then, and in each such case, the Fair Market
Value shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
securities are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which 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 last quoted high
bid and low asked prices) in the over-the-counter market, as
reported by NASDAQ or such other system then in use; or, if on
any such date 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. If
on any such date no market maker is making a market in such
security, the Fair Market Value of such security on such date
shall be determined reasonably and with utmost good faith to the
holders of the Rights by the Board of Directors of the Company,
provided, however, that if at the time of such determination
there is an Acquiring Person or an Adverse Person, the Fair
Market Value of such security on such date shall be determined by
a nationally recognized investment banking firm selected by the
Board of Directors of the Company, which determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. The
term "Trading Day" shall mean a day on which the principal
national securities exchange on which such security is listed
21
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.
(ii) 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 security, determined
reasonably and with utmost good faith to the holders of the
Rights by the Board of Directors of the Company; provided,
however, that if at the time of such determination there is an
Acquiring Person or an Adverse Person, the Fair Market Value of
such security on such date shall be determined by a nationally
recognized investment banking firm selected by the Board of
Directors of the Company, which determination shall be described
in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and the holders of the Rights; provided,
however, that for the purposes of making any adjustment provided
for by Section 11(a)(ii) hereof, the Fair Market Value of a share
of Preferred Stock shall not be less than 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 (as both of
such terms are defined in the Certificate of Designation attached
as Exhibit A hereto) applicable 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.
(iii) In the case of property other than securities, the
Fair Market Value thereof shall be determined reasonably and with
utmost good faith to the holders of Rights by the Board of
Directors of the Company; provided, however, that if at the time
of such determination there is an Acquiring Person or an Adverse
Person, the Fair Market Value of such property on such date shall
be determined by a nationally recognized investment banking firm
selected by the Board of Directors of the Company, which
determination shall be described in a statement filed with the
Rights Agent and shall be binding upon the Rights Agent and the
holders of the Rights.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in the Exercise Price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest
hundred-thousandth of a share of Common Stock of the Company or
ten-millionth of a share of Preferred Stock, as the case may be, or to such
other figure as the Board of Directors of the Company may deem appropriate.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made
22
no later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a) or Section
13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Stock, thereafter the number of such other shares so receivable
upon exercise of any Right shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Section 11(a),
(b), (c), (d), (e), (g) through (k) and (m), inclusive, and the provisions
of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock
shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of one
one-thousandths of a share of Preferred Stock (or other securities or
amount of cash or combination thereof) purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of one one-thousandths of a share of Preferred Stock
(calculated to the nearest one ten-millionth) as the Board of Directors of
the Company determines is appropriate to preserve the economic value of the
Rights, including, by way of example, that number obtained by (i)
multiplying (x) the number of one one-thousandths of a share of Preferred
Stock for which a Right may be exercisable immediately prior to this
adjustment by (y) the Exercise Price in effect immediately prior to such
adjustment of the Exercise Price and (ii) dividing the product so obtained
by the Exercise Price in effect immediately after such adjustment of the
Exercise Price.
(i) The Company may elect on or after the date of any adjustment
of the Exercise Price to adjust the number of Rights, in substitution for
any adjustment in the number of shares of Preferred Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of
one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one hundred thousandth)
obtained by dividing the Exercise Price in effect immediately prior to
adjustment of the Exercise Price by the Exercise Price in effect
immediately after adjustment of the Exercise Price. The Company shall make
a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time,
the amount of the adjustment to be made. This record date may be the date
on which the
23
Exercise Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten (10) days later than
the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear,
at the option of the Company, the adjusted Exercise Price) and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise
Price or the number of one one-thousandths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Exercise
Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder without prejudice to any
adjustment or change.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below the then stated value, if any, of the
number of one one-thousandths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and nonassessable shares of
Preferred Stock at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the number of one one-thousandths of a share of Preferred Stock
or other capital stock or securities of the Company, if any, issuable upon
such exercise over and above the number of one one-thousandths of a share
of Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Exercise Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Exercise
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith
24
judgment the Board of Directors of the Company shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any shares of Preferred Stock at less
than the Fair Market Value, issuance wholly for cash of shares of Preferred
Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, stock dividends or issuance of
rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred Stock, shall not
be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or exchanged pursuant to Section 24
hereof, (i) consolidate with (other than a Subsidiary of the Company in a
transaction that complies with the proviso at the end of this sentence),
(ii) merge with or into, or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction or a series of related
transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries taken as a whole, to
any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with the
proviso at the end of this sentence) if (x) at the time of or immediately
after such consolidation, merger or sale there are any rights, warrants or
other instruments outstanding or agreements or arrangements in effect which
would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights, or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale the shareholders of a
Person who constitutes, or would constitute, the "Principal Party" for the
purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates; provided, however, that this Section 11(n) shall not affect the
ability of any Subsidiary of the Company to consolidate with, or merge with
or into, or sell or transfer assets or earning power to, any other
Subsidiary of the Company. The Company further covenants and agrees that
after the Distribution Date it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such
action will substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(o) Notwithstanding anything in this Agreement to the contrary,
in the event the Company shall at any time after the date of this Agreement
and prior to the Distribution Date (i) declare or pay any dividend on the
outstanding Common Stock of the Company payable in shares of Common Stock
of the Company or (ii) effect a subdivision, combination or consolidation
of the outstanding shares of Common Stock of the Company (by
reclassification or otherwise than by payment of dividends in shares of
Common Stock of the Company) into a greater or lesser number of shares of
Common Stock of the Company, then in any such case (A) the number of one
one-thousandths of a share of Preferred Stock purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the
number of one one-thousandths of a share of Preferred Stock so purchasable
immediately prior to such event by a fraction, the numerator of which is
the number of shares of Common Stock
25
of the Company outstanding immediately prior to such event and the
denominator of which is the number of shares of Common Stock of the Company
outstanding immediately after such event, and (B) each share of Common
Stock of the Company outstanding immediately after such event shall have
issued with respect to it that number of Rights which each share of Common
Stock of the Company outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(o)
shall be made successively whenever such a dividend is declared or paid or
such a subdivision, combination or consolidation is effected.
