EXHIBIT 4
RIGHTS AGREEMENT
dated as of January 9, 2004
between
BIOVERIS CORPORATION
and
EQUISERVE TRUST COMPANY, N.A.
as Rights Agent
Table of Contents
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Page
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SECTION 1. Certain Definitions..............................................1
SECTION 2. Appointment of Rights Agent......................................9
SECTION 3. Issue of Rights and Right Certificates...........................9
SECTION 4. Form of Right Certificates......................................11
SECTION 5. Execution, Countersignature and Registration....................12
SECTION 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates; Uncertificated Rights.........................12
SECTION 7. Exercise of Rights; Expiration Date of Rights...................13
SECTION 8. Cancellation and Destruction of Right Certificates..............15
SECTION 9. Reservation and Availability of Preferred Shares................16
SECTION 10. Preferred Shares Record Date....................................17
SECTION 11. Adjustments in Rights After There is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations........18
SECTION 12. Certain Adjustments.............................................23
SECTION 13. Certificate of Adjustment.......................................24
SECTION 14. Additional Covenants............................................24
SECTION 15. Fractional Rights and Fractional Shares.........................24
SECTION 16. Rights of Action................................................25
SECTION 17. Transfer and Ownership of Rights and Right Certificates.........26
SECTION 18. Right Certificate Holder Not Deemed a Stockholder...............27
SECTION 19. Concerning the Rights Agent.....................................27
SECTION 20. Merger or Consolidation or Change of Rights Agent...............27
SECTION 21. Duties of Rights Agent..........................................28
SECTION 22. Change of Rights Agent..........................................30
SECTION 23. Issuance of Additional Rights and Right Certificates............31
SECTION 24. Redemption and Termination......................................32
SECTION 25. Notices.........................................................32
SECTION 26. Supplements and Amendments......................................33
SECTION 27. Successors......................................................34
SECTION 28. Benefits of Rights Agreement; Determinations and Actions by
the Board of Directors, etc.................................34
SECTION 29. Severability....................................................35
SECTION 30. Governing Law...................................................35
SECTION 31. Counterparts; Effectiveness.....................................35
SECTION 32. Descriptive Headings............................................35
Exhibits
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A Certificate of Designation
B Form of Right Certificate
C Summary of Rights
RIGHTS AGREEMENT dated as of January 9, 2004 (this
"Rights Agreement"), between BIOVERIS CORPORATION, a
Delaware corporation (the "Company"), and EQUISERVE TRUST
COMPANY, N.A., as rights agent (the "Rights Agent").
The board of directors of the Company (the "Board of Directors") has
authorized and declared a dividend of one Right (as hereinafter defined) for
each share of common stock, par value $0.001 per share, of the Company (the
"Common Stock") outstanding immediately after the Effective Time (as
hereinafter defined) (the "Record Date"), and has authorized the issuance of
one Right (as such number may hereafter be adjusted pursuant to the provisions
of this Rights Agreement) with respect to each share of Common Stock that
shall become outstanding between the Record Date and the earliest to occur of
the Distribution Date, the Redemption Date, the Exchange Date, or the
Expiration Date (as such terms are hereinafter defined); provided, however,
that Rights may be issued with respect to shares of Common Stock that shall
become outstanding after the Distribution Date and prior to the earliest of
the Redemption Date, the Exchange Date, to the extent applicable, or the
Expiration Date in accordance with the provisions of Section 23. Each Right
shall initially represent the right to purchase one one-thousandth (1/1,000th)
of a share of Series A Participating Cumulative Preferred Stock, par value
$0.001 per share, of the Company (the "Preferred Shares"), having the powers,
rights and preferences set forth in the Certificate of Designation attached as
Exhibit A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Rights
Agreement, the following terms shall have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 10% of the Common Shares then outstanding, but
shall not include
(a) any Exempt Person,
(b) any such Person that the Board of Directors determines has
become the Beneficial Owner of more than 10% of the Common Shares then
outstanding solely as the result of (i) a change in the aggregate number
of Common Shares outstanding since the last date on which such Person
acquired Beneficial Ownership of any Common Shares (provided, however,
that if a Person becomes the Beneficial Owner of more than 10% of the
Common Shares then outstanding by reason of such change in the aggregate
number of Common Shares outstanding and thereafter becomes the Beneficial
Owner of any additional Common Shares (other than pursuant to a dividend
or distribution paid or made by the Company
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on the outstanding Common Shares or pursuant to a split or subdivision of
the outstanding Common Shares), then such Person shall be deemed to be an
"Acquiring Person" unless upon becoming the Beneficial Owner of such
additional Common Shares such Person does not beneficially own more than
10% of the Common Shares then outstanding), (ii) the acquisition by such
Person or one or more of its Affiliates or Associates of Beneficial
Ownership of additional Common Shares if such acquisition was made in the
good faith belief that such acquisition would not (A) cause the
Beneficial Ownership by such Person, together with its Affiliates and
Associates, to exceed 10% of the Common Shares outstanding at the time of
such acquisition and such good faith belief was based on the good faith
reliance on information contained in publicly filed reports or documents
of the Company that are inaccurate or out-of-date or (B) otherwise cause
a Distribution Date or the adjustment provided for in Section 11(a) to
occur or (iii) the acquisition by such Person or one or more of its
Affiliates or Associates of Beneficial Ownership of additional Common
Shares if the Board of Directors determines (which determination shall be
final, conclusive and binding on such Person, the Rights Agent, the
holders of the Rights and all other Persons) that such acquisition was
made in good faith without the knowledge by such Person or one or more of
its Affiliates or Associates that such Person would thereby become an
Acquiring Person and without the intention of changing or influencing
control of the Company, including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of Common
Shares that would otherwise cause such Person to be an Acquiring Person
or (B) such Person was aware of the extent of its Beneficial Ownership of
Common Shares but had no actual knowledge of the consequences of such
Beneficial Ownership under this Rights Agreement, or
(c) any such Person that is immediately following the Effective
Time, and solely as a result of receiving Common Shares pursuant to the
Agreement and Plan of Merger (and not attributable in whole or in part to
any other acquisition of Common Shares) the Beneficial Owner of more than
10% of the Common Shares then outstanding if such Person was not an
"Acquiring Person" within the meaning of the Rights Agreement dated as of
November 6, 1996, as amended, between IGEN International, Inc. and the
Rights Agent (provided, however, that if such Person thereafter becomes
the Beneficial Owner of any additional Common Shares (other than pursuant
to a dividend or distribution paid or made by the Company on the
outstanding Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), then such Person shall be deemed to be an
"Acquiring Person" unless upon becoming the Beneficial Owner of such
additional Common Shares such Person does not beneficially own more than
10% of the Common Shares then outstanding).
Notwithstanding clause (b)(ii) or (b)(iii) above, if any Person that is not an
Acquiring Person due to such clause (b)(ii) or (b)(iii) does not reduce its
percentage of Beneficial Ownership of Common Shares to 10% or less by the
Close of Business on the tenth calendar day, or such other calendar day as
determined, in good faith, by the Board of
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Directors, after notice from the Company (the date of notice being the first
day) that such Person's Beneficial Ownership of Common Shares would make it an
Acquiring Person, such Person shall, at the end of such ten calendar day
period (or other period determined by the Board of Directors), become an
Acquiring Person (and such clause (b)(ii) or (b)(iii) shall no longer apply to
such Person). For purposes of this definition, the determination whether any
Person acted in "good faith" shall be conclusively determined by the Board of
Directors.
"Affiliate" and "Associate," when used with reference to any Person,
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 Rights Agreement.
"Agreement and Plan of Merger" shall mean the Agreement and Plan of
Merger dated as of July 24, 2003, among Roche Holding Ltd, 66 Acquisition
Corporation II, IGEN International, Inc. and the Company, as successor to IGEN
Integrated Healthcare, LLC.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," and shall be deemed to have "Beneficial
Ownership" of, any securities:
(a) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Rights Agreement;
(b) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly: (i) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (written or
oral), or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), options or warrants, or otherwise; provided,
however, that a Person shall not be deemed under this clause (i) to be
the Beneficial Owner of, or to beneficially own, or to have Beneficial
Ownership of, any 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 thereunder or cease to be subject to withdrawal by
the tendering security holder; or (ii) the right to vote pursuant to any
agreement, arrangement or understanding (written or oral); provided,
however, that a Person shall not be deemed under this clause (ii) to be
the Beneficial Owner of, or to beneficially own, any security if (A) the
agreement, arrangement or understanding (written or oral) to vote such
security arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made
generally to all holders of Common Shares pursuant to, and in accordance
with, the applicable rules and regulations under the Exchange Act and (B)
the beneficial
4
ownership of such security is not also then reportable on Schedule 13D or
13G under the Exchange Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (written or
oral) for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to clause (b)(ii) of this
definition) or disposing of any securities of the Company; provided,
however, that no Person who is an officer, director or employee of an
Exempt Person shall be deemed, solely by reason of such Person's status
or authority as such, to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of or to "beneficially own" any securities that
are "beneficially owned" (as defined herein), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other
such officer, director or employee of an Exempt Person.
Notwithstanding the foregoing, nothing contained in this definition shall
cause a Person ordinarily engaged in business as an underwriter of securities
to be deemed the "Beneficial Owner" of, or to "beneficially own," or to have
"Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment underwriting pursuant to an underwriting agreement with the
Company.
"Board of Directors" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"Book Value," when used with reference to Common Shares issued by
any Person, shall mean the amount of equity of such Person applicable to each
Common Share, determined (a) in accordance with United States generally
accepted accounting principles in effect on the date as of which such Book
Value is to be determined, (b) using all the consolidated assets and all the
consolidated liabilities of such Person on the date as of which such Book
Value is to be determined, except that no value shall be included in such
assets for goodwill arising from consummation of a Business Combination and
(c) after giving effect to (i) the exercise of all rights, options and
warrants to purchase such Common Shares (other than the Rights), and the
conversion of all securities convertible into such Common Shares, at an
exercise or conversion price, per Common Share, which is less than such Book
Value before giving effect to such exercise or conversion (whether or not
exercisability or convertibility is conditioned upon occurrence of a future
event), (ii) all dividends and other distributions on the capital stock of
such Person declared prior to the date as of which such Book Value is to be
determined and to be paid or made after such date and (iii) any other
agreement, arrangement or understanding (written or oral), or transaction or
other action contemplated prior to the date as of which such Book Value is to
be determined that would have the effect of thereafter reducing such Book
Value.
"Business Combination" shall have the meaning set forth in Section
11(c)(i).
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"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in the Borough of
Manhattan, the City of New York, are authorized or obligated by law or
executive order to close.
"Certificate of Designation" shall mean the Certificate of
Designation of Series A Participating Cumulative Preferred Stock setting forth
the powers, preferences, rights, qualifications, limitations and restrictions
of such series of preferred stock of the Company, a copy of which is attached
hereto as Exhibit A.
