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HEMACARE CORPORATION
and
U.S. STOCK TRANSFER CORPORATION
Rights Agent
Rights Agreement
Dated as of March 3, 1998
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions......................................... 1
Section 2. Appointment of Rights Agent................................. 5
Section 3. Issue of Right Certificates................................. 6
Section 4. Form of Right Certificates.................................. 8
Section 5. Countersignature and Registration........................... 8
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates................................................ 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights...................................................... 10
Section 8. Cancellation and Destruction of Right Certificates.......... 11
Section 9. Availability of Common and Preferred Share.................. 12
Section 10. Preferred or Common Shares Record Date...................... 12
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights...................................................... 13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.. 21
Section 13. Consolidation, Merger, Sale or Transfer of Assets or Earning
Power....................................................... 21
Section 14. Fractional Rights and Fractional Shares..................... 23
Section 15. Rights of Action............................................ 24
Section 16. Agreement of Right Holders.................................. 24
Section 17. Right Certificate Holder Not Deemed a Shareholder........... 25
Section 18. Concerning the Rights Agent................................. 25
Section 19. Merger or Consolidation or Change of Name of Rights Agent... 00
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Xxxxxxx 00. Duties of Rights Agent...................................... 27
Section 21. Change of Rights Agent...................................... 29
Section 22. Issuance of New Right Certificates.......................... 30
Section 23. Redemption.................................................. 30
Section 24. Exchange.................................................... 31
Section 25. Notice of Certain Events.................................... 33
Section 26. Notices..................................................... 34
Section 27. Supplements and Amendments.................................. 34
Section 28. Successors.................................................. 35
Section 29. Benefits of this Agreement.................................. 35
Section 30. Severability................................................ 35
Section 31. Governing Law............................................... 35
Section 32. Counterparts................................................ 35
Section 33. Descriptive Headings........................................ 35
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RIGHTS AGREEMENT
THIS AGREEMENT, dated as of March 3, 1998, between HEMACARE CORPORATION,
a California corporation (the "Company"), and U.S. STOCK TRANSFER CORPORATION
(the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend to be distributed on March 10, 1998 of one preferred share purchase
right (a "Right") for each Common Share (as hereinafter defined) of the
Company outstanding at the close of business (as hereinafter defined) on March
3, 1998 (the "Record Date"), each Right representing the right to purchase
one-hundredth of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common Share that
shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
Common Shares of the Company then outstanding, but shall not include the
Company, any Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company which,
by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding; provided, however, that if a
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary or any entity holding Common
Shares for or pursuant to the terms of any such plan) shall become the
Beneficial Owner of 15% or more of the Common Shares of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
Common Shares of the Company, then such Person shall be deemed to be an
"Acquiring Person."
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(b) "Adverse Person" shall have the meaning set forth in Section
11(a)(ii)(B) hereof.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act (as hereinafter defined), as in effect on the date of
this Agreement.
(d) A Person shall be deemed the "Beneficial owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Regulation 13D-G thereunder (or any comparable
or successor law or regulation);
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
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offering of securities), or upon the exercise of conversion rights, exchange
rights, rights (other than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy
or consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the Exchange Act, and (2)
is not also then reportable on Schedule 13D or 13G under the Exchange Act (or
any comparable or successor report); 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 (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), whether or not in writing, for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso
to Section l(d)(ii)(B)) or disposing of any securities of the Company;
provided, however, that in no case shall an officer or director of the Company
be deemed to be the Beneficial Owner of any securities (A) beneficially owned
by another officer or director of the Company solely by reason of actions
taken by such individual in his or her capacity as an officer or director of
the Company, or (B) held of record by the trustee of any employee benefit plan
of the Company or any Subsidiary of the Company for the benefit of any
employee of the Company or a Subsidiary of the Company, other than the officer
or director, by reason of any influence that such officer or director may have
over the voting of the securities held in such plan.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M., Los
Angeles time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Los Angeles time, on the next succeeding
Business Day.
(g) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, without par value, of the Company. "Common
Shares" when used with reference to any Person other than the Company shall
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(i) "Excepted Tender Offer" shall mean a tender offer, made in the
manner prescribed by Section 14(d) of the Exchange Act (as defined below) and
the rules and regulations promulgated thereunder, which tender offer is
delivered to the Company in the form of a written proposal and:
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(A) Is made by a Person who both (x) beneficially owns 1% or less of
the outstanding Common Shares of the Company as of the date the proposal is
delivered to the Company, and (y) has not, within the year prior to the
delivery of such proposal, beneficially owned more than 1% of the Company's
outstanding Common Shares and, at such time, disclosed, or caused the
disclosure of, any intention which relates to or would result in the
acquisition, or influence of control, of the Company;
(B) Provides for the acquisition of all of the out- standing
Voting Stock of the Company not owned by such Person or its Affiliates or
Associates, for cash;
(C) Is accompanied by a written opinion of a nation-
ally recognized investment banking firm, which opinion is addressed to the
holders of shares of Voting Stock (other than such Person and its Affiliates
and Associates) and states that the price to be paid to the holders (other
than such Person and its Associates and Affiliates) of each individual class
or series of Voting Stock pursuant to such tender offer is fair to such
holders;
(D) States that such Person has obtained written financing
commitments from recognized financing sources, and/or has on hand cash or cash
equivalents, for the full amount of all financing necessary to consummate such
tender offer; and
(E) Causes such Person, together with its Affiliates and Associates,
to be the Beneficial owner of 80% or more of the Company's Voting Stock then
outstanding.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(k) "Final Expiration Date" shall mean the close of business on March
10, 2008.
