Exhibit 4.1
RIGHTS AGREEMENT
DATED AUGUST 30, 2002
BETWEEN
CENTENE CORPORATION
AND
MELLON INVESTOR SERVICES LLC,
AS RIGHTS AGENT
TABLE OF CONTENTS
PAGE
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1. Certain Definitions.........................................................................................1
2. Appointment of Rights Agent.................................................................................5
3. Issuance of Rights..........................................................................................5
4. Form of Rights Certificates.................................................................................7
5. Countersignature and Registration...........................................................................7
6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates.........................................................................................8
7. Exercise of Rights; Purchase Price; Expiration Date of Rights...............................................9
8. Cancellation and Destruction of Rights Certificates........................................................10
9. Reservation and Availability of Capital Stock..............................................................11
10. Preferred Stock Record Date................................................................................12
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights................................12
12. Certificate of Adjusted Purchase Price or Number of Shares.................................................18
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.......................................18
14. Fractional Rights and Fractional Shares....................................................................20
15. Rights of Action...........................................................................................22
16. Agreement of Rights Holders................................................................................22
17. Rights Certificate Holder Not Deemed a Stockholder.........................................................22
18. Concerning the Rights Agent................................................................................23
19. Merger or Consolidation or Change of Name of Rights Agent..................................................23
20. Duties of Rights Agent.....................................................................................24
21. Change of Rights Agent.....................................................................................26
22. Issuance of New Rights Certificates........................................................................26
23. Redemption.................................................................................................26
24. Exchange...................................................................................................27
25. Notice of Certain Events...................................................................................28
26. Notices....................................................................................................29
27. Supplements and Amendments.................................................................................30
28. Successors.................................................................................................30
29. Actions by the Board, etc. ................................................................................30
30. Benefits of this Agreement.................................................................................30
31. Severability...............................................................................................31
32. Governing Law..............................................................................................31
33. Counterparts...............................................................................................31
34. Construction...............................................................................................31
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RIGHTS AGREEMENT
THE RIGHTS AGREEMENT as entered into August 30, 2002 (the "Agreement"),
between Centene Corporation a Delaware corporation (the "Company"), and Mellon
Investor Services LLC, a New Jersey limited liability company, as Rights Agent
(the "Rights Agent").
WITNESSETH
WHEREAS, on August 26, 2002 the Board of Directors of the Company (the
"Board") authorized and declared a dividend distribution of one Right (as
hereinafter defined) for each share of Common Stock (as hereinafter defined) of
the Company outstanding at the Close of Business on September 10, 2002 (the
"Record Date"), and authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(i) or (p)) for
each share of Common Stock issued between the Record Date (whether originally
issued or delivered from the Company's treasury) and the earlier of the
Distribution Date (as hereinafter defined) or the Expiration Date (as
hereinafter defined), each Right initially representing the right to purchase
one one-thousandth of a share of Preferred Stock (as hereinafter defined) having
the rights, powers and preferences set forth in the form of Certificate of
Designations attached hereto as EXHIBIT A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following terms
have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or 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, but
shall not include (i) the Company, (ii) any Subsidiary of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the
Company, or (iv) any Person organized, appointed or established by the
Company for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, (x) no Person shall become an "Acquiring Person" as the result
of an acquisition of Common Stock by the Company that, by reducing the
number of shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the shares of Common
Stock of the Company then outstanding; provided, however that if a Person
shall become the Beneficial Owner of 15% or more of the shares of Common
Stock of the Company then outstanding as the result of an acquisition of
Common Stock by the Company and shall, following written notice from, or
public disclosure by the Company of such share purchases by the Company
become the Beneficial Owner of any additional Common Stock of the Company
and shall then beneficially own 15% or more of the shares of Common Stock
then outstanding, then such Person shall be deemed to be an "Acquiring
Person" and (y) if the Board determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), has become such inadvertently,
and such Person divests as promptly as practicable (as determined in good
faith by the Board), but in any event within 15 Business Days, following
receipt of written notice from the Company of such event, of Beneficial
Ownership of a sufficient number of shares of Common Stock so that such
Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this Agreement
unless and until such Person shall again become an "Acquiring Person."
(b) "Act" shall mean the Securities Act of 1933, as amended.
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(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act as in effect on the date of this Agreement.
(d) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(e) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities that:
(i) such Person or any of such Person's Affiliates or
Associates, directly or indirectly, owns or 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 (other than customary
agreements with and between underwriters and selling group
members with respect to a bona fide public offering of
securities), whether or not in writing, or upon the exercise
of conversion rights, exchange rights, other rights,
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "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 which Rights were
acquired by such Person or any of such Person's Affiliates
or Associates prior to the Distribution Date or pursuant to
Section 3(a) or 22 (the "Original Rights") or pursuant to
Section 11(i) in connection with an adjustment made with
respect to any Original Rights;
(ii) 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, or any comparable or successor
rule), including pursuant to any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect
to a bona fide public offering of securities), whether or
not in writing; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this 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 or consent 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, and (B) is not then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding
(other than customary agreements with and between
underwriters and selling group members with respect to a
bona fide public offering of securities) whether or not in
writing, for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy or consent as
described in the proviso to subparagraph (ii) of this
paragraph (e)) or disposing of any voting securities of the
Company.
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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)(l)(i) of the General Rules and Regulations
under the Exchange Act.
(f) "Board" shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.
(g) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of New York or Missouri are
authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date shall mean 5:00 p.m., St. Louis,
Missouri time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., St. Louis, Missouri time, on the next
succeeding Business Day.
(i) "Common Stock" shall mean the common stock, $0.001 par value per share,
of the Company, except that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock of such Person with
the greatest voting power, or the equity securities or other equity interest
having power to control or direct the management, of such Person.
(j) "Common stock equivalents" shall have the meaning set forth in Section
11(a)(iii).
(k) "Company" shall have the meaning set forth in the introductory
paragraph hereof.
(l) "Current market price" shall have the meaning set forth in Section
11(d)(i).
(m) "Current Value" shall have the meaning set forth in Section 11(a)(iii).
(n) "Distribution Date" shall have the meaning set forth in Section 3(a).
(o) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b).
(p) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(q) "Exchange Ratio" shall have the meaning set forth in Section 24(a).
(r) "Expiration Date" shall have the meaning set forth in Section 7(a).
(s) "Final Expiration Date" shall mean the Close of Business on August 30,
2012.
(t) "Nasdaq" shall mean the Nasdaq National Market of The National Stock
Market, Inc.
(u) "Permitted Offer" shall mean a tender offer or an exchange offer for
all outstanding shares of Common Stock at a price and on terms determined, prior
to the consummation of such tender offer or exchange offer, by directors
constituting at least 75% of all of the members of the Board, after receiving
advice from a nationally recognized investment banking firm selected by the
Board, to be (a) at a price that is fair to stockholders (taking into account
all factors that such members of the Board deem relevant, including 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.
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(v) "Person" shall mean any individual, firm, corporation, partnership,
trust, association, limited liability company or other entity.
