EXHIBIT 1
Eyetech Pharmaceuticals, Inc.
and
American Stock Transfer & Trust Company
as Rights Agent
RIGHTS AGREEMENT
Dated as of June 10, 2005
TABLE OF CONTENTS
Section 1. Certain Definitions....................................................................... 1
Section 2. Appointment of Rights Agent............................................................... 6
Section 3. Issuance of Rights Certificates........................................................... 6
Section 4. Form of Rights Certificates............................................................... 8
Section 5. Countersignature and Registration......................................................... 9
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.................................. 9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights............................. 10
Section 8. Cancellation and Destruction of Rights Certificates....................................... 12
Section 9. Reservation and Availability of Capital Stock............................................. 12
Section 10. Preferred Stock Record Date............................................................... 14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights............... 14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares................................ 23
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...................... 23
Section 14. Fractional Rights and Fractional Shares................................................... 27
Section 15. Rights of Action.......................................................................... 28
Section 16. Agreement of Rights Holders............................................................... 29
Section 17. Rights Certificate Holder Not Deemed a Stockholder........................................ 29
Section 18. Concerning the Rights Agent............................................................... 30
Section 19. Merger or Consolidation or Change of Name of Rights Agent................................. 30
Section 20. Duties of Rights Agent.................................................................... 31
Section 21. Change of Rights Agent.................................................................... 32
Section 22. Issuance of New Rights Certificates....................................................... 33
Section 23. Redemption and Termination................................................................ 34
Section 24. Notice of Certain Events.................................................................. 34
Section 25. Notices................................................................................... 36
Section 26. Supplements and Amendments................................................................ 36
Section 27. Successors................................................................................ 37
Section 28. Determinations and Actions by the Board of Directors, etc................................. 37
Section 29. Benefits of this Agreement................................................................ 37
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TABLE OF CONTENTS
(continued)
PAGE
Section 30. Severability.............................................................................. 38
Section 31. Governing Law............................................................................. 38
Section 32. Counterparts.............................................................................. 38
Section 33. Descriptive Headings...................................................................... 38
Section 34. Exchange.................................................................................. 38
Exhibit A. Form of Rights Certificate
Exhibit B. Form of Summary of Rights
Exhibit C Certificate of Designation
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of June 10, 2005 (the "Agreement"), between
Eyetech Pharmaceuticals, Inc., a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company, as rights agent (the "Rights Agent").
WHEREAS, effective June 8, 2005 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company (the "Board of Directors") (i) authorized
and declared a dividend of one right ("Right") for each share of Common Stock,
par value $.01 per share, of the Company (the "Company Common Stock")
outstanding at the Close of Business on June 21, 2005 (the "Record Date"), and
(ii) authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant hereto) for each share of Company Common Stock issued between
the Record Date and the earlier of the Distribution Date and the Expiration Date
and, in certain circumstances, for each share of Company Common Stock issued
after the Distribution Date but before the Expiration Date; and
WHEREAS, each Right initially represents the right to purchase, upon the
terms and subject to the conditions hereinafter set forth, one Unit of Series A
Preferred Stock;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the shares of Company Common Stock then outstanding.