(l) "Ownership Limitation" shall have the meaning set forth in
Section 11(a)(ii)(B) hereof.
(m) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(n) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock , without par value, of the Company having the
rights and preferences set forth in the form of Certificate of Determination
attached to this Agreement as Exhibit A.
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(o) "Purchase Price" shall have the meaning set forth in Section 7
hereof.
(p) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(q) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(r) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned or controlled, directly or indirectly, by such
Person.
(s) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(t) "Voting Stock" shall mean (i) the Common Shares of the Company
and (ii) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with the
Common Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or winding
up. Whenever any provision of this Agreement requires a determination of
whether a number of shares of Voting Stock comprising a specified percentage
of such Voting Stock has been voted, tendered, acquired, sold or otherwise
disposed of, or a determination of whether a Person has offered or proposed to
acquire a number of shares of Voting Stock comprising such specified
percentage, the number of shares of Voting Stock comprising such specified
percentage of Voting Stock shall in every such case be deemed to be the number
of shares of Voting Stock comprising the specified percentage of the Company's
entire voting power then entitled to vote generally in the election of
directors or then entitled to vote together with the Common Shares in respect
of any merger, consolidation, sale of all or substantially all of the
Company's assets, liquidation, dissolution or winding up.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common Shares) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
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Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of:
(i) the close of business on the tenth day after the Shares
Acquisition Date;
(ii) the close of business on the tenth business day after the
date of the commencement by any Person (other than the Company any Subsidiary
of the Company, any employee benefit plan of the Company or of any Subsidiary
of the Company or any entity holding Common Shares for or pursuant to the
terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) to commence, a tender or exchange offer the consummation of
which would result in any Person becoming the Beneficial Owner of Common
Shares aggregating 15% or more of the then outstanding Common Shares;
(iii) the close of business on the tenth day after any Person
becomes an Adverse Person pursuant to the criteria set forth in Section
11(a)(ii)(B), below; or
(iv) with respect to the dates described in subsections (i) and
(ii), above, such later date or dates as the Board of Directors may designate,
provided, that if a later date or dates are so designated, such designation
shall be made on or prior to the earlier of the dates specified in subsections
(i) or (ii), above;
(including any such date which is after the date of this Agreement and prior
to the issuance of the Rights), the earliest of the dates specified in
subsections (i), (ii), (iii), and (iv) above being herein referred to as the
"Distribution Date," (A) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also
be deemed to be Right Certificates) and not by separate Right Certificates,
and (B) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will, upon request, countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close
of business on the Distribution Date at the address of such holder shown on
the records of the Company, one or more Right Certificates, in substantially
the form of Exhibit B hereto (a "Right Certifi-
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cate"), evidencing one Right for each Common Share so held subject to
adjustment as provided herein. As of and after the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares,
in substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof, together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the Redemption Date
or the Final Expiration Date), the surrender for transfer of any certificate
for Common Shares outstanding on the Record Date, with or without a copy of
the Summary of Rights attached thereto, shall also constitute the transfer of
the Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares (including, without limitation,
reacquired Common Shares referred to in the last sentence of this paragraph
(c)) which become outstanding after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date
shall have impressed on, printed on, written on or otherwise affixed to them
the following legend:
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights
Agreement between HemaCare Corporation and U.S. Stock
Transfer Corporation, dated as of March 3,1998 (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at
the principal executive offices of HemaCare Corporation.
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. HemaCare Corporation will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
As described in the Rights Agreement, under certain
circumstances Rights issued to any Person who becomes
an Acquiring Person or an Adverse Person or any Affiliate
or Associate
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thereof (as such terms are defined in the
Rights Agreement) shall become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights associated with
such Common Shares shall be deemed canceled and retired so that the Company
shall not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11 and 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of
one-hundredths of a Preferred Share as shall be set forth therein at the price
per one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one-hundredths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President, its Vice Chairman of the Board,
or any of its Vice Presidents, either manually or by facsimile signature,
shall have affixed thereto the Company's seal or a facsimile thereof, and
shall be attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Com-
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pany with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall
be a proper officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such person was not
such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purposes, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14 hereof, at any time after
the close of business on the Distribution Date, and at or prior to the close
of business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase
a like number of one-hundredths of a Preferred Share (or other securities) as
the Right Certificate or Right Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Right certificate or Right Certificates to be transferred, split up, combined
or exchanged at the office of the Rights Agent designated for such purpose;
provided, however, that in the case of any transfer or assignment of all or
part of a Right Certificate, neither the Company nor the Rights Agent shall be
obligated to take any action whatsoever with respect to such a request until
the registered holder of the Right Certificate shall have completed and signed
the certificate contained in the form of assignment on the reverse side
thereof and shall have provided such additional evidence as to the identity of
the Beneficial Owner (or former Beneficial Owner), and/or the Affiliates or
Associates thereof, as the Company shall reasonably request. Thereupon the
Company will prepare and execute, and the Rights Agent will countersign and
deliver to the person entitled thereto, a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company or the Rights
Agent may require
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payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split-up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
or the Rights Agent's request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will issue, execute and deliver a new Right Certificate of like tenor
to the Rights Agent for countersignature and delivery to the registered holder
in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for
each one-hundredth of a Preferred Share as to which the Rights are exercised,
at or prior to the earliest of (i) the close of business on March 10, 2008
(the "Final Expiration Date"), (ii) the time at which the Rights are redeemed
as provided in Section 23 hereof (the "Redemption Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $5.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 hereof, and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares (or other securities or property,
as the case may be) to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right Certificate in
accordance with Section 9 hereof in cash, or by certified check, cashier's
check, bank draft or money order payable to the order of the Company, the
Rights Agent shall thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred
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Shares certificates for the number of Preferred Shares
to be purchased (and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests), or (B) requisition from the
depositary agent depositary receipts representing such number of
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent), and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Right Certificate, registered in such name or names as may be designated by
such holder and (iv) when appropriate, after receipt thereof, deliver such
cash to or upon the order of the registered holder of such Right Certificate.