(w) "Preferred Stock" shall mean shares of Series A Junior Participating
Preferred Stock, $0.001 par value per share, of the Company having the rights
and preferences set forth in the form of Certificate of Designations attached to
this Agreement as EXHIBIT A and, to the extent that there is not a sufficient
number of shares of Series A Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of Preferred Stock,
$0.001 par value per share, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series A Junior
Participating Preferred Stock.
(x) "Principal Party" shall have the meaning set forth in Section 13(b).
(y) "Purchase Price" shall have the meaning set forth in Section 4(a).
(z) "Record Date" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
(aa) "Redemption Date" shall have the meaning set forth in Section 7(a).
(bb) "Redemption Price" shall have the meaning set forth in Section 23(a).
(cc) "Rights" shall have the meaning set forth in the WHEREAS clause at the
beginning of this Agreement.
(dd) "Rights Agent" shall have the meaning set forth in the introductory
paragraph hereof.
(ee) "Rights Certificates" shall have the meaning set forth in Section
3(a).
(ff) "Section 11(a)(ii) Event" shall mean an acquisition of Common Stock
described in the first sentence of Section 11(a)(ii).
(gg) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii).
(hh) "Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a).
(ii) "Spread" shall have the meaning set forth in Section 11(a)(iii).
(jj) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include a report
filed pursuant to Section 13(d) under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such; provided, however,
that, if such Person is deemed not to be an Acquiring Person pursuant to clause
(y) of Section 1(a), no Stock Acquisition Date shall be deemed to have occurred.
(kk) "Subsidiary" shall mean, with reference to any Person, any corporation
or other entity of which an amount of voting securities sufficient to elect at
least a majority of the directors (or comparable body) of such corporation or
other entity is beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
(ll) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(mm) "Trading Day" shall have the meaning set forth in Section 11(d)(i).
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(nn) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions, 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 upon ten days' prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such Co-Rights Agent.
3. ISSUANCE OF RIGHTS
(a) Until the earlier of (i) the Close of Business on the tenth
Business Day (or such later date as may be determined by the Board) 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 may be determined by action of the Board) after the
date that a tender or exchange offer (other than a Permitted Offer) by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any
Person organized, appointed or established by the Company for or pursuant
to the terms of any such plan) is first published or sent or given within
the meaning of Rule 14d-2 of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced by the certificates
for the Common Stock registered in the names of the 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). As
soon as practicable after the Distribution Date and receipt by the Rights
Agent of (i) written notice of the occurrence of the Distribution Date and
(ii) a list of the shareholders (with addresses) of Common Stock, the
Rights Agent will 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 records of
the Company, one or more rights certificates, in substantially the form of
EXHIBIT B hereto (the "Rights Certificates"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided herein.
With respect to certificates for the Common Stock outstanding as of the
Close of Business on the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the registered holders
of the associated Rights. 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 (i) shall, with
respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee benefit plan or
arrangement, or upon the exercise, conversion or exchange of securities
granted or issued by the Company prior to the Distribution Date, and (ii)
may, in any other case, if deemed necessary or appropriate by the Board,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (x) no such
Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant
risk of material adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (y) 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.
In the event that an adjustment in the number of Rights per share of Common
Stock has been made pursuant to Section 11(i) or 11(p), 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)) so that Rights Certificates representing only whole
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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.
(b) 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, by first-class,
postage prepaid mail, 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. The failure to send a copy of the Summary of
Rights shall not affect the enforceability of any part of this Rights
Agreement or the rights of any holder of the Rights.
(c) Rights shall be issued (i) in respect of all shares of Common
Stock that are issued (either as an original issuance or from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date and (ii) 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 (x) with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee benefit plan or arrangement, or upon the
exercise, conversion or exchange of securities, granted or issued by the
Company prior to the Distribution Date and (y) with respect to shares of
Common Stock so issued or sold in any other case, if deemed necessary or
appropriate by the Board. Certificates representing such shares of Common
Stock (including certificates issued upon transfer or exchange 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
Centene Corporation (the "Company"), and Mellon Investor
Services LLC, as Rights Agent (the "Rights Agent"), dated as
of August 30, 2002, as the same may be amended, restated or
renewed from time to time (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of 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 (i) the Distribution Date and (ii) the Expiration Date, the
Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of
Common Stock shall also be the registered holders of the associated
Rights. Notwithstanding this Section 3(c), the omission of a legend shall
not affect the enforceability of any part of this Rights Agreement or the
rights of any holder of the Rights.
(d) Until the earlier of the Distribution Date and the Expiration
Date, the transfer of any certificates representing shares of Common Stock
in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Common Stock. In the
event that the Company purchases or acquires any shares of Common Stock
after the Record Date but
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prior to the Distribution Date, any Rights associated with such shares
of Common Stock shall be deemed cancelled and retired so that the Company
shall not be entitled to exercise any Rights associated with the shares of
Common Stock that are no longer outstanding.
4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase,
certification and 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 and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate, which do not affect the rights, duties, obligations 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 over-the-counter market on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11 and 22, the Rights
Certificates, whenever distributed, shall entitle the holders thereof to
purchase such number of one one-thousandths of a share of Preferred Stock
as shall be set forth therein at the price set forth therein (such exercise
price per one one-thousandth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of each Right
and the Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section 3, 11(i) or 22
that represents Rights beneficially owned by persons known to be: (i) an
Acquiring Person or an 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
(whether or not in writing) regarding the transferred Rights or (B) a
transfer that the Board has determined is part of a plan, arrangement or
understanding (whether or not in writing) that has as a primary purpose or
effect avoidance of Section 7(e), and any Rights Certificate issued
pursuant to Section 6 or 11 upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became 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 such Agreement.
The provisions of Section 7(e) shall be operative whether or not the
foregoing legend is contained on any such Rights Certificate.
5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, President or any Vice President, either
manually or by facsimile signature, and 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
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Certificates shall be manually countersigned by the Rights Agent 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 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; and 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 Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
all relevant information, the Rights Agent shall keep or cause to be kept,
at its office 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 holders of the Rights Certificates,
the number of Rights evidenced on its face by each of the Rights
Certificates, the Rights Certificate number and the date of each of the
Rights Certificates.
