EXHIBIT 4.2
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RIGHTS AGREEMENT
between
ORASURE TECHNOLOGIES, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
as Rights Agent
Dated as of May 6, 2000
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TABLE OF CONTENTS
Page
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Section 1. Definitions........................................................................... 1
Section 2. Appointment of Rights Agent........................................................... 7
Section 3. Evidence of Rights; Issuance of Rights Certificates................................... 7
Section 4. Form of Rights Certificates........................................................... 9
Section 5. Execution, Countersignature and Registration of Rights Certificates................... 10
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Lost,
Stolen, Destroyed or Mutilated Rights Certificates.................................... 11
Section 7. Exercise of Rights; Expiration Date of Rights; Purchase Price......................... 12
Section 8. Cancellation and Destruction of Rights Certificates................................... 14
Section 9. Reservation and Availability of Capital Stock......................................... 15
Section 10. Preferred Stock Record Date........................................................... 16
Section 11. Adjustment of Purchase Price, Number and Kind of Shares and Number of Rights.......... 17
Section 12. Certificate of Adjusted Purchase Price or Number of Shares............................ 25
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.................. 26
Section 14. Fractional Rights and Fractional Shares............................................... 29
Section 15. Rights of Action...................................................................... 31
Section 16. Agreement of Rights Holders........................................................... 31
Section 17. Rights Certificate Holder Not Deemed a Stockholder.................................... 32
Section 18. Concerning the Rights Agent........................................................... 32
Section 19. Merger or Consolidation or Change of Name of Rights Agent............................. 33
Section 20. Duties of Rights Agent................................................................ 33
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TABLE OF CONTENTS
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Section 21. Change of Rights Agent................................................................ 36
Section 22. Issuance of New Rights Certificates................................................... 37
Section 23. Redemption and Termination............................................................ 37
Section 24. Exchange.............................................................................. 38
Section 25. Notice of Certain Events.............................................................. 39
Section 26. Notices............................................................................... 40
Section 27. Supplements and Amendments............................................................ 41
Section 28. Successors............................................................................ 41
Section 29. Determinations and Actions by the Board of Directors.................................. 41
Section 30. Benefits of this Agreement............................................................ 42
Section 31. Severability.......................................................................... 42
Section 32. Governing Law......................................................................... 42
Section 33. Counterparts.......................................................................... 42
Section 34. Descriptive Headings.................................................................. 43
Exhibit A - Form of Certificate of Designation, Preferences and Rights
Exhibit B - Form of Rights Certificate
Exhibit C - Form of Summary of Rights
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RIGHTS AGREEMENT
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THIS RIGHTS AGREEMENT (this "Agreement") is entered into as of May 6, 2000
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between OraSure Technologies, Inc., a Delaware corporation (the "Company"), and
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ChaseMellon Shareholder Services, L.L.C., a New Jersey limited company, as
rights agent (the "Rights Agent").
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WHEREAS, on May 6, 2000 (the "Rights Distribution Declaration Date"), the
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Board of Directors of the Company authorized the distribution of one Right for
each share of Common Stock of the Company outstanding immediately after the
Effective Time of the Mergers (as such terms are defined in that certain Merger
Agreement, dated as of May 6, 2000 among Epitope, Inc., STC Technologies, Inc.
and the Company) (the "Record Date"), and has authorized the issuance of one (as
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such number may hereinafter be adjusted pursuant to the provisions of Section
11(p) hereof) Right for each share of Common Stock issued between the Record
Date (whether originally issued or delivered from the Company's treasury) and
the Distribution Date, and, in certain circumstances provided in Section 22 of
this Agreement, after the Distribution Date, each Right initially representing
the right to purchase one one-thousandth of a share of Preferred Stock of the
Company having the rights, powers and preferences set forth in the form of
Certificate of Designation attached hereto as Exhibit A, upon the terms and
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subject to the conditions hereinafter set forth ("Rights"); and
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Definitions. For purposes of this Agreement, the following
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terms have the meanings indicated:
(a) "Acquiring Person" shall mean collectively any Person who or
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which, together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding (other than as a result of a Qualifying Offer) or was such a
Beneficial Owner at any time after the date hereof, whether or not such
Person together with all Affiliates or Associates of such Person continues
to be the Beneficial Owner of 15% or more of the then outstanding Common
Stock. Notwithstanding the foregoing, (A) the term "Acquiring Person"
shall not include (i) the Company, (ii) any Subsidiary of the Company
(including with respect to any shares of Common Stock held in trust), (iii)
any employee benefit plan of the Company or of any Subsidiary of the
Company, (iv) any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan, and (v) any
Person together with all Affiliates and Associates of such Person who or
which becomes the Beneficial Owner of 15% or more of the then outstanding
shares of Common Stock as a result of the acquisition of Common Stock
directly from the Company (each of (i) through (v), an "Exempted Person");
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(B) no Person shall become an "Acquiring Person" as a result of an
acquisition of Common Stock by the Company which, by reducing the number of
such shares then outstanding, increases the proportionate number of shares
beneficially owned by such Person together with all Affiliates and
Associates of such Person to 15% or more of the outstanding Common Stock,
except that if such Person, after such share purchases by the Company,
becomes the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the then outstanding
shares of Common Stock other than pursuant to a Qualifying Offer, such
Person shall be deemed to be an "Acquiring Person"; and (C) if the Board of
Directors of the Company determines in good faith that a Person, together
with all Affiliates and Associates of such Person, who would otherwise be
an "Acquiring Person" has become such inadvertently, and such Person,
together with all Affiliates and Associates of such Person, divests as
promptly as practicable a sufficient number of shares of Common Stock so
that such Person, together with all Affiliates and Associates of such
Person, would no longer be an Acquiring Person, then such Person shall not
be deemed to be an "Acquiring Person." The term "outstanding," when used
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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 beneficially
own hereunder.
(b) "Act" shall mean the Securities Act of 1933, as amended and in
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effect on the date hereof.
(c) "Adjustment Shares" shall have the meaning set forth in Section
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11(a)(ii) of this Agreement.
(d) "Affiliate" shall have the meaning set forth in Rule 12b-2 of the
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General Rules and Regulations under the Exchange Act, as amended and in
effect on the date hereof.
(e) "Associate" shall have the meaning set forth in Rule 12b-2 of the
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General Rules and Regulations under the Exchange Act, as amended and in
effect on the date hereof.
(f) A Person shall be deemed the "Beneficial Owner" of, and shall be
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deemed to "beneficially own," any securities:
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(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion rights, exchange
rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
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"Beneficial Owner" of, or to "beneficially own," (A) 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)
securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event
to the extent such Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 22 hereof ("Original Rights") or pursuant to
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Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
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(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as
amended and in effect on the date hereof), including pursuant to any
agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the "Beneficial
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Owner" of, or to "beneficially own," any security under this
subparagraph (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, as amended and in effect on
the date hereof, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of
this paragraph (f)) or disposing of any voting securities of the
Company;
provided, however, that nothing in this paragraph (f) shall cause a Person
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engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a bona fide firm commitment
underwriting until the expiration of forty days after the date of such
acquisition. Notwithstanding anything in this definition of Beneficial
Owner to the contrary, a Person who, prior to the Distribution Date, is a
member of the Board of Directors or an officer of the Company or who is an
Affiliate or Associate of a member of the Board of Directors or officer of
the Company (each, an "Excluded Person") shall not be deemed to
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"beneficially own" shares of Common Stock held by another Excluded Person
solely by reason of any agreement, arrangement or understanding (whether or
not in writing), entered into in opposition to any transaction or in
support of a Qualifying Offer.
(g) "Board of Directors" shall mean the Board of Directors of the
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Company as constituted from time to time.
(h) "Business Day" shall mean any day other than a Saturday, Sunday
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or a day on which banking institutions in the State of Pennsylvania or the
State of New Jersey is located are authorized or obligated by law or
executive order to close.
(i) "Close of Business" on any given date shall mean 5:00 p.m., New
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York City time, on such date; provided, however, that if such date is not a
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Business Day it shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
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(j) "Common Stock" shall mean the common stock, par value $0.000001
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per share, of the Company (or in the event of a subdivision, combination or
reclassification with respect to such shares of common stock, the shares of
common stock resulting from such subdivision, combination or
reclassification), except, subject to the proviso in Section 13(b) of this
Agreement, that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock (or other equity securities
or equity interests) of such Person with the greatest voting power to
control or direct the management of such Person, or if such Person is a
Subsidiary of another Person, the Person or Persons that ultimately control
such first-mentioned Person.
(k) "Common Stock Equivalents" shall have the meaning set forth in
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Section 11(a)(iii) of this Agreement.
(l) "Company" shall have the meaning set forth in the introductory
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paragraph of this Agreement, subject to Section 13(a) hereof.
(m) "Current Market Price" shall have the meaning set forth in
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Section 11(d).
(n) "Current Value" shall have the meaning set forth in Section
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11(a)(iii) of this Agreement.
(o) "Distribution Date" shall have the meaning set forth in Section
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3(a) of this Agreement.
(p) "Equivalent Preferred Stock" shall have the meaning set forth in
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Section 11(b) of this Agreement.
(q) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended and in effect on the date hereof.
(r) "Exchange Ratio" shall have the meaning set forth in Section
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24(a) hereof.
(s) "Excluded Person" shall have the meaning set forth in Section
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1(f) of this Agreement.
(t) "Exempted Person" shall have the meaning set forth in Section
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1(a) of this Agreement.
(u) "Expiration Date" shall have the meaning set forth in Section
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7(a) of this Agreement.
(v) "Final Expiration Date" shall have the meaning set forth in
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Section 7(a) of this Agreement.
(w) "NASDAQ" shall have the meaning set forth in Section 4(a) of this
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Agreement.
(x) "Original Rights" shall have the meaning set forth in Section
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1(f)(i) of this
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Agreement.
(y) "Person" shall mean any individual, firm, corporation,
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partnership, limited liability company or other entity.
(z) "Preferred Stock" shall mean shares of Series A Preferred Stock,
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$0.000001 par value per share, of the Company (or in the event of a
subdivision, combination or reclassification with respect to such shares of
Series A Preferred Stock, the shares of preferred stock resulting from such
subdivision, combination or reclassification), and, to the extent that
there is not a sufficient number of shares of Series A Preferred Stock
authorized to permit the full exercise of the Rights, any other series of
preferred stock of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Preferred Stock.