(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 will be
prepared and executed by the Company and countersigned and delivered by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner),
and/or the 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 to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if delivered or surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all
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canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. AVAILABILITY OF COMMON AND PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares (and, following the occurrence of an event described in Section
11(a)(ii), below, out of its authorized and unissued Common Shares), or any
Common or Preferred Shares held in its treasury, the number of Preferred
Shares that will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with this Section 7.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all securities delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
securities (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(c) 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 Preferred Shares 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 the issuance or delivery of certificates or depositary
receipts for the Preferred Shares in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or
to issue or to deliver any certificates or depositary receipts for Preferred
Shares upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
reasonable satisfaction that no such tax is due.
Section 10. PREFERRED OR COMMON SHARES RECORD DATE. Each Person in
whose name any certificate for Preferred Shares or Common Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of the Preferred Shares or Common Shares represented
thereby on, and such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered with the election form
duly executed and payment of the Purchase Price (and any applicable transfer
taxes) was made; PROVIDED, HOWEVER, that if the date of such surrender and
payment is a date upon which the Preferred or Common Share transfer books of
the Company are closed, such person shall be deemed to have become the record
-12-
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of Preferred or
Common 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 such holder shall not be entitled to
receive any notice of any proceedings of the Company, except as provided
herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number of Preferred Shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and at a time
when the Preferred Shares transfer books of the Company were open, he would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), below, 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), below.
(ii) Subject to Section 24 of this Agreement, in the event that
(A) any Person shall become an Acquiring Person (other than through
an acquisition described in subparagraph (iii) of this paragraph (a)); or
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(B) (1) the Board of Directors shall designate a specific limitation
on the amount of Common Shares which a specified Person may beneficially own,
which amount (the "Ownership Limitation") may be less than, equal to or more
than the amount of Common Shares then owned by such Person, but shall in no
event be less than 11% of the then outstanding Common Shares of the Company,
(2) at least a majority of the Board of Directors who are not officers of the
Company and who are not representatives, nominees, Affiliates or Associates of
such Person, after reasonable inquiry and investigation, including
consultation with such persons as such directors shall deem appropriate, shall
(x) conclude that Beneficial Ownership by such Person of an amount of Common
Shares exceeding the Ownership Limitation is, or would likely be, intended to
cause the Company to repurchase the Common Shares beneficially owned by such
Person or to cause pressure on the Company to take action or enter into a
transaction or series of transactions intended to 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 would not be served by taking such action or entering into such
transactions or series of transactions at that time, or (y) determine that
Beneficial Ownership by such Person of an amount of Common Shares exceeding
the Ownership Limitation 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 Company, and (3)
such Person, together with its Affiliates and Associates shall (before or
after the occurrence of (1) and (2) above) beneficially own a number of shares
that exceeds the Ownership Limitation (any person meeting all of the criteria
set forth in this subparagraph (B) being an "Adverse Person");
then, following the first occurrence of either such event, each holder of a
Right (except as provided below) shall thereafter have a right to receive,
upon exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this Agreement and
in lieu of Preferred Shares, such number of Common Shares of the Company as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the number of one-hundredths of a Preferred Share for which a Right
is then exercisable and dividing that product by (y) 50% of the then current
per share market price of the Company's Common Shares (determined pursuant to
Section 11(d) hereof) on the date of the first to occur of the events
described in clauses (A) or (B), above. In the event that any Person shall
become an Acquiring Person and the Rights shall then be outstanding, the
Company shall not take any action which
-14-
would eliminate or diminish the benefits intended to be afforded by the
Rights.
From and after the occurrence of any of the events described in clauses
(A) or (B), above, any Rights that are or were acquired or beneficially owned
by such Acquiring Person or Adverse Person (or any Associate or Affiliate of
such Acquiring Person or Adverse Person) shall be void, and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights beneficially owned by an Acquiring Person or
Adverse Person whose Rights would be void pursuant to the preceding sentence,
or any Associate or Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person or Adverse
Person whose Rights would be void pursuant to the preceding sentence, or any
Associate or Affiliate thereof, or to any nominee of such Acquiring Person or
Adverse Person, or his or its Associates or Affiliates; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
or Adverse Person (or any Associate, Affiliate or nominee thereof) whose
Rights would be void pursuant to the preceding sentence shall be canceled.