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14, 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 (other than Rights Certificates representing Rights that have
become null and void pursuant to Section 7(e) or that have been exchanged
pursuant to Section 24) may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the registered
holder to purchase a like number of one one-thousandths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate
or Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged, with the form of assignment
and certificate appropriately executed, at the office 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 registered holder shall
have 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 Sections 4(b), 7(e) and 14, countersign and deliver
to the Person entitled thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested. The Company may require payment of a
sum sufficient to cover any 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
under this Section unless and until it is satisfied that all such taxes
and/or governmental charges have been paid.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security satisfactory to them, and
reimbursement to the Company and the Rights
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Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e), the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including the restrictions on exercisability set forth in
Sections 9(c), 11(a)(iii) and 23) 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 certificate on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of one one-thousandths of a
share of Preferred Stock (or other shares, securities, cash or other
assets, as the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earliest of (i) the Final Expiration Date,
(ii) the time at which the Rights expire as provided in Section 13(d),
(iii) the time at which the Rights are redeemed as provided in Section 23
(the "Redemption Date") and (iv) the time at which such Rights are
exchanged as provided in Xxxxxxx 00 (xxx xxxxxxxx xx (x), (xx), (xxx) and
(iv) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$170.00 and shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one one-thousandth of a share of Preferred Stock
(or other shares, securities, cash or other assets, as the case may be) to
be purchased and an amount equal to any applicable tax or governmental
charge, the Rights Agent shall, subject to Section 20(k), 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 authorizes its transfer agent to comply with 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 hereby
directs the depositary agent to comply with such requests, (ii) requisition
from the Company the amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14, (iii) after receipt of
such certificates or depositary receipts, cause the same to be delivered to
or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, and
(iv) after receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii)) may be made in cash or by certified bank check or money order
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 pursuant to Section
11(a), the Company shall 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.
-9-
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the
provisions of Sections 6 and 14.
(e) 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 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 the Acquiring Person has any continuing
agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer that the Board has
determined is part of a plan, arrangement or understanding (whether or not
in writing) that has as a primary purpose or effect avoidance of this
Section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. No
Rights Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be null and void pursuant
to the preceding sentence or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Rights
Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights would be null and void pursuant to the preceding
sentence shall be cancelled. The Company shall notify the Rights Agent when
this Section 7(e) applies and shall use all reasonable efforts to insure
that the provisions of this Section 7(e) and Section 4(b) are complied
with, but neither the Company nor the Rights Agent shall have any liability
to any 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.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported transfer or exercise as set forth in this Section 7 unless such
registered holder shall have (i) properly completed and signed the
certificate following the form of assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
assignment or exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or any
Affiliates or Associates thereof as the Company or the Rights Agent shall
reasonably request.
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 cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
-10-
9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued 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 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), will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Section 11(a)(ii) 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 automated quotation system,
the Company shall use its best efforts to cause, from and after such time
as the Rights become exercisable, all shares reserved for such issuance to
be so listed upon official notice of issuance upon such exercise.
(c) 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)(iii), or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Act, with respect to the 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, (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, and (iv) obtain such other regulatory approvals as may
be necessary for it to issue securities purchasable upon the exercise of
the Rights. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of
the various states in connection with the exercisability of the Rights. 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 or to
obtain any other required regulatory approval in connection with the
exercisability of the Rights. Upon any such suspension, the Company shall
promptly notify the Rights Agent thereof and shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement (with prompt notice
thereof to the Rights Agent) at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary,
the Rights shall not be exercisable in any jurisdiction unless the
requisite registration or qualification in such jurisdiction shall have
been effected or obtained.
(d) 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) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject
to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all taxes and charges that may be payable in respect of
the issuance or delivery of the Rights Certificates and of 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 Rights. The Company shall not, however, be required (i) to pay any tax
or charge that may be payable in
-11-
respect of any transfer or delivery of Rights Certificates to a Person
other than, or the issuance or delivery of 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 registered
holder of the Rights Certificate evidencing Rights surrendered for exercise
or (ii) to issue or deliver 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) in a name other than that of the registered
holder upon the exercise of any Rights until such tax or charge shall have
been paid (any such tax or 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 tax or charge is
due.
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 with the forms of election and certification duly
executed and payment of the Purchase Price (and all applicable taxes or 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 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 holder of a Rights Certificate, as such, shall not
be entitled to any rights of a stockholder of the Company with respect to
securities for which the Rights shall be exercisable, including 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.
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred 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), 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 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 capital stock, 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, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
that would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), 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).
-12-
(i) Subject to Section 24 of this Agreement, in the event that
any Person, alone or together with its Affiliates or Associates,
becomes an Acquiring Person (other than pursuant to a Permitted
Offer), then, promptly following the first occurrence of such event,
proper provision shall be made so that each holder of a Right (except
as provided below and in Section 7(e)) shall thereafter have the right
to receive (subject to the last sentence of Section 23(a)), 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 that equals 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)) per
share of Common Stock on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(ii) 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 the foregoing subparagraph (ii)
of this Section 11(a), the Company shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such excess,
the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity securities of the Company
(including shares, or units of shares, of preferred stock that the
Board has deemed to have the same value as shares of Common Stock
(such shares of preferred stock, "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 based upon the advice of a nationally recognized investment
banking firm selected by the Board; provided, however, if the Company
shall not have made adequate provision to - deliver value pursuant to
clause (B) above within thirty days following the later of (x) the
first occurrence of a Section 11(a)(ii) Event and (y) the date on
which the Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be obligated
to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common 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
shall determine 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 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 shareholder approval for the authorization
of such additional shares (such period, as it may be extended, the
"Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 7(e), that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the event of any such
suspension, the Company shall promptly notify the Rights Agent of such
suspension and shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement
-13-
(with prompt notice thereof to the Rights Agent) at such time as
the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of the Common Stock shall be the current market
price (as determined pursuant to Section 11(d)) per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the value of
any "common stock equivalent" shall be deemed to have the same value
as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred 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 (as
determined pursuant to Section 11(d)) 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 outstanding on such record date,
plus the number of shares of Preferred Stock that 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 outstanding on such record date, plus the
number of additional shares of Preferred Stock and/or equivalent preferred
stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
such subscription price may be paid 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, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. Shares of Preferred Stock owned
by or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price that would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing 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)), 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 (as determined pursuant to Section 11(d)) per share of
Preferred Stock on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes) 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 such current market price (as determined
pursuant to Section 11(d)) 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 that would have
been in effect if such record date had not been fixed.