"Close of Business" on any given date shall mean 5:00 p.m., Eastern
time, on such date; provided, however, that, if such date is not a Business
Day, "Close of Business" shall mean 5:00 p.m., Eastern time, on the next
succeeding Business Day.
"Common Shares," when used with reference to the Company prior to a
Business Combination, shall mean the shares of Common Stock of the Company or
any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares," when used with reference to
any Person (other than the Company prior to a Business Combination), shall
mean shares of capital stock of such Person (if such Person is a corporation)
of any class or series, or units of equity interests in such Person (if such
Person is not a corporation) of any class or series, the terms of which do not
limit (as a maximum amount and not merely in proportional terms) the amount of
dividends or income payable or distributable on such class or series or the
amount of assets distributable on such class or series upon any voluntary or
involuntary liquidation, dissolution or winding up of such Person and do not
provide that such class or series is subject to redemption at the option of
such Person, or any shares of capital stock or units of equity interests into
which the foregoing shall be reclassified or changed.
"Common Stock" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Company" shall have the meaning set forth in the heading of this
Rights Agreement; provided, however, that if there is a Business Combination,
"Company" shall have the meaning set forth in Section 11(c)(iii).
The term "control" with respect to any Person shall mean the power
to direct the management and policies of such Person, directly or indirectly,
by or through stock ownership, agency or otherwise, or pursuant to or in
connection with an agreement, arrangement or understanding (written or oral)
with one or more other Persons by or through stock ownership, agency or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Distribution Date" shall have the meaning set forth in Section
3(b).
"Effective Time" shall have the meaning assigned to such term in the
Agreement and Plan of Merger.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, (or any comparable or successor law or act) as in effect on the date
in question, unless otherwise specifically provided.
"Exempt Person" shall mean (a) the Company or any Subsidiary of the
Company, (b) any employee benefit or compensation plan of the Company or any
of its Subsidiaries or any Person holding Common Shares for or pursuant to the
terms of any such employee benefit or compensation plan or for the purpose of
funding other employee benefits for employees of the Company or any of its
Subsidiaries, (c) Xxxxxxxxxxx and (d) until immediately after the Effective
Time, IGEN International, Inc. or any Affiliate or Associate thereof.
"Exchange Date" shall have the meaning set forth in Section 7(a).
"Exchange Consideration" shall have the meaning set forth in Section
11(b)(i).
"Expiration Date" shall have the meaning set forth in Section 7(a).
"Major Part," when used with reference to the assets of the Company
and its Subsidiaries as of any date, shall mean assets (a) having a fair
market value aggregating 50% or more of the total fair market value of all the
assets of the Company and its Subsidiaries (taken as a whole) as of the date
in question, (b) accounting for 50% or more of the total value (net of
depreciation and amortization) of all the assets of the Company and its
Subsidiaries (taken as a whole) as would be shown on a consolidated or
combined balance sheet of the Company and its Subsidiaries as of the date in
question, prepared in accordance with United States generally accepted
accounting principles then in effect or (c) accounting for 50% or more of the
total amount of earnings before interest, taxes, depreciation and amortization
or of the revenues of the Company and its Subsidiaries (taken as a whole) as
would be shown on, or derived from, a consolidated or combined statement of
income or net earnings of the Company and its Subsidiaries for the period of
12 months ending on the last day of the Company's monthly accounting period
next preceding the date in question, prepared in accordance with United States
generally accepted accounting principles then in effect.
"Market Value," when used with reference to Common Shares or
Preferred Shares on any date, shall mean the average of the daily closing
prices, per share, of such Common Shares or Preferred Shares, as applicable,
for the period which is the shorter of (a) 30 consecutive Trading Days ending
on the Trading Day immediately prior to the date in question or (b) the number
of consecutive Trading Days beginning on the Trading Day immediately after the
date of the first public announcement of the event requiring a determination
of the Market Value of Common Shares or Preferred Shares, as applicable, and
ending on the Trading Day immediately prior to the date in question; provided,
however, that, in the event that the Market Value of such Common Shares or
Preferred Shares, as applicable, is to be determined in whole or in part
during a period following the announcement by the issuer of such Common Shares
or Preferred Shares,
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as applicable, of any action of the type described in Section 12(a) that would
require an adjustment thereunder, then, and in each such case, the Market
Value of such Common Shares or Preferred Shares, as applicable, shall be
appropriately adjusted to reflect the effect of such action on the market
price of such Common Shares or Preferred Shares, as applicable. The closing
price for each Trading Day shall be the closing price quoted on the composite
tape for securities listed on the New York Stock Exchange, or, if such
securities are not quoted on such composite tape or if such securities are not
listed on such exchange, on the principal United States securities exchange
registered under the Exchange Act (or any recognized foreign stock exchange)
on which such securities are listed, or, if such securities are not listed on
any such exchange, the closing price quoted on the Nasdaq Stock Market or, if
such securities are not so quoted, the average of the closing bid and asked
quotations with respect to a share of such securities on any National
Association of Securities Dealers, Inc. quotations system or such other system
then in use, or if no such quotations are available, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in such securities selected by the Board of Directors, or if
on any such Trading Day no market maker is making a market in such securities,
the closing price of such securities on such Trading Day shall be deemed to be
the fair value of such securities as determined in good faith by the Board of
Directors (whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent, the holders of
Rights and all other Persons); provided, however, that for the purpose of
determining the closing price of the Preferred Shares for any Trading Day on
which there is no such market maker for the Preferred Shares the closing price
on such Trading Day shall be deemed to be the Formula Number (as defined in
the Certificate of Designation) multiplied by the closing price of the Common
Shares of the Company on such Trading Day.
"Person" shall mean an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization, firm or group or other entity and shall include any successor
(by merger or otherwise) of such entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized
fraction of a Preferred Share, unless the context otherwise requires.
"Principal Party" shall mean the Surviving Person in a Business
Combination; provided, however, that (i) if such Surviving Person is a direct
or indirect Subsidiary of any other Person, "Principal Party" shall mean the
Person which is the ultimate parent of such Surviving Person and which is not
itself a Subsidiary of another Person and (ii) in the event ultimate control
of such Surviving Person is shared by two or more Persons, "Principal Party"
shall mean that Person that is immediately controlled by such two or more
Persons.
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"Purchase Price" with respect to each Right shall mean $50.00, as
such amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references herein
to the Purchase Price shall mean the Purchase Price as in effect at the time
in question.
"Record Date" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth in Section 24(a).
"Redemption Price" with respect to each Right shall mean $0.001, as
such amount may from time to time be adjusted in accordance with Section 12.
All references herein to the Redemption Price shall mean the Redemption Price
as in effect at the time in question.
"Registered Common Shares" shall mean Common Shares that are, as of
the date of consummation of a Business Combination, and have continuously been
for the 12 months immediately preceding such date, registered under Section 12
of the Exchange Act.
"Right Certificate" shall mean a certificate evidencing a Right in
substantially the form attached hereto as Exhibit B.
"Rights" shall mean the rights to purchase Preferred Shares (or
other securities) as provided in this Rights Agreement.
"Rights Agent" shall have the meaning set forth in the heading of
this Rights Agreement.
"Rights Agreement" shall have the meaning set forth in the heading
of this Rights Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
(or any comparable or successor law or act) as in effect on the date in
question, unless otherwise specifically provided.
"Subsidiary" shall mean a Person, at least a majority of the total
outstanding voting power (being the power under ordinary circumstances (and
not merely upon the happening of a contingency) to vote in the election of
directors of such Person (if such Person is a corporation) or to participate
in the management and control of such Person (if such Person is not a
corporation)) of which is owned, directly or indirectly, by another Person.
"Summary of Rights" shall have the meaning set forth in Section
3(c).
"Surviving Person" shall mean (a) the Person which is the continuing
or surviving Person in a consolidation or merger specified in Section
11(c)(i)(A) or
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11(c)(i)(B) or (b) the Person to which the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise
transferred or disposed of in a transaction specified in Section 11(c)(i)(C);
provided, however, that, if the Major Part of the assets of the Company and
its Subsidiaries is sold, leased, exchanged or otherwise transferred or
disposed of in one or more related transactions specified in Section
11(c)(i)(C) to more than one Person, the "Surviving Person" in such case shall
mean the Person that acquired assets of the Company and/or its Subsidiaries
with the greatest fair market value in such transaction or transactions.
"Trading Day" shall mean a day on which the principal national
securities exchange or quotation system (or principal recognized foreign stock
exchange, as the case may be) on which the security in question or the Rights,
as the case may be, are listed or quoted is open for the transaction of
business or, if the securities in question or the Rights, as the case may be,
are not listed or quoted on any national securities exchange or quotation
system (or recognized foreign stock exchange, as the case may be), a Business
Day.
"Xxxxxxxxxxx" shall mean Xxxxxx X. Xxxxxxxxxxx and Xxxxxx
Xxxxxxxxxxx and their Affiliates, Associates and heirs and any trust or
foundation to which they have transferred or may transfer Common Shares.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used herein to
refer, collectively, to the Rights Agent together with any such co-Rights
Agents). The Company shall notify the Rights Agent in writing within ten (10)
days of any such appointment. In the event the Company appoints one or more
co-Rights Agents, the respective duties of the Rights Agent and any co-Rights
Agents shall be as the Company shall determine. Notwithstanding the foregoing,
the Rights Agent shall have no duty to supervise, and in no event shall be
liable for, the acts or omissions of any such co-Rights Agent.
SECTION 3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES. (a) One Right
shall be associated with each Common Share outstanding on the Record Date,
each additional Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date, the
Exchange Date, to the extent applicable, or the Expiration Date and each
additional Common Share with respect to which Rights are issued after the
Distribution Date but prior to the earliest of the Redemption Date, the
Exchange Date, to the extent applicable, or the Expiration Date as provided in
Section 23; provided, however, that, if the number of outstanding Rights are
combined into a smaller or larger number of outstanding Rights pursuant to the
terms hereof, the appropriate number of Rights (or fraction thereof)
determined pursuant to such Section shall thereafter be associated with each
such Common Share.