(iii) The right to buy Common Shares of the Company pursuant to
subparagraph (ii) of this paragraph (a) shall not arise as a result of any
Person becoming an Acquiring Person through a purchase of Common Shares
pursuant to an Excepted Tender Offer.
(iv) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit the exercise
in full of the Rights in accordance with the foregoing subparagraph (ii), the
Company shall take all such action as may be necessary to authorize additional
Common Shares for issuance upon exercise of the Rights.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares) ("equivalent preferred
shares") or securities convertible into Preferred Shares or equivalent
preferred shares, at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current
per share market price of the Preferred Shares (as defined in Section 11(d))
on such record date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by
-15-
a fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which
the aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be
the number of Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or equivalent preferred shares to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be
as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of the
Preferred Shares (as defined in Section 11(d), below) on such record date,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share and the denominator of which
shall be such current per share market price of the Preferred Shares. Such
adjustments shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security"
-16-
for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the current
per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend
or distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision, combination
or reclassification of such Security, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equivalent of such
Security. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if on any such date
the Security is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Security selected by the Board of Directors of the
Company, or, if on any such date no market maker is making a market in the
Preferred Shares, the fair value of such shares on such date as determined in
good faith by the Board of Directors of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Security is listed or admitted to trading is open for
the transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in accordance
with the method set forth in Section 11(d)(i). If the Preferred Shares are
not publicly traded, the "current per share market price" of the Preferred
Shares shall be conclusively deemed to be the current per share market price
of the Common Shares as determined pursuant to Section 11(d)(i)
-17-
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by 100. If neither
the Common Shares nor the Preferred Shares are publicly held or so listed
or traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-millionth
of a Preferred Share or ten-thousandth of any other share or security as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If, as a result of an adjustment made pursuant to Section 11(a)
or 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 Shares, thereafter the number of such other shares so receivable
upon exercise of any Right shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10, 13, and 14 with respect to
the Preferred Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence
the right to purchase, at the adjusted Purchase Price, that number of
one-hundredths of a Preferred Share (calculated to the nearest one-millionth
of a Preferred Share) obtained by (i) multiplying (A) the number of
one-hundredths of a share covered by a Right immediately prior to this
-18-
adjustment by (B) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This record date may be
the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed
to holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and countersigned
in the manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one-hundredths of a Preferred Share issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one-hundredths of a
Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
-19-
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one percent of the par or stated value, if any, of
the Preferred Shares issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Shares, (ii)
issuance wholly for cash of any Preferred Shares at less than the current
market price, (iii) issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred
Shares, (iv) dividends on Preferred Shares payable in Preferred Shares, or (v)
issuance of rights, options or warrants referred to hereinabove, in Section
11(b), hereafter made by the Company to holders of its Preferred Shares, shall
not be taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall declare or pay any
dividend on the Common Shares payable in Common Shares, or effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (i)
the number of one-hundredths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the
number of one-hundredths of a Preferred Share so purchasable immediately prior
to such event by a fraction, the numerator of which is the number of Common
-20-
Shares outstanding immediately before such event and the denominator of which
is the number of Common Shares outstanding immediately after such event shall
have issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it.
The adjustments provided for in this Section 11(n) shall be made successively
whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
(o) Any failure by the Company's Board of Directors to take steps to
declare a Person to be an Adverse Person following the date on which such
Person (alone or together with its Affiliates and Associates) becomes the
Beneficial owner of an amount of Common Shares in excess of the Ownership
Limitation shall not limit the Board's right or authority to declare such
Person to be an Adverse Person at any time in the future.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such certificate, and (c)
mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof. Notwithstanding the foregoing sentence,
however, the failure of the Company to make such certification or give such
notice shall not affect the validity of any such adjustment, or the force and
effect of any requirement therefor.
Section 13. CONSOLIDATION, MERGER, SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, after the Shares Acquisition Date, directly or
indirectly,
(i) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction the
principal purpose of which is to change the Company's state of incorporation),
(ii) any Person (other than a Subsidiary of the Company in a
transaction the principal purpose of which is to change the Company's state of
incorporation) shall consolidate with the Company, or merge with and into the
Company and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding Common Shares shall be changed into or
exchanged for stock or other securities of any other Person (or the Company)
or cash or any other property, or
-21-
(iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise 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 other than the Company or one or more
of its wholly-owned subsidiaries;
then, and in each such case, proper provision shall be made so that (A) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of validly
authorized and issued, fully paid and nonassessable Common Shares of such
other Person (including the Company as successor thereto or as the surviving
corporation), not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the number of one-hundredths of a Preferred
Share for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Common Shares of such
other Person (determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; (B) the issuer
of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (C) the term "Company"
shall thereafter be deemed to refer to such issuer; and (D) such issuer shall
take such steps (including, but not limited to, the reservation of a
sufficient number of its Common Shares) in connection with such consummation
as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) The Company shall not consummate any transactions of the type
referred to in Section 13(a), above, unless (i) prior thereto the Company and
such issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing; (ii) at the time of such transaction such
issuer has no rights, warrants, instruments or securities outstanding, and has
entered into no agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights; and (iii) such issuer
shall have a sufficient number of authorized Common Shares which have not been
issued or reserved for issuance to permit the exercise in full of the Rights
in accordance with this Section 13. The provisions of this Section
-22-
13 shall similarly apply to successive mergers or consolidations or sales
or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the Rights are
listed or admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it; PROVIDED, HOWEVER, that such agreement shall
provide that the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as beneficial
-23-
owners of the Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral multiples of one
one-hundredth of a Preferred Share, the Company shall pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one Preferred Share. For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares), may,
in his own behalf and for his own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and in
this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent maintained for such
-24-
purpose, duly endorsed or accompanied by a proper instrument of transfer;
and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 25 hereof), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability or expense, incurred without negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or Common Shares or
for other securities
-25-
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
(c) The obligations of the Company under this Section 18 shall
survive the redemption, exchange or cancellation of the Right Certificates or
the resignation or removal of the Rights Agent.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust 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 Rights Agent or in the name of the successor
Rights Agent; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
(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.