-14-
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), 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 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii), 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 consecutive
Trading Days immediately following such date; provided, however, that in
the event that the current market price per share of the Common Stock is
determined during a period following the announcement by 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 prior to the
expiration of the requisite thirty Trading Day or ten Trading Day period,
as set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification occurs, then, and in each such case, the "current market
price" shall be properly adjusted to take into account ex-dividend or post
record date trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the 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 quoted
price or, if not so quoted, the average of the high bid and the 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. All references in this Section to
closing prices, last quoted prices or other stock prices mean prices during
regular trading hours, without giving effect to any after-hours or extended
hours trading. 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 shall be as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "Trading Day" shall mean a day on
which Nasdaq or any 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 Nasdaq or any national securities exchange, a Business Day. If
the Common Stock is not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share as determined
in good faith by the Board, 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 above for the Common Stock in clause (i) of this Section
11(d) (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 clause (i) of this Section 11(d), 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 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, which determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. For
-15-
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) 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 in the Purchase Price;
provided, however, that any adjustments that 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 ten-millionth of a
share of Preferred Stock, or hundred-thousandth of a share of Common Stock
or other security, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction that mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Preferred Stock, thereafter
the number of such other securities 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 with respect to the Preferred Stock shall
apply on like terms to any such other securities; provided, however, that
the Company shall not be liable for its inability to reserve and keep
available for issuance upon exercise of the Rights pursuant to Section
11(a)(ii) a number of shares of Common Stock greater than the number then
authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for other purposes.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-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) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of one one-thousandths of a share of Preferred Stock (calculated to the
nearest ten-millionth) obtained by (i) multiplying (x) the number 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) 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-hundred-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement and promptly notify 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
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is adjusted or any day thereafter, but, if the Rights Certificates
have been issued, shall be at least ten 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 record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at
the option of the Company, shall cause to be distributed to such holders of
record in substitution and replacement for the 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) Irrespective of any adjustment or change in the Purchase Price or
the number of 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-thousandth of a share and the number of one one-thousandths of a share
that were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action that may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue such number of one one-thousandths of a share of fully
paid and nonassessable Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer (and shall promptly
notify the Rights Agent of any such election) until the occurrence of such
event the issuance to the 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) 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 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, (iii) issuance wholly for cash
of shares of Preferred Stock or securities that 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 stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction that complies with
Section 11(o)), (ii) merge with or into any other Person (other than a
Subsidiary
-17-
of the Company in a transaction that complies with Section 11(o)), 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)), if (x) at the
time of or immediately after such consolidation, merger or sale there are
any charter or bylaw provisions or any rights, warrants or other
instruments or securities outstanding or agreements in effect that 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) shall have received a distribution of Rights previously owned
by such Person or any of its Affiliates or Associates. The Company shall
not consummate any consolidation, merger, sale or transfer described in
clause (i), (ii) or (iii) of the prior sentence 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) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23, 24 or 27, 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) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record 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
the outstanding shares of Common Stock, or (iii) combine the outstanding
shares of Common Stock into a smaller number of shares, 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 number of shares of Common Stock
outstanding immediately prior to the occurrence of such event and the
denominator of which shall be the number of shares of Common Stock
outstanding immediately following the occurrence of such event.
12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever an
adjustment is made as provided in Section 11 or 13, the Company shall promptly
(a) prepare a certificate setting forth such adjustment and a brief statement of
the facts and computations accounting for such adjustment, (b) 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 holder of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common Stock) in
accordance with Section 26. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment or statement therein contained and
shall have no duty or liability with respect to, and shall not be deemed to have
knowledge of, any adjustment or any such event unless and until it shall have
received such a certificate.
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.
(a) In the event that, at any time after a Person has become an
Acquiring Person, (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)), 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)) shall consolidate with,
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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)), then, and in each such case and
except as contemplated by Section 13(d), proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e), 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), which shall not be 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)) per share of the Common
Stock of such Principal Party on the date of consummation 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, subject to clause (v) below, the provisions of
Section 11 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) shall
be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger or consolidation, and if
no securities are so issued, the Person that is the other party
to such merger or 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;
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-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
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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 of the Common Stock having the
greatest aggregate market value; and (3) in case such Person is owned,
directly or indirectly, by a joint 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 ventures 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) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number
of authorized shares of its Common Stock that have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with 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 providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of 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;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the
Rights under the blue sky laws of such jurisdictions as
may be necessary or appropriate; and
(iii) deliver to 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.
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 at the same time as, or 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).
(d) 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 (or a wholly owned subsidiary of any
such Person or Persons) who acquired shares of Common Stock pursuant to a
Permitted Offer, (ii) the price per share of Common Stock paid in such
transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant
to such Permitted Offer, and (iii) the form of consideration paid in such
transaction is the same as the form of consideration paid pursuant to such
Permitted Offer. Upon consummation of any such transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(i) or
11(p), or to distribute Rights Certificates that
-20-
evidence fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered 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 principal national securities exchange on which the Rights are
listed or admitted to trading, or if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted price or,
if not so quoted, the average of the high bid and the 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. All references in this Section to closing prices, last quoted
prices or other stock prices means prices during regular trading hours,
without giving effect to any after-hours or extended hours trading. 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 shall be used, which determination shall be described in a statement
filed with Rights Agent and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than 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). Fractional 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; provided, however, that holders of such depositary
receipts shall have all of the designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions 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 (other than fractions that are integral multiples of one
one-thousandth of a share of Preferred Stock), the Company shall pay to the
registered 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 value of one one-thousandth of a share of Preferred
Stock. For purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii)) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise
of the Rights or to distribute certificates that evidence fractional shares
of Common Stock. In lieu of fractional shares of Common Stock, the Company
shall pay to the registered 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 of one share of Common Stock (as
determined pursuant to Section 11(d)(i)) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of such Right 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.
-21-
15. RIGHTS OF ACTION. All rights of action in respect of this Agreement,
except the rights of action expressly given to the Rights Agent, are vested in
the respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any
registered 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 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 holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
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 registry books of the Rights Agent if
surrendered at the office 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 duly
completed and fully executed;
(c) subject to Sections 6(a) and 7(f), the Company and the Rights
Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or
the associated Common Stock certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the
penultimate sentence of Section 7(e), 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 (whether interlocutory or final)
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company
must use its best efforts to prevent the issuance of any such
order, decree, judgement or ruling and to have any such order,
decree or ruling lifted or otherwise overturned as soon as
possible.
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 that 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
-22-
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), 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.
18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and disbursements and other disbursements incurred in the preparation,
delivery, amendment, administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, damage, judgment, fine, penalty, claim, demand,
settlement, cost or expense (including, without limitation, the reasonable
fees and expenses of legal counsel), incurred without gross negligence or
bad faith on the part of the Rights Agent (which gross negligence or bad
faith must be determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction), for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance,
administration, exercise and performance of its duties under this
Agreement. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company. The provisions of this
Section 18 and Section 20 below shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation or
removal of the Rights Agent.
(b) 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 and administration of this Agreement
and the exercise and performance of its duties hereunder, in reliance upon
any Rights Certificate or certificate for the Preferred Stock or 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 or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) 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
shareholder service 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, however, that such Person would be
eligible for appointment as a successor Rights Agent under the provisions
of Section 21. 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 either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
-23-
(b) 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.
20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes to perform only the
duties and obligations expressly imposed by this Agreement (and no implied
duties) upon the following terms and conditions, by all of which the Company and
the holders of Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company or an employee of the Rights Agent), and the advice
or opinion of such counsel shall be full and complete 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 by it
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 an Acquiring Person and the
determination of the current per share market price of any security) 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
conclusively proved and established by a certificate signed by any one of
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 and complete 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 by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence or bad faith (as determined
by a final, non-appealable order, judgment, decree or ruling of 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, nor 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 liable
or 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
liable or responsible for any adjustment required under the provisions of
Section 11, 13 or 24 or responsible for the manner, method or amount of any
such adjustment or the
-24-
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after receipt of a certificate describing any such
adjustment, delivered pursuant to Section 12); 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 or Preferred Stock will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, 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 such instructions shall be
full authorization and protection to the Rights Agent and the Rights Agent
shall not be liable for or in respect of any action taken, suffered or
omitted by it in accordance with instructions of any such officer or for
any delay in acting while waiting for those instructions. The Rights Agent
shall be fully authorized and protected in relying upon the most recent
instructions received by any such officer. Any application by the Rights
Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken,
suffered or omitted by the Rights Agent under this Rights Agreement and the
date on and/or after which such action shall be taken or suffered or such
omission shall be effective. The Rights Agent shall not be liable for any
action taken or suffered by, or omission of, the Rights Agent in accordance
with a proposal included in any such application on or after the date
specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying
the action to be taken, suffered or omitted
(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
the Rights Agent were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent or any such stockholder, affiliate,
director, officer or employee 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
(through its directors, officers and employees) 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 or bad faith in the selection and continued employment thereof
(each as determined by a final, non-appealable order, judgment, decree or
ruling of a court of competent jurisdiction).