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(b) Until the earlier of (i) such date as the Company learns that a
Person has become an Acquiring Person and (ii) such date, if any, as may be
designated by the Board of Directors following the commencement of, or the
first public disclosure of an intent to commence, a tender or exchange offer
by any Person (other than an Exempt Person) for outstanding Common Shares, if
upon consummation of such tender or exchange offer such Person could be the
Beneficial Owner of more than 10% of the outstanding Common Shares (the Close
of Business on the earlier of such dates being the "Distribution Date"), (x)
the Rights shall, except as otherwise provided in Section 3(c), be evidenced
by the certificates for Common Shares registered in the names of the holders
thereof and not by separate Right Certificates, and (y) the Rights, including,
without limitation, the right to receive Right Certificates, will be
transferable only in connection with the transfer of Common Shares. The
Company shall notify the Rights Agent in writing as promptly as practicable
that the Distribution Date has occurred and, if the Rights Agent is not then
also the transfer agent and registrar for the Common Shares, provide the
Rights Agent with the names and addresses (as shown on the registry books of
the transfer agent for the Common Shares) of all record holders of Common
Shares as of the Distribution Date. As soon as practicable after the
Distribution Date, the Rights Agent shall send, by first-class mail, postage
prepaid, to each record holder of Common Shares as of the Distribution Date,
at the address of such holder shown on the registry books for the transfer
agent for the Common Shares, a Right Certificate evidencing one whole Right
for each Common Share (or for the number of Common Shares with which one whole
Right is then associated if the number of Rights per Common Share held by such
record holder has been adjusted in accordance with the proviso in Section
3(a)). If the number of Rights associated with each Common Share has been
adjusted in accordance with the proviso in Section 3(a), at the time of
distribution of the Right Certificates the Company may make any necessary and
appropriate rounding adjustments so that Right Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Right in accordance with Section 15(a). The Company shall notify
the Rights Agent in writing as promptly as practicable of any such
adjustments. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Right Certificates.
(c) As soon as practicable, and in any event no later than 30 days
after the Record Date, the Company shall send a copy of a Summary of Rights to
Purchase Preferred Shares, in substantially the form attached hereto as
Exhibit C (the "Summary of Rights"), by first-class mail, postage prepaid, to
each record holder of Common Shares as of the Close of Business on the Record
Date, at the address of such holder shown on the registry books of the
transfer agent. With respect to any certificate for Common Shares outstanding
as of the Record Date, until the earliest of the Distribution Date, the
Redemption Date, the Exchange Date, to the extent applicable, or the
Expiration Date, (i) the Rights associated with the Common Shares represented
by any such certificate shall be evidenced by such certificates for the Common
Shares with a copy of the Summary of Rights attached thereto and the
registered holders of the Common Shares shall also be the registered holders
of the associated Rights and (ii) the surrender for transfer of any such
certificate, even without a copy of the Summary of Rights attached thereto,
shall also
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constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(d) Certificates issued for Common Shares after the Record Date
(including, without limitation, upon transfer or exchange of outstanding
Common Shares), but prior to the earliest of the Distribution Date, the
Redemption Date, the Exchange Date, to the extent applicable, or the
Expiration Date, shall have printed on, written on or otherwise affixed to
them the following legend or such similar legend as the Company may deem
appropriate and as is not inconsistent with the provisions of this Rights
Agreement:
This certificate also evidences and entitles the holder hereof to
certain Rights (the "Rights") as set forth in a Rights Agreement dated as
of January 9, 2004 (as it may be amended from time to time, the "Rights
Agreement"), between BioVeris Corporation (the "Corporation") and
EquiServe Trust Company, N.A., as rights agent (the "Rights Agent"), the
terms of which (including, without limitation, restrictions on the
transfer of such Rights) are hereby incorporated herein by reference and
a copy of which is on file at the principal executive offices of the
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. The Corporation shall
mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES AND
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN TRANSFEREES THEREOF ARE NULL AND VOID AND ARE NO LONGER
TRANSFERABLE.
Notwithstanding this Section 3(d), neither the omission of a legend nor the
inclusion of a legend that makes reference to a rights agreement other than
this Rights Agreement shall affect the enforceability of any part of this
Rights Agreement or the rights of any holder of Rights. In the event that the
Company purchases or otherwise acquires any Common Shares after the Record Date
but prior to the Distribution Date, any Rights associated with such Common
Shares shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Shares which are no
longer outstanding; provided, however, that any such Common Shares reissued
shall again have rights associated therewith as contemplated by Section 3(a).
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the form of election to purchase and form of assignment to be printed on the
reverse side thereof) shall be in substantially the form attached hereto as
Exhibit B and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Rights
Agreement or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or
12
to conform to usage. Subject to the provisions of Sections 7, 11 and 23, the
Right Certificates, whenever issued, shall be dated as of the Distribution
Date, and on their face shall entitle the holders thereof to purchase such
number of Preferred Shares as shall be set forth therein for the Purchase
Price set forth therein, subject to adjustment from time to time as herein
provided.
SECTION 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION. (a) The
Right Certificates shall be executed on behalf of the Company by the Chairman
of the Board of Directors, any Vice Chairman of the Board of Directors, the
Chief Executive Officer, the President, the Chief Operating Officer, the
Treasurer or any Vice President (whether preceded by any additional title) of
the Company, either manually or by facsimile signature, and have affixed
thereto the Company's seal or a facsimile thereof, which shall be attested by
the Secretary, an Assistant Secretary or a Vice President (whether preceded by
any additional title, provided that such Vice President shall not have also
executed the Right Certificates) of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid or obligatory for any purpose unless
so countersigned. In case any officer of the Company who shall have signed any
of the Right Certificates shall cease to be such an officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates may nevertheless 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 Right Certificates had not ceased
to be such an officer of the Company; and any Right Certificate may be signed
on behalf of the Company by any person who, at the actual date of execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of execution of this Rights Agreement
any such person was not such an officer of the Company.
(b) Following the Distribution Date and receipt by the Rights Agent
of written notice to that effect, the Rights Agent shall keep or cause to be
kept, at its office designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced by each of the Right Certificates, the certificate
number of each of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES;
UNCERTIFICATED RIGHTS. (a) Subject to Sections 7(e) and 15, at any time after
the Distribution Date, and at or prior to the Close of Business on the
earliest of the Redemption Date, the Exchange Date, to the extent applicable,
or the Expiration Date, any Right Certificate or Right Certificates (other
than those that have become null and void) may be transferred, split-up,
combined or exchanged for another Right Certificate or Right Certificates
representing, in the aggregate, the same number of Rights as the Right
Certificate or Right Certificates surrendered then represented. Any registered
holder desiring to transfer, split-up, combine or exchange any Right
Certificate shall make such request in
13
writing delivered to the Rights Agent and shall surrender the Right
Certificate or Right Certificates to be transferred, split-up, combined or
exchanged at the office of the Rights Agent designated for such purpose;
provided, however, that neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any
Right Certificate surrendered for transfer until the registered holder shall
have (i) properly completed and signed the certificate contained in the form
of assignment set forth on the reverse side of such Right Certificate and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request. Thereupon the Rights Agent shall,
subject to Sections 7(e) and 15, countersign and deliver to the Person
entitled thereto a Right Certificate or Right 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 Right Certificates.
(b) Subject to Sections 7(e) and 15, at any time after the
Distribution Date, and at or prior to the Close of Business on the earliest of
the Redemption Date, the Exchange Date, to the extent applicable, or the
Expiration Date, upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a valid Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company shall make a
new Right Certificate of like tenor and deliver such new Right Certificate to
the Rights Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
SECTION 7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS. (a)
Subject to Section 7(e) and except as otherwise provided herein (including,
without limitation, Section 11), each Right shall entitle the registered
holder thereof, upon exercise thereof as provided herein, to purchase for the
Purchase Price, at any time after the Distribution Date and at or prior to the
earliest of (i) the Close of Business on the 10th anniversary of the date of
this Rights Agreement (the Close of Business on such date being the
"Expiration Date"), (ii) the Redemption Date or (iii) the time at which such
Right is exchanged as provided in Section 11(b) hereof (the Close of Business
on such date as to such Right being the "Exchange Date"), one one-thousandth
(1/1,000th) of a Preferred Share, subject to adjustment from time to time as
provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of
14
election to purchase set forth on the reverse side thereof duly executed, to
the Rights Agent at the office of the Rights Agent designated for such
purpose, together with payment of the Purchase Price for each one
one-thousandth (1/1,000th) of a Preferred Share as to which the Rights are
exercised, at or prior to the earliest of (i) the Expiration Date, (ii) the
Exchange Date, to the extent applicable, and (iii) the Redemption Date.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the
Preferred Shares to be purchased together with an amount equal to any
applicable transfer tax or similar governmental charge, in lawful money of the
United States of America, in cash or by certified check or money order payable
to the order of the Company, the Rights Agent shall thereupon (i) either (A)
promptly requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or (B) if the
Company shall have elected to deposit the Preferred Shares with a depositary
agent under a depositary arrangement, promptly requisition from the depositary
agent depositary receipts representing the number of one one-thousandths
(1/1,000ths) of a Preferred Share to be purchased (in which case certificates
for the Preferred Shares to be represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the Company shall direct
the depositary agent to comply with all such requests, (ii) when necessary to
comply with this Rights Agreement, promptly requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 15, (iii) promptly after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when necessary to comply
with this Rights Agreement, after receipt promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the registered
holder of any Right Certificate shall exercise fewer than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights Agent and delivered
to the registered holder of such Right Certificate or to such holder's duly
authorized assigns, subject to the provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Affiliate or Associate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Affiliate or Associate) 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
15
agreement, arrangement or understanding (written or oral) regarding the
transferred Rights or (B) a transfer which the Board of Directors has
determined is part of a plan, agreement, arrangement or understanding (written
or oral) which has as a primary purpose or effect the avoidance of this
Section 7(e), and subsequent transferees of such Persons, in each case shall
be null and void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of this Rights Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e) are
complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of any Right Certificate or any other Person as a
result of the Company's failure to make any determinations with respect to an
Acquiring Person or its Affiliate or Associate, or any transferee thereof,
hereunder. From and after the time a Person becomes an Acquiring Person, no
Right Certificate shall be issued pursuant to Section 3 or Section 6 hereof
that represents Rights that are or have become null and void pursuant to the
provisions hereof, and any Right Certificate delivered to the Rights Agent
that represents Rights that are or have become null and void pursuant to the
provisions of this paragraph shall be canceled.
(f) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to a registered holder of any Right
Certificates upon the occurrence of any purported exercise as set forth in
this Section 7 until such registered holder shall have (i) properly completed
and signed the certificate contained in the form of election to purchase set
forth on the reverse side of the Right Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall reasonably request.
(g) The Company may temporarily suspend, for a period of time not to
exceed 90 calendar days after the Distribution Date, the exercisability of the
Rights in order to prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration statement
to become effective; provided, however, that no such suspension shall remain
effective after, and the Rights shall without any further action by the
Company or any other Person become exercisable immediately upon, the
effectiveness of such registration statement. Upon any such suspension, the
Company shall promptly notify the Rights Agent in writing of such suspension
and shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended and shall issue a further public
announcement at such time as the suspension is no longer in effect (with
prompt written notice to the Rights Agent that such suspension is no longer in
effect). Notwithstanding any provision herein to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification
under the blue sky or securities laws of such jurisdiction shall not have been
obtained or the exercise of the Rights shall not be permitted under applicable
law.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up,
16
combination or exchange shall, and any Right Certificate representing Rights
that have become null and void and nontransferable pursuant to Section 7(e)
surrendered or presented for any purpose shall, if surrendered or presented to
the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered or presented to the
Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Rights Agreement.