Notwithstanding the foregoing:
(i) an "Acquiring Person" shall not include:
(A) the Company;
(B) any Subsidiary of the Company;
(C) any employee benefit plan maintained by the Company
or any of its Subsidiaries;
(D) any trustee or fiduciary with respect to such
employee benefit plan acting in such capacity or a trustee or
fiduciary holding shares of Company Common Stock for the purpose of
funding any such plan;
(E) any Person if:
(1) the Board of Directors determines in good
faith that such Person who would otherwise be an "Acquiring
Person" became such inadvertently (including, without
limitation, because (x) such Person was unaware that it
beneficially owned a percentage of Company Common
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Stock that would otherwise cause such Person to be an
"Acquiring Person" or (y) such Person was aware of the extent
of its Beneficial Ownership of Company Common Stock but had no
actual knowledge of the consequences of such Beneficial
Ownership under this Agreement) and without any intention of
changing or influencing control of the Company;
(2) such Person does not become the Beneficial
Owner of any additional shares of Company Common Stock after
such Person becomes aware that such Person would be an
Acquiring Person (but for the operation of this clause (F));
and
(3) such Person as promptly as practicable (as
determined in good faith by the Board of Directors) divested
or divests itself of Beneficial Ownership of a sufficient
number of shares of Company Common Stock so that such Person
would no longer be an "Acquiring Person;"
or
(F) any Person who becomes the Beneficial Owner of 15%
or more of the then-outstanding shares of Company Common Stock as a
result of the acquisition of shares of Company Common Stock directly
from the Company in one or more transactions approved by a majority
of the Board of Directors,
and
(ii) no Person shall be deemed an "Acquiring Person" as a
result of the acquisition of shares of Company Common Stock by the
Company, which, by reducing the number of shares of Company Common Stock
outstanding, increases the proportional number of shares beneficially
owned by such Person; provided, however, that if (x) a Person would become
an Acquiring Person (but for the operation of this subclause (ii)) as a
result of the acquisition of shares of Company Common Stock by the Company
and (y) after such share acquisition by the Company, such Person becomes
the Beneficial Owner of any additional shares of Company Common Stock
(other than pursuant to the grant or exercise of an option under a Company
stock option plan or pursuant to a dividend or distribution paid or made
by the Company on the outstanding shares of Company Common Stock or
pursuant to a split or subdivision of the Company Common Stock), then such
Person shall be deemed an Acquiring Person unless, upon becoming the
Beneficial Owner of such additional shares, such Person is the Beneficial
Owner of less than 15% of the outstanding shares of Company Common Stock.
Each Person identified in subclauses (A), (B), (C) and (D) of this Section
(1)(a) is individually an "Exempt Person" and collectively "Exempt Persons."
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations (the
"Exchange Act
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Regulations") under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to have "Beneficial Ownership" of and to "beneficially own", any
securities:
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of under Rule 13d-3 of the Exchange Act
Regulations as in effect on the date hereof; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own", any securities under this
subparagraph (i) as a result of an agreement, arrangement or understanding
to vote such securities if such agreement, arrangement or understanding
(A) arises solely from a revocable proxy or consent given in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the Exchange Act and the Exchange Act
Regulations, and (B) is not reportable by such Person on Schedule 13D
under the Exchange Act (or any comparable or successor report);
(ii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate of such other Person) with
which such Person (or any of such Person's Affiliates or Associates) has
any agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy or consent as described in the proviso to subparagraph (i)
of this paragraph (c)) or disposing of such securities; or
(iii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time or upon
the satisfaction of conditions) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise;
provided, however, that under this paragraph (c) a Person shall not be deemed
the "Beneficial Owner" of, to have "Beneficial Ownership" of, or to
"beneficially own", any securities
(A) tendered pursuant to a tender or exchange offer made
in accordance with Exchange Act Regulations by such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange,
(B) that may be issued upon exercise of Rights at any
time prior to the occurrence of a Triggering Event, or
(C) that may be issued upon exercise of Rights from and
after the occurrence of a Triggering Event, which Rights were
acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section
3(c) or Section 22 hereof (the "Original Rights") or pursuant
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to Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights; and
further provided, however, that:
(x) nothing in this paragraph (c) shall cause a Person engaged
in business as an underwriter of securities to be the "Beneficial Owner"
of, to have "Beneficial Ownership" of, or to "beneficially own" any
securities acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days after the
date of such acquisition,
(y) no decision reached, or action taken, by the Board of
Directors or any committee thereof shall cause any Person (or any
Affiliate or Associate of such Person) who is a member of the Board of
Directors or such committee to be deemed, for the purposes of this
Agreement, to be a Beneficial Owner of any securities beneficially owned
by any other Person (or any Affiliate or Associate of such Person) who is
a member of the Board of Directors or any committee thereof solely by
reason of such membership of the Board of Directors or any committee
thereof or participation in the decisions or actions thereof on the part
of either or both of such Persons, and
(z) 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 in this paragraph (c)), including,
without limitation, in a fiduciary capacity, by an Exempt Person or by any
other such officer, director or employee of an Exempt Person.
(d) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in the city of New York, New York are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., New
York, New York time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York, New York time, on the next
succeeding Business Day.
(f) "Common Stock" of any Person other than the Company shall mean
the capital stock of such Person with the greatest voting power, or, if such
Person shall have no capital stock, the equity securities or other equity
interest having power to control or direct the management of such Person.