-26-
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of
the Board, the Vice Chairman of the Board, the President, any Vice President,
the Chief Financial Officer or the Secretary of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall
it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice that such change
-27-
or adjustment is required); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation
of any Preferred Shares to be issued pursuant to this Agreement or any
Right Certificate or as to whether any Preferred Shares will, when issued,
be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Vice Chairman of the Board, the
President, any Vice President, the Secretary or the Chief Financial Officer of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) The Rights Agent shall be obligated to perform such duties and
only such duties as are specifically set forth herein and in the Right
Certificates and no implied duties or obligations (other than good faith and
due care) shall be read into this Agreement or the Right Certificates.
Without limiting the generality of the foregoing, the Rights Agent shall be
under no duty to make any determination whether a supplement or amendment to
this Agreement, or any course of action proposed to be taken
-28-
by the Company, is or is not in the best interests of the holders of Right
Certificates or in any way affects or diminishes the benefits intended to be
afforded by the Rights. The Rights Agent shall have no duty or responsibility
to the holders of Right Certificates in case of any default by the Company
in the performance of its covenants or agreements contained herein or in the
Right Certificates.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the registered holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares or Preferred Shares by registered or certified mail, and to the
registered holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30 days after
giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder
of any Right Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the
States of New York or California (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 States of New York or California), in good standing, having
an office in the States of New York or California, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject
to supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus of
at least $50 million, or (b) an affiliate of a corporation described in clause
(a) of this sentence. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor
-29-
Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of the Common Shares or Preferred Shares, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement. If the
Company determines to issue new Right Certificates pursuant to this Section
22, the Company will prepare and execute and, upon request, the Rights Agent
will countersign and deliver to the holders of Right Certificates such new
Right Certificates.
Section 23. REDEMPTION.
(a) The Rights may be redeemed only by action of the Board of
Directors pursuant to subsection (b) of this Section 23, and shall not be
redeemed in any other manner.
(b) The Board of Directors of the Company may, at its option, redeem
all but not less than all the then outstanding Rights at a redemption price of
$.001 per Right (rounded upward for each holder to the nearest $.01), payable
in cash or shares of Common Stock of the Company at the discretion of the
Board of Directors, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"), at
any time on or before the earlier of (i) the close of business on the tenth
day following the Shares Acquisition Date (or, if the shares Acquisition Date
shall have occurred prior to the Record Date, then the close of business on
the tenth business day following the Record Date), (ii) the close of business
on the tenth day following the date on which any Person becomes an Adverse
Person, (iii) such later date or dates as the Board of Directors, or any duly
authorized committee thereof, any designate (provided, however, that if such
later date or dates are designated, such designation shall be made on or prior
to the date by which redemption would otherwise be required), or (iv) the
Final Expiration Date. The redemption of the Rights by the Board of Directors
may be made effective at such time on such basis and with such conditions as
the Board of Directors in its sole discretion may establish.
-30-
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to subsection (b) of
this Section 23, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give notice to the Rights Agent and public notice of any such
redemption; provided, however, that the failure to give, or any defect in, any
such notice shall not affect the validity of such redemption. Within 10
business days after such action of the Board of Directors ordering the
redemption of the Rights pursuant to subsection (b), the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. Neither the company
nor any of its Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24 hereof, and other than in connection
with the purchase of Common Shares prior to the Distribution Date.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at any
time after the first occurrence of any of the events described in Section
11(a)(ii), above, exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to effect such exchange at any time after any Acquiring Person or Adverse
Person, together with all Affiliates and Associates of such Acquiring or
Adverse Person, becomes the Beneficial Owner of 50% or more of the Common
Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to 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 Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give notice to the
-31-
Rights Agent and public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company 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. Any notice
which is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the Common Shares for Rights will
be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder
of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as
such term is defined in section 11(b) hereof) for Common Shares exchangeable
for Rights, at the initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) for each Common Share, as appropriately adjusted
to reflect adjustments in the voting rights of the Preferred Shares pursuant
to the terms thereof, so that the fraction of a Preferred Share delivered in
lieu of each Common Share shall have the same voting rights as one Common
Share.