The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any Right Certificate
purchased or acquired by the Company. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES. (a) The
Company shall cause to be reserved and kept available out of its authorized
and unissued Preferred Shares or any authorized and issued Preferred Shares
held in its treasury, free from preemptive rights or any right of first
refusal, a number of Preferred Shares sufficient to permit the exercise in
full of all outstanding Rights.
(b) If there are not sufficient Preferred Shares issued but not
outstanding or authorized but unissued to permit the exercise or exchange of
Rights in accordance with Section 11, the Company shall take all such action
as may be necessary to authorize additional Preferred Shares for issuance upon
the exercise or exchange of Rights pursuant to Section 11; provided, however,
that if the Company is unable to cause the authorization of additional
Preferred Shares, then the Company shall, or (if action by the Company's
stockholders is necessary to cause such authorization) in lieu of seeking any
such authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (i) upon surrender of a Right, pay
cash equal to the Purchase Price in lieu of issuing Preferred Shares and
requiring payment therefor, (ii) upon due exercise of a Right and payment of
the Purchase Price for each Preferred Share as to which such Right is
exercised, issue common stock or other equity securities having a value equal
to the value of the Preferred Shares that otherwise would have been issuable
pursuant to Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors, or
(iii) upon due exercise of a Right and payment of the Purchase Price for each
Preferred Share as to which such Right is exercised, distribute a combination
of Preferred Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Preferred Shares that otherwise
would have been issuable pursuant to Section 11, which value shall be
determined by a nationally recognized investment banking firm selected by the
Board of Directors. To the extent that any legal or contractual restrictions
(pursuant to agreements or instruments in effect prior to the Distribution
Date to which it is party) prevent the Company from paying the full amount
payable in accordance with the foregoing sentence, the Company shall pay to
holders of the Rights as to which such payments are being made all amounts
that are not then restricted on a pro rata basis as such payments
17
become permissible under such legal or contractual restrictions until such
payments have been paid in full.
(c) The Company shall take all such action as may be necessary to
ensure that all Preferred Shares delivered upon exercise or exchange of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights may be listed or quoted on any national securities exchange
or other quotation system, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable or exchangeable, all
Preferred Shares reserved for such issuance to be listed or quoted on such
securities exchange or other quotation system upon official notice of issuance
upon such exercise or exchange.
(e) The Company shall pay when due and payable any and all Federal
and state transfer taxes and similar charges which may be payable in respect
of the issuance or delivery of Right Certificates or of any Preferred Shares
or Common Shares or other securities upon the exercise or exchange of the
Rights. The Company shall not, however, be required to pay any transfer tax or
similar charge which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or in respect of the issuance or
delivery of certificates for the Preferred Shares or Common Shares or other
securities, as the case may be, in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or
exchange or to issue or deliver any certificates for Preferred Shares or
Common Shares or other securities, as the case may be, upon the exercise or
exchange of any Rights until any such tax or charge shall have been paid (any
such tax or charge being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the Company's
satisfaction that no such tax or charge is due.
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose name
any certificate for Preferred Shares or Common Shares or other securities is
issued upon the exercise or exchange of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares or Common
Shares or other securities, as the case may be, represented thereby on, and
such certificate shall be dated, the date on which the Right Certificate
evidencing such Rights was duly surrendered and payment of any Purchase Price
(and any applicable transfer taxes and similar charges) was made; provided,
however, that, if the date of such surrender and payment is a date upon which
the transfer books of the Company for the Preferred Shares or Common Shares or
other securities, as the case may be, are closed, such Person shall be deemed
to have become the record holder of such Preferred Shares or Common Shares or
other securities, as the case may be, on, and such certificate shall be dated,
the next succeeding Business Day on which the transfer books of the Company
for the Preferred Shares or Common Shares or other securities, as the case may
be, are open.
18
SECTION 11. ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING
PERSON; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS. (a) Upon a
Person becoming an Acquiring Person, each holder of a Right, except as
provided in Section 7(e), shall thereafter have a right to receive, upon
exercise thereof for the Purchase Price in accordance with the terms of this
Rights Agreement, such number of one one-thousandths (1/1,000ths) of a
Preferred Share as shall equal the result obtained by multiplying the Purchase
Price by a fraction, the numerator of which is the number of one
one-thousandths (1/1,000ths) of a Preferred Share for which such Right is then
exercisable and the denominator of which is 50% of the Market Value of the
Common Shares on the date on which such Person became an Acquiring Person. As
soon as practicable after a Person becomes an Acquiring Person (provided the
Company shall not have elected to make the exchange permitted by Section
11(b)(i) for all outstanding Rights), the Company shall use its best efforts
to:
(i) prepare and file a registration statement under the Securities
Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights;
(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 Securities Act)
until the Expiration Date; and
(iv) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
(b)(i) The Board of Directors may, at its option, at any time after
a Person becomes an Acquiring Person, mandatorily exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
shall have become null and void and nontransferable pursuant to Section 7(e))
for consideration per Right consisting of either (A) one-half of the
securities that would be issuable at such time upon the exercise of one Right
in accordance with Section 11(a) or, if applicable, Section 9(b)(ii) or
9(b)(iii) or (B) if applicable, the cash consideration specified in Section
9(b)(i) (the consideration issuable per Right pursuant to this Section
11(b)(i) being the "Exchange Consideration"). The Board of Directors may, at
its option, issue a number of Common Shares in lieu of each Preferred Share
equal to the Formula Number (as defined in the Certificate of Designation) if
there are sufficient Common Shares issued but not outstanding or authorized
but unissued. If the Board of Directors, at any time after a Person becomes an
Acquiring Person, elects to exchange all the Rights for Exchange Consideration
pursuant to this Section 11(b)(i) prior to the physical distribution of the
Right Certificates, the Company may distribute the Exchange Consideration in
lieu of distributing Right Certificates, in which case for purposes of this
Rights Agreement holders of Rights shall be deemed to have simultaneously
received and surrendered for
19
exchange Right Certificates on the date of such distribution. Notwithstanding
the foregoing, the Board of Directors may not effect such exchange at any time
after any Person (other than an Exempt Person), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of more than 50%
of the Common Shares then outstanding. From and after the time a Person
becomes an Acquiring Person and, subsequent thereto, a Business Combination
occurs, any Rights that theretofore have not been exchanged pursuant to this
Section 11(b) shall thereafter be exercisable only in accordance with Section
11(c) and may not be exchanged pursuant to this Section 11(b). The exchange of
the Rights by the Board of Directors may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish.
(ii) Any action of the Board of Directors ordering the exchange of
any Rights pursuant to Section 11(b)(i) shall be irrevocable and, immediately
upon the effectiveness of such action and without any further action and
without any notice, the right to exercise any such Right so exchanged pursuant
to Section 11(a) shall terminate and the only right thereafter of a holder of
such Right shall be to receive the Exchange Consideration in exchange for each
such Right held by such holder or, if the Exchange Consideration shall not
have been paid or issued, to exercise any such Right pursuant to Section
11(c)(i). The Company shall promptly notify the Rights Agent in writing of
such exchange and shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all holders of the Rights to be
exchanged at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of exchange shall state the method by which the exchange of the
Rights for the Exchange Consideration will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e)) held by each holder of Rights.
(c)(i) In the event that following the time a Person becomes an
Acquiring Person, directly or indirectly, any transactions specified in the
following clause (A), (B) or (C) of this Section 11(c)(i) (each such
transaction being a "Business Combination") shall be consummated:
(A) the Company shall consolidate with, or merge with and into, any
Person (other than Xxxxxxxxxxx);
(B) any Person (other than Xxxxxxxxxxx) shall merge with and into
the Company and, in connection with such merger, all or part of the
outstanding Common Shares shall be changed into or exchanged for capital
stock or other securities of the Company or of any other Person or cash
or any other property; or
20
(C) the Company shall sell, lease, exchange or otherwise transfer or
dispose of (or one or more of its Subsidiaries shall sell, lease,
exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any Person (other than Xxxxxxxxxxx,
the Company or any Subsidiary of the Company),
then, in each such case, proper provision shall be made so that each holder of
a Right, except as provided in Section 7(e), shall thereafter have the right
to receive, upon the exercise thereof for the Purchase Price in accordance
with the terms of this Rights Agreement, the securities specified below (or,
at such holder's option, the securities specified in Section 11(a) if the
Company is the surviving corporation in such Business Combination):
(1) if the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights
Agreement, such number of Registered Common Shares of such Principal
Party, free and clear of all liens, encumbrances or other adverse
claims, as shall have an aggregate Market Value as of the time of
exercise thereof equal to the result obtained by multiplying the
Purchase Price by two;
(2) if the Principal Party involved in such Business
Combination does not have Registered Common Shares outstanding, each
Right shall thereafter represent the right to receive, upon the
exercise thereof for the Purchase Price in accordance with the terms
of this Rights Agreement, at the election of the holder of such
Right at the time of the exercise thereof, any of:
(x) such number of Common Shares of the Surviving Person
in such Business Combination as shall have an aggregate Book
Value immediately after giving effect to such Business
Combination equal to the result obtained by multiplying the
Purchase Price by two;
(y) such number of Common Shares of the Principal Party in
such Business Combination (if the Principal Party is not also
the Surviving Person in such Business Combination) as shall
have an aggregate Book Value immediately after giving effect to
such Business Combination equal to the result obtained by
multiplying the Purchase Price by two; or
(z) if the Principal Party in such Business Combination is
an Affiliate of one or more Persons that has Registered Common
Shares outstanding, such number of Registered Common Shares of
whichever of such Affiliates of the Principal Party has
Registered
21
Common Shares with the greatest aggregate Market Value on the
date of consummation of such Business Combination as shall have
an aggregate Market Value on the date of such Business
Combination equal to the result obtained by multiplying the
Purchase Price by two.