(p) The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent so
exercised and shall not otherwise affect the rights of holders of Right
Certificates under this Rights Agreement, including rights to purchase
securities of the Principal Party following a Section 13 Event which has
occurred or may thereafter occur, as set forth in Section 13 hereof. Upon
exercise of a Right Certificate under Section 11(a)(ii), the Rights Agent
shall return such Right Certificate duly marked to indicate that such
exercise has occurred.
Section 12. Certificate of Adjusted Exercise Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or
Section 13 hereof, the Company shall (a) promptly prepare a certificate
setting forth such adjustment and a brief statement of the facts accounting
for such adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Preferred Stock and the Common Stock of the Company
a copy of such certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock of the
Company) in accordance with Section 26 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
contained therein and shall not be deemed to have knowledge of any such
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, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in
a transaction which is not prohibited by Section 11(n) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction which is not prohibited by the proviso at the end
of the first sentence of Section 11(n) hereof) shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with
such merger, all or part of the shares of Common Stock of the Company shall
be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell,
mortgage or otherwise transfer (or one or more of its Subsidiaries shall
sell, mortgage or otherwise transfer), in one transaction or a series of
26
related transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or any
Subsidiary of the Company in one or more transactions, each of which is not
prohibited by the proviso at the end of the first sentence of Section 11(n)
hereof), then, and in each such case, proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall have the right to receive, upon the exercise thereof at the
then current Exercise Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid and nonassessable
shares of freely tradeable Common Stock of the Principal Party (as
hereinafter defined in Section 13(b)), free and clear of rights of call or
first refusal, liens, encumbrances, transfer restrictions or other adverse
claims, as shall be equal to the result obtained by (1) multiplying the
then current Exercise Price by the number of one one-thousandths of a share
of Preferred Stock for which a Right is exercisable immediately prior to
the first occurrence of a Section 13 Event, and dividing that product by
(2) 50% of the Fair Market Value (determined pursuant to Section 11(d)
hereof) per share of the Common Stock of such Principal Party on the date
of 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, mortgage or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof
shall apply to such Principal Party; and (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 to permit exercise of all
outstanding Rights in accordance with this Section 13(a) and the making of
payments in cash and/or other securities in accordance with Section
11(a)(iii) hereof) in connection with such consummation as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer of Common Stock that has the
highest aggregate Fair Market Value (determined pursuant to Section
11(d)), and if no securities are so issued, the Person that is the
other party to the merger or consolidation, or, if there is more than
one such Person, the Person the Common Stock of which has the highest
aggregate Fair Market Value (determined pursuant to Section 11(d));
and
(ii) in the case of any transaction described in clause (z)
of the first sentence of 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,
27
if each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power transferred
pursuant to such transaction or transactions or if the Person
receiving the largest portion of the assets or earning power cannot be
determined, whichever Person the Common Stock of which has the highest
aggregate Fair Market Value (determined pursuant to Section 11(d));
provided, however, that in any such case, (1) 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
("Registered Common Stock") or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary or Affiliate of another Person
who has Registered Common Stock outstanding, "Principal Party" shall refer
to such other Person; (2) if the Common Stock of such Person is not
Registered Common Stock or such Person is not a corporation, and such
Person is a direct or indirect Subsidiary of another Person but is not a
direct or indirect Subsidiary of another Person which has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate parent
entity of such first-mentioned Person; (3) if the Common Stock of such
Person is not Registered Common Stock or such Person is not a corporation,
and such Person is directly or indirectly controlled by more than one
Person, and one or more of such other Persons has Registered Common Stock
outstanding, "Principal Party" shall refer to whichever of such other
Persons is the issuer of the Registered Common Stock having the highest
aggregate Fair Market Value (determined pursuant to Section 11(d)); and (4)
if the Common Stock of such Person is not Registered Common Stock or such
Person is not a corporation, and such Person is directly or indirectly
controlled by more than one Person, and none of such other Persons has
Registered Common Stock outstanding, "Principal Party" shall refer to