(aa) "Principal Party" shall have the meaning set forth in Section
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13(b) of this Agreement.
(bb) "Purchase Price" shall have the meaning set forth in Section
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4(a) of this Agreement, subject to Section 11(a)(ii) hereof.
(cc) "Qualifying Offer" shall mean an acquisition of shares of Common
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Stock pursuant to a tender offer or an exchange offer for all outstanding
shares of Common Stock at a price and on terms determined by at least a
majority of the members of the Board of Directors, after receiving advice
from one or more nationally recognized investment banking firms selected by
the Board of Directors, to be (a) fair to stockholders (taking into account
all factors that the Board of Directors may deem relevant including,
without limitation, prices that could reasonably be achieved if the Company
or its assets were sold on an orderly basis designed to realize maximum
value) and (b) otherwise in the best interests of the Company and its
stockholders (other than the Person or any Affiliate or Associate thereof
on whose behalf the offer is being made) taking into account all factors
that the Board of Directors may deem relevant; provided, however, that (i)
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such determination is made by the Board of Directors prior to the purchase
of shares under such tender offer or exchange offer, and (ii) a majority
of the members of the Board of Directors are not Acquiring Persons or
Affiliates, Associates, nominees or representatives of an Acquiring Person.
(dd) "Record Date" shall have the meaning set forth in the first
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"WHEREAS" clause at the beginning of this Agreement.
(ee) "Redemption Date" shall have the meaning set forth in Section
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7(a) of this Agreement.
(ff) "Redemption Price" shall have the meaning set forth in Section 23
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of this Agreement.
(gg) "Rights" shall have the meaning set forth in the first "WHEREAS"
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clause at the beginning of this Agreement.
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(hh) "Rights Agent" shall have the meaning set forth in the
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introductory paragraph of this Agreement.
(ii) "Rights Certificates" shall have the meaning set forth in Section
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3(d) of this Agreement.
(jj) "Rights Distribution Declaration Date" shall have the meaning set
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forth in the first "WHEREAS" clause at the beginning of this Agreement.
(kk) "Section 11(a)(ii) Event" shall have the meaning set forth in
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Section 11(a)(ii) of this Agreement.
(ll) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
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in Section 11(a)(iii) of this Agreement.
(mm) "Section 13 Event" shall mean any event described in clauses (x),
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(y) or (z) of Section 13(a) of this Agreement.
(nn) "Spread" shall have the meaning set forth in Section 11(a)(iii)
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of this Agreement.
(oo) "Stock Acquisition Date" shall mean the earlier of the date of
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(i) the public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed under the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such or
(ii) the public disclosure of facts by the Company or an Acquiring Person
indicating that an Acquiring Person has become an Acquiring Person;
provided, however, that if such Person is determined not to have become an
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Acquiring Person pursuant to Section 1(a)(C) hereof, then no Stock
Acquisition Date shall be deemed to have occurred.
(pp) "Subsidiary" shall mean, with reference to any Person, any
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corporation or other Person of which an amount of voting securities
sufficient to elect at least a majority of the directors or others having
similar authority over such corporation or other Person is beneficially
owned, directly or indirectly, by such first-named Person, or otherwise
controlled by such first-named Person.
(qq) "Substitution Period" shall have the meaning set forth in Section
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11(a)(iii) of this Agreement.
(rr) "Summary of Rights" shall have the meaning set forth in Section
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3(b) of this Agreement.
(ss) "Trading Day" shall have the meaning set forth in Section
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11(d)(i) of this Agreement.
(tt) "Transaction" shall mean any merger, consolidation or sale of
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assets or earning power described in Section 13(a) hereof or any
acquisition of Common Stock which, without regard to any required approval
of the Company, would result in a Person
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becoming an Acquiring Person.
(uu) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
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Section 13 Event.
(vv) "Vote" shall mean, with respect to any entity, the ability to
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cast a vote at a stockholders', members' or comparable meeting of such
entity with respect to the election of directors, managers or other members
of such entity's governing body, or the ability to cast a general
partnership or comparable vote.
(ww) "Voting Power" shall mean, with respect to any entity as of any
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date, the aggregate number of Votes outstanding as of such date in respect
of such entity.
(xx) "Voting Securities" shall mean the Common Stock and any other
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securities of the Company the holders of which are ordinarily, in the
absence of contingencies, entitled to Vote, even if the right to such Vote
has been suspended by the happening of such a contingency.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
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Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and
in no event shall be liable for, the acts or omissions of any such co-Rights
Agent.
Section 3. Evidence of Rights; Issuance of Rights Certificates.
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(a) Evidence of Rights Prior to Distribution Date. Until the
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earlier of (i) the Close of Business on the tenth Business Day after the
Stock Acquisition Date (or, if the tenth Business Day after the Stock
Acquisition Date occurs before the Record Date, the Close of Business on
the Record Date), or (ii) the Close of Business on the tenth Business Day
(or such later date as the Board of Directors shall determine) after the
date of the earlier of commencement by any Person (other than an Exempted
Person) of, or the first public announcement of the intention of any Person
(other than an Exempted Person) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming an Acquiring
Person (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
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provisions of Section 3(d) of this Agreement) by the certificates for the
Common Stock registered in the names of the record holders of the Common
Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company);
provided, however, that if a tender or exchange offer is terminated prior
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to the occurrence of a Distribution Date, then no Distribution Date shall
occur as a result of such tender or exchange offer. The Board of Directors
may defer the date set forth in clause (ii) of the preceding sentence to a
specified later date or to an unspecified later date, each to be
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determined by action of the Board of Directors. The Company shall provide
the Rights Agent with prompt notice of any such deferral.
(b) Common Stock Outstanding as of the Record Date. With respect to
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the Common Stock outstanding as of the Record Date, until the earlier of
the Distribution Date or the Expiration Date, the Rights will be evidenced
by the certificates for such Common Stock and the record holders of the
Common Stock shall also be the record holders of the associated Rights, and
the transfer of any of such certificates shall also constitute the transfer
of the Rights associated with such shares of Common Stock. As promptly as
practicable following the Record Date, the Company will send a copy of a
Summary of Rights to Purchase Preferred Stock, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), which Summary of
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Rights will be included as a part of the proxy statement being distributed
to stockholders in connection with the merger of Epitope with and into the
Company, to each record holder of the Common Stock as of the Close of
Business on the Record Date, at the address of such holder shown on the
records of the Company.
(c) Common Stock Issued After the Record Date. Rights shall be issued
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in respect of all shares of Common Stock that are issued (whether
originally issued or from the Company's treasury) after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date, and,
in certain circumstances provided in Section 22 of this Agreement, after
the Distribution Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights and shall bear the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between
OraSure Technologies, Inc. (the "Company") and ChaseMellon
Shareholder Services, L.L.C. (the "Rights Agent"), dated as of
May 6, 2000 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on
file at the principal offices of the Company. 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. The Company will mail to the
holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge, promptly after
receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become
null and void.
With respect to such certificates containing the foregoing legend, until
the earlier of the Distribution Date or the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and record holders of Common Stock
shall also be the record holders of the associated Rights, and
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the transfer of any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificates. In the event the Company purchases or acquires any Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated
with Common Stock that is no longer outstanding. Notwithstanding the
provisions of this Section 3(c), the omission of a legend shall not affect
the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
(d) Issuance of Rights Certificates. As soon as practicable after the
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Distribution Date, the Company shall prepare and execute, and the Rights
Agent will countersign and, at the Company's expense and provided the
Rights Agent has been provided with all necessary information, send by
first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the registry books for the Common Stock of
the Company, one or more rights certificates, in substantially the form of
Exhibit B hereto (the "Rights Certificates"), evidencing one Right for each
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share of Common Stock so held, subject to adjustment as provided herein.
In the event that an adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(p) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the
necessary and appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
Section 4. Form of Rights Certificates.
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(a) Form of Rights Certificates. The Rights Certificates (and the
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form of election to purchase and form of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or designation
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and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate (but which do not affect the rights, duties or
responsibilities of the Rights Agent) 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 or the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") on which or with whom the Rights may from time to time be listed
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or quoted, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall
entitle the record holders thereof to purchase such number of one one-
thousandths of a share of Preferred Stock as shall be set forth therein at
the exercise price set forth therein (such exercise price per one one-
thousandth of a share, the "Purchase Price"), but the amount and the type
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of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Legend to be Included in Certain Rights Certificates. Any Rights
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Certificate issued pursuant to Section 3(d) or Section 22 hereof that
represents Rights
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beneficially owned by: (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer that the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a primary purpose
or effect avoidance of Section 7(e) hereof, and any Rights Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in
this sentence, shall contain (to the extent feasible and to the extent the
Rights Agent has knowledge of the applicability of this Section) the
following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who is or was an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement between OraSure Technologies, Inc. and ChaseMellon
Shareholder Services, L.L.C., dated as of May 6, 2000 (the
"Rights Agreement")). Accordingly, this Rights Certificate
and the Rights represented hereby may become, or may have
already become, null and void in the circumstances specified
in Section 7(e) of the Rights Agreement.
The provisions of Section 7(e) of this Agreement shall be operative whether
or not the foregoing legend is contained in any such Rights Certificate.
Section 5. Execution, Countersignature and Registration of Rights
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Certificates.
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(a) Execution and Countersignature. The Rights Certificates shall
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be executed on behalf of the Company by its Chairman of the Board, its
President or any Vice President, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile thereof,
which shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned by an authorized signatory of the
Rights Agent, either manually or by facsimile signature, and shall not be
valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by an authorized signatory of the Rights
Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company. Any Rights Certificates may be
signed on behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this
10
Agreement any such person was not such an officer.
(b) Registration. Following the Distribution Date and receipt by
------------
the Rights Agent of all relevant information, the Rights Agent will keep or
cause to be kept, at its offices designated as the appropriate place for
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective record holders
of the Rights Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the date of each of the Rights
Certificates. The Company and Rights Agent may deem and treat the person in
whose name any Rights Certificate (or prior to the Distribution Date, the
associated certificate of Common Stock) is recorded on the books for the
registration and transfer of Rights (or, prior to the Distribution Date,
Common Stock) as the absolute owner thereof, for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
------------------------------------------------------
Certificates; Lost, Stolen, Destroyed or Mutilated Rights
---------------------------------------------------------
Certificates.