(ii) The Company shall not consummate any Business Combination
unless each issuer of Common Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Common Shares
that have not been issued or reserved for issuance (and which shall, when
issued upon exercise thereof in accordance with this Rights Agreement, be
validly issued, fully paid and nonassessable and free of preemptive rights,
rights of first refusal or any other restrictions or limitations on the
transfer or ownership thereof) to permit the exercise in full of the Rights in
accordance with this Section 11(c) and unless prior thereto:
(A) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares
of such issuer purchasable upon exercise of the Rights, shall be
effective under the Securities Act; and
(B) the Company and each such issuer shall have:
(1) executed and delivered to the Rights Agent a
supplemental agreement providing for the assumption by such
issuer of the obligations set forth in this Section 11(c)
(including, without limitation, the obligation of such issuer
to issue Common Shares upon the exercise of Rights in
accordance with the terms set forth in Sections 11(c)(i) and
11(c)(iii)) and further providing that such issuer, at its own
expense, shall use its best efforts to:
(x) cause a registration statement under the
Securities Act on an appropriate form, with respect to the
Rights and the Common Shares of such issuer purchasable
upon exercise of the Rights, to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date;
(y) qualify or register the Rights and the Common
Shares of such issuer purchasable upon exercise of the
Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate; and
(z) approve for listing or quotation the Rights and
the Common Shares of such issuer purchasable upon exercise
of the Rights on each national securities exchange or
other quotation system on which the Common Shares were
listed or quoted prior to the consummation of the Business
Combination or, if the Common Shares
22
were not listed or quoted on a national securities
exchange or other quotation system prior to the
consummation of the Business Combination, on a national
securities exchange;
(2) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement is
a valid, binding and enforceable agreement of such issuer; and
(3) filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting
forth the number of Common Shares of such issuer that may be
purchased upon the exercise of each Right after the
consummation of such Business Combination.
(iii) After consummation of any Business Combination and subject to
the provisions of Section 11(c)(ii), (A) each issuer of Common Shares for
which Rights may be exercised as set forth in this Section 11(c) shall be
liable for, and shall assume, by virtue of such Business Combination, all the
obligations and duties of the Company pursuant to this Rights Agreement, (B)
the term "Company" shall thereafter be deemed to refer to such issuer, (C)
each such issuer shall take such steps in connection with such consummation as
may be necessary to assure that the provisions hereof (including, without
limitation, the provisions of Sections 11(a) and 11(c)) shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights, and (D) the number of
Common Shares of each such issuer thereafter receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions of Sections 11 and
12 and the provisions of Sections 7, 9 and 10 with respect to the Preferred
Shares shall apply, as nearly as reasonably may be, on like terms to any such
Common Shares.
(iv) In case the issuer of Common Shares for which Rights may be
exercised, as set forth in this Section 11(c), has a provision in any of its
authorized securities or in its certificate of incorporation or by-laws or
other instrument governing its affairs, which provision would have the effect
of (A) causing such issuer to issue (other than to holders of Rights pursuant
to this Section 11(c)), in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 11(c), Common Shares
of such issuer at less than the then Market Value per share thereof or
securities exercisable for, or convertible into, Common Shares of such issuer
at less than such then Market Value, or (B) providing for any special payment,
tax or similar provision in connection with the issuance of the Common Shares
of such issuer pursuant to the provisions of Section 11(c), then, in such
event, the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and such
issuer shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such issuer shall have
been canceled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
23
SECTION 12. CERTAIN ADJUSTMENTS. (a) To preserve the actual or
potential economic value of the Rights, if at any time after the date of this
Rights Agreement there shall be any change in the Common Shares or the
Preferred Shares, whether by reason of stock dividends, stock splits,
reclassifications, recapitalizations, mergers, consolidations, combinations or
exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other
similar changes in capitalization, any distribution or issuance of cash,
assets, evidences of indebtedness or subscription rights, options or warrants
to holders of Common Shares or Preferred Shares, as the case may be (other
than distribution of the Rights or regular quarterly cash dividends), or
otherwise, then, in each such event the Board of Directors shall make such
appropriate adjustments in the number of Preferred Shares (or the number and
kind of other securities) issuable upon exercise of each Right, the Purchase
Price and Redemption Price in effect at such time and the number of Rights
outstanding at such time (including, without limitation, the number of Rights
or fractional Rights associated with each Common Share) such that following
such adjustment such event shall not have had the effect of reducing or
limiting the benefits the holders of the Rights would have had absent such
event.
(b) If, as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Preferred Shares, thereafter the
number of such securities so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions of Sections 11 and 12 and the
provisions of Sections 7, 9 and 10 with respect to the Preferred Shares shall
apply, as nearly as reasonably may be, on like terms to any such other
securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities relating
to a Right shall evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(d) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number or kind of other securities
issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the terms that were expressed in
the initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect 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 securities upon the
occurrence of the event requiring such adjustment.
24
SECTION 13. CERTIFICATE OF ADJUSTMENT. Whenever an adjustment is
made as provided in Section 11 or 12, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and
with each transfer agent for the Preferred Shares a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares) in accordance with
Section 25, provided that the failure to prepare, file or mail such
certificate or summary shall not affect the validity of such adjustment. The
Rights Agent shall be fully authorized and protected in relying on any such
certificate and on any adjustment or statement therein contained.
SECTION 14. ADDITIONAL COVENANTS. (a) Notwithstanding any other
provision of this Rights Agreement, no adjustment to the number of Preferred
Shares (or fractions of a share) or other securities for which a Right is
exercisable or the number of Rights outstanding or associated with each Common
Share or any similar or other adjustment shall be made or be effective if such
adjustment would have the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such adjustment, including,
without limitation, the benefits under Sections 11 and 12, unless the terms of
this Rights Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the Distribution
Date, except as permitted by Section 26, it shall not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce or
otherwise limit the benefits the holders of the Rights would have had absent
such action, including, without limitation, the benefits under Sections 11 and
12. Any action taken by the Company during any period after any Person becomes
an Acquiring Person but prior to the Distribution Date shall be null and void
unless such action could be taken under this Section 14(b) from and after the
Distribution Date. Following the time a Person becomes an Acquiring Person,
the Company shall not consummate any Business Combination if (i) any issuer of
Common Shares for which Rights may be exercised after such Business
Combination in accordance with Section 11(c) shall have taken any action that
reduces or otherwise limits the benefits the holders of the Rights would have
had absent such action, including, without limitation, the benefits under
Sections 11 and 12, (ii) at the time of or immediately after such
consolidation, merger, sale, transfer or other transaction there are any
rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, (iii) prior to, simultaneously
with or immediately after such consolidation, merger, sale, transfer or other
transaction, the stockholders of the Person who constitutes, or would
constitute, the issuer for purposes of Section 11(c) hereof shall have
received a distribution of Rights previously owned by such Person or any of
its Affiliates or Associates or (iv) the form or nature of organization of the
issuer would preclude or limit the exercisability of the Rights.
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
may, but shall not be required to, issue fractions of Rights or distribute
Right
25
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company may pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 15(a), the current market
value of a whole Right shall be the closing price of the Rights (as determined
pursuant to the second sentence of the definition of Market Value contained in
Section 1) for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company may, but shall not be required to, issue fractions
of Preferred Shares upon exercise of the Rights or distribute certificates
that evidence fractional Preferred Shares. In lieu of fractional Preferred
Shares, the Company may elect to (i) utilize a depository arrangement as
provided by the terms of the Preferred Shares or (ii) in the case of a
fraction of a Preferred Share (other than one one-thousandths (1/1,000ths) of
a Preferred Share or any integral multiple thereof), pay to the registered
holders of Right Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one Preferred Share, if any are outstanding and publicly traded (or
the same fraction of the current market value of one Common Share times the
Formula Number if the Preferred Shares are not outstanding and publicly
traded). For purposes of this Section 15(b), the current market value of a
Preferred Share (or Common Share) shall be the closing price of a Preferred
Share (or Common Share) (as determined pursuant to the second sentence of the
definition of Market Value contained in Section 1) for the Trading Day
immediately prior to the date of such exercise. If, as a result of an
adjustment made pursuant to Section 12(a), the holder of any Right thereafter
exercised shall become entitled to receive any securities other than Preferred
Shares, the provisions of this Section 15(b) shall apply, as nearly as
reasonably may be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue fractions
of Common Shares upon exercise or exchange of Rights, or to distribute
certificates that evidence fractional Common Shares. In lieu of such
fractional Common Shares, the Company may pay to the registered holders of the
Right Certificates with regard to which such fractional Common Shares would
otherwise be issuable an amount in cash equal to the same fraction of the
Market Value of one Common Share as of the date on which a Person became an
Acquiring Person.
(d) Each holder of Rights by the acceptance of such Rights expressly
waives such holder's right to receive any fractional Rights or any fractional
shares upon exercise or exchange of a Right except as provided in this Section
15.
SECTION 16. RIGHTS OF ACTION. (a) All rights of action in respect of
this Rights Agreement, except the rights of action given to the Rights Agent
pursuant to Sections 19 and 21 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any
Right Certificate (or, prior to the Distribution
26
Date, of the Common Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the Common Shares) may, in such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Rights Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Rights Agreement and
shall be entitled to specific performance of the obligations of any Person
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the
reasonable costs and expenses, including, without limitation, attorneys' fees,
incurred in such action.
(c) Notwithstanding anything in this Rights 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 Rights 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, that the Company must use its reasonable
efforts to have any such order, decree, judgment or ruling lifted or otherwise
overturned as soon as possible.
SECTION 17. TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT CERTIFICATES.
(a) Prior to the Distribution Date, the Rights shall be transferable only in
connection with the transfer of the Common Shares and the Right associated
with each Common Share shall be automatically transferred upon the transfer of
each Common Share.
(b) After the Distribution Date, the Right Certificates shall be
transferable, subject to Section 7(e), only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of transfer.
(c) The Company and the Rights Agent may deem and treat the Person
in whose name a Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated certificate
for Common Shares made by anyone other than
27
the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary.
SECTION 18. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or other distributions or be deemed, for any purpose, the
holder of the Preferred Shares or of any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of
a stockholder of the Company, including, without limitation, 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, or to
receive dividends or other distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 19. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration, execution and amendment of this Rights Agreement and the
exercise and performance of its duties hereunder, including, without
limitation, any taxes or governmental charges imposed as a result of the
action taken by it hereunder (other than any taxes on the fees payable to it).
The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent
for anything done or omitted to be done by the Rights Agent in connection with
the acceptance and administration of this Rights Agreement, including, without
limitation, the costs and expenses of defending against any claim of liability
arising therefrom. The indemnity provided in this Section 19 shall survive the
termination of this Rights Agreement and the expiration of the Rights.
(b) The Rights Agent shall be authorized and protected and shall
incur no liability for or in respect of any action taken or suffered by it in
connection with the acceptance and administration of this Rights Agreement in
reliance upon any Right Certificate or certificate for the Common Shares or
for other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE 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 services,
stock transfer or corporate
28
trust business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Rights Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22. In
case, at the time such successor Rights Agent shall succeed to the agency
created by this Rights Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and, in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and, in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Rights Agreement.