(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
-25-
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 not
been properly completed, the Company and the Rights Agent will deem the
beneficial owner of the rights evidenced by such Rights Certificate to be
an Acquiring Person or an Affiliate or Associate thereof and such
assignment or election to purchase will not be honored.
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
days' notice in writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail. The Company
may remove the Rights Agent or any successor Rights Agent upon thirty days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of thirty days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a Person organized and doing business under the laws of the United States (or of
any state of the United States) in good standing, which is authorized under such
laws to exercise corporate trust or shareholder services and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an Affiliate of a Person described in clause (a) of
this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
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 the Board to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the provisions
of this Agreement.
23. REDEMPTION.
(a) The Board may, at its option, at any time prior to the earlier of
(i) the Close of Business on the tenth Business Day (or such later date as
may be determined by the Board pursuant to clause (i) of the first sentence
of Section 3(a) with respect to the Distribution Date) 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) and (ii) the Final Expiration Date, redeem all
but not less than all the then outstanding Rights at a redemption price of
-26-
$0.001 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board
in its sole discretion may establish. The Company may, at its option, pay
the Redemption Price in cash, shares of Common Stock (based on the "current
market price," as defined in Section 11(d)(i), of the Common Stock at the
time of redemption) or any other form of consideration, or any combination
of any of the foregoing, deemed appropriate by the Board. 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.
(b) Immediately upon the action of the Board ordering the redemption
of the Rights, evidence of which shall have been filed with the Rights
Agent and without any further action and without any notice, the right to
exercise the Rights shall terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for each Right
so held. Promptly after the action of the Board ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice
to all such holders at each holder's last address as it appears upon the
registry books of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common Stock. Any notice
that is mailed in the manner herein provided shall be deemed given, whether
or not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be made.
(c) In the event of a redemption of the Rights in accordance with this
Agreement, the Company may, at its option, discharge all of its obligations
with respect to the Rights by (i) issuing a press release announcing the
manner of redemption of the Rights in accordance with this Agreement and
(ii) mailing payment of the Redemption Price to the registered holders of
the Rights at their last addresses as they appear on the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books
of the Transfer Agent of the Common Stock, and upon such action, all
outstanding Rights and Right Certificates shall be null and void without
any further action by the Company.
24. EXCHANGE.
(a) The Board may, at its option, at any time after a Section
11(a)(ii) Event, exchange all or part of the then outstanding and
exercisable Rights (which (i) shall not include Rights that have become
null and void pursuant to the provisions of Section 7(e), and (ii) shall
include any Rights issued after the Distribution Date) 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"). Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary,
or any entity holding Common Stock for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the shares of Common Stock then
outstanding.
(b) Immediately upon the action of the Board ordering the exchange of
any Rights pursuant to subsection (a) of this Section 24, evidence of which
shall have been filed with the Rights Agent, and without any further action
and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the
-27-
Exchange Ratio. The Company shall promptly give public notice of any
such exchange; provided, however, that the failure to give, or any defect
in, such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to the Rights Agent and
to all of the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange shall state the method by
which the exchange of 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 pro rata based on the
number of Rights (other than Rights that have become null and void pursuant
to the provisions of Section 7(e)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Stock (or equivalent preferred stock, as
such term is defined in Section 11(b)) for shares of Common Stock
exchangeable for Rights, at the initial rate of one one-thousandth of a
share of Preferred Stock (or equivalent preferred stock) for each share of
Common Stock, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Stock pursuant to Section 3(A) of the
Certificate of Designations attached hereto as EXHIBIT A, so that the
fraction of a share of Preferred Stock (or equivalent preferred stock)
delivered in lieu of each share of Common Stock shall have the same voting
rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of Common
Stock or Preferred Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance
with this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock or Preferred Stock
for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates that evidence fractional shares
of Common Stock. In lieu of such fractional shares of Common Stock, there
shall be paid to the registered holders of the Right Certificates with
regard to which such fractional shares of Common Stock would otherwise be
issuable, an amount in cash equal to the same fraction of the current
market value of a whole share of Common Stock. For the purposes of this
subsection (e), the current market value of a whole share of Common Stock
shall be the closing price per share of Common Stock (as determined
pursuant to the second sentence of Section 11(d)(i)) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the Distribution
Date,
(i) to pay any dividend payable in stock of any class to the holders
of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular 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
-28-
(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)), 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)), 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, to the extent feasible and in
accordance with Section 26, a notice of such proposed action,
which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of
the shares of 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 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 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) In case 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, to the extent feasible and in accordance
with Section 26, 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), and (ii) all references in the preceding paragraph
to Preferred Stock shall be deemed thereafter to refer also to Common Stock
and/or, if appropriate, other securities; provided that the failure to give
such notice shall not affect the validity of such consent.
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) as follows:
Centene Corporation
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
with a copy to:
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
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 if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
-00-
Xxxxxx Xxxxxxxx Services LLC
0 Xxxxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxx, XX 00000
Attention: Relationship Manager
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 as shown on the registry books of the Company.
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 in
any respect 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, by approval of at a majority of
the members of the Board, and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
in order (i) to cure any ambiguity or (ii) to correct or supplement any
provision contained herein that may be defective or inconsistent with any other
provisions herein, provided that no such supplement or amendment shall adversely
affect the interests of the holders of Rights as such (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person). 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, and provided such supplement or amendment does not change or increase the
Rights Agent's rights, duties, liabilities or obligations hereunder, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall be
made that changes the Redemption Price. 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.
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.
29. ACTIONS BY THE BOARD, ETC. The Board shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including 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 this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) that are done or made by the Board in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board to
any liability to the holders of the Rights. The Rights Agent is entitled always
to assume that the Board acted in good faith and shall be fully protected and
incur no liability in reliance thereon.
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
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered 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
-30-
the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of the
Common Stock).
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 determines in its good faith
judgment that severing the invalid, void or unenforceable language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by the Board.
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 New York and for all purposes shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within the State of New York.
33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
34. CONSTRUCTION. The headings of the Sections of this Agreement are
included only for convenience and shall not affect the meaning or interpretation
of this Agreement. References herein to Sections shall mean such Sections of
this Agreement, except as otherwise specified. The words "herein" and "hereof"
and other words of similar import refer to this Agreement as a whole and not to
any particular part of this Agreement. The word "including" as used herein shall
not be construed so as to exclude any other thing not referred to or described.