------------
(a) Transfer, Split Up, Combination and Exchange of Rights
------------------------------------------------------
Certificates. Subject to the provisions of Section 4(b), Section 7(e) and
------------
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the
Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the record holder to purchase a like number of one
one-thousandths of a share of Preferred Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the case
may be) as the Rights Certificate or Certificates surrendered then entitles
such holder (or former holder in the case of a transfer) to purchase. Any
record holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing to
the Rights Agent in a form acceptable to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be transferred, split
up, combined or exchanged at the office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the record holder
shall have properly completed and signed the certificate contained in the
form of assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
the Company or the Rights Agent shall reasonably request. Thereupon the
Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Certificates, as the case may be, as so requested. The
Company may require payment by the record holder of a Rights Certificate of
a sum sufficient to cover any U.S. federal or state transfer tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates. The Rights Agent
shall have no duty or obligation to take any action under any Section of
this Agreement which requires the payment by a Rights holder of applicable
U.S. federal or state transfer taxes and
11
governmental charges unless and until the Rights Agent is satisfied that
all such taxes and/or charges have been paid.
(b) Lost, Stolen, Destroyed or Mutilated Rights Certificates. Subject
--------------------------------------------------------
to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, upon
receipt by the Rights Agent of (i) evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of a Rights Certificate, (ii)
in the case of loss, theft or destruction of a Rights Certificate,
indemnity or security to the Rights Agent and the Company reasonably
satisfactory to the Rights Agent and (iii) reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and in the
case of mutilation of a Rights Certificate, upon surrender of the Rights
Certificate to the Rights Agent and cancellation of the Rights Certificate,
the Company will execute and deliver a new Rights Certificate of like tenor
to the Rights Agent for countersignature and delivery to the record holder
in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Expiration Date of Rights; Purchase Price.
-------------------------------------------------------------
(a) Exercise of Rights; Expiration Date of Rights. Subject to
---------------------------------------------
Section 7(e) hereof, the record holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth
in Section 9(c), Section 11(a)(iii), Section 23(a) and Section 24(b)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase
and the related certification set forth on the reverse side thereof duly
executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably request,
together with payment of the aggregate Purchase Price with respect to the
total number of one one-thousandths of a share of Preferred Stock (or,
following the occurrence of a Triggering Event, Common Stock or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of (i)
the Close of Business on May 6, 2010 (the "Final Expiration Date"), (ii)
---------------------
the time at which the Rights are redeemed as provided in Section 23 hereof
(the "Redemption Date"), (iii) the time at which such Rights are exchanged
---------------
as provided in Section 24 hereof, or (iv) the consummation of a transaction
contemplated by Section 13(d) hereof (the earliest of (i), (ii), (iii) and
(iv) being herein referred to as the "Expiration Date").
---------------
(b) Purchase Price. The Purchase Price for each one one-thousandth of
--------------
a share of Preferred Stock to be purchased pursuant to the exercise of a
Right shall initially be $85.00, and shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with Section 7(c).
(c) Deliveries Upon Exercise of Rights. Upon receipt of a Rights
----------------------------------
Certificate representing exercisable Rights, with the form of election to
purchase and the related certification set forth on the reverse side
thereof duly executed along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request, together
with payment of the aggregate Purchase Price with respect to the total
12
number of one one-thousandths of a share of Preferred Stock (or, following
the occurrence of a Triggering Event, Common Stock or other securities,
cash or other assets, as the case may be) to be purchased and an amount
equal to any applicable U.S. federal or state transfer tax or governmental
charge required to be paid by the holder of such Rights Certificate in
accordance with Section 9(e) hereof, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if the
Rights Agent is the transfer agent for such shares) certificates for the
total number of one one-thousandths of a share of Preferred Stock to be
purchased, and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Company shall have elected
to deposit the total number of shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be purchased (in
which case certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the depositary
agent), and the Company will direct the depositary agent to comply with
such request, (ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14
hereof, (iii) promptly after receipt of such aforementioned certificates or
depositary receipts, cause the same to be delivered to or upon the order of
the record holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt thereof,
promptly deliver such aforementioned cash, if any, to or upon the order of
the record holder of such Rights Certificate. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii) hereof)
shall be made in cash or by certified bank check or bank draft payable to
the order of the Company. In the event that the Company is obligated to
issue other securities (including Common Stock) of the Company, pay cash
and/or distribute other property upon exercise of the Rights pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so
that such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when necessary to comply with this
Agreement. The Company reserves the right to require, prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, a
number of Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) New Rights Certificate Issued for Unexercised Rights. In case the
----------------------------------------------------
record holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent and delivered to, or upon the order of, the record holder of
such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 6 and
Section 14 hereof.
(e) Rights Owned by an Acquiring Person To Become Null and Void.
-----------------------------------------------------------
Notwithstanding anything in this Agreement to the contrary, from and after
the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or
13
of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer that the Board of Directors has determined is part of a
plan, arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void without any
further action, and no record holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall notify the Rights Agent as soon
as practicable after the Company obtains knowledge that this Section 7(e)
has become applicable and shall use all reasonable efforts to ensure that
the provisions of this Section 7(e) and Section 4(b) hereof are complied
with, but neither the Rights Agent nor the Company shall have any liability
to any record holder of Rights Certificates or other Person as a result of
the Company's failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
The Company may require (or cause the Rights Agent or any transfer agent of
the Company to require) any Person who submits a Rights Certificate (or a
certificate representing shares of Common Stock that evidences, or but for
the provisions of this Section 7(e) would evidence, Rights) for transfer on
the registry books or to exercise the Rights represented thereby, to
establish to the satisfaction of the Company in its sole discretion that
such Rights have not become null and void pursuant to the provisions of
this Section 7(e).
(f) Certification and Evidence of Identity Required.
-----------------------------------------------
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 record holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such holder shall have (i)
properly completed and signed the certification contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
---------------------------------------------------
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
the provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificates purchased or acquired by the Company. The
Rights Agent shall deliver a certificate of cancellation to the Company with
respect to each canceled Rights Certificate and shall destroy such canceled
Rights Certificates in accordance with applicable law and regulations.
14
Section 9. Reservation and Availability of Capital Stock.
---------------------------------------------
(a) Reservation and Availability of Capital Stock. The Company
---------------------------------------------
covenants and agrees that it will cause to be reserved and kept available
out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its
authorized and issued shares of Common Stock and/or other securities held
in its treasury), the number of shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement, including Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) Reserved Shares To Be Listed Upon Issuance. So long as the
-------------------------------------------
shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and deliverable upon
the exercise of the Rights may be listed on any national securities
exchange or national automated quotation system, the Company shall use its
best efforts to cause, from and after such time as the Rights become
exercisable (but only to the extent that it is reasonably likely that the
Rights will be exercised), all shares reserved for such issuance to be
listed on such exchange or authorized to be quoted on such quotation system
upon official notice of issuance upon such exercise.
(c) Registration of Securities to be Acquired Upon Exercise of
----------------------------------------------------------
Rights. The Company shall use its best efforts to (i) file, as soon as
------
practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(ii) and 11(a)(iii) hereof, a registration statement under the
Act with respect to the securities purchasable upon exercise of the Rights
on an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such securities, and (B)
the Expiration Date. The Company also will take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue
sky" laws of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of time not
to exceed ninety (90) days after the date set forth in clause (i) of the
first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to
become effective. Upon any such suspension, the Company shall make a public
announcement, and shall give simultaneous written notice to the Rights
Agent, stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension
is no longer in effect. The Company shall promptly provide the Rights Agent
with copies of such announcements. In addition, if the Company shall
determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability
of the Rights (with prompt notice of such suspension to the Rights Agent)
until such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the
15
Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) Stock To Be Validly Issued. The Company covenants and agrees that
--------------------------
it will take all such action as may be necessary to ensure that all one
one-thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities, as
the case may be) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preferred Stock, Common Stock, or
other securities, as the case may be (subject to payment of the Purchase
Price), be duly and validly authorized and issued, and fully paid and
nonassessable including, without limitation, effecting such changes to the
accounts of the Company as may be necessary to accomplish the foregoing
purposes.
(e) Transfer Taxes. The Company covenants and agrees that it will pay
--------------
when due and payable any and all U.S. federal and state transfer taxes and
governmental charges that may be payable in respect of the issuance or
delivery of the Rights Certificates and any certificates for a number of
one one-thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) upon the exercise of the Rights. The
Company shall not, however, be required to pay any U.S. federal or state
transfer tax or governmental charge that may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for a number of
one one-thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in respect of a name other than that
of, the record holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a
number of one one-thousandths of a share of Preferred Stock (or, following
the occurrence of a Triggering Event, Common Stock and/or other securities,
as the case may be) in a name other than that of the record holder upon the
exercise of any Rights until such U.S. federal or state transfer tax or
governmental charge shall have been paid (any such U.S. federal or state
transfer tax or governmental charge being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such U.S. federal or
state transfer tax or governmental charge is due.
SECTION 10. Preferred Stock Record Date. Each Person in whose name any
---------------------------
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the aggregate
Purchase Price (and all applicable U.S. federal or state transfer taxes or
governmental charges) was made; provided, however, that if the date of such
-------- -------
surrender and payment is a date upon which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred
16
Stock (or Common Stock and/or other securities, as the case may be) transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the record holder of a Rights Certificate shall not be entitled to any
rights of a stockholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares and
-----------------------------------------------------------
Number of Rights. The Purchase Price, the number and kind of shares covered by
----------------
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) Adjustment of Purchase Price Upon Declaration of Stock Dividend or
------------------------------------------------------------------
Subdivision, Combination or Reclassification of Preferred Stock; Adjustment
---------------------------------------------------------------------------
of Number and Kind of Shares Upon Person Becoming an Acquiring Person;
----------------------------------------------------------------------
Substitution for Adjustment Shares.