whichever ultimate parent entity is the corporation having the greatest
stockholders' equity or, if no such ultimate parent entity is a
corporation, "Principal Party" shall refer to whichever ultimate parent
entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto (x) the Principal Party shall
have a sufficient number of authorized shares of its Common Stock, which
have not been issued or reserved for issuance, to permit the exercise in
full of the Rights in accordance with this Section 13, and (y) the Company
and each Principal Party and each other Person who may become a Principal
Party as a result of such consolidation, merger, sale or transfer shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in Section 13(a) and (b) and further
providing that, as soon as practicable after the date of any consolidation,
merger, sale or transfer of assets mentioned in Section 13(a), the
Principal Party at its own expense will:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, cause
such registration statement to become effective as soon as practicable
after such filing and cause such registration statement to remain
effective
28
(with a prospectus that at all times meets the requirements of the
Securities Act) until the Expiration Date;
(ii) qualify or register the Rights and the securities
purchasable upon exercise of the Rights under the blue sky laws of
such jurisdictions as may be necessary or appropriate;
(iii) 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
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.
(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 affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), 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 current Fair Market Value (determined pursuant to Section 11(d)) or
securities exercisable for, or convertible into, Common Stock of such
Principal Party at less than such Fair Market Value, or (ii) providing for
any special payment, tax or similar provisions in connection with the
issuance of the 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.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(o)
hereof, or to distribute Right Certificates which evidence fractional
Rights. If the Company elects not to issue such fractional Rights, the
Company shall pay, in lieu of such fractional Rights, to the registered
holders of the Right Certificates with regard to which such fractional
Rights would otherwise
29
be issuable, an amount in cash equal to the same fraction of the Fair
Market Value of a whole Right, as determined pursuant to Section 11(d)
hereof.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock).
In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company
may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the Fair Market Value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the Fair Market Value
of one one-thousandth of a share of Preferred Stock shall be determined
pursuant to Section 11(d) hereof for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement, other than rights of action vested in the Rights Agent
pursuant to Sections 18 and 20 hereof, are vested in the respective
registered holders of the Right Certificates (or, prior to the Distribution
Date, the registered holders of the Common Stock of the Company); and any
registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Stock of the Company), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock of the Company), may, in such
registered holder's own behalf and for such registered holder's 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 Right evidenced by such Right Certificate in the
manner provided in such Right Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and shall be
entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement. Holders of
Rights shall be entitled to recover the reasonable costs and expenses,
including attorneys' fees, incurred by them in any action to enforce the
provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
30
(a) prior to the Distribution Date, each Right will be
transferable only simultaneously and together with the transfer of shares
of Common Stock of the Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the office or offices of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of transfer;
(c) subject to Sections 6(a) and 7(f), the Company and the
Rights Agent may deem and treat the person in whose name a Right
Certificate (or, prior to the Distribution Date, the associated certificate
representing Common Stock of the Company) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or the
associated certificate representing Common Stock of the Company made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and, subject to the last sentence of Section 7(e), neither the
Company nor the Rights Agent shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as the result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or
otherwise restraining performance of such obligations; provided, however,
that the Company must use its best efforts to have any such order, decree
or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except
as provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent such
compensation as shall be agreed to in writing between the Company and the
Rights Agent for all services
31
rendered by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability arising therefrom,
directly or indirectly. The provisions of this Section 18(a) shall survive
the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate representing Common Stock of the
Company, Preferred Stock, or 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 in good faith and without negligence to be genuine
and to be signed and executed by the proper Person or Persons.