-31-
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.
CENTENE CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Attest:
By: /s/ Xxxxx X. Xxxxx
---------------------------------
Xxxxx X. Xxxxx
Secretary
MELLON INVESTOR SERVICES LLC,
AS RIGHTS AGENT
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Asst. Vice President
-32-
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
CENTENE CORPORATION
------------------------------
CENTENE CORPORATION, a corporation organized and existing under the laws
of the State of Delaware (hereinafter called the "Corporation"), hereby
certifies that the following resolution was adopted by the Board of Directors of
the Corporation at a meeting duly called and held on August 26, 2002:
RESOLVED: That pursuant to the authority granted to and vested in the
Board of Directors of the Corporation (hereinafter called the "Board") in
accordance with the provisions of the Certificate of Incorporation, as amended,
the Board hereby creates a series of Preferred Stock, $0.001 par value per share
(the "Preferred Stock"), of the Corporation and hereby states the designation
and number of shares, and fixes the relative rights, preferences and limitations
thereof as follows:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:
1. DESIGNATION AND AMOUNT. The shares of such series shall be designated
as "Series A Junior Participating Preferred Stock" (the "Series A Preferred
Stock") and the number of shares constituting the Series A Preferred Stock shall
be 40,000. Such number of shares may be increased or decreased by resolution of
the Board prior to issuance; provided, that no decrease shall reduce the number
of shares of Series A Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.
2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
$0.001 par value per share (the "Common Stock"), of the Corporation, and of
any other junior stock, shall be entitled to receive, when, as and if
declared by the Board out of funds of the Corporation legally available for
the payment of dividends, quarterly dividends payable in cash on the last
day of each fiscal quarter of the Corporation in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the greater of
(a) $10 or (b) subject to the provision for adjustment hereinafter set
forth, 1000 times the aggregate per share amount of all cash dividends, and
1000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares
of Common Stock or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of
A-1
Common Stock, or effect a subdivision, combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event. In the
event the Corporation shall at any time declare or pay any dividend on the
Series A Preferred Stock payable in shares of Series A Preferred Stock, or
effect a subdivision, combination or consolidation of the outstanding
shares of Series A Preferred Stock (by reclassification or otherwise than
by payment of a dividend in shares of Series A Preferred Stock) into a
greater or lesser number of shares of Series A Preferred Stock, then in
each such case the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (b) of the
first sentence of this Section 2(A) shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of
Series A Preferred Stock that were outstanding immediately prior to such
event and the denominator of which is the number of shares of Series A
Preferred Stock outstanding immediately after such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock) and the
Corporation shall pay such dividend or distribution on the Series A
Preferred Stock before the dividend or distribution declared on the Common
Stock is paid or set apart; provided that, in the event no dividend or
distribution shall have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $10 per share on the Series
A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata
on a share-by-share basis among all such shares at the time outstanding.
The Board may fix a record date for the determination of holders of shares
of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60
days prior to the date fixed for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series A Preferred Stock shall
have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
1000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser
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number of shares of Common Stock, then in each such case the number of
votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation
shall at any time declare or pay any dividend on the Series A Preferred
Stock payable in shares of Series A Preferred Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of
Series A Preferred Stock (by reclassification or otherwise than by payment
of a dividend in shares of Series A Preferred Stock) into a greater or
lesser number of shares of Series A Preferred Stock, then in each such case
the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such amount by a fraction, the numerator of which
is the number of shares of Series A Preferred Stock that were outstanding
immediately prior to such event and the denominator of which is the number
of shares of Series A Preferred Stock outstanding immediately after such
event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock and any other capital stock of
the Corporation having general voting rights shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(C) In addition:
(i) If at any time dividends on any Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends
thereon, the holders of the Series A Preferred Stock, voting as a
separate series from all other series of Preferred Stock and classes
of capital stock, shall be entitled to elect two members of the Board
in addition to any Directors elected by any other series, class or
classes of securities and the authorized number of Directors will
automatically be increased by two. Promptly thereafter, the Board
shall, as soon as may be practicable, call a special meeting of
holders of Series A Preferred Stock for the purpose of electing such
members of the Board. Such special meeting shall in any event be held
within 45 days of the occurrence of such arrearage.
(ii) During any period when the holders of Series A Preferred
Stock, voting as a separate series, shall be entitled and shall have
exercised their right to elect two Directors, then, and during such
time as such right continues, (a) the then authorized number of
Directors shall be increased by two, and the holders of Series A
Preferred Stock, voting as a separate series, shall be entitled to
elect the additional Directors so provided for, and (b) each such
additional Director shall not be a member of any existing class of the
Board, but shall serve until the next annual meeting of stockholders
for the election of Directors, or until his successor shall be elected
and shall qualify, or until his right to hold such office terminates
pursuant to the provisions of this Section 3(C).
(iii) A Director elected pursuant to the terms hereof may be
removed with or without cause by the holders of Series A Preferred
Stock entitled to vote in an election of such Director.
(iv) If, during any interval between annual meetings of
stockholders for the election of Directors and while the holders of
Series A Preferred Stock shall be entitled to elect two Directors,
there is no such Director in office by reason of resignation, death or
removal, then, promptly thereafter, the Board shall call a special
meeting of the holders of Series A Preferred Stock for the purpose of
filling such vacancy and such vacancy shall be filled at such special
meeting. Such special
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meeting shall in any event be held within 45 days of the occurrence
of such vacancy.
(v) At such time as the arrearage is fully cured, and all
dividends accumulated and unpaid on any shares of Series A Preferred
Stock outstanding are paid, and, in addition thereto, at least one
regular dividend has been paid subsequent to curing such arrearage,
the term of office of any Director elected pursuant to this Section
3(C), or his successor, shall automatically terminate, and the
authorized number of Directors shall automatically decrease by two,
the rights of the holders of the shares of the Series A Preferred
Stock to vote as provided in this Section 3(C) shall cease, subject to
renewal from time to time upon the same terms and conditions, and the
holders of shares of the Series A Preferred Stock shall have only the
limited voting rights elsewhere herein set forth.
(D) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A Preferred Stock, except in accordance
with a purchase offer made in writing or by publication (as determined
by the Board) to all holders of such shares upon such terms as the
Board, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation
A-4
could, under paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
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 cancelled 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 subject to the
conditions and restrictions on issuance set forth herein, in the Certificate of
Incorporation, or in any other Certificate of Designations creating a series of
Preferred Stock or any similar stock or as otherwise required by law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have
received $1000 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date
of such payment, provided that the holders of shares of Series A Preferred
Stock shall be entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth, equal to 1000 times
the aggregate amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up.
(B) Neither the consolidation, merger or other business combination of
the Corporation with or into any other corporation nor the sale, lease,
exchange or conveyance of all or any part of the property, assets or
business of the Corporation shall be deemed to be a liquidation,
dissolution or winding up of the Corporation for purposes of this Section
6.