----------------------------------
(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock
or capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the record 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 Preferred Stock (or Common Stock and/or other securities, as
the case may be), which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer
books of the Company were open, such record holder would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 hereof, in the event any Person, alone
or together with its Affiliates and Associates, shall, at any time
after the Rights Distribution Declaration Date, become an Acquiring
Person (such an event being referred to herein as a "Section 11(a)(ii)
-----------------
Event"), then, promptly following the occurrence of such Section
-----
11(a)(ii) Event, proper provision shall be made by the
17
Company so that each holder of a Right (except as provided below and
in Section 7(e) hereof) shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one one-
thousandths of a share of Preferred Stock, such number of shares of
Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event, and (y) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase
--------
Price" for each Right and for all purposes of this Agreement) by 50%
-----
of the Current Market Price (determined pursuant to Section 11(d)(i)
hereof) per share of Common Stock on the date of such first occurrence
(such number of shares being referred to as the "Adjustment Shares");
-----------------
provided, however, that if the transaction that would otherwise give
-------- -------
rise to the foregoing adjustment is also subject to the provisions of
Section 13 hereof, then only the provisions of Section 13 hereof shall
apply and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) Subject to such limitations existing as of the date hereof
as are necessary to prevent a default under any agreement to which the
Company is a party, in the event that the number of shares of Common
Stock that are authorized by the Company's certificate of
incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to
permit the exercise in full of the Rights in accordance with Section
11(a)(ii), the Company, acting by resolution of its Board of Directors
shall (A) determine the excess of (x) the value of the Adjustment
Shares issuable upon the exercise of a Right determined as set forth
below (the "Current Value"), over (y) the Purchase Price (such excess,
-------------
the "Spread"), and (B) with respect to each Right (subject to Section
------
7(e) hereof), make adequate provision to substitute for the Adjustment
Shares, upon the exercise of a Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company (including,
without limitation, shares or units of shares of preferred stock, such
as the Preferred Stock, which the Board of Directors has deemed to
have essentially the same value or economic rights as shares of Common
Stock (such shares of preferred stock or other equity securities being
referred to as "Common Stock Equivalents")), (4) debt securities of
------------------------
the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value, where
such aggregate value has been determined by the Board of Directors
based upon the advice of a nationally recognized investment banking
firm selected by the Board of Directors; provided, however, that if
-------- -------
the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the
date on which the Company's right of redemption pursuant to Section
23(a) expires (such date being referred to herein as the "Section
-------
11(a)(ii) Trigger Date"), then the Company shall be obligated to
-----------------------
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price (other than an amount equal to
the par value of the shares of Common Stock to be issued), shares of
Common
18
Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the
Board of Directors determines in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but
not more than ninety (90) days after the Section 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such thirty (30) day period,
as it may be extended, is herein called the "Substitution Period").
-------------------
To the extent that action is to be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (1) shall
provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek such stockholder approval for such
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall make a public announcement and shall give simultaneous
written notice to the Rights Agent stating that the exercisability of
the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the Current Value of each
Adjustment Share shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date, and the per share
or per unit value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Common Stock on such
date.
(b) Adjustment of Purchase Price Upon Issuance of Rights, Options or
----------------------------------------------------------------
Warrants to Holders of Preferred Stock. In case the Company shall fix a
--------------------------------------
record date for the issuance of rights, options or warrants to all record
holders of Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such record
date) Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Preferred Stock ("Equivalent Preferred
--------------------
Stock")) or securities convertible into Preferred Stock or Equivalent
-----
Preferred Stock at a price per share of Preferred Stock or per share of
Equivalent Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price (determined pursuant to Section
11(d)(ii) hereof) per share of Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock and Equivalent Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock and
Equivalent Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or Equivalent Preferred Stock so to
be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current
Market Price, and the denominator of which shall be the number of shares of
Preferred Stock and Equivalent Preferred Stock outstanding on such record
date plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to
19
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 by delivery of consideration part or all of
which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock and Equivalent Preferred Stock owned by or held
for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights 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) Adjustment of Purchase Price Upon Distributions to Holders of
-------------------------------------------------------------
Preferred Stock. In case the Company shall fix a record date for a
---------------
distribution to all record holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or 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 Current Market Price per
share of Preferred Stock on such record date less the fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights) of the portion
of the cash, assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to a share of Preferred
Stock, and the denominator of which shall be the Current Market Price per
share of Preferred Stock on such record date. 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 be adjusted
to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) Definition of Current Market Price.
----------------------------------
(i) For the purpose of any computation hereunder other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current
-------
Market Price" per share of Common Stock on any date shall be deemed to
------------
be the average of the daily closing prices per share of such Common
Stock for the thirty (30) consecutive Trading Days immediately prior
to but not including such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the Current Market Price per
share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the ten
(10) consecutive Trading Days immediately following but not including
such date; provided, however, that in the event that the Current
-------- -------
Market Price per share of Common Stock is determined during a period
following the announcement by
20
the issuer of such Common Stock of (A) a dividend or distribution on
such Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common
Stock, and the ex-dividend or ex-distribution date for such dividend
or distribution, or the record date for such subdivision, combination
or reclassification shall not have occurred prior to the commencement
of the requisite thirty (30) Trading Day or ten (10) Trading Day
period, as set forth above, then, and in each such case, the Current
Market Price shall be properly adjusted to reflect the current market
per share equivalent. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange,
the last sale price, regular way, or, if such last sale price is not
reported, 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 shares of Common Stock 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 Common Stock selected by the Board of Directors. If on
any such date no market maker is making a market in the Common Stock,
the fair value of such shares on such date as determined in good faith
by the Board of Directors shall be used. The term "Trading Day" shall
-----------
mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is
open for the transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, a Business Day. Notwithstanding the first sentence of this
Section 11(d)(i), if the Common Stock is not publicly held or not so
listed or traded, Current Market Price per share of the Common Stock
shall mean the fair value per share as determined in good faith by the
Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the Current
Market Price per share of Preferred Stock shall be determined in the
same manner as set forth for the Common Stock in Section 11(d)(i)
(other than the last sentence thereof). If the Current Market Price
per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or
listed or traded in a manner described in Section 11(d)(i), the
Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1000 (as such number may
be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the
21
Common Stock occurring after the date of this Agreement) multiplied by
the Current Market Price per share of the Common Stock. If neither the
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board
of Directors, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
For all purposes of this Agreement, the Current Market Price of one
one-thousandth of a share of Preferred Stock shall be equal to the
Current Market Price of one share of Preferred Stock divided by 1000.
(e) Limitation on Adjustments to Purchase Price. Anything herein to
-------------------------------------------
the contrary notwithstanding, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least one percent (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 hundred-thousandth of a share of Common
Stock or other share or one-millionth of a share of Preferred Stock, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
(f) Applicability of Certain Provisions to Shares of Capital Stock
--------------------------------------------------------------
Other Than Preferred Stock. If as a result of an adjustment made pursuant
--------------------------
to Section 11(a)(ii) or Section 13(a) hereof the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock other than Preferred Stock, thereafter the number of such other
shares so receivable upon exercise of any Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g), (h),
(i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any
such other shares.
(g) Purchase Price for Rights Issued After Adjustment to Purchase
-------------------------------------------------------------
Price. All Rights originally issued by the Company subsequent to any
-----
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Adjustment of Number of Shares of Preferred Stock Covered By a
--------------------------------------------------------------
Right. Unless the Company shall have exercised its election to adjust the
-----
number of Rights as provided in Section 11(i), upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a share of Preferred
Stock (calculated to the nearest one-millionth) obtained by (i) multiplying
(x) the number
22
of one one-thousandths of a share covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) Election To Adjust the Number of Rights. The Company may elect on
---------------------------------------
or after the date of any adjustment of the Purchase Price to adjust the
number of Rights in lieu of any adjustment in the number of one one-
thousandths of a share of Preferred Stock purchasable upon the exercise of
a Right. Each of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of one one-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one-millionth) 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 and shall give
simultaneous written notice to the Rights Agent of its election to adjust
the number of Rights, indicating the record date for the adjustment, 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 Rights Certificates have been issued, shall be at
least ten (10) days later than the date of the public announcement. If
Rights 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 Rights Certificates on
such record date Rights 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 in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for
herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of
Rights Certificates on the record date specified in the public
announcement.
(j) Rights Certificates Need Not Reflect Certain Adjustments.
--------------------------------------------------------
Irrespective of any adjustment or change in the Purchase Price or the
number by one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one one-
thousandths of a share and the number of one one-thousandths of a share
which were expressed in the initial Rights Certificates issued hereunder.
(k) Stock To Be Fully Paid and Non-Assessable. Before taking any
-----------------------------------------
action that would cause an adjustment reducing the Purchase Price below the
then par value, if any, of the one one-thousandths of a share of Preferred
Stock issuable upon exercise of the Rights, or the par value, if any, of
any shares of any other capital stock issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the
23
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and non-assessable one one-thousandths of a
share of Preferred Stock, or other shares of capital stock, as the case may
be, at such adjusted Purchase Price. If upon any exercise of the Rights, a
holder is to receive a combination of Common Stock and Common Stock
Equivalents, a portion of the consideration paid upon such exercise, equal
to at least the then par value of a share of Common Stock, shall be
allocated as the payment for each share of Common Stock so received.
(l) Election to Defer Issuance of Certain Shares Until After Record
---------------------------------------------------------------
Date for Adjustment Event. 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 (with
prompt notice of such election to the Rights Agent), until the occurrence
of such event, the issuance to the record holder of any Right exercised
after such record date the number of one one-thousandths of a share of
Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the number of one one-
thousandths of a share of Preferred Stock, and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis
of the 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 (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Reductions in Purchase Price to Avoid Taxable Events. 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 in their good faith judgment the Board of Directors shall
determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the Current Market Price thereof,
(iii) issuance wholly for cash of shares of Preferred Stock or securities
which by their terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends, or (v) issuance of rights, options
or warrants referred to in this Section 11, hereafter made by the Company
to holders of its Preferred Stock shall not be taxable to such holders.