(c) The Rights Agent shall not be liable for consequential
damages under any provision of this Agreement or for any consequential
damages arising out of any act or failure to act hereunder.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or shareholder services business of the
Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided
that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Right Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
32
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations expressly imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by
it (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person or Adverse Person and the determination of "Fair Market
Value") 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 shall be herein specifically prescribed) may be deemed
to be conclusively proved and established by a certificate signed by a
person believed by the Rights Agent to be the Chairman of the Board of
Directors, a Vice Chairman of the Board of Directors, the President, a Vice
President, the Treasurer, any Assistant Treasurer, the Clerk or an
Assistant Clerk 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 Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company
33
of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 7(e) hereof) or any adjustment required under the provisions of
Sections 11, 13 or 23(c) 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 Right Certificates after receipt of a certificate
describing any such adjustment furnished in accordance with Section 12
hereof), nor shall it be responsible for any determination by the Board of
Directors of the Company of the Fair Market Value of the Rights or
Preferred Stock pursuant to the provisions of Section 14 hereof; 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 Common Stock of the
Company or Preferred Stock to be issued pursuant to this Agreement or any
Right Certificate or as to whether any shares of Common Stock of the
Company or Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any person
believed by the Rights Agent to be the Chairman of the Board of Directors,
any Vice Chairman of the Board of Directors, the President, a Vice
President, the Clerk, an Assistant Clerk, the Treasurer or an Assistant
Treasurer of the Company, and is authorized to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer. Any application by the
Rights Agent for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action proposed to be taken
or omitted by the Rights Agent under this Agreement and the date on or
after which such action shall be taken or such omission shall be effective.
The Rights Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in such
application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any 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
34
were not the Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company
or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause
(1) or clause (2) thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the
Company by first class mail. The Company may remove the Rights Agent or
any successor Rights Agent (with or without cause) upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Stock of the
Company and Preferred Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company
shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then
the incumbent Rights Agent or the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the
Commonwealth of Massachusetts or the State of New York (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking institution in the Commonwealth of Massachusetts or
the State of New York), in good standing, which is authorized under such
laws to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus
of at least $100,000,000 or (b) an Affiliate of a corporation described in
clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with
35
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 of the Company and the
Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights
in such form as may be approved by the Board of Directors of the Company 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 Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock of the Company following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company
(a) shall, with respect to shares of Common Stock of the Company so issued
or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion or exchange of
securities hereafter issued by the Company, and (b) may, in any other case,
if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that
(i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustments shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, appropriately adjusted to reflect any
dividend declared or paid on the Common Stock of the Company in shares of
Common Stock of the Company or any subdivision or combination of the
outstanding shares of Common Stock of the Company or similar event
occurring after the date of this Agreement (such redemption price, as
adjusted from time to time, being hereinafter referred to as the
"Redemption Price"). The Rights may be redeemed only until the earliest to
occur of (i) the time at which any Person becomes an Acquiring Person, or
(ii) the declaration by the Board of Directors that any Person is an
Adverse Person or (iii) the Final Expiration Date.
36
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights in accordance with Section 23
hereof, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right
so held. Promptly after the action of the Board of Directors of the
Company ordering the redemption of the Rights in accordance with Section 23
hereof, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice
to the Rights Agent and to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the
Common Stock of the Company. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives
the notice. 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 redemption will state the method
by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or Section 24 hereof or in
connection with the purchase of shares of Common Stock of the Company prior
to the Distribution Date.
(c) The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock of the Company (based on the Fair Market Value
of the Common Stock of the Company as of the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors of
the Company.
Section 24. Exchange.
(a) (i) The Board of Directors of the Company may, at its
option, at any time on or after the occurrence of a Section
11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock of the Company at an exchange ratio of
one share of Common Stock of the Company 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 "Section 24(a)(i) Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors
of the Company 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 Common Stock of the
Company.
37
(ii) Notwithstanding the foregoing, the Board of Directors
of the Company may, at its option, at any time on or after the
occurrence of a Section 11(a)(ii) Event, exchange all or part of
the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for shares of Common Stock of the Company
at an exchange ratio specified in the following sentence, as
appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date of this
Agreement. Subject to the adjustment described in the foregoing
sentence, each Right may be exchanged for that number of shares
of Common Stock of the Company obtained by dividing the Spread
(as defined in Section 11(a)(iii)) by the then Fair Market Value
per one one-thousandth of a share of Preferred Stock on the
earlier of (x) the date on which any person becomes an Acquiring
Person or (y) the date on which a tender or exchange offer by any
Person (other than an Exempt Person) is first published or sent
or given within the meaning of Rule 14d-4(a) of the Exchange Act
or any successor rule, if upon consummation thereof such Person
would be the Beneficial Owner of more than 15% of the shares of
Common Stock of the Company then outstanding (such exchange ratio
being referred to herein as the "Section 24(a)(ii) Exchange
Ratio"). Notwithstanding the foregoing, the Board of Directors
of the Company 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 Common Stock of the
Company.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of
Common Stock of the Company equal to the number of such Rights held by such
holder multiplied by the Section 24(a)(i) Exchange Ratio or the Section
24(a)(ii) Exchange Ratio, as applicable. The Company shall promptly give
notice of any such exchange in accordance with
Section 26 hereof and shall promptly 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; provided, however, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the shares of Common Stock of the Company 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.