(d) In the event that there shall not be sufficient Common Shares or
Preferred Shares 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 Common Shares or Preferred Shares for issuance upon exchange of the
Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash equal
to the same fraction of the current market value of a whole Common Share. For
the purposes of this subsection (e), the current market value of a whole
Common Share shall be the closing price of a common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately after the public announcement by the Company that an exchange
is to be effected pursuant to this Section 24.
-32-
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose to (i) pay any dividend payable
in stock of any class to the holders of its Preferred Shares or to make any
other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (ii) offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities,
rights or options, (iii) effect any reclassification of its Preferred Shares
(other than a reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) effect the
liquidation, dissolution or winding up of the Company, or (vi) declare or pay
any dividend on the Common Shares payable in Common Shares or effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 10 business days prior to
the record date for determining holders of the Preferred Shares for purposes
of such action, and in the case of any such other action, at least 10 business
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
(b) In case any event described in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice
of the occurrence of such event, which notice shall describe the event and the
consequences of the event under Section 11(a)(ii) hereof to holders of Rights.
-33-
Section 26. NOTICES.
(a) Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Right Certificate to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
HemaCare Corporation
0000 Xxx Xxxx Xxxxxxxxx
Xxxxxxx Xxxx, XX 00000
Attention: Chief Financial Officer
(b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
U.S. Stock Transfer Company
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Operations Manager
(c) Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on
the registry books of the Company or the Rights Agent.
(d) If, at any time, the Company shall appoint a transfer agent
for the Preferred Shares (other than itself), it shall give notice to the
Rights Agent of such appointment and the address of such transfer agent
as provided in this Section 26.
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that from and after such time as any Person becomes
an Acquiring Person or an Adverse Person, this Agreement shall not be amended
in any manner which would adversely affect the interests of the holders of
Rights (other than an Acquiring Person, an Adverse Person, or an Affiliate or
Associate of an Acquiring or Adverse
-34-
Person). Without limiting the foregoing, the Company may at any time prior
to such time as any Person becomes an Acquiring Person or an Adverse Person
amend this Agreement to lower the thresholds set forth in Sections 1(a) and
3(a) hereof from 15% to any percentage not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding Common
Shares then known by the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) and (ii) 11%.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent
and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
Section 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of California and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. 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 coun-terparts shall together constitute
but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
Attest: HEMACARE CORPORATION
By /s/ XxXxx X. Xxxxxx By /s/ Xxx X. Xxxxxxxxx
--------------------------- -------------------------
XxXxx X. Xxxxxx, Xxx X. Xxxxxxxxx, Chief
Corporate Secretary Executive Officer and
President
Attest: U.S. STOCK TRANSFER CORPORATION
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxx
--------------------------- ----------------------------
Xxxxx Xxxxxx, Vice President Xxxxxxx Xxxxx, Vice President
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EXHIBIT A
CERTIFICATE OF DETERMINATION
of the
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
(WITHOUT PAR VALUE)
of
HEMACARE CORPORATION
(Pursuant to Section 401 of the
General Corporation Law of the State of California)
_____________________________________
The undersigned, being the Secretary of HemaCare Corporation, a
corporation organized and existing under the General Corporation Law of the
State of California (the "Company"), DOES HEREBY CERTIFY that the following
resolution was adopted by the Board of Directors of the Company as required by
Selection 401 of the General Corporation Law at a meeting duly called and held
on February 23, 1998:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of this Company in accordance with the
provisions of the Company's Articles of Incorporation, as amended (the
"Articles of Incorporation"), this Board of Directors hereby authorizes the
issuance of a series of the Serial Preferred Stock of the Company (the
"Preferred Stock") which shall consist of 250,000 shares of the Company's
Preferred Stock, and hereby fixes the powers, designations, preferences, and
relative, participating, optional, or other special rights, and the
qualifications, limitations, or restrictions thereof, of the shares of such
series (in addition to the powers, designations, preferences, and relative,
participating, optional or other special rights, and the qualifications,
limitations, or restrictions thereof, set forth in the Articles of
Incorporation of the Company which are applicable to the Preferred Stock) as
follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series
A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 250,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, however, that no
decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights,
or warrants or upon the conversion of any outstanding securities issued by the
Company convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(a) 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 A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
without par value (the "Common Stock"), of the Company, 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 January 15, April 15, July 15, and October 15 of
each year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the
greater of (a) $0.02 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the event
the Company shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision, 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 to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) 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.
(b) The Company shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided, however,
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 $0.02 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, 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 A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the shareholders of the
Company. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or 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 number of votes per share to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other
Certificate of Determination creating a series of Preferred Stock or any
similar stock, or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other capital stock of the
Company having general voting rights shall vote together as one class on all
matters submitted to a vote of shareholders of the Company.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon liquidatio
n, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided, that the Company may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Company ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock or shares of any stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective 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 and classes.
(b) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Company in any manner whatsoever shall
be retired and canceled promptly after the acquisition thereof. All such
shares upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in
the Articles of Incorporation, or in any other Certificate of Determination
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Company, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $1.00 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided, that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (b) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (a) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, Etc. In case the Company shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each
share of Series A Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, 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 A Preferred Stock
shall be adjusted by multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Company's Preferred Stock.
Section 10. Amendment. The Articles of Incorporation shall not be
amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
IN WITNESS WHEREOF, the Company has caused this Certificate of
Determination to be duly executed on its behalf by its undersigned Chief
Executive Officer and attested to by its Secretary this 3rd day of March,
1998.