(n) No Consolidation, Merger or Sale of More Than 50% of Assets or
--------------------------------------------------------------
Earning Power. The Company covenants and agrees that it shall not, at any
-------------
time after the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or exchanged pursuant to Section 24
hereof, (i) consolidate with any other Person (other than a Subsidiary of
the Company in a transaction that complies with Section 11(o) hereof), (ii)
merge with or into any other Person (other than a Subsidiary of the Company
in a transaction that complies with Section 11(o) hereof), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions, each of which complies with Section 11(o) hereof), if (x) at
the time of or
24
immediately after such consolidation, merger or sale there are any
certificate of incorporation or bylaw provisions or any rights, warrants or
other instruments or securities outstanding or agreements in effect or
other actions taken which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of the Person who constitutes, or would constitute,
the Principal Party for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company
and such other Person shall have executed and delivered to the Rights Agent
a supplemental agreement evidencing compliance with this Section 11(n).
(o) No Actions That Diminish Benefits of Rights. The Company
-------------------------------------------
covenants and agrees that, after the Distribution Date, it will not, except
as permitted by Section 23, Section 24 or Section 27 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.
(p) Adjustment in Number of Rights Associated With Each Share of
------------------------------------------------------------
Common Stock. Anything in this Agreement to the contrary notwithstanding,
------------
in the event that the Company shall at any time after the Rights
Distribution Declaration Date and prior to the Distribution Date (i)
declare or pay any dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide or split the outstanding
shares of Common Stock into a greater number of shares, or (iii) combine or
consolidate the outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Common Stock,
then, and in each such event, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered thereafter
but prior to the Distribution Date, shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of Common
Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common Stock
immediately prior to such event by a fraction the numerator of which shall
be the total number of shares of Common Stock outstanding immediately prior
to the occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately following
the occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
----------------------------------------------------------
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts and computations accounting for
such adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Common Stock, a copy of such certificate,
and (c) mail a brief summary thereof to each record holder of a Rights
Certificate (or, if prior to the Distribution Date, to each record holder of a
certificate representing shares of Common Stock) in accordance with Section 26
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall have no duty with
respect to and shall not be deemed to have knowledge of such adjustment unless
and until it shall have received such certificate.
25
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
------------------------------------------------------
Earning Power.
-------------
(a) Section 13 Events. In the event that, following the Stock
-----------------
Acquisition Date (which for purposes of this Section 13(a) only shall also
include the date of the first public announcement (including, without
limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) that any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan), together with
any of such Person's Affiliates and Associates, has become the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding
pursuant to a Qualifying Offer), directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving corporation
of such consolidation or merger and, in connection with such consolidation
or merger, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any other Person
or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets
or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o) hereof), then,
upon the first occurrence of such event (except as may be contemplated by
Section 13(d) hereof), proper provision shall be made so that: (i) each
holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price, in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid, non-assessable
and freely tradable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to the
result obtained by (1) multiplying the then current Purchase Price by the
number of one one-thousandths of a share of Preferred Stock for which a
Right is exercisable immediately prior to the first occurrence of a Section
13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one one-
thousandths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price
in effect immediately prior to such first occurrence), and (2) dividing
that product (which, following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d)(i) hereof) per share of the Common Stock of such
Principal Party on the date of consummation, provided that the Purchase
Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided
in Section 11(f) of this Agreement to
26
reflect any events occurring in respect of such Principal Party after the
date of such Section 13 Event; (ii) such Principal Party shall thereafter
be liable for, and shall assume, by virtue of such Section 13 Event, all
the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal
-------
Party, it being specifically intended that the provisions of Section 11
hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the consummation
of any such transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13
Event.
(b) Definition of Principal Party. "Principal Party" shall mean:
----------------------------- ---------------
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a): (A) the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, or if there is
more than one such issuer, the issuer that has the greatest aggregate
market value of shares of its Common Stock outstanding, or (B) if no
securities are so issued, (1) the Person that is the other party to
the merger, if such Person survives said merger, or, if there is more
than one such Person, the Person that has the greatest aggregate
market value of shares of its Common Stock outstanding or (2) if the
Person that is the other party to the merger does not survive the
merger, the Person that does survive the merger (including the Company
if it survives) or (3) the Person resulting from the consolidation;
and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions or, if each
Person that is a party to such transaction or transactions receives
the same portion of the assets or earning power so transferred or if
the Person receiving the greatest portion of the assets or earning
power cannot be determined, whichever of such Persons has the greatest
aggregate market value of shares of its Common Stock outstanding;
provided, however, that in any such case, (1) if the Common Stock of such
-------- -------
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal Party"
---------------
shall refer to such other Person; (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common Stocks of two
or more of which are and have been so registered, "Principal Party" shall
---------------
refer to whichever of such Persons is the issuer having the greatest
aggregate market value of shares of its Common Stock outstanding; and (3)
in case such Person is owned, directly or indirectly, by a joint
27
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above
shall apply to each of the chains of ownership having an interest in such
joint venture as if such party were a "Subsidiary" of both or all of such
joint venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct
or indirect interests in such Person bear to the total of such interests.
(c) Obligations of Principal Party. The Company shall not consummate
------------------------------
any consolidation, merger, sale or transfer described in Section 13(a)
unless the Principal Party covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Common Stock or out of its authorized and issued shares of Common Stock
held in its treasury, the number of shares of its Common Stock that will be
sufficient to permit the exercise in full of all outstanding Rights under
this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement confirming that the requirements set forth in paragraphs (a) and
(b) of this Section 13 shall be promptly performed in accordance with their
terms and further providing that, as soon as practicable after executing
such agreement pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date and similarly comply with applicable state
securities laws;
(ii) use its best efforts, if the shares of Common Stock of the
Principal Party shall be listed or admitted to trading on a national
securities exchange or NASDAQ to list or admit to trading (or continue
the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange or NASDAQ and, if
the shares of Common Stock of the Principal Party shall not be listed
or admitted to trading on a national securities exchange or NASDAQ, to
cause the Rights and the securities purchasable upon exercise of the
Rights to be reported by such other system then in use;
(iii) deliver to record holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur
28
at any time after the occurrence of a Section 11(a)(ii) Event, the Rights
that have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a). If, for any reason,
the Rights cannot be exercised for Common Stock of the Company or such
Principal Party, then a holder of Rights will have the right to exchange
such Rights for cash from the Company or such Principal Party in an amount
equal to the number of shares of such Common Stock such holder would
otherwise be entitled to purchase times 50% of the then Current Market
Price, as determined pursuant to Section 11(d)(i) hereof, of such stock of
such Principal Party or the Company. If, for any reason, including, without
limitation, such Principal Party is an individual, private partnership or
private company, the foregoing formulation cannot be applied to determine
the cash amount into which the Rights are exchangeable, then the Board of
Directors, based upon advice from one or more nationally recognized
investment banking firms, shall determine such amount reasonably and with
utmost good faith to the holders of Rights. Any such determination shall be
binding and final.
(d) Section 13 Not Applicable to Certain Transactions Following a
-------------------------------------------------------------
Qualifying Offer. Notwithstanding anything in this Agreement to the
----------------
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a Qualifying Offer (or a wholly owned Subsidiary of any such
Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid
to all record holders of shares of Common Stock whose shares were purchased
pursuant to such Qualifying Offer, and (iii) the form of consideration
being offered to the remaining record holders of shares of Common Stock
pursuant to such transaction is the same as the form of consideration paid
pursuant to such Qualifying Offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
SECTION 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) Fractional Rights. The Company shall not be required to issue
-----------------
fractions of Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates that evidence
fractional Rights. In lieu of such fractional Rights, the Company may pay
to the record holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right. For
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 of the Rights 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
29
last sale price or, if such last sale price is not reported, 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. 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 shall be used to determine the current market value of the
whole Right.
(b) Fractional Shares of Preferred Stock. The Company shall not
------------------------------------
issue fractions of shares of Preferred Stock (other than, except as
provided in Section 7(c), fractions that are integral multiples of one one-
thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Preferred Stock
(other than fractions that are integral multiples of one one-thousandth of
a share of Preferred Stock). Fractions of shares of Preferred Stock in
integral
multiples of one one-thousandth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to
an appropriate agreement between the Company and a depositary selected by
it; provided, however, that such agreement shall provide that the holders
-------- -------
of such depositary receipts shall have the rights, privileges and
preferences to which they are entitled as beneficial owners of the shares
of Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company shall pay to the
record holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the
Current Market Price per share of Preferred Stock as of the Trading Day
immediately prior to the date of such exercise.
(c) Fractional Shares of Common Stock. The Company shall not issue
---------------------------------
fractions of shares of Common Stock or distribute certificates that
evidence fractional shares of Common Stock upon the exercise of Rights by
any record holder thereof following the occurrence of a Triggering Event.
In lieu of fractional shares of Common Stock, the Company shall pay to the
record holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the
Current Market Price per share of Common Stock as of the Trading Day
immediately prior to the date of such exercise.
(d) Waiver by Record Holder of Rights. The record holder of a Right
---------------------------------
by the acceptance of the Rights expressly waives his right to receive any
fractional Rights or any fractional shares upon exercise of a Right, except
as permitted by this Section 14.
(e) Rights Agent's Duties. The Rights Agent shall have no duty or
---------------------
obligation with respect to this Section 14 and any other Section of this
Agreement relating to fractional shares of Common Stock unless and until it
has received specific instructions (and sufficient cash, if required) from
the Company with respect to its duties and obligations under such Sections.
30
SECTION 15. Rights of Action. All rights of action in respect of this
----------------
Agreement, excepting the rights of action given to the Rights Agent, are vested
in the respective record holders of the Rights Certificates (and, prior to the
Distribution Date, the record holders of the Common Stock); and any record
holder of any Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the record holder
of any other Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the record holders of Rights, it is specifically
acknowledged that such holders of Rights would not have an adequate remedy at
law for any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
SECTION 16. Agreement of Rights 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 Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the transfer books of the Rights Agent if surrendered
at the offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered on the transfer books of the Rights Agent
as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent, subject to the last sentence
of Section 7(e) hereof, shall be required to be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligations;
provided, however, the Company must use its reasonable efforts to have any
-------- -------
such order, judgment, decree or ruling lifted or otherwise overturned as
soon as possible.