38
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Preferred Stock (or Preferred Stock Equivalent,
as such term is defined in Section 11(b) hereof) for Common Stock of the
Company exchangeable for Rights, at the initial rate of one one-thousandth
of a share of Preferred Stock (or Preferred Stock Equivalent) for each
share of Common Stock of the Company, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock pursuant to the
terms thereof, so that the fraction of a share of Preferred Stock delivered
in lieu of each share of Common Stock of the Company shall have the same
voting rights as one share of Common Stock of the Company.
(d) In the event that there shall not be sufficient shares of
Common Stock of the Company or Preferred Stock (or Preferred Stock
Equivalent) issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 24,
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock of the Company or Preferred Stock (or
Preferred Stock Equivalent) for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Stock of the Company or to distribute certificates which evidence
fractional shares of Common Stock of the Company. If the Company elects
not to issue such fractional shares of Common Stock of the Company, the
Company shall pay, in lieu of such fractional shares of Common Stock of the
Company, to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock of the Company would otherwise
be issuable, an amount in cash equal to the same fraction of the Fair
Market Value of a whole share of Common Stock of the Company. For the
purposes of this paragraph (e), the Fair Market Value of a whole share of
Common Stock of the Company shall be the closing price of a share of Common
Stock of the Company (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular periodic cash dividend out
of earnings or retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or with, or to effect
any sale, mortgage or other transfer (or to permit one or more of its
Subsidiaries to effect any sale, mortgage or other transfer), in one
transaction or a series of related transactions, of 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person (other than a Subsidiary of the Company in one
or more transactions each of which is not prohibited by the
39
proviso at the end of the first sentence of Section 11(n) hereof), (v) to
effect the liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Common Stock of the Company
payable in Common Stock of the Company or to effect a subdivision,
combination or consolidation of the Common Stock of the Company (by
reclassification or otherwise than by payment of dividends in Common Stock
of the Company) then in each such case, the Company shall give to each
holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding
up is to take place and the date of participation therein by the holders of
the shares of Common Stock of the Company and/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 twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Common Stock of the Company and/or Preferred Stock, whichever
shall be the earlier; provided, however, no such notice shall be required
pursuant to this Section 25 as a result of any Subsidiary of the Company
effecting a consolidation or merger with or into, or effecting a sale or
other transfer of assets or earnings power to, any other Subsidiary of the
Company in a manner not inconsistent with the provisions of this Agreement.
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, the Company shall as soon as practicable thereafter give to
each registered holder of a Right Certificate and to the Rights Agent, in
accordance with Section 26 hereof, a notice of the occurrence of such
event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, by facsimile transmission or by
nationally-recognized overnight courier addressed (until another address is
filed in writing with the Rights Agent) as follows:
Anika Therapeutics, Inc.
000 Xxxx Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Clerk
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, by
40
facsimile transmission or by nationally-recognized overnight courier
addressed (until another address is filed in writing with the Company) as
follows:
Firstar Trust Company
000 Xxxxx XxxxxXxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to the holder of any certificate
representing shares of Common Stock of the Company) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry books of
the Company.
Section 27. Supplements and Amendments. Prior to the occurrence of a
Section 11(a)(ii) Event, the Company and the Rights Agent shall, if the
Board of Directors of the Company so directs, supplement or amend any
provision of this Agreement as the Board of Directors of the Company may
deem necessary or desirable without the approval of any holders of
certificates representing shares of Common Stock of the Company. From and
after the occurrence of a Section 11(a)(ii) Event, the Company and the
Rights Agent shall, if the Board of Directors of the Company so directs,
supplement or amend this Agreement without the approval of any holder of
Right Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder, or (iv) to change or supplement the provisions
hereof in any manner which the Board of Directors of the Company may deem
necessary or desirable and which shall not adversely affect the interests
of the holders of Right Certificates (other than an Acquiring Person,
Adverse Person or any Affiliate or Associate of an Acquiring Person or
Adverse Person); provided, however, that from and after the occurrence of a
Section 11(a)(ii) Event this Agreement may not be supplemented or amended
to lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are
not then redeemable or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and
the benefits to, the holders of Rights (other than an Acquiring Person,
Adverse Person or any Affiliate or Associate of an Acquiring Person or
Adverse Person). Without limiting the foregoing, the Company may at any
time prior to the occurrence of a Section 11(a)(ii) Event amend this
Agreement to lower the threshold set forth in Section 1(a) to not less than
the greater of (i) the sum of .001% and the largest percentage of the
outstanding Common Stock of the Company then known by the Company to be
beneficially owned by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any Subsidiary of
the Company, or any entity holding Common Stock of the Company for or
pursuant to the terms of any such plan) and (ii) 10%. Upon the delivery of
such certificate from an appropriate officer of the Company which states
that the proposed supplement or amendment is in compliance with the
41
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Prior to the occurrence of a Section 11(a)(ii) Event, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock of the Company. Notwithstanding