(C) In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of
paragraph (A) of this Section 6 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. In the event the Corporation shall at any
time declare or pay any dividend on the Series A Preferred Stock payable in
shares of Series A Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series A Preferred Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Series A Preferred Stock) into a greater or lesser number of shares of
Series A Preferred Stock, then in each such case the aggregate amount to
which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of
paragraph (A) of this Section 6 shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of
Series A Preferred Stock that were outstanding immediately prior to such
event and the denominator of which is the number of shares of Series A
Preferred Stock outstanding immediately after such event.
A-5
7. CONSOLIDATION, MERGER, ETC. Notwithstanding anything to the contrary
contained herein, 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 each share of Series A Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision, combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series A Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event. In the event the
Corporation shall at any time declare or pay any dividend on the Series A
Preferred Stock payable in shares of Series A Preferred Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Series A
Preferred Stock (by reclassification or otherwise than by payment of a dividend
in shares of Series A Preferred Stock) into a greater or lesser number of shares
of Series A Preferred Stock, then in each such case the amount set forth in the
first sentence of this Section 7 with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Series A
Preferred Stock that were outstanding immediately prior to such event and the
denominator of which is the number of shares of Series A Preferred Stock
outstanding immediately after such event.
8. NO REDEMPTION. The shares of Series A Preferred Stock shall not be
redeemable.
9. RANK. The Series A Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Preferred Stock issued either before or after the issuance of
the Series A Preferred Stock, unless the terms of any such series shall provide
otherwise.
10. AMENDMENT. At such time as any shares of Series A Preferred Stock are
outstanding, the Certificate of Incorporation, as amended, of the Corporation
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 at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single class.
11. FRACTIONAL SHARES. Series A Preferred Stock may be issued in fractions
of a share that shall entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive dividends, participate in
distributions and have the benefit of all other rights of holders of Series A
Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by its Chief Executive Officer this __ day of August, 2002.
CENTENE CORPORATION
By: _____________________________________
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
A-6
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
[FORM OF FACE OF RIGHTS CERTIFICATE]
CERTIFICATE NO. R-________ ______ RIGHTS
NOT EXERCISABLE AFTER AUGUST 30, 2012 OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO
EXCHANGE 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.
CENTENE CORPORATION
RIGHTS CERTIFICATE
This certifies that ____________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of August 30, 2002 (the "Rights Agreement"), between Centene
Corporation, a Delaware corporation (the "Company"), and Mellon Investor
Services LLC, a New Jersey limited liability company, as Rights Agent (the
"Rights Agent"), to purchase from the Company after the Distribution Date (as
such term is defined in the Rights Agreement) and at any time prior to 5:00 p.m.
(St. Louis, Missouri time) on August 30, 2012 at the office of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, non-assessable share of Series A Junior
Participating Preferred Stock (the "Preferred Stock") of the Company, $0.001 par
value per share, at a purchase price of $0.17 in cash 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 Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of one one-thousandth of a share of Preferred Stock that may be purchased
upon exercise hereof) set forth above, and the Purchase Price set forth above,
are the number and Purchase Price as of the close of business on September 10,
2002, based on the Preferred Stock as constituted at such date. Capitalized
terms used herein and not otherwise defined herein shall have the meanings
ascribed to such terms in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, 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, Associate or Affiliate who becomes a transferee after the Acquiring
Person becomes an Acquiring Person, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, concurrently
with or 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.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock or other securities that may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Section 11(a)(ii) Events.
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
Rights Agreement reference is hereby made for a full description of the rights,
B-1
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 principal offices of the
Company and are available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, with
the Form of Election and Certificate set forth on the reverse side duly
executed, may be exchanged for another Rights Certificate or Rights 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 Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at its option at a redemption
price of $0.001 per Right at any time prior to the earlier of (i) the close of
business on the tenth Business Day (or such later date as may be determined by
the Board pursuant to clause (i) of the first sentence of Section 3(a) with
respect to the Distribution Date) 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) and (ii)
the Final Expiration Date.
Subject to the provisions of the Rights Agreement, the Company may, at its
option, at any time after a Section 11(a)(ii) Event, exchange all or part of the
Rights evidenced by this Certificate for shares of the Company's Common Stock or
for Preferred Stock (or shares of a class or series of the Company's preferred
stock having the same rights, privileges and preferences as the Preferred
Stock).
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of 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.
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WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of __________ __, 2002
CENTENE CORPORATION
By:
-------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Attest:
By:
---------------------------------
Xxxxx X. Xxxxx
Secretary
MELLON INVESTOR SERVICES LLC,
AS RIGHTS AGENT
By:
-------------------------------------
Name:
Title:
B-3
[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH
HOLDER DESIRES TO TRANSFER THE RIGHTS CERTIFICATE.)
FOR VALUE RECEIVED, ____________________ hereby sells, assigns and transfers
unto ____________________ this Rights Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and appoint
____________________ Attorney, to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Dated: ________________
_________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies that the Rights evidenced by this Rights
Certificate are not beneficially owned by, or being assigned to, an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined pursuant
to the Rights Agreement).
Dated: ______________
_________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
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Form of Election To Purchase
(TO BE EXECUTED IF HOLDER DESIRES TO EXERCISE
RIGHTS REPRESENTED BY THE RIGHTS CERTIFICATE.)
To: Mellon Investor Services LLC
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 that may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security or other identifying number ______________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert social security or other identifying number ______________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
Dated: ______________
_________________________________
Signature
Signature Guaranteed:
Certificate
B-5
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
[ ] are
[ ] are not
being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned
[ ] did
[ ] 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 thereof.
Dated: _______________
_______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-6
EXHIBIT C
SUMMARY OF RIGHTS TO
PURCHASE PREFERRED STOCK
On August 30, 2002, the Board of Directors of Centene Corporation (the
"Company"), declared a dividend of one Right for each outstanding share of the
Company's Common Stock, $0.001 par value per share (the "Common Stock"), to
stockholders of record at the close of business on September 10, 2002 (the
"Record Date"). Each "Right" entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Junior Participating Preferred
Stock, $0.001 par value per share (the "Preferred Stock"), at a purchase price
of $170.00 in cash, subject to adjustment (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement dated as
of August 30, 2002 (the "Rights Agreement") between the Company and Mellon
Investor Services LLC, as Rights Agent.