31
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
--------------------------------------------------
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one one-
thousandths of a share of Preferred Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 25 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
---------------------------
(a) Compensation and Indemnification. The Company agrees to pay to
--------------------------------
the Rights Agent such compensation as shall be agreed to in writing between
the Company and the Rights Agent for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other disbursements
incurred in the preparation, execution, delivery, amendment and
administration of this Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent,
including its members, directors, officers, employees, stockholders and
agents, for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense
incurred without gross negligence, bad faith or willful misconduct (each as
may be finally determined by a court of competent jurisdiction) on the part
of the Rights Agent, for any action, taken, suffered, or omitted by the
Rights Agent in connection with the acceptance and administration of this
Agreement, including, without limitation, the costs and expenses of
defending against any claim of liability in the premises (including
reasonable counsel fees and expenses). The indemnity provided for herein
shall survive the expiration of the Rights and the termination of this
Agreement. The costs and expenses incurred by the Rights Agent in
enforcing this right of indemnification shall be paid by the Company.
(b) Limitation of Liability. The Rights Agent shall be authorized
-----------------------
and protected and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in connection with its acceptance, insofar
as it relates to the Company, and administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it
to be genuine and to be signed, executed, and where necessary, verified,
guaranteed or acknowledged, by the proper Person or Persons.
32
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
---------------------------------------------------------
(a) Merger or Consolidation of Rights Agent. Any Person into which
---------------------------------------
the Rights Agent or any successor Rights Agent may be merged or with which
it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall
be a party, or any Person succeeding to the stockholder services business
of the Rights Agent or any successor Rights Agent, shall be the successor
to the Rights Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto,
provided, that such Person 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 Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates in the name of the successor
Rights Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
(b) Change of Name of Rights Agent. In case at any time the name
------------------------------
of the Rights Agent shall be changed and at such time any of the Rights
Certificates shall have been countersigned but not delivered, the Rights
Agent may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
----------------------
the specific duties and obligations expressly imposed by this Agreement, and no
implied duties or obligations shall be read into this Agreement against the
Rights Agent, upon the following terms and conditions, by which the Company and
the holders of Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel
shall be full and complete authorization and protection to the Rights Agent
as to, and the Rights Agent shall incur no liability for or in respect of,
any action taken, suffered or omitted by it in good faith and in accordance
with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person
and the determination of "Current Market Price") be proved or established
by the Company prior to taking, suffering or omitting to take any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be
33
conclusively proved and established by a certificate signed by the Chairman
of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be
full authorization and protection to the Rights Agent, and the Rights Agent
shall incur no liability for or in respect of, any action taken, suffered
or omitted to be taken in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct, each as may be finally
determined by a court of competent jurisdiction. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage. Any
liability of the Rights Agent under this Rights Agreement will be limited
to the amount of fees paid by the Company to the Rights Agent.
(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
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), 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 have any liability for or 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 Rights
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of Section 11
or Section 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common
Stock, Preferred Stock or other securities, will when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board,
34
the President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and
it shall be full authorization to the Rights Agent and the Rights Agent
shall not be liable for any action taken, suffered or omitted to be taken
by it in good faith in accordance with instructions of any such officer or
for any delay in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, affiliate, 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 Person.
(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 or any other
Person resulting from any such act, default, neglect or misconduct, absent
gross negligence, willful misconduct or bad faith (each as may be finally
determined by a court of competent jurisdiction) in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to
it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting
with the Company.
(l) The Rights Agent shall have no responsibility to the Company, any
holders of Rights or any holders of shares of Common Stock for interest or
earnings on any moneys held by the Rights Agent pursuant to this Agreement.
(m) The Rights Agent shall not be required to take notice or be
deemed to have notice of any event or condition hereunder, including, but
not limited to, a Distribution Date, a Redemption Date, any adjustment of
the Purchase Price of the Common Stock, and adjustment to the Purchase
Price of the Preferred Stock, the existence of an Acquiring Person or any
other event or condition that may require action by the Rights Agent,
unless the Rights Agent shall be specifically notified in writing of such
event or
35
condition by the Company, and all notices or other instruments required by
this Agreement to be delivered to the Rights Agent must, in order to be
effective, be received by the Rights Agent as specified in Section 26
hereof, and in the absence of such notice so delivered, the Rights Agent
may conclusively assume no such event or condition exists.
Section 21. Change of Rights Agent. The Rights Agent or any successor
----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing to the Company and shall provide notice
thereof to each transfer agent of the Common Stock or Preferred Stock by
registered or certified mail and to the holders of the Rights Certificates in
accordance with Section 26 hereof, (or if prior to the Distribution Date, to the
holders of Rights through any filing made by the Company pursuant to the
Exchange Act). The Company may remove the Rights Agent or any successor Rights
Agent upon thirty (30) days' notice in writing to the Rights Agent or successor
Rights Agent, as the case may be, and shall provide notice thereof to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail and to the holders of the Rights Certificates in accordance with
Section 26 hereof (or, if prior to the Distribution Date, to the holders of
Rights through any filing made by the Company pursuant to the Exchange Act). If
the Rights Agent shall resign or be removed or shall otherwise become incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the record holder of a Rights Certificate (who shall, with such notice,
submit his Rights Certificate for inspection by the Company), then the Company
shall become the Rights Agent until a successor Rights Agent has been appointed,
and any record holder of any Rights Certificate or the Rights Agent 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 either (a) a Person organized and doing business under the laws of the
United States or of the State of New York (or of any other state of the United
States so long as such Person is authorized to do business in the State of New
York), in good standing, which 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 $25,000,000, or (b) an
Affiliate of such Person. 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 and the rights
and obligations of the predecessor shall cease and terminate, but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock, and mail a notice thereof in writing
to the holders of the Rights Certificates in accordance with Section 26 hereof
(or, if prior to the Distribution Date, give notice to the holders of Rights
through any filing made by the Company pursuant to the Exchange Act). 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.
36
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
-----------------------------------
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price or the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
-------- -------
Certificates shall be issued and this sentence shall be null and void ab initio
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
--------------------------
(a) Redemption of Rights. The Board of Directors, at its option,
--------------------
at any time prior to the earlier of (i) the Close of Business on the tenth
Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the Close of
Business on the tenth Business Day following the Record Date), or (ii) the
Close of Business on the Final Expiration Date, redeem all but not less
than all of the then outstanding Rights at a redemption price of $.01 per
Right (such redemption price being hereinafter referred to as the
"Redemption Price"). Notwithstanding anything contained in this Agreement
-----------------
to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption hereunder has expired. The Company may, at its option,
pay the Redemption Price in cash, shares of Common Stock (based on the
Current Market Price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by 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.
(b) Termination of Exercise Rights; Notice of Redemption.
----------------------------------------------------
Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(a) hereof (or at such later
time as the Board of Directors may establish for the effectiveness of such
redemption) and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action by the Board of Directors ordering
the redemption of the Rights becoming effective, the Company shall provide
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights in accordance with Section 26
37
(provided that the failure to provide, or any defect in, such notice shall
not affect the validity of such redemption). Any notice that is provided in
the manner herein provided shall be deemed given, whether or not the record
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made.
Section 24. Exchange.
--------
(a) Exchange. The Board of Directors may, at its option, at any
--------
time after any Person becomes an Acquiring Person, exchange all or part of
the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio"),
--------------
provided that the shares of Common Stock so exchanged shall be of the same
class or series which the holders of such Rights would have been entitled
to receive upon the exercise thereof. Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempted Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of
Voting Securities of the Company then outstanding representing 50% or more
of the Voting Power of the Company.
(b) Termination of Exercise Right. Immediately upon the action of
-----------------------------
the Board of Directors ordering the exchange of any Rights pursuant to
Section 24(a) hereof and without any further action and without any notice,
the right to exercise such Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights held by such
holders multiplied by the Exchange Ratio, provided that the shares of
Common Stock so exchanged shall be of the same class or series which the
holders of such Rights would have been entitled to receive upon the
exercise thereof. The Company shall promptly make a public announcement of
any such exchange; provided, however, that the failure to make, or any
-------- -------
defect in, such public announcement shall not affect the validity of such
exchange. Promptly after the action of the Board of Directors ordering the
exchange of the Rights becoming effective, the Company shall provide notice
of such exchange to the Rights Agent and all of the holders of the then
outstanding Rights in accordance with Section 26 hereof (provided that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange). Any notice that is mailed in the manner
provided in Section 26 hereof shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock for Rights will
be effected and, in the event of any partial exchange, the number of Rights
that will be exchanged. Any partial exchange shall be effected based on the
number of Rights (other than Rights that have become null and void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) Substitution of Preferred Stock. In the event that there shall
-------------------------------
not be authorized and unissued shares of the applicable class or series of
Common Stock and/or
38
authorized and issued shares of the applicable class or series of Common
Stock held in its treasury sufficient to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional shares of the
applicable class or series of Common Stock for issuance upon exchange of
the Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such
additional shares of the applicable class or series of Common Stock, the
Company shall substitute, for each share of such class or series of Common
Stock that would otherwise be issuable upon exchange of a Right, a number
of shares of the applicable series of Preferred Stock or fraction thereof
(subject to Section 14(b) hereof) such that the Current Market Price per
share of the applicable series of Preferred Stock multiplied by such number
or fraction is equal to the Current Market Price per share of such class or
series of Common Stock as of the date of issuance of such shares of such
series of Preferred Stock or fraction thereof.
(d) Fractional Shares of Common Stock. The Company shall not issue
---------------------------------
fractions of shares of Common Stock or distribute certificates that
evidence fractional shares of Common Stock upon an exchange of Rights for
Common Stock pursuant to this Section 24. In lieu of such fractional
shares of Common Stock, the Company shall pay to the registered holders of
the Rights Certificates with regard to which fractional shares of Common
Stock would otherwise be issuable an amount in cash equal to the same
fraction of the Current Market Price per share of the applicable class or
series of Common Stock as of the Trading Day immediately prior to the
record date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
------------------------
(a) Notice of Dividend Payment, Distribution of Rights or
-----------------------------------------------------
Warrants, Reclassification, Consolidation, Merger, Sale, Liquidation, Etc.
-------------------------------------------------------------------------
In case the Company shall propose, at any time after the Distribution Date,
(i) to pay any dividend payable in stock of any class to the holders of
Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to offer to the
holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights Certificate and to the Rights
Agent, to the extent feasible and 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,
39
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the shares of Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least twenty (20) days prior to the
record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of the shares of Preferred
Stock, whichever shall be the earlier.