SECTION 21. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following
terms and conditions, by all of which the Company and the holders of Right
Certificates (or, prior to the Distribution Date, of the Common Shares), by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization to the Rights Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring
Person) be proved or established by the Company prior to taking, refraining
from taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by
any one of the Chairman of the Board of Directors, any Vice Chairman of the
Board of Directors, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, a Vice President (whether
preceded by any additional title), the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
and complete authorization of the Rights
29
Agent for any action taken or suffered in good faith by it under the
provisions of this Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in
the Right Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be liable for nor be under any
responsibility in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right 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
Rights Agreement or in any Right Certificate; nor shall it be responsible for
any adjustment required under the provisions of Section 11 or 12 or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares or Common Shares to be issued pursuant to
this Rights Agreement or any Right Certificate or as to whether any Preferred
Shares or Common Shares will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it shall 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 Rights 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 of Directors, any Vice Chairman of the Board
of Directors, the Chief Executive Officer, the President, the Chief Operating
Officer, a Vice President (whether preceded by any additional title), the
Secretary or the Treasurer of the Company, and to apply to such officers for
instructions, in connection with its duties and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer,
employee or Affiliate 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
30
Company or its Subsidiaries may be interested, or contract with or lend money
to the Company or its Subsidiaries or otherwise act as fully and freely as
though it were not the Rights Agent under this Rights Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided that reasonable care was
exercised in the selection and continued employment thereof.
(j) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage, judgment, fine, penalty, claim,
demand, settlement, cost or expense (including, without limitation, reasonable
fees and expenses of legal counsel) which the Rights Agent may incur resulting
from its actions as Rights Agent pursuant to this Rights Agreement; provided,
however, that the Rights Agent shall not be indemnified or held harmless with
respect to any such loss, liability, damage, judgment, fine, penalty, claim,
demand, settlement, cost or expense incurred by the Rights Agent as a result
of, or arising out of, its own gross negligence, bad faith or willful
misconduct. In no case shall the Company be liable with respect to any action,
proceeding, suit or claim against the Rights Agent unless the Rights Agent
shall have notified the Company, by letter or by facsimile confirmed by
letter, of the assertion of any action, proceeding, suit or claim against the
Rights Agent, promptly after the Rights Agent shall have notice of any such
assertion of an action, proceeding, suit or claim or have been served with the
summons or other first legal process giving information as to the nature and
basis of the action, proceeding, suit or claim. The Company shall be entitled
to participate at its own expense in the defense of any such action,
proceeding, suit or claim, and, if the Company so elects, the Company shall
assume the defense of any such action, proceeding, suit or claim. In the event
that the Company assumes such defense, the Company shall not thereafter be
liable for the fees and expenses of any additional counsel retained by the
Rights Agent, so long as the Company shall retain counsel satisfactory to the
Rights Agent, in the exercise of its reasonable judgment, to defend such
action, proceeding, suit or claim. The Rights Agent agrees not to settle any
litigation in connection with any action, proceeding, suit or claim with
respect to which it may seek indemnification from the Company without the
prior written consent of the Company. The provisions of this Section 21 shall
survive the termination of this Rights Agreement, the exercise or expiration
of the Rights, and the resignation or removal of the Rights Agent.
SECTION 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and the Preferred Shares by
registered or certified mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail. In the event the
transfer agency relationship in effect between the Company and the
31
Rights Agent terminates, the Rights Agent will be deemed to resign on the
earlier of (a) 30 days from the effective date of such termination or (b) the
appointment of a successor Rights Agent. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Shares and the Preferred Shares by registered or
certified mail and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Right Certificate (who shall, with such notice, submit such holder's Right
Certificate), then the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a Person organized and doing business under the laws of the
United States or of the State of New York (or of any other state of the United
States so long as such Person is authorized to conduct a shareholder services,
stock transfer or corporate trust business in the State of New York), in good
standing, having a principal office in the State of New York, which is
authorized under such laws to exercise stock transfer or corporate trust
powers and is subject to supervision or examination by Federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000; provided, however, that
the principal transfer agent for the Common Shares shall in any event be
qualified to be the Rights Agent. 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 as soon as practicable 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 Shares and the Preferred Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 22, however, or any defect therein shall
not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
SECTION 23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Rights Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change made in accordance with the
provisions of this Rights Agreement. In addition, in connection with the
issuance or sale of Common Shares following the Distribution Date and prior to
the earliest of the Redemption Date, the Exchange Date, to the extent
applicable, and the Expiration Date, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee
32
plan or arrangement, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors,
issue Right Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no such
Right Certificate shall be required to be (but in the sole discretion of the
Board of Directors, may be) issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof and (iii) no such Right Certificate
shall be issued to an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
SECTION 24. REDEMPTION AND TERMINATION. (a) The Board of Directors
may, at its option, at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date, order the
redemption of all, but not fewer than all, the then outstanding Rights at the
Redemption Price (the date of such redemption being the "Redemption Date"),
and the Company, at its option, may pay the Redemption Price either in cash or
Common Shares or other securities of the Company deemed by the Board of
Directors, in the exercise of its sole discretion, to be at least equivalent
in value to the Redemption Price. The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights (or at such later time as the Board of Directors
may establish for the effectiveness of such redemption), and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 Business Days after the action of the
Board of Directors ordering the redemption of the Rights, the Company shall
give written 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
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Each such notice of redemption shall
state the method by which payment of the Redemption Price will be made. The
notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder of Rights receives
such notice. In any case, failure to give such notice by mail, or any defect
in the notice, to any particular holder of Rights shall not affect the
sufficiency of the notice to other holders of Rights. Neither the Company nor
any of its Affiliates or Associates may redeem, acquire or purchase for value
any Rights at any time in any manner except as specifically set forth in this
Section or in Section 11(b) or in connection with the purchase of Common
Shares prior to the Distribution Date.
SECTION 25. NOTICES. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of a Right
33
Certificate (or, prior to the Distribution Date, of the Common Shares) 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:
BioVeris Corporation
00000 Xxxxxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Secretary
Subject to the provisions of Section 22, any notice or demand authorized by
this Rights Agreement to be given or made by the Company or by the holder of a
Right Certificate (or, prior to the Distribution Date, of the Common Shares)
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:
EquiServe Trust Company, N.A.
Blue Hills Office Park
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Client Administration
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate (or,
prior to the Distribution Date, of the Common Shares) 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
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. At any time prior to the
time any Person becomes an Acquiring Person, and subject to the last sentence
of this Section 26, the Company may, and the Rights Agent shall if the Company
so directs, supplement or amend any provision of this Rights Agreement in any
manner which the Company may deem necessary or desirable (including, without
limitation, the date on which the Expiration Date or the Distribution Date
shall occur, the amount of the Purchase Price, the definition of "Acquiring
Person" or the time during which the Rights may be redeemed pursuant to
Section 24) without the approval of any holder of the Rights. From and after
the time any Person becomes an Acquiring Person, and subject to applicable
law, the Company may, and the Rights Agent shall if the Company so directs,
amend this Rights Agreement without the approval of any holders of Right
Certificates (a) to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provision of this Rights Agreement or (b) to otherwise change or
supplement any other provisions in this Rights Agreement in any matter which
the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Right Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). Any
supplement or amendment adopted during any period after any Person has become
an
34
Acquiring Person but prior to the Distribution Date shall be null and void
unless such supplement or amendment could have been adopted under the prior
sentence from and after the Distribution Date. Any supplement or amendment to
this Rights Agreement duly approved by the Company that does not amend Section
19, 20, 21 or 22 in a manner adverse to the Rights Agent shall immediately
become effective after execution by the Company, whether or not also executed
by the Rights Agent; provided, that to the extent any such supplement or
amendment amends Section 19, 20, 21 or 22 in a manner adverse to the Rights
Agent, such supplement or amendment, unless also executed by the Rights Agent,
shall be invalid and unenforceable only to the extent it amends Section 19,
20, 21 or 22 in a manner adverse to the Rights Agent and shall otherwise
immediately become effective after execution by the Company. In addition,
notwithstanding anything to the contrary contained in this Rights Agreement,
no supplement or amendment to this Rights Agreement shall be made which
reduces the Redemption Price (except as required by Section 12(a)).
SECTION 27. SUCCESSORS. All the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. BENEFITS OF RIGHTS AGREEMENT; DETERMINATIONS AND ACTIONS
BY THE BOARD OF DIRECTORS, ETC. (a) Nothing in this Rights Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the
Distribution Date, of the Common Shares) any legal or equitable right, remedy
or claim under this Rights Agreement; but this Rights Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, of the Common Shares).
(b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors shall have the exclusive power and authority
to administer this Rights Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to the Company, or as may be
necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Rights Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including, without limitation, a determination to redeem or not redeem the
Rights or to amend this Rights Agreement and a determination of whether there
is an Acquiring Person). All such actions, calculations, interpretations and
determinations that are done or made by the Board of Directors in good faith
shall be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights, as such, and all other parties. The Rights Agent shall
always be entitled to assume that the Company's Board of Directors acted in
good faith and shall be fully protected and incur no liability in reliance
thereon.
(c) Nothing contained in this Rights Agreement shall be deemed to be
in derogation of the obligation of the Board of Directors to exercise its
fiduciary duty. Without limiting the foregoing, nothing contained herein shall
be construed to suggest or
35
imply that the Board of Directors shall not be entitled to reject any tender
offer or other acquisition proposal, or to recommend that holders of Common
Shares reject any tender offer, or to take any other action (including,
without limitation, the commencement, prosecution, defense or settlement of
any litigation and the submission of additional or alternative offers or other
proposals) with respect to any tender offer or other acquisition proposal that
the Board of Directors believes is necessary or appropriate in the exercise of
such fiduciary duty.
SECTION 29. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
SECTION 30. GOVERNING LAW. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
law of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the law of such State applicable to contracts to
be made and performed entirely within such State.
SECTION 31. COUNTERPARTS; EFFECTIVENESS. This Rights Agreement may
be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. This Rights Agreement
shall be effective as of the Close of Business on the date hereof.
SECTION 32. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions of this Rights Agreement.
36
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
BIOVERIS CORPORATION,
by /s/ Xxxxxx X. Xxxxxxxxxxx
--------------------------
Name:
Title:
EQUISERVE TRUST COMPANY, N.A.,
by /s/ Xxxxxxxx Xxxxxxxx
--------------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Managing Partner
EXHIBIT A
CERTIFICATE OF THE VOTING POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING, OPTIONAL AND OTHER SPECIAL
RIGHTS AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SERIES A
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
BIOVERIS CORPORATION
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, BioVeris Corporation, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Company"), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors of the Company by Section 4.02 of the certificate of incorporation
of the Company (the "Certificate of Incorporation"), the Board of Directors of
the Company (the "Board of Directors") on December 18, 2003, adopted the
following resolution designating a new series of preferred stock as Series A
Participating Cumulative Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Certificate of
Incorporation and the provisions of Section 151(g) of the General
Corporation Law of the State of Delaware, a series of preferred stock of
the Company is hereby authorized, and the designation and number of
shares thereof, and the voting powers, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations or restrictions thereof, shall be as follows:
SECTION 1. DESIGNATION AND NUMBER OF SHARES. The shares of such
series shall be designated as "Series A Participating Cumulative Preferred
Stock" (the "Series A Preferred Stock"). The number of shares initially
constituting the Series A Preferred Stock shall be 600,000; provided, however,
that, if more than a total of 600,000 shares of Series A Preferred Stock shall
be issuable upon the exercise of Rights (the "Rights") issued pursuant to the
Rights Agreement dated as of January 9, 2004, as it may be amended from time
to time (the "Rights Agreement"), between the Company and EquiServe Trust
Company, N.A., as rights agent, the Board of Directors, pursuant to Section
151(g) of the General Corporation Law of the State of Delaware, shall direct
by resolution or resolutions that a certificate be properly executed,
acknowledged, filed and recorded, in accordance with the provisions of Section
103 thereof, providing for the total number of shares of Series A Preferred
Stock authorized to be issued to be increased (to the extent that the
Certificate of Incorporation then permits) to the largest number of whole
shares (rounded up to the nearest whole number) issuable upon exercise of such
Rights.