/s/ Xxx X. Xxxxxxxxx
______________________________
Xxx X. Xxxxxxxxx,
Chief Executive Officer
[Corporate Seal]
Attest:
/s/ XxXxx X. Xxxxxx
_____________________________
Corporate Secretary
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate Number R-_________ ______________ Rights
NOT EXERCISABLE AFTER MARCH 10, 2008 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $ .001
PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY ANY PERSON WHO IS OR BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) SHALL BECOME NULL AND VOID.
Right Certificate
HEMACARE CORPORATION
This certifies that _________________________, or registered assigns, is
the registered owner of the number of rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of March 3, 1998 (the "Rights Agreement"),
between HemaCare Corporation, a California corporation (the "Company"), and
U.S. Stock Transfer Corporation (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 March 10, 2008 at the principal office of
the Rights Agent, or at the office of its successor as Rights Agent, one one-
hundredth of a fully paid non-assessable share of Preferred Stock, no par
value (the "Preferred Shares"), of the Company, at a purchase price of $5.00
per one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-hundredths of a Preferred Share
which may be purchased on exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of _____________,
1998, based on the Preferred Shares as constituted at such date. As provided
in the Rights Agreement, the Purchase
Exhibit B
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Price and the number of one one-hundredths of a Preferred Share which may be p
urchased 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 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 to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price
of $.001 per Right or (ii) may be exchanged in whole or in part for Common
Shares of the Company, no par value.
No factional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one-hundredth of a Preferred Share), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
of any other securities of the Company which may at any time 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
Exhibit B
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rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ______________, _____.
ATTEST:
_________________________________
HemaCare Corporation
By ______________________________
Countersigned:
U.S. Stock Transfer Corporation
By_______________________________
Authorized Signature
Exhibit B
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Form Of Reverse Side Of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________ hereby sells,
assigns and transfers unto __________________________________________________
(Please print name and address of transferee)
___________________________________________________________________ this
Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________________________
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Dated: _____________, ____
_______________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights Agreement).
_____________________________
Signature
Exhibit B
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: HemaCare Corporation
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Rights Certificate to purchase the Preferred
Shares issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the name of:
Please insert social security or other identifying number ___________________
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number____________________
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
Dated: ____________, _______
______________________________
Signature Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_______________________________
Signature
Exhibit B
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NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the
face of this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner
of the Rights evidenced by this Right Certificate to be an Acquiring Person
or an Affiliate or an Associate thereof (as defined in the Rights Agreement)
and such Assignment or Election to Purchase will not be honored.
Exhibit B
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EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On February 23, 1998, the Board of Directors of HemaCare Corporation
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, without par value (the
"Common Shares"), of the Company. The dividend is payable on March 10, 1998
to the shareholders of record on March 3, 1998 (the "Record Date"). Each
Right entitles the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock,
without par value (the "Preferred Shares"), of the Company, at a price of
$5.00 per one-hundredth of a Preferred Share (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the Company and U.S. Stock
Transfer Company, as Rights Agent (the "Rights Agent").
Until the earlier to occur of:
(i) the close of business on the tenth day, after a public
announcement that a person or a group of affiliated or associated persons
(other than the Company, any subsidiary of the Company, any employee benefit
plan of the Company or a subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) (an "Acquiring
Person") has acquired beneficial ownership of 15% or more of the outstanding
Common Shares;
(ii) the close of business on tenth business day (or such later date
as may be determined by action of the Board of Directors prior to such time as
any person becomes an Acquiring Person) after the commencement of, or the
first public announcement of an intention of any person (other than the
Company, any subsidiary of the Company, any employee benefit plan of the
Company or a subsidiary of the Company, or any entity holding Common Shares
for or pursuant to any such plan) to commence, a tender or exchange offer the
consummation of which would result in the beneficial ownership by such person
or group of 15% or more of the then outstanding Common Shares;
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(iii) the close of business on the tenth day after all of the
following events have occurred: (A) the Board of Directors designates a
specific limitation (the "Ownership Limitation") on the amount of Common Stock
which a specified person may beneficially own (which may be more or less than
such person actually then owns), (B) the Board determines (x) that the
acquisition by such person of an amount of Common Shares exceeding the
Ownership Limitation is, or would likely be, intended to cause the Company to
repurchase the Common Shares beneficially owned by such person or to cause
pressure on the Company to take action or enter into a transaction or series
of transaction intended to provide such person with short-term financial gain
under circumstances where the Board determines that the best long-term
interests of the Company and its shareholders would not be served by taking
such action or entering into such transactions at that time, or (y) that
Beneficial Ownership by such Person of an amount of Common Shares exceeding
the ownership Limitation 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 Company, and (C) the
specified person or group obtains or has obtained (either before or after the
events described in (A) and (B), above) a number of shares of Common Stock
which exceeds the Ownership Limitation (thereby becoming an "Adverse Person");
or
(iv) with respect to the dates described in (i) and (ii), above, such
later date or dates as the Board of Directors may designate; provided, that if
a later date or dates are designated, such designation shall be made on or
before the earlier of the dates specified in (i) or (ii) above;
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate with a
copy of this Summary of Rights attached to the Rights Agreement as Exhibit C
(the "Summary of Rights") attached thereto.