(b) Notice of Section 11(a)(ii) Event. In the event that a Section
---------------------------------
11(a)(ii) Event shall occur, then in any such case (i) the Company shall as
soon as practicable thereafter give to each holder of a Rights Certificate
and to the Rights Agent, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in Section 25(a) to
Preferred Stock shall be deemed thereafter to refer to Common Stock and/or,
if appropriate, other securities of the Company.
Section 26. Notices. Notices or demands authorized by this Agreement to
-------
be given or made by the Rights Agent or by the holder of any Rights 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), or by facsimile transmission, as follows:
OraSure Technologies, Inc.
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made upon
receipt by the Rights Agent, if sent by registered or certified mail, postage
prepaid, addressed (until another address is filed in writing with the Company),
or by facsimile transmission, as follows:
ChaseMellon Shareholder Services, L.L.C., as Rights Agent
000 Xxxxx Xxxx Xxxxxx, 0/xx/ Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Relationship Manager
Facsimile No.: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed to such holder at the address of such
holder
40
as shown on the registry books of the Rights Agent (or, if prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Stock of the Company).
Section 27. Supplements and Amendments. Except as provided in the
--------------------------
penultimate sentence of this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights. At any time when
the Rights are no longer redeemable, except as provided in the penultimate
sentence of this Section 27, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Rights Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein that may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen any
time period hereunder, or (iv) change or supplement the provisions hereunder in
any manner that the Company may deem necessary or desirable; provided that no
such supplement or amendment adversely affects the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person) and no such amendment may cause the Rights again to become
redeemable or cause the Agreement again to become amendable other than in
accordance with this sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price. Upon the delivery of a certificate from an
appropriate officer of the Company that states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment; provided, however, that the Rights
-------- -------
Agent may, but shall not be obligated to, enter into any such supplement or
amendment that adversely affects or changes the Rights Agent's own rights,
duties or immunities under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions of this
----------
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors. For
----------------------------------------------------
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act, as amended and in effect on the date hereof. The Board
of Directors, except as otherwise specifically provided for herein, shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board of Directors or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, valuations, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors in good faith shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
41
holders of the Rights Certificates (and, prior to the Distribution Date, record
holders of the Common Stock) and all other Persons, and (y) not subject the
Board of Directors to any liability to the holders of the Rights. With respect
to the immediately preceding sentence, the Rights Agent shall always be entitled
to assume that the Board of Directors acted in good faith and shall be fully
protected and shall incur no liability in reliance thereon.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
--------------------------
be construed to give to any Person other than the Company, the Rights Agent and
the record holders of the Rights Certificates (and, prior to the Distribution
Date, record holders of the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the record holders of the
Rights Certificates (and, prior to the Distribution Date, record holders of the
Common Stock).
Section 31. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of Business on the
tenth Business Day (or such longer period of time as permitted pursuant to
Section 27 of this Agreement) following the date of such determination by the
Board of Directors. Without limiting the foregoing, if any provision requiring
that a determination be made by less than the entire Board of Directors (or at a
time or with the concurrence of a group of directors consisting of less than the
entire Board of Directors) is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination shall then be
made by the Board of Directors in accordance with applicable law and the
Company's Certificate of Incorporation and Bylaws. The Company shall promptly
provide the Rights Agent with written notice of such determination.
Section 32. Governing Law. This Agreement, each Right and each Rights
-------------
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
Delaware applicable to contracts made and to be performed entirely within such
State.
Section 33. Counterparts. This Agreement may be executed in any number
------------
of counterparts, each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
42
Section 34. Descriptive Headings. Descriptive headings of the Sections
--------------------
of this Agreement are inserted for convenience of reference only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
ORASURE TECHNOLOGIES, INC.
[SEAL]
By: __________________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Chief Executive Officer
ATTEST:
By: ____________________
Name:
Title:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., as Rights Agent
By: ______________________________
Name:
Title:
ATTEST:
By:____________________
Name:
Title:
43
EXHIBIT A
---------
FORM OF CERTIFICATE OF DESIGNATION
OF SERIES A PREFERRED STOCK
OF
ORASURE TECHNOLOGIES, INC.
--------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
We, Xxxxxx X. Xxxxxxxx, Chief Executive Officer, and Xxxxxxx X.
Xxxxxxxx, Secretary of OraSure Technologies, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Sections 103 and 151(g)
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, the Board of Directors
on May 6, 2000, adopted the following resolution creating a series of One
Hundred Twenty Thousand (120,000) shares of Preferred Stock designated as Series
A Preferred Stock, $0.000001 par value:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the
provisions of its Certificate of Incorporation (the "Certificate
of Incorporation"), a series of Preferred Stock, $0.000001 par
value, of the Corporation be and it hereby is created, and that
the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other
special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof are as
follows:
Section 1. Designation and Amount. The shares of such
----------------------
series shall be designated as "Series A Preferred Stock" and the
number of shares constituting such series shall be One Hundred
Twenty Thousand (120,000). Such number of shares may be increased
or decreased by resolution of the Board of Directors, provided
that no decrease shall reduce the number of shares of Series A
Preferred Stock to a number less than the number of shares
outstanding plus the number of shares reserved for issuance upon
the exercise of outstanding rights to purchase or convert into
shares of Series A Preferred Stock.
Section 2. Dividends and Distributions.
---------------------------
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock
ranking prior and superior to the shares of 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, par value $0.000001 per share (the
"Common Stock"), of the Corporation and of any other class
of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the shares of
Series A Preferred Stock (together with the Common Stock,
the "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,
dividends payable in cash in an amount per share (rounded to the
nearest cent), equal to the product of the Series A Multiple (as
defined below) then in effect times the aggregate per share amount of
all cash dividends declared (but not withdrawn) on the Common Stock,
plus the product of the Series A Multiple then in effect times the
aggregate per share amount (payable in cash, based upon the fair
market value at the time the non-cash dividend or other distribution
is declared as determined in good faith by the Board of Directors) 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
(but not withdrawn) on the Common Stock.
(B) As used herein, the Series A Multiple shall initially be
1,000. In the event the Corporation shall (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the
Series A Multiple 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.
(C) The Board of Directors of the Corporation shall not declare a
dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock) unless it shall concurrently
therewith declare a dividend or distribution on the Series A Preferred
Stock. Payment of a dividend or distribution determined on the Series
A Preferred Stock shall be in preference to payment of any dividend or
distribution on any Junior Stock.
(D) 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 no more than thirty (30) days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. Except as otherwise provided herein or by
-------------
law and in addition to any rights provided in the Certificate of
Incorporation, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the
holder thereof to a number of votes on all matters submitted to the
stockholders of the Corporation equal to the product of the Series A
2
Multiple then in effect times the number of votes that each share of
Common Stock entitles its holder to vote at a meeting of the
stockholders of the Corporation.
(B) The holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of the stockholders of the
Corporation.
(C) The 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 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 on shares
of Series A Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends (other than a dividend
payable in shares of Common Stock) on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of Junior Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock ("Parity 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 Parity Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such Parity Stock in exchange for shares of any
Junior Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of Parity
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
3
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
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 Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, in any other Certificate of
Designation establishing a series of Preferred Stock or any similar stock
or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
--------------------------------------
(A) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of the
shares of Series A Preferred Stock shall be entitled to receive, in
preference to the holders of any Junior Stock, the greater of (a)
$1,000.00 per share, plus accrued dividends to the date of
distribution, whether or not earned or declared, or (b) an amount per
share equal to the product of the Series A Multiple then in effect
times the aggregate amount to be distributed per share to holders of
Common Stock.
(B) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of Parity
Stock shall not receive any distributions except for distributions
made ratably on the Series A Preferred Stock and all other such Parity
Stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding
up.
Section 7. Consolidation, Merger, Etc. In case the Corporation shall
---------------------------
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of the Series A Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share equal to the product
of the Series A Multiple then in effect 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.
4
Section 8. No Redemption. The shares of Series A Preferred Stock
-------------
shall not be redeemable.
Section 9. Ranking. The Series A Preferred Stock shall rank junior
-------
to all other series of the Corporation's Preferred Stock, or any similar
stock that specifically provides that it shall rank prior to the shares of
Series A Preferred Stock, as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide
otherwise. Nothing herein shall preclude the Board of Directors from
creating any series of Preferred Stock or any similar stock ranking on a
parity with or prior to the shares of Series A Preferred Stock as to the
payment of dividends or the distribution of assets.
Section 10. Fractional Shares. Series A Preferred Stock may be
-----------------
issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series A Preferred Stock.
Section 11. Amendment. The Certificate of Incorporation, including
---------
this Certificate of Designation establishing the shares of the Series A
Preferred Stock, shall not be amended in any manner that 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 two-thirds or more of the outstanding shares of Series A
Preferred Stock voting separately as a class.
5
IN WITNESS WHEREOF, this Certificate is executed on behalf of the
Corporation by its president and attested by it Secretary this 21/st/ day of
July, 2000.
____________________________________
Xxxxxx X. Xxxxxxxx
Chief Executive Officer
ATTEST:
______________________________
Xxxxxxx X. Xxxxxxxx
Secretary
STATE OF OREGON )
) ss.
COUNTY OF WASHINGTON )
BE IT REMEMBERED, that before me, a notary public in and for the aforesaid
county and state, personally appeared Xxxxxx X. Xxxxxxxx, Chief Executive
Officer, and Xxxxxxx X. Xxxxxxxx, Secretary, of OraSure Technologies, Inc., a
Delaware corporation, who are known to me to be the same persons who executed
the foregoing instrument, and duly acknowledged the execution of the same this
21/st/ day of July, 2000.
___________________________
Notary Public
My commission expires:
____________________________
6
EXHIBIT B
---------
FORM OF RIGHTS CERTIFICATE
Certificate No. R- Rights
NOT EXERCISABLE AFTER MAY 6, 2010 OR EARLIER IF REDEEMED BY THE COMPANY. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO IS OR WAS AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
ORASURE TECHNOLOGIES, INC.