2
SECTION 2. DIVIDENDS OR DISTRIBUTIONS. (a) Subject to the superior
rights of the holders of shares of any other series of Preferred Stock or
other class of capital stock of the Company ranking superior to the shares of
Series A Preferred Stock with respect to dividends, the holders of shares of
the Series A Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of the assets of the Company legally
available therefor, (1) quarterly dividends payable in cash on the last day of
each fiscal quarter in each year, or such other dates as the Board of
Directors shall approve (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 a fraction of a share of
Series A Preferred Stock, in the amount of $0.05 per whole share (rounded to
the nearest cent) less the amount of all cash dividends declared on the Series
A Preferred Stock pursuant to the following clause (2) 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 (the total of which shall not,
in any event, be less than zero) and (2) dividends payable in cash on the
payment date for each cash dividend declared on the Common Stock in an amount
per whole share (rounded to the nearest cent) equal to the Formula Number (as
hereinafter defined) then in effect times the cash dividends then to be paid
on each share of Common Stock. In addition, if the Company shall pay any
dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or
distributions solely in shares of Common Stock), then, in each such case, the
Company shall simultaneously pay or make on each outstanding whole share of
Series A Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall be
1,000; provided, however, that, if at any time after the date of the Rights
Agreement, the Company shall (i) declare or pay any dividend on the Common
Stock payable in shares of Common Stock or make any distribution on the Common
Stock in shares of Common Stock, (ii) subdivide (by a stock split or
otherwise) the outstanding shares of Common Stock into a larger number of
shares of Common Stock or (iii) combine (by a reverse stock split or
otherwise) the outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then in each such event the Formula Number shall be
adjusted to a number determined by multiplying the Formula Number in effect
immediately prior to such event by a fraction, the numerator of which is the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock
that are outstanding immediately prior to such event (and rounding the result
to the nearest whole number); and provided further that, if at any time after
date of the Rights Agreement, the Company shall issue any shares of its
capital stock in a merger, reclassification, or otherwise change the
outstanding shares of Common Stock, then in each such event the Formula Number
shall be appropriately adjusted to reflect such merger, reclassification or
change so that each share of Preferred Stock continues to be the economic
equivalent of a Formula Number of shares of Common Stock prior to such merger,
reclassification or change.
3
(b) The Company shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately prior to or
at the same time it declares a dividend or distribution on the Common Stock
(other than a dividend or distribution solely in shares of Common Stock);
provided, however, that, in the event no dividend or distribution (other than
a dividend or distribution in shares of Common Stock) shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$0.05 per share on the Series A Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date. The Board of Directors may
fix a record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a dividend or distribution declared
thereon, which record date shall be the same as the record date for any
corresponding dividend or distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series A Preferred Stock; provided, however, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and on or prior to the next succeeding Quarterly Dividend Payment
Date shall begin to accrue and be cumulative from and after such Quarterly
Dividend Payment Date. Notwithstanding the foregoing, dividends on shares of
Series A Preferred Stock which are originally issued prior to the record date
for the determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend on the first Quarterly Dividend
Payment Date shall be calculated as if cumulative from and after the last day
of the fiscal quarter next preceding the date of original issuance of such
shares. 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 then
outstanding.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be declared
on the Series A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock shall not
be entitled to receive any dividends or other distributions except as provided
herein.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share of
Series A Preferred Stock held of record on each matter on which holders of the
Common Stock or stockholders generally are entitled to vote, multiplied by the
maximum number of votes
4
per share which any holder of the Common Stock or stockholders generally then
have with respect to such matter (assuming any holding period or other
requirement to vote a greater number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Company and on all other matters submitted to a vote of stockholders of
the Company.
(c) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable on any share or shares of Series A Preferred Stock
are in default, the number of directors constituting the Board of Directors
shall be increased by two. In addition to voting together with the holders of
Common Stock for the election of other directors of the Company, the holders
of record of the Series A Preferred Stock, voting separately as a class to the
exclusion of the holders of Common Stock, shall be entitled at said meeting of
stockholders (and at each subsequent annual meeting of stockholders), unless
all dividends in arrears have been paid or declared and set apart for payment
prior thereto, to vote for the election of two directors of the Company, the
holders of any Series A Preferred Stock being entitled to cast a number of
votes per share of Series A Preferred Stock equal to the Formula Number. Each
such additional director shall not be classified, 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). Until
the default in payments of all dividends which permitted the election of said
directors shall cease to exist, any director who shall have been so elected
pursuant to the next preceding sentence may be removed at any time, without
cause, only by the affirmative vote of the holders of the shares of Series A
Preferred Stock at the time entitled to cast a majority of the votes entitled
to be cast for the election of any such director at a special meeting of such
holders called for that purpose, and any vacancy thereby created may be filled
by the vote of such holders. If and when such default shall cease to exist,
the holders of the Series A Preferred Stock shall be divested of the foregoing
special voting rights, subject to revesting in the event of each and every
subsequent like default in payments of dividends. Upon the termination of the
foregoing special voting rights, the terms of office of all persons who may
have been elected directors pursuant to said special voting rights shall
forthwith terminate, and the number of directors constituting the Board of
Directors shall be reduced by two. The voting rights granted by this Section
3(c) shall be in addition to any other voting rights granted to the holders of
the Series A Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable 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 authorizing or
taking any corporate action.
5
SECTION 4. CERTAIN RESTRICTIONS. (a) Whenever quarterly dividends or
other dividends or distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Preferred Stock outstanding shall have been paid in full, the Company
shall not
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, 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 on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock; provided, however, that the Company may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in exchange
for shares of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) 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 of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under Section 4(a), purchase or otherwise
acquire such shares at such time and in such manner.
SECTION 5. LIQUIDATION RIGHTS. Upon the liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, 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 an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not
6
declared, to the date of such payment, plus an amount equal to the greater of
(x) $1,000 per whole share or (y) an aggregate amount per share equal to the
Formula Number then in effect times the aggregate amount to be distributed per
share to holders of Common Stock or (2) to the holders 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 other such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. Neither the merger or consolidation of
the Company into or with another entity nor the merger or consolidation of any
other entity into or with the Company shall be deemed to be a liquidation,
dissolution or winding up of the Company within the meaning of this Section 5.
SECTION 6. CONSOLIDATION, MERGER, ETC. In case the Company shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash or any other property, then in any such case the then
outstanding shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both
this Section 6 and Section 2 appear to apply to a transaction, this Section 6
will control.
SECTION 7. NO REDEMPTION; NO SINKING FUND. (a) The shares of Series
A Preferred Stock shall not be subject to redemption by the Company or at the
option of any holder of Series A Preferred Stock; provided, however, that,
subject to Section 4(a)(iv), the Company may purchase or otherwise acquire
outstanding shares of Series A Preferred Stock in the open market or by offer
to any holder or holders of shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to
or entitled to the operation of a retirement or sinking fund.
SECTION 8. RANKING. The Series A Preferred Stock shall rank junior
to all other series of Preferred Stock of the Company as to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, unless the Board of Directors shall specifically determine
otherwise in fixing the powers, preferences and relative, participating,
optional and other special rights of the shares of such series and the
qualifications, limitations and restrictions thereof.
SECTION 9. FRACTIONAL SHARES. The Series A Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement
in whole shares or in any fraction of a share that is one one-thousandth of a
share or any integral multiple of such fraction which shall entitle the
holder, in proportion to such holder's fractional shares, to receive
dividends, exercise voting rights, participate in distributions and to have
the benefit of all other rights of holders of Series A Preferred Stock. In
lieu of fractional shares, the Company, prior to the first issuance of a share
or a fraction of a
7
share of Series A Preferred Stock, may elect (a) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one one-
thousandths of a share or any integral multiple thereof or (b) to issue
depository receipts evidencing such authorized fraction of a share of Series A
Preferred Stock pursuant to an appropriate agreement between the Company and a
depository selected by the Company; provided, however, that such agreement
shall provide that the holders of such depository receipts shall have all the
rights, privileges and preferences to which they are entitled as holders of
the Series A Preferred Stock.
SECTION 10. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancelation become authorized but unissued shares of
Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board of Directors
pursuant to the provisions of the Certificate of Incorporation.
SECTION 11. AMENDMENT. None of the powers, preferences and relative,
participating, optional and other special rights of the Series A Preferred
Stock as provided herein shall be amended in any manner which would alter or
change the powers, preferences, rights or privileges of the holders of Series
A Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of at least 66-2/3% of the outstanding shares of Series A
Preferred Stock, voting as a separate class.
8
IN WITNESS WHEREOF, the Company has caused this Certificate to be
duly executed in its corporate name on this day of , 2004.
BIOVERIS CORPORATION,
by
-----------------------------
Name:
Title:
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ___________ Rights
NOT EXERCISABLE AFTER JANUARY 9, 2014, OR EARLIER IF REDEEMED
OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.001 PER RIGHT,
AND ARE SUBJECT TO EXCHANGE, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF ARE NULL AND VOID AND ARE NO LONGER
TRANSFERABLE.
Right Certificate
BIOVERIS CORPORATION
This certifies that _____________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of January 9, 2004, as it may be amended from
time to time (the "Rights Agreement"), between BioVeris Corporation, a
Delaware corporation (the "Company"), and EquiServe Trust Company, N.A., as
rights agent (the "Rights Agent"), unless the Rights evidenced hereby shall
have been previously redeemed or exchanged by the Company, to purchase from
the Company at any time after the Distribution Date (as defined in the Rights
Agreement) and prior to 5:00 p.m., New York City time, on the 10th anniversary
of the date of the Rights Agreement (the "Expiration Date"), at the principal
office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth (1/1,000th) of a fully paid,
nonassessable share of Series A Participating Cumulative Preferred Stock, par
value $0.001 per share, of the Company (the "Preferred Shares"), at a purchase
price per one one-thousandth (1/1,000th) of a share equal to $50.00 (the
"Purchase Price") payable in cash, upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly executed.