any other provision hereof, the Rights Agent's consent must be obtained
regarding any amendment or supplement pursuant to this Section 27 which
alters the Rights Agent's rights or duties.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of Directors.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock of the Company outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of the Company of which any Person is
the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the Rules under the Exchange Act as in effect on the
date hereof. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors or to
the Company, or as may be necessary or advisable in the administration of
this Agreement, including without limitation, the right and power to (i)
interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend
the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board of
Directors in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject any member of the Board of Directors to any liability
to the holders of the Rights or to any other person.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock of the
Company) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, registered holders of
the Common Stock of the Company).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the
42
contrary, if any such term, provision, covenant or restriction is held by
such court or authority to be invalid, void or unenforceable and the Board
of Directors of the Company determines in its good faith judgment that
severing the invalid language from the Agreement would adversely affect the
purpose or effect of the Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the Close
of Business on the tenth day following the date of such determination by
the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the Commonwealth of Massachusetts and for all purposes shall be
governed by and construed in accordance with the laws of such Commonwealth
applicable to contracts to be made and to be performed entirely within such
Commonwealth. The courts of the Commonwealth of Massachusetts and of the
United States of America located in the Commonwealth of Massachusetts (the
"Massachusetts Courts") shall have exclusive jurisdiction over any
litigation arising out of or relating to this Agreement and the
transactions contemplated hereby, and any Person commencing or otherwise
involved in any such litigation shall waive any objection to the laying of
venue of such litigation in the Massachusetts Courts and shall not plead or
claim in any Massachusetts Court that such litigation brought therein has
been brought in an inconvenient forum.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
[Remainder of page intentionally left blank]
43
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as an instrument under seal and attested, all as of the
day and year first above written.
ATTEST: ANIKA THERAPEUTICS, INC.
By: /s/ Xxxx X. Xxxxx By: /s/ J. Xxxxxxxx Xxxxx
----------------- ------------------------
Name: J. Xxxxxxxx Xxxxx
Title: President
ATTEST: FIRSTAR TRUST COMPANY,
as Rights Agent
By:/s/ Xxxxxx X. Xxx By:/s/ Xxxxxxx X. Xxxxxx Xxxxxx
----------------- --------------------------
Name: Xxxxxxx X. Xxxxxx Xxxxxx
Title: Vice President
Exhibit A
VOTE OF DIRECTORS ESTABLISHING
SERIES B JUNIOR PARTICIPATING CUMULATIVE
PREFERRED STOCK
of
ANIKA THERAPEUTICS, INC.
Pursuant to Section 26 of Chapter 156B of the General Laws of The
Commonwealth of Massachusetts:
VOTED, that pursuant to authority conferred upon and vested in the
Board of Directors by the Restated Articles of Organization, as amended
(the "Articles"), of Anika Therapeutics, Inc. (the "Corporation"), the
Board of Directors hereby establishes and designates a series of Preferred
Stock of the Corporation, and hereby fixes and determines the relative
rights and preferences of the shares of such series, in addition to those
set forth in the Articles, as follows:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series B Junior Participating Cumulative Preferred Stock"
(the "Series B Preferred Stock"), and the number of shares constituting
such series shall be 150,000.
Section 2. Dividends and Distributions.
(A) (i) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and superior
to the Series B Preferred Stock with respect to dividends, the holders of
shares of Series B Preferred Stock, in preference to the holders of shares
of common stock and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the greater of
(a) $1.00 or (b) subject to the provisions for adjustment hereinafter set
forth, 1000 times the aggregate per share amount of all cash dividends, and
1000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
common stock or a subdivision of the outstanding shares of common stock (by
reclassification or otherwise), declared on the common stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series B Preferred Stock. The multiple of
cash and non-
cash dividends declared on the common stock to which holders of the Series
B Preferred Stock are entitled, which shall be 1000 initially but which
shall be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "Dividend Multiple." In the event the Corporation shall
at any time after April 6, 1998 (the "Rights Declaration Date") (i) declare
or pay any dividend on common stock payable in shares of common stock, or
(ii) effect a subdivision or combination or consolidation of the
outstanding shares of common stock (by reclassification or otherwise than
by payment of a dividend in shares of common stock) into a greater or
lesser number of shares of common stock, then in each such case the
Dividend Multiple thereafter applicable to the determination of the amount
of dividends which holders of shares of Series B 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.
(ii) Notwithstanding anything else contained in this paragraph
(A), the Corporation shall, out of funds legally available for that
purpose, declare a dividend or distribution on the Series B Preferred Stock
as provided in this paragraph (A) immediately after it declares a dividend
or distribution on the common stock (other than a dividend payable in
shares of common stock); provided that, in the event no dividend or
distribution shall have been declared on the common stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series B Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series B Preferred
Stock, unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series
B Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series B Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix in
accordance with applicable law a record date for the determination of
holders of shares of Series B Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be
not more than such number of days prior to the date fixed for the payment
thereof as may be allowed by applicable law.