(g) "Company" has the meaning given it in the first paragraph of
this Agreement, and also means a Principal Party to the extent provided in
Section 13(a).
(h) "Person" shall mean any individual, partnership, firm, limited
liability company, corporation, association, trust, unincorporated organization
or other entity, as well as any syndicate or group deemed to be a person under
Section 14(d)(2) of the Exchange Act as in effect on the date hereof.
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(i) "Preferred Stock" shall mean the Series A Preferred Stock, par
value $.01 per share, of the Company having the voting powers, designation,
preferences and relative, participating, optional or other special rights and
qualifications, limitations and restrictions described in the Certificate of
Designation set forth as Exhibit C hereto and as amended from time to time.
(j) "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of any report, or any
amendment to any report, pursuant to Section 13(d) of the Exchange Act (or any
comparable or successor report)) by the Company or an Acquiring Person that an
Acquiring Person has become such; provided, however, that if such Person is
determined not to have become an Acquiring Person pursuant to Section 1(a)
hereof, then no Stock Acquisition Date shall be deemed to have occurred.
(k) "Subsidiary" shall mean, with reference to any Person, any other
Person of which an amount of voting securities or equity interests sufficient to
elect at least a majority of the directors or equivalent governing body of such
other Person is beneficially owned, directly or indirectly, by such Person, or
any other Person otherwise controlled by such first-mentioned Person.
(l) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
In addition, the following terms are defined in the Sections
indicated below:
Defined Term Section Number
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Adjustment Shares 11(a)(ii)
common stock equivalents 11(a)(iii)
Company Common Stock Whereas clause
current market price 11(d)
Current Value 11(a)(iii)
Distribution Date 3(a)
Equivalent Preferred Stock 11(b)
Exchange Act 1(b)
Exchange Act Regulations 1(b)
Exchange Ratio 34(a)
Exempt Person 1(a)
Expiration Date 7(a)
Final Expiration Date 7(a)
Nasdaq 11(d)(i)
Original Rights 1(c)
Purchase Price 7(b)
Record Date Whereas clause
Redemption Price 23(a)
Registered Common Stock 13(b)(ii)
Registration Date 9(c)
Registration Statement 9(c)
Right Whereas clause
Rights Certificates 3(a)
Rights Dividend Declaration Date Whereas clause
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Defined Term Section Number
------------------------------- --------------
Section 11(a)(ii) Event 11(a)(ii)
Section 11(a)(iii) Trigger Date 11(a)(iii)
Section 13 Event 13(a)
Securities Act 9(c)
Spread 11(a)(iii)
Summary of Rights 3(b)
Trading Day 11(d)(i)
Unit 7(b)
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-rights agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and in
no event shall be liable for, the acts or omissions of any such co-rights agent.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
Business Day after the Stock Acquisition Date, and (ii) the Close of Business on
the tenth Business Day (or such later date as may be determined by action of a
majority of the Board of Directors prior to the occurrence of a Section
11(a)(ii) Event) after the date that a tender or exchange offer by any Person
(other than an Exempt Person) is first published or sent or given within the
meaning of Rule 14d-4(a) of the Exchange Act Regulations or any successor rule,
if upon consummation thereof such Person would be an Acquiring Person
(including, in the case of both clause (i) and (ii), any such date that is after
the date of this Agreement and prior to the issuance of the Rights) (the earlier
of (i) and (ii) above being the "Distribution Date"):
(x) the Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) by the certificates for shares of Company
Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates
for shares of Company Common Stock shall be deemed also to be certificates
for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Company Common Stock including a
transfer to the Company;
provided, however, that if a tender or exchange offer is terminated prior to the
occurrence of a Distribution Date, then no Distribution Date shall occur as a
result of such tender or exchange offer. As soon as practicable after the
Company has notified the Rights Agent of the occurrence of the Distribution
Date, the Rights Agent will send by first-class, insured, postage prepaid mail,
to each record holder of shares of Company Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in substantially the
form of Exhibit A hereto (the "Rights Certificates"),
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evidencing one Right for each share of Company Common Stock so held, subject to
adjustment as provided herein.