This certifies that _____________________________________________, or
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of ___________,
2000, as may be amended from time to time (the "Rights Agreement"), between
OraSure Technologies, Inc., a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services, L.L.C., a New Jersey limited liability company
(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 at any
time prior to 5:00 p.m. (New York City time) on May 6, 2010 at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-thousandth of a fully paid, nonassessable share of Series
A Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of
$85.00 per one one-thousandth of a share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and related Certification duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one one-thousandths of a
share of Preferred Stock that may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the number and
Purchase Price as of _________, 2000, based on the Preferred Stock as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number and kind of shares of Preferred Stock or other securities
of the Company or any other Person (as such term is defined in the Rights
Agreement) that may be purchased upon the exercise of the Rights evidenced by
this Rights Certificate are
---------------
* The portion of the legend in brackets will be inserted only if applicable
and shall replace the preceding sentence.
subject to modification and adjustment upon the happening of certain events
including a Triggering Event (as such term is defined in the Rights Agreement).
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Affiliate or
Associate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
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, which limitations of rights
include the temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and are
also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-thousandths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of the close
of business on (i) the tenth Business Day following the Stock Acquisition Date
(as such term is defined in the Rights Agreement, and as such time period may be
extended pursuant to the Rights Agreement), or (ii) the Final Expiration Date
(as such term is defined in the Rights Agreement). In addition, subject to the
provisions of the Rights Agreement, each Right evidenced by this Certificate may
be exchanged by the Company at its option for one share of Common Stock of the
Company (subject to adjustment for any stock split, stock dividend or similar
transaction) following the Stock Acquisition Date and prior to the time an
Acquiring Person owns 50% or more of the shares of Common Stock of the Company
then outstanding.
No fractional shares of Preferred Stock or other securities will be
issued upon the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock, which may, at the election of the
2
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company that may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _______________, ____.
ORASURE TECHNOLOGIES, INC.
By:______________________________
Name:
Title:
ATTEST:
_________________________________
Name:
Title:
Countersigned:
ChaseMellon Shareholder Services, L.L.C.
as Rights Agent
By:______________________________
Name:
Title:
3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the record holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto_____
______________________________________________________________________________
______________________________________________________________________________
(Please print name, address and social security or other identifying number of
transferee)
______________ (______) of the Rights represented by this Rights Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint ____________________________________________________ its
attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated: __________________, ___.
________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (12 C.F.R. 240.17Ad-15) or any similar rule which
the Rights Agent deems applicable.
4
[Form of Reverse Side of Rights Certificate (continued)]
Certification
-------------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate is not being sold, assigned and transferred by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________________, ___.
_________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (12 C.F.R. 240.17Ad-15) or any similar rule which
the Rights Agent deems applicable.
NOTICE
------
The signature to the foregoing Assignment and Certification must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above is not or cannot be
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment will not be honored.
5
[Form of Reverse Side of Rights Certificate (continued)]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate)
To: OraSure Technologies, Inc.:
The undersigned hereby irrevocably elects to exercise ___________________
(____) Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other Person (as such term is defined in the
Rights Agreement) that may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of:
_______________________________________________________________________________
_______________________________________________________________________________
(Please print name, address and social security number or other identifying
number)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
_______________________________________________________________________________
_______________________________________________________________________________
(Please print name, address and social security number or other identifying
number)
Dated: __________________, ___.
________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (12 C.F.R. 240.17Ad-15) or any similar rule which
the Rights Agent deems applicable.
6
[Form of Reverse Side of Rights Certificate (continued)]
Certification
-------------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate are not being exercised
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: __________________, ___.
_______________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (12 C.F.R. 240.17Ad-15) or any similar rule which
the Rights Agent deems applicable.
NOTICE
------
The signature to the foregoing Election to Purchase and Certification must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above is not or cannot be
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Election to Purchase will not be honored.
7
EXHIBIT C
---------
FORM OF
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On May 6, 2000, the Board of Directors of OraSure Technologies, Inc.
("OraSure"), adopted a Stockholder Rights Plan providing for the distribution of
one Right to purchase its Series A Preferred Stock for each outstanding share of
its Common Stock. The Rights will be distributed together with the Common Stock
issued upon the consummation of the mergers of STC Technologies, Inc. ("STC")
with and into OraSure and Epitope, Inc. ("Epitope") with and into OraSure,
pursuant to that certain Merger Agreement, dated as of May 6, 2000 among
Epitope, STC and OraSure. No income will be recognized by stockholders for tax
purposes on payment of the dividend. The Rights are not now exercisable, and it
is not known at this time whether they ever will be exercisable. No action can
be taken by holders of Rights at this time. Until a Right is exercised, the
Right does not create any rights as a stockholder of OraSure, including the
right to vote or receive dividends.
The Rights will trade with the Common Stock of OraSure. In general,
the Rights detach from the Common Stock of OraSure and become exercisable on the
tenth business day after the earlier of either of the following two events
occurs:
. a person or entity, together with its Affiliates or Associates,
becomes the beneficial owner of 15% or more of the outstanding
shares of Common Stock of OraSure, or
. a person or entity, together with its Affiliates or Associates,
announces or commences a tender offer that, if consummated, would
result in them becoming the beneficial owner of 15% or more of
the outstanding shares of Common Stock of OraSure.
An "Affiliate" of a person or entity is a person or entity that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person or entity specified. An "Associate" of
a person or entity is (a) any corporation or organization (other than OraSure or
any majority-owned subsidiary of OraSure) of which such person or entity is an
officer or partner or is, directly or indirectly, the beneficial owner of 10% or
more of any class of equity securities, (b) any trust or other estate in which
such person or entity has a substantial beneficial interest or as to which such
person or entity serves as trustee or in a similar fiduciary capacity, and (c)
any relative or spouse of such person or entity, or any relative of such spouse,
who has the same home as such person or entity or who is a director or officer
of such person or entity or any of its parents or subsidiaries.
If the Rights detach and become exercisable as a result of the
commencement of a tender offer, each Right entitles its holder to purchase one
one-thousandth of a share of Series A Preferred Stock for an exercise price of
$85.00 unless the Rights are redeemed by OraSure. This exercise price and the
number of shares, or fraction of a share, of Series A Preferred Stock that can
be purchased are both subject to adjustment to prevent dilution in the event of
a stock
dividend on the Series A Preferred Stock or a subdivision, combination or
reclassification of the Series A Preferred Stock or if OraSure distributes
certain rights, options, warrants, evidences of indebtedness or assets to the
holders of the Series A Preferred Stock.
Because of the nature of the Series A Preferred Stock's dividend,
liquidation and voting rights, the value of one one-thousandth of a share of
Series A Preferred Stock that may be purchased upon the exercise of each Right
should approximate the value of one share of Common Stock. In the event of the
liquidation of OraSure, the holders of shares of Series A Preferred Stock will
be entitled to the greater of
. a minimum preferential liquidation payment of $1,000 per share, plus
accrued dividends, or
. 1,000 times the aggregate amount to be distributed per share of Common
Stock.
Each share of Series A Preferred Stock will have 1000 votes and will vote
together with the Common Stock as a single class. Finally, in the event of any
merger, consolidation or other transaction involving OraSure (other than the
Merger) in which shares of Common Stock are exchanged for or changed into other
stock, securities, cash and/or other property, each share of Series A Preferred
Stock will be entitled to receive 1,000 times the amount received per share of
Common Stock. The dividend, liquidation, voting and other rights of the Series A
Preferred Stock will be proportionately adjusted to reflect any stock split,
stock dividend or similar transaction involving the Common Stock.
After a person or entity (referred to as an Acquiring Person), together
with its Affiliates and Associates, becomes the beneficial owner of 15% or more
of the outstanding shares of Common Stock of OraSure in one or more transactions
that do not constitute a Qualifying Offer, each Right entitles its holder to
purchase, for the Right's exercise price, a number of shares of Common Stock (or
in certain circumstances, cash, property or other securities of OraSure) having
a value equal to two times the then current exercise price of the Right. All
Rights that are, or under certain circumstances were, beneficially owned by any
Acquiring Person, or Affiliates or Associates of that person or entity, will be
null and void. A "Qualifying Offer" is an offer for outstanding shares of
Common Stock that a majority of the directors of OraSure who are not Affiliates
or Associates of an Acquiring Person determine, after receiving advice from one
or more investment banking firms, to be fair to the stockholders and otherwise
in the best interests of OraSure and its stockholders.
If OraSure is involved in a merger or other business combination
transaction after the Rights become exercisable, each Right entitles its holder
to purchase, for the Right's exercise price, a number of the acquiring or
surviving company's shares of common stock having a market value equal to twice
the exercise price of the Right. Similarly, if OraSure sells or transfers 50%
or more of its assets or earning power after the Rights become exercisable, each
Right entitles its holder to purchase, for the Right's exercise price, a number
of the acquiring company's shares of common stock having a market value equal to
twice the exercise price of the Right.
2
At any time after any person or entity becomes an Acquiring Person and
before the acquisition by such person or entity, together with that person's
Affiliates or Associates, of 50% or more of the Common Stock of OraSure, the
OraSure Board may exchange Common Stock for all or any part of the Rights other
than any Rights that have become null and void. The exchange rate is one share
of Common Stock for each Right. This exchange rate is subject to adjustment to
reflect any stock split, stock dividend or similar transaction involving the
Common Stock.
OraSure is entitled to redeem the Rights at $.01 per Right at any time
until ten business days following a public announcement that a person, together
with that person's Affiliates or Associates, has become the beneficial owner of
15% or more of the outstanding shares of Common Stock of OraSure. The terms of
the Rights expire on May 6, 2010, unless OraSure redeems the Rights before then
or unless the OraSure Board extends the Rights by amending the Rights Agreement.
Until the Rights are no longer redeemable, the OraSure Board of Directors
may amend the Rights Agreement and Rights in any respect. After the Rights are
no longer redeemable, the OraSure Board of Directors may amend the Rights
Agreement and the Rights to make changes that do not adversely affect the
interests of the holders of the Rights (excluding the interests of the Acquiring
Person or its Affiliates and Associates) or to shorten or lengthen any time
period under the Rights Agreement (except for the time period governing
redemption of the Rights). No amendment of the Rights Agreement or Rights by
the OraSure Board of Directors is permitted to change the redemption price of
the Rights, regardless of whether the amendment occurs before or after the time
the Rights cease to be redeemable.
The terms of the Rights are set forth in the Rights Agreement, which has
been filed with the Securities and Exchange Commission as an Exhibit to this
Registration Statement on Form S-4. 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.
3