2
Section 3. Voting Rights. In addition to any other voting rights
required by law, the holders of shares of Series B Preferred Stock shall
have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Preferred Stock shall entitle the holder thereof to
1000 votes on all matters submitted to a vote of the stockholders of the
Corporation. The number of votes which a holder of a share of Series B
Preferred Stock is entitled to cast, which shall initially be 1000 but
which may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple." In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare
or pay any dividend on common stock payable in shares of common stock, or
(ii) effect a subdivision or combination or consolidation of the
outstanding shares of common stock (by reclassification or otherwise than
by payment of a dividend in shares of common stock) into a greater or
lesser number of shares of common stock, then in each such case the Vote
Multiple thereafter applicable to the determination of the number of votes
per share to which holders of shares of Series B Preferred Stock shall be
entitled 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 or by law, the holders of
shares of Series B Preferred Stock and the holders of shares of common
stock and the holders of shares of any other capital stock of this
Corporation having general voting rights, shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as otherwise required by applicable law or as set forth
herein, holders of Series B Preferred Stock shall have no special voting
rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of common stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the Series B
Preferred Stock as provided in Section 2 are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series B Preferred Stock outstanding shall have been
paid in full, the Corporation 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 B Preferred
Stock;
3
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii)except as permitted in subsection 4(A)(iv) below, redeem,purchase
or other wise 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 B Preferred Stock , provided that
the Corporation may at any time redeem, purchase or other wise acquire
shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series B Preferred
Stock ; or
(iv) purchase or otherwise acquire for consideration any shares of
Series B Preferred Stock, or any shares of any stock ranking on a
parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series B Preferred Stock, except in
accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under subsection
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of preferred stock and may be reissued as part of a new series of
preferred stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made (x) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock unless, prior
thereto, the holders of shares of Series B Preferred Stock shall have
received an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, plus
4
an amount equal to the greater of (1) $1000.00 per share or (2) an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1000 times the aggregate amount to be
distributed per share to holders of common stock, or (y) to the holders of
stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred Stock, except
distributions made ratably on the Series B Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare or pay any dividend on common stock
payable in shares of common stock, or (ii) effect a subdivision or
combination or consolidation of the outstanding shares of common stock (by
reclassification or otherwise than by payment of a dividend in shares of
common stock) into a greater or lesser number of shares of common stock,
then in each such case the aggregate amount per share to which holders of
shares of Series B Preferred Stock were entitled immediately prior to such
event under clause (x) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of common stock outstanding immediately after such event and the
denominator of which is the number of shares of common stock that were
outstanding immediately prior to such event.
Neither the consolidation of nor merging of the Corporation with or
into any other corporation or corporations, nor the sale or other transfer
of all or substantially all of the assets of the Corporation, shall be
deemed to be a liquidation, dissolution or winding up of the Corporation
within the meaning of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of common stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series B Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of common stock is
changed or exchanged, plus accrued and unpaid dividends, if any, payable
with respect to the Series B Preferred Stock. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare or pay any
dividend on common stock payable in shares of common stock, or (ii) effect
a subdivision or combination or consolidation of the outstanding shares of
common stock (by reclassification or otherwise than by payment of a
dividend in shares of common stock) into a greater or lesser number of
shares of common stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of
Series B Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of common stock
outstanding immediately after such event and the denominator of which is
the number of shares of common stock that were outstanding immediately
prior to such event.
5
Section 8. Redemption. The shares of Series B Preferred Stock shall
not be redeemable.
Section 9. Ranking. Unless otherwise expressly provided in the
Articles or a Certificate of Vote of Directors Establishing a Class of
Stock relating to any other series of preferred stock of the Corporation,
the Series B Preferred Stock shall rank junior to every other series of the
Corporation's preferred stock previously or hereafter authorized, as to the
payment of dividends and the distribution of assets on liquidation,
dissolution or winding up and shall rank senior to the common stock.
Section 10. Amendment. The Articles and this Certificate of Vote of
Directors Establishing a Class of Stock shall not be amended in any manner
which would materially alter or change the powers, preferences or special
rights of the Series B Preferred Stock so as to affect them adversely
(within the meaning of Section 77 of Chapter 156B of the Massachusetts
General Laws) without the affirmative vote of the holders of two-thirds or
more of the outstanding shares of Series B Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. Series B Preferred Stock may be
issued in whole shares or in any fraction of a share that is one
one-thousandth (1/1000th) of a share or any integral multiple of such
fraction, which shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock. In lieu of fractional shares, the
Corporation may elect to make a cash payment as provided in the Rights
Agreement for fractions of a share other than one one-thousandth (1/1000th)
of a share or any integral multiple thereof.