In the event that an adjustment in the number of Rights per share of
Company Common Stock has been made pursuant to Section 11(p) hereof, at the time
of distribution of the Rights Certificates, the Company may make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock, in
substantially the form attached hereto as Exhibit B (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of shares of Company
Common Stock as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to certificates
for Company Common Stock outstanding as of the Record Date or issued subsequent
to the Record Date but prior to the earlier of the Distribution Date and the
Expiration Date, until the Distribution Date the Rights will be evidenced by
such certificates registered in the names of the holders thereof. Until the
Distribution Date (or, if earlier, the Expiration Date), the surrender for
transfer of any such certificate for Company Common Stock outstanding as of the
Record Date shall also constitute the transfer of the Rights associated with the
Company Common Stock represented thereby.
(c) Rights shall, without any further action, be issued in respect
of all shares of Company Common Stock that are issued (including any shares of
Company Common Stock held in treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. In addition, Rights
shall be issued with respect to all shares of Company Common Stock described in
the second sentence of Section 22 hereof, subject to the provisions thereof.
Certificates representing such shares of Company Common Stock issued after the
Record Date shall bear the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between Eyetech
Pharmaceuticals, Inc. (the "Company") and American Stock Transfer & Trust
Company (the "Rights Agent") dated as of June 10, 2005, as amended from
time to time (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
office of the Rights Agent. Under certain circumstances, as set forth in
the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge promptly
after receipt of a written request therefor. UNDER CERTAIN CIRCUMSTANCES
SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY
PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT
HOLDER, MAY BECOME NULL AND VOID.
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With respect to certificates representing shares of Company Common Stock that
bear the foregoing legend, until the earlier of the Distribution Date and the
Expiration Date, the Rights associated with the shares of Company Common Stock
represented by such certificates shall be evidenced by such certificates alone
and registered holders of the shares of Company Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the shares of Company Common Stock represented by such certificates.
(d) In the event that the Company purchases or acquires any shares
of Company Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such shares of Company Common Stock shall be
deemed canceled and returned so that the Company shall not be entitled to
exercise any Rights associated with the shares of Company Common Stock that are
no longer outstanding.
(e) Notwithstanding anything to the contrary contained herein,
shares of Company Common Stock and Rights (and any securities issuable on their
exercise) may be issued and transferred by book-entry and not represented by
physical certificates. Where shares of Company Common Stock and Rights (and any
securities issuable on their exercise) are held in uncertificated form, the
Company and the Rights Agent shall cooperate in all respects to give effect to
the intent of the provisions contained herein.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment and the certificates to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or any rule or regulation thereunder or with any
rule or regulation of any stock exchange or automated quotation system on which
the Rights may from time to time be listed or to conform to usage. Subject to
the provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date (or in the case of
Rights issued with respect to Common Stock issued by the Company after the
Record Date, as of the date of issuance of such Common Stock) and on their face
shall entitle the holders thereof to purchase such number of Units of Preferred
Stock as shall be set forth therein at the price set forth therein, provided,
however, that the amount and type of securities, cash or other assets that may
be acquired upon the exercise of each Right and the Purchase Price thereof shall
be subject to adjustment as provided herein.
(b) Any Rights Certificate that represents Rights that are null and
void pursuant to Section 7(e) of this Agreement and any Rights Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owed by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an
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Acquiring Person (as such terms are defined in the Rights Agreement).
Accordingly, this Right Certificate and the Rights represented hereby are
null and void.
The provisions of Section 7(e) hereof shall be operative whether or not the
foregoing legend is contained on any such Right Certificate.
Section 5. Countersignature and Registration.