The Rights Agreement provides that, until the Distribution Date or
earlier redemption or expiration of the Rights, (i) the Rights will be
transferred with and only with the Common Shares, (ii) new Common Share
certificates issued after the Record Date upon transfer or new issuance of
Common Shares will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date, with or without such notation or a
copy of the Summary of Rights being attached thereto, will also
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constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable after the Distribution
Date, separate certificates evidencing the Rights ("Right Certificates") will
be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date, and such separate Right Certificates
alone will evidence the Rights as of and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on March 10, 2008 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed by
the Company, in each case as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution in the event that the
Company (i) declares a dividend on the Preferred Shares that is payable in
Preferred Shares, (ii) subdivides, combines or reclassifies the outstanding
Preferred Shares, (iii) grants to holders of the Preferred Shares certain
rights or warrants to subscribe for or purchase Preferred Shares at a price,
or securities convertible into Preferred Shares with a conversion price, less
than the then current market price of the Preferred Shares, or (iv)
distributes to holders of the Preferred Shares evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or subscription
rights or warrants (other than those referred to above).
In the event that (i) any person becomes an Acquiring Person (unless
such person first acquires 15% or more of the outstanding Common Shares
through a tender offer which meets all of the following criteria: the tender
offer (A) is made in the manner prescribed by Section 14(d) of the Securities
Exchange Act of 1934, as amended, and the rules of the Securities and Exchange
Commission, (B) is delivered to the Company in a written proposal, (C) is made
by a person who both owns 1% or less of the Company's outstanding Common Stock
and has not, during the last year, indicated an interest in acquiring control
of the Company at any time when it owned more than 1% of the outstanding
Common Stock, (D) is for the acquisition of all the Company's outstanding
Common Stock and other voting securities for cash, (E) is accompanied by a
written opinion of a nationally recognized investment banking firm stating
that the price to be paid for each class of outstanding Common Stock or other
voting securities is fair to the holders thereof, (F) states that the offeror
has obtained written financing commitments from recognized financing sources,
and/or has on hand cash or cash equivalents, sufficient to consummate the
tender offer, and (G) causes the offeror to be the owner of 80% or more of the
Company's outstanding Common Stock and other voting securities); or (ii) a
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person becomes an Adverse Person, proper provision shall be made so that each
holder of a Right (other than Rights beneficially owned by the Acquiring
Person or Adverse Person and their respective associates and affiliates, which
will thereafter be void), will thereafter have the right to receive, upon
exercise thereof, at a price equal to the then current Purchase Price
multiplied by the number of one-hundredths of a Preferred Share for which a
Right is then exercisable, and in lieu of Preferred Shares, that number of
Common Shares having a market value of two times the exercise price of such
Right.
In the event that, at any time after a person becomes an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are
sold or transferred, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current exercise price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction will have
a market value of two times the exercise price of the Right.
At any time after a person becomes an Acquiring Person, but before
any Acquiring Person or Adverse Person acquires 50% or more of the outstanding
Common Shares, the Board of Directors of the Company may exchange the Rights
(other than Rights owned by such Acquiring Person or group which have become
void), in whole or in part, for Common Stock or Preferred Stock of the Company
at an exchange ratio of one Common Share (or 1/100 of a Preferred Share) per
Right, subject to adjustment as provided in the Rights Plan.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other
than fractions which are integral multiples of one one-hundredth of a
Preferred Share) and, in lieu thereof, an adjustment in cash will be made
based on the market price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time before the earlier of (i) the tenth day following the
date on which any Acquiring Person (or the Company) announces that such
Acquiring Person has obtained 15% or more of the Company's outstanding Common
Stock, (ii) the tenth day following the date on which any person becomes an
Adverse Person, (iii) such later date as the Board of Directors, or any
authorized committee of the Board, may designate (if it does so before the
time periods specified above have expired), or (iv) the Final Expiration Date,
the Board of Directors of the Company may redeem all, but not less than all,
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of the then outstanding Rights at a price (subject to adjustment) of $.001 per
Right, rounded upward for each holder to the nearest whole cent (the
"Redemption Price"), payable in cash or in Common Shares at the discretion of
the Board of Directors. The redemption of the Rights may be made effective at
such time, on such basis and with such conditions as the Board of Directors in
its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will automatically terminate and the
only right of the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights. As part of its
power to amend the Rights Plan, the Board may, at any time before a person
becomes an Acquiring Person or an Adverse Person, lower the threshold for
exercisability of the Rights from 15% to not less than the greater of (i) 11%
or (ii) any percentage greater than the largest percentage of the outstanding
Common Shares then known to the Company to be beneficially owned by any person
or group of affiliated or associated persons (other than the Company or any of
its subsidiaries, any employee benefit plan of the Company or any of its
subsidiaries, or any entity holding Common Shares for or pursuant to any such
plan). From and after such time as any person becomes an Acquiring Person or
an Adverse Person, however, no amendment may be made which would adversely
affect the interests of the holders of the Rights (other than an Acquiring or
Adverse Person or their affiliates or associates).
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to the Company's shareholders or to the Company itself,
the shareholders may, depending on circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock of the Company
or for common stock of the acquiring company, as set forth above.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-K
dated March 5, 1998. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is incorporated herein by reference.
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