Initially, the Rights are not exercisable and will be attached to all
certificates representing outstanding shares of Common Stock, and no separate
certificate representing the Rights (a "Rights Certificate") will be
distributed. The Rights will separate from the Common Stock, and the
distribution date will occur, upon the earlier of (i) 10 business days following
the first date of a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of 15% or more of the outstanding shares of
Common Stock or (ii) 10 business days following the commencement of a tender
offer or exchange offer that would result in a person or group beneficially
owning 15% or more of the outstanding shares of Common Stock (the "Distribution
Date"). The Distribution Date may be deferred in circumstances determined by the
Board of Directors. In addition, certain inadvertent acquisitions will not
trigger the occurrence of the Distribution Date. Until the Distribution Date (or
earlier redemption or expiration of the Rights), (i) the Rights will be
evidenced by the Common Stock certificates outstanding on the Record Date,
together with this Summary of Rights, or by new Common Stock certificates issued
after the Record Date that contain a notation incorporating the Rights Agreement
by reference, (ii) the Rights will be transferred with and only with such Common
Stock certificates; and (iii) the surrender for transfer of any certificates for
Common Stock outstanding (with or without a copy of this Summary of Rights or
such notation) will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will expire
upon the close of business on August 30, 2012 (the "Final Expiration Date")
unless earlier redeemed or exchanged as described below. As soon as practicable
after the Distribution Date, separate Rights Certificates will be mailed to
holders of record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates alone will
represent the Rights. Except as otherwise determined by the Board of Directors,
and except for shares of Common Stock issued upon exercise, conversion or
exchange of then outstanding options, convertible or exchangeable securities or
other contingent obligations to issue shares or pursuant to any employee benefit
plan or arrangement, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that any person becomes an Acquiring Person, then, promptly
following the first occurrence of such event, each holder of a Right (except as
provided below and in Section 7(e) of the Rights Agreement) shall thereafter
have the right to receive, upon exercise, that number of shares of Common Stock
of the Company (or, in certain circumstances, cash, property or other securities
of the Company) that equals the exercise price of the Right divided by 50% of
the current market price (as defined in the Rights Agreement) per share of
Common Stock at the date of the occurrence of such event. However, Rights are
not exercisable following such event until such time as the Rights are no longer
redeemable by the Company as described below. Notwithstanding any of the
foregoing, following the occurrence of such event, all Rights that are, or,
under certain circumstances specified in the Rights Agreement, were,
beneficially owned by any Acquiring Person will be null and void. The event
summarized in this paragraph is referred to as a "Section 11(a)(ii) Event."
C-1
For example, at an exercise price of $60 per Right, each Right not owned
by an Acquiring Person (or by certain related parties) following a Section
11(a)(ii) Event would entitle its holder to purchase for $60 such number of
shares of Common Stock (or other consideration, as noted above) as equals $60
divided by one-half of the current market price (as defined in the Rights
Agreement) of the Common Stock. Assuming that the Common Stock had a market
price of $30 per share at such time, the holder of each valid Right would be
entitled to purchase four shares of Common Stock, having a market value of 4 x
$30 or $120 for $60.
In the event that, at any time after any person becomes an Acquiring
Person, (i) the Company is consolidated with, or merged with and into, another
entity and the Company is not the surviving entity of such consolidation or
merger or if the Company is the surviving entity, but shares of its outstanding
Common Stock are changed or exchanged for stock or securities (of any other
person) or cash or any other property, or (ii) more than 50% of the Company's
assets or earning power is sold or transferred, each holder of a Right (except
Rights that previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, that number of shares of common stock
of the acquiring company that equals the exercise price of the Right divided by
50% of the current market price (as defined in the Rights Agreement) of such
common stock at the date of the occurrence of the event. The events summarized
in this paragraph are referred to as "Section 13 Events." A Section 11(a)(ii)
Event and Section 13 Events are collectively referred to as "Triggering Events."
For example, at an exercise price of $60 per Right, each valid Right
following a Section 13 Event would entitle its holder to purchase for $60 such
number of shares of common stock of the acquiring company as equals $60 divided
by one-half of the current market price (as defined in the Rights Agreement) of
such common stock. Assuming that such common stock had a market price of $30 per
share at such time, the holder of each valid Right would be entitled to purchase
four shares of common stock of the acquiring company, having a market value of 4
x $30 or $120 for $60.
At any time after the occurrence of a Section 11(a)(ii) Event, when no
person owns a majority of the Common Stock, the Board of Directors may exchange
the Rights (other than Rights owned by such Acquiring Person that have become
null and void), in whole or in part, at an exchange ratio of one share of Common
Stock, or one one-thousandth of a share of Preferred Stock (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the then-current market price (as defined in the Rights Agreement) of the
Preferred Stock, or (iii) upon the distribution to holders of the Preferred
Stock of evidences of indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings) or of subscription rights
or warrants (other than those referred to above). The number of Rights
associated with each share of Common Stock is also subject to adjustment in the
event of a stock split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or combinations of
the Common Stock occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Preferred Stock (other than fractions that are
integral multiples of one one-thousandth of a share of Preferred Stock) will be
issued and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Stock on the last trading date prior to the date
of exercise.
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Preferred Stock purchasable upon exercise of the Rights will not be
redeemable. Each share of Preferred Stock will be entitled to receive, when, as
and if declared by the Board of Directors, a minimum preferential quarterly
dividend payment of $10 per share or, if greater, an aggregate dividend of 1000
times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Preferred Stock will be entitled to a minimum
preferential liquidation payment of $1000 per share, plus an amount equal to
accrued and unpaid dividends, and will be entitled to an aggregate payment of
1000 times the payment made per share of Common Stock. Each share of Preferred
Stock will have 1000 votes, voting together with the Common Stock. In the event
of any merger, consolidation or other transaction in which Common Stock is
changed or exchanged, each share of Preferred Stock will be entitled to receive
1000 times the amount received per share of Common Stock. These rights are
protected by customary antidilution provisions. Because of the nature of the
Preferred Stock's dividend, liquidation and voting rights, the value of one
one-thousandth of a share of Preferred Stock purchasable upon exercise of each
Right should approximate the value of one share of Common Stock.
At any time prior to the earlier of the tenth Business Day (or such later
date as may be determined by the Board of Directors) after the Stock Acquisition
Date, the Company may redeem the Rights in whole, but not in part, at a price of
$0.001 per Right (the "Redemption Price"), payable in cash or stock. Immediately
upon the redemption of the Rights or such earlier time as established by the
Board of Directors in the resolution ordering the redemption of the Rights, the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price. The Rights may also be redeemable following
certain other circumstances specified in the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including the right to vote or to
receive dividends. Although the distribution of the Rights should not be taxable
to stockholders or to the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Any provision of the Rights Agreement, other than the redemption price,
may be amended by the Board of Directors prior to such time as the Rights are no
longer redeemable. Once the Rights are no longer redeemable, the Board of
Directors' authority to amend the Rights is limited to correcting ambiguities or
defective or inconsistent provisions in a manner that does not adversely affect
the interest of holders of Rights.
The Rights are intended to protect the stockholders of the Company in the
event of an unfair or coercive offer to acquire the Company and to provide the
Board of Directors with adequate time to evaluate unsolicited offers. The Rights
may have anti-takeover effects. The Rights will cause substantial dilution to a
person or group that attempts to acquire the Company without conditioning the
offer on a substantial number of Rights being acquired. The Rights, however,
should not affect any prospective offeror willing to make an offer at a fair
price and otherwise in the best interests of the Company and its stockholders,
as determined by a majority of the Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Current Report on Form 8-K
dated August 30, 2002. A copy of the Rights Agreement is available free of
charge from the Company. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
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