6
Exhibit B
[Form of Right Certificate]
Certificate No. R- ______
Rights
NOT EXERCISABLE AFTER APRIL 6, 2008 OR EARLIER IF NOTICE OF REDEMPTION
IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF ANIKA
THERAPEUTICS, INC., AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE
SHAREHOLDER RIGHTS AGREEMENT BETWEEN ANIKA THERAPEUTICS, INC. AND
FIRSTAR TRUST COMPANY, AS RIGHTS AGENT, DATED AS OF APRIL 6, 1998
(THE "RIGHTS AGREEMENT"). UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON, AN ADVERSE PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID.
Right Certificate
ANIKA THERAPEUTICS, INC.
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Shareholder Rights Agreement dated as of April 6,
1998 (the "Rights Agreement") between Anika Therapeutics, Inc. (the
"Company") and Firstar Trust Company, as Rights Agent (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 the close of business
on April 6, 2008 at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one one-thousandth of
a fully paid, non-assessable share of the Series B Junior Participating
Cumulative Preferred Stock (the "Preferred Stock") of the Company, at a
purchase price of $_______ per one one-thousandth of a share (the "Exercise
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase and the related Certificate duly executed.
The number of Rights evidenced by this Right Certificate (and the number of
shares which may be purchased upon exercise thereof) set forth above, and
the
Exercise Price per share set forth above, are the number and Exercise Price
as of , based on the Preferred Stock as constituted at such
date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person, an Adverse
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Adverse Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a Person
who, after such transfer, became an Acquiring Person or an Adverse Person,
or an Affiliate or Associate of an Acquiring Person or an Adverse Person,
such Rights shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and the number
of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate are
subject to modification and adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension
of the exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on file
at the principal office of the Company and the designated office of the
Rights Agent and are also available upon written request to the Company or
the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Preferred Stock as the Rights evidenced
by the Right Certificate or Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Certificates for the number of whole Rights not
exercised. If this Right Certificate shall be exercised in whole or in
part pursuant to Section 11(a)(ii) of the Rights Agreement, the holder
shall be entitled to receive this Right Certificate duly marked to indicate
that such exercise has occurred as set forth in the Rights Agreement.
Under certain circumstances, subject to the provisions of the Rights
Agreement, the Board of Directors of the Company at its option may exchange
all or any part of the Rights evidenced by this Certificate for shares of
the Company's Common Stock or Preferred Stock at
2
an exchange ratio (subject to adjustment) set forth in the Rights
Agreement.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Board of Directors
of the Company at its option at a redemption price of $0.01 per Right
(payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors).
The Company is not obligated to issue fractional shares of stock upon
the exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-thousandth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by
depositary receipts). If the Company elects not to issue such fractional
shares, in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares
of Preferred Stock, Common Stock or any other securities of the Company
which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory
of the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
[Corporate Seal] ANIKA THERAPEUTICS, INC.
Attested:
By
--------------------------------
Name:
By-------------------------- Title: [Chairman, Vice Chairman,
[Clerk or Assistant Clerk] President or Vice President]
3
Countersigned:
[--------------------------],
as Rights Agent
---------------------------
Authorized Signatory
Date of countersignature:
4
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________ hereby sells, assigns and
transfers unto ____________________________________ (Please print name and
address of transferee) ____________________________________ this Right
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named
Company, with full power of substitution.
Dated: ,
------------------- ---- -----------------------------
Signature
Signature Guaranteed:
--------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ______ are ______
are not being transferred by or on behalf of a Person who is or was an
Acquiring Person, an Adverse Person or an Affiliate or Associate of any
such Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned ____ did ____ did not directly or indirectly acquire the
Rights evidenced by this Right Certificate from any Person who is, was or
became an Acquiring Person, an Adverse Person or an Affiliate or Associate
of any such Person.
Dated: ,
------------------ --- ---------------------------
Signature
5
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To ANIKA THERAPEUTICS, INC.:
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Right Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of
the Company or of any other person which may be issuable upon the exercise
of the Rights) and requests that certificates for such shares be issued in
the name of:
Please insert social security
or other identifying taxpayer number: __________________
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate or if the Rights are being exercised pursuant to Section
11(a)(ii) of the Rights Agreement, a new Right Certificate for the balance
of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying taxpayer number: _____________________
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Dated: ,
------------------- ---- --------------------------
Signature
Signature Guaranteed:
--------------
7
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ____ are ____ are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such Person
(as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned ____ did ____ did not directly or indirectly acquire the
Rights evidenced by this Right Certificate from any Person who is, was or
became an Acquiring Person, an Adverse Person or an Affiliate or Associate
of any such Person.
Dated: ,
------------------ ---- -----------------------------------
Signature
8
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
9