The Purchase Price and the number and kind of shares which may
be purchased upon exercise of each Right evidenced by this Right Certificate,
as set forth above, are the Purchase Price and the number and kind of shares
which may be so purchased as of the date of the Rights Agreement. As provided
in the Rights Agreement, the Purchase Price and the number and kind of shares
which may be purchased upon the exercise of each Right evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
2
If the Rights evidenced by this Right Certificate are at any
time beneficially owned by an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including, without limitation, any purported transferee or subsequent
holder) shall not have any right to exercise or transfer any such Right.
This Right Certificate is subject to all the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which reference to the Rights Agreement is hereby made for a full description
of the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available from the
Company upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal stock transfer or corporate
trust office of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number and kind of shares as
the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its
option at a redemption price (in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors to be at least
equivalent in value) of $0.001 per Right (which amount shall be subject to
adjustment as provided in the Rights Agreement) at any time prior to the
earlier of (i) such time as a Person becomes an Acquiring Person and (ii) the
Expiration Date.
The Company may, but shall not be required to, issue fractions
of Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash
payment as provided in the Rights Agreement for fractions of a share other
than one one-thousandth (1/1,000th) of a share or any integral multiple
thereof or to issue certificates or utilize a depository arrangement as
provided in the terms of the Rights Agreement and the Preferred Shares.
No holder of this Right Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise or exchange 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
3
the Company, including, without limitation, 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 other distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised or exchanged as provided in
accordance with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of
the Rights Agent.
4
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of:
BIOVERIS CORPORATION,
by
---------------------------
Name:
Title:
Attest:
-------------------------
Name:
Title:
Date of countersignature:
Countersigned:
EQUISERVE TRUST COMPANY, N.A.,
as Rights Agent,
by
--------------------
Authorized Signatory
5
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other shares) issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
6
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
Dated: _____________, ____
-------------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced by
this Right Certificate 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 in the Rights Agreement), (2) this Right Certificate is not
being sold, assigned or transferred 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 in the Rights Agreement) and (3) after inquiry and to the best
knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate thereof
(as such terms are defined in the Rights Agreement).
-------------------------------------
Signature
7
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _______________________________ hereby sells,
assigns and transfer unto _______________________________________________
________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________ Attorney, to
transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: ____________, ____
-------------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced by
this Right Certificate are not being sold, assigned or transferred 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 in the Rights Agreement), (2)
this Right Certificate is not being sold, assigned or transferred to or on
behalf of any such Acquiring Person, Affiliate or Associate and (3) after
inquiry and to the best knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).
-------------------------------------
Signature
8
NOTICE
The signature on the foregoing Form of Election to Purchase or Form
of Assignment must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
EXHIBIT C
RIGHTS BENEFICIALLY OWNED BY ANY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES AND CERTAIN TRANSFEREES THEREOF ARE NULL AND VOID AND ARE NO LONGER
TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A PARTICIPATING CUMULATIVE PREFERRED STOCK OF
BIOVERIS CORPORATION
On December 18, 2003, the board of directors (the "Board of
Directors") of BioVeris Corporation (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding share of common
stock, par value $0.001 per share, of the Company (the "Common Shares"). The
Rights will be issued to the holders of record of Common Shares outstanding at
the Effective Time (as defined in the Agreement and Plan of Merger dated as of
July 24, 2003, among Roche Holding Ltd, 66 Acquisition Corporation II, IGEN
International, Inc. and the Company, as successor to IGEN Integrated
Healthcare, LLC) (the date on which the Effective Time occurs being the "Record
Date"), and with respect to Common Shares issued thereafter until the
Distribution Date (as defined below). Each Right, when it becomes exercisable
as described below, will entitle the registered holder to purchase from the
Company one one-thousandth (1/1,000th) of a share of Series A Participating
Cumulative Preferred Stock, par value $0.001 per share, of the Company (the
"Preferred Shares") at a price of $50.00 (the "Purchase Price"). The
description and terms of the Rights are set forth in a Rights Agreement dated
as of January 9, 2004, as it may be amended from time to time
2
(the "Rights Agreement"), between the Company and EquiServe Trust Company,
N.A., as rights agent (the "Rights Agent").
Until the earlier of (a) such date as the Company learns that a
person or group (other than (i) the Company or any subsidiary of the Company,
(ii) any employee benefit or compensation plan of the Company or of any of its
subsidiaries and (iii) Xxxxxx X. Xxxxxxxxxxx and Xxxxxx Xxxxxxxxxxx and their
affiliates, associates and heirs and any trust or foundation to which they have
transferred to may transfer Common Shares (each such person or entity, an
"Exempt Person")), including, without limitation, any affiliate or associate of
such person or group, has acquired or obtained the right to acquire, beneficial
ownership of more than 10% of the outstanding Common Shares (such person or
group being called an "Acquiring Person"), and (b) such date, if any, as may be
designated by the Board of Directors following the commencement of, or the
first public disclosure of an intention to commence, a tender or exchange offer
for outstanding Common Shares which could result in any person or group (other
than an Exempt Person) becoming the beneficial owner of more than 10% of the
outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced by certificates for Common
Shares registered in the names of the holders thereof and not by separate Right
Certificates (as defined below). With respect to any certificate for Common
Shares outstanding as of the Record Date, until the Distribution Date, the
Rights associated with the Common Shares represented by such certificates shall
be evidenced by such certificates with a copy of this Summary of Rights
attached thereto, and the surrender for transfer of any such certificate, even
without a copy of this Summary of Rights attached thereto, shall also
constitute the transfer of the Rights
3
associated with the Common Shares represented thereby. Therefore, until the
Distribution Date, the Rights will be transferred with and only with the
Common Shares.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will thereafter
evidence the Rights.
The Rights are not exercisable until the Distribution Date and
will expire on January 9, 2014 (the "Expiration Date"), unless earlier redeemed
or exchanged by the Company as described below.
The number of Preferred Shares or other securities issuable upon
exercise of the Rights is subject to adjustment by the Board of Directors in
the event of any change in the Common Shares or the Preferred Shares, whether
by reason of stock dividends, stock splits, reclassifications,
recapitalizations, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to
holders of Common Shares or Preferred Shares or otherwise. The Purchase Price
and the number of Preferred Shares or other securities issuable upon exercise
of the Rights are subject to adjustment from time to time in the event of the
declaration of a stock dividend on the Common Shares payable in Common Shares
or a subdivision or combination of the Common Shares prior to the Distribution
Date.
The Preferred Shares are authorized to be issued in fractions
which are an integral multiple of one one-thousandth (1/1,000th) of a Preferred
Share. The Company
4
may, but is not required to, issue fractions of shares upon the exercise of
the Rights. In lieu of issuing fractional shares, the Company may elect to
make a cash payment with respect to fractions of shares other than one
one-thousandth (1/1,000th) of a Preferred Share based on the market price of
such shares on the first trading date prior to the date of exercise or utilize
a depositary arrangement as provided by the terms of the Preferred Shares.
Subject to the right of the Board of Directors to redeem or
exchange the Rights as described below, at such time as there is an Acquiring
Person, the holder of each Right will thereafter have the right to receive,
upon exercise thereof, for the Purchase Price, that number of one one-
thousandths of a Preferred Share equal to the number of Common Shares which at
the time of such transaction would have a market value of twice the Purchase
Price. Any Rights that are or were beneficially owned by an Acquiring Person
on or after the Distribution Date will become null and void and will not be
subject to the "flip-in" provision.
In the event that after a person becomes an Acquiring Person, the
Company is acquired in a merger or other business combination by a person that
is a publicly traded corporation or 50% or more of the Company's assets or
assets representing 50% or more of the Company's earning power are sold,
leased, exchanged or otherwise transferred (in one or more transactions) to a
person that is a publicly traded corporation, proper provision must be made so
that each Right will entitle its holder to purchase, for the Purchase Price,
that number of common shares of such corporation which at the time of the
transaction would have a market value of twice the Purchase Price. In the
event that after a person becomes an Acquiring Person, the Company is
5
acquired in a merger or other business combination by a person that is not a
publicly traded entity or 50% or more of the Company's assets or assets
representing 50% or more of the earning power of the Company are sold, leased,
exchanged or otherwise transferred (in one or more transactions) to a person
that is not a publicly traded entity, proper provision must be made so that
each Right will entitle its holder to purchase, for the Purchase Price, at
such holder's option, (i) that number of shares of the surviving corporation
in the transaction with such entity (or, at such holder's option, of the
surviving corporation in such acquisition, which could be the Company) which
at the time of the transaction would have a book value of twice the Purchase
Price or (ii) that number of shares of such entity which at the time of the
transaction would have a book value of twice the Purchase Price or (iii) if
such entity has an affiliate which has publicly traded common shares, that
number of common shares of such affiliate which at the time of the transaction
would have a market value of twice the Purchase Price.
ANY RIGHTS THAT ARE OR WERE, AT ANY TIME ON OR AFTER THE DATE AN
ACQUIRING PERSON BECOMES SUCH, BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (OR CERTAIN TRANSFEREES THEREOF)
WILL BECOME NULL AND VOID AND ANY HOLDER OF ANY SUCH RIGHT (INCLUDING, WITHOUT
LIMITATION, CERTAIN TRANSFEREES THEREOF) WILL BE UNABLE TO EXERCISE OR TRANSFER
ANY SUCH RIGHT.
The Rights are redeemable by the Board of Directors at a
redemption price of $0.001 per Right (the "Redemption Price") any time prior to
the earlier of (i) such time as there is an Acquiring Person and (ii) the
Expiration Date. Immediately upon the
6
effectiveness of the action of the Board of Directors electing to redeem the
Rights, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
After there is an Acquiring Person the Board of Directors may
elect to exchange each Right (other than Rights owned by an Acquiring Person)
for consideration per Right consisting of one-half of the securities that would
be issuable at such time upon the exercise of one Right pursuant to the terms
of the Rights Agreement. Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any person
(other than an Exempt Person), together with all affiliates and associates of
such person, becomes the beneficial owner of more than 50% of the Common Shares
then outstanding.
At any time prior to such time as there shall be an Acquiring
Person, the Company may, without the approval of any holder of the Rights,
supplement or amend any provision of the Rights Agreement (including, without
limitation, the date on which the Expiration Date or the Distribution Date
shall occur, the amount of the Purchase Price or the definition of "Acquiring
Person"), except that no supplement or amendment shall be made that reduces the
Redemption Price of the Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
A copy of the Rights Agreement, including, without limitation, the
terms of the Preferred Shares, will be filed with the Securities and Exchange
Commission as an
7
Exhibit to a Registration Statement on Form S-4 (Registration No. 333-109196).
A copy of the Rights Agreement is available free of charge from the Company
upon written request. 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.