(a) Any Rights Certificates shall be executed on behalf of the
Company by its Chairman, its Chief Executive Officer, its President or one of
its Vice Presidents and shall be attested by its Secretary, Treasurer or one of
its Assistant Secretaries and may have affixed thereto the Company's seal (if
any) or a facsimile thereof. The signature of any of these officers on the
Rights Certificates may be manual or facsimile. Rights Certificates bearing the
manual or facsimile signatures of the individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
countersignature of such Rights Certificates or did not hold such offices at the
date of such Rights Certificates. No Rights Certificate shall be entitled to any
benefit under this Agreement or be valid for any purpose unless there appears on
such Rights Certificate a countersignature duly executed by the Rights Agent by
manual signature of an authorized signatory, and such countersignature upon any
Rights Certificate shall be conclusive evidence, and the only evidence, that
such Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Sections 4, 7(e) and 14 hereof, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered holder to purchase
a like number of Units of Preferred Stock (or, following a Triggering Event,
other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or former
holder, in the case of a transfer) to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the office of the Rights Agent designated for
such purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and executed
the certificate set forth in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Rights Certificate or Affiliates or
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Associates thereof as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to the provisions of Section 7(e), Section 14 and Section
34 hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(b) Subject to Section 7(e) hereof, if a Rights Certificate shall be
mutilated, lost, stolen or destroyed, upon request by the registered holder of
the Rights represented thereby and upon payment to the Company and the Rights
Agent of all reasonable expenses incident thereto, there shall be issued, in
exchange for and upon cancellation of the mutilated Rights Certificate, or in
substitution for the lost, stolen or destroyed Rights Certificate, a new Rights
Certificate, in substantially the form of the prior Rights Certificate, of like
tenor and representing the equivalent number of Rights, but, in the case of
loss, theft or destruction, only upon receipt of evidence satisfactory to the
Company and the Rights Agent of such loss, theft or destruction of such Rights
Certificate and, if requested by the Company or the Rights Agent, indemnity also
satisfactory to it.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Prior to the earlier of (i) the Close of Business on June 20,
2015 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, and (iii) the time at which the
Rights are exchanged as provided in Section 34 hereof, at which time the Rights
are deemed terminated (the earlier of (i), (ii), and (iii) being the "Expiration
Date"), the registered holder of any Rights Certificate may, subject to the
other provisions hereof, including without limitation Sections 7(e), 7(f), 9(c),
11(a) and 23 hereof, exercise the Rights evidenced thereby, in whole or in part,
at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the aggregate
Purchase Price (as hereinafter defined) for the number of Units of Preferred
Stock (or, following a Triggering Event, other securities, cash or other assets,
as the case may be) for which such surrendered Rights are then exercisable.
(b) The purchase price for each one one-hundredth of a share (each
such one one-hundredth of a share being a "Unit") of Preferred Stock upon
exercise of Rights shall be $150.00, subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof (such purchase price, as so adjusted,
being the "Purchase Price"), and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price for the Units of Preferred Stock (or, following a Triggering Event, other
securities, cash or other assets, as the case may be) to be purchased thereby as
set forth below and an amount equal to any applicable transfer tax or evidence
satisfactory to the Company of payment of such tax, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly:
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(i) (A) requisition from any transfer agent of the Preferred
Stock (or make available, if the Rights Agent is the transfer agent for
the Preferred Stock) a certificate or certificates for the number of Units
of Preferred Stock to be purchased, and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if
the Company shall have elected to deposit the total number of Units of
Preferred Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary
receipts representing interests in such number of Units of Preferred Stock
as are to be purchased (in which case certificates for the Units of
Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs
the depositary agent to comply with such request,
(ii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or, upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder,
(iii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14
hereof, and
(iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate.
In the event that the Company is obligated to issue Company Common Stock or
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such Company Common Stock, other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) may be made in cash or by certified or
bank check or money order payable to the order of the Company.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Sections 6 and 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of any Section 11(a)(ii) Event, any Rights
beneficially owned by:
(i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) which becomes a transferee after the Acquiring
Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and that receives such Rights
pursuant to either (A) a transfer (whether or
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not for consideration) from the Acquiring Person (or any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person (or any
such Associate or Affiliate) or to any Person with whom the Acquiring
Person (or such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights, shares of
Company Common Stock or the Company or (B) a transfer that the Board of
Directors has determined to be part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 7(e),
shall be null and void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of Rights or
any other Person as a result of the Company's failure to make or delay in making
any determinations with respect to an Acquiring Person or its Affiliates or
Associates or any transferee or any of them hereunder.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate to the contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise by such registered holder unless such
registered holder shall have (i) completed and executed the certificate
following the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, (ii) not indicated an
affirmative response to clause 1 or 2 thereof, and (iii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights represented by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company shall, at all times prior to the occurrence of a
Section 11(a)(ii) Event, cause to be reserved and kept available, out of its
authorized and unissued shares of preferred stock or its authorized and issued
shares of preferred stock held in its treasury, and, after the occurrence of a
Section 11(a)(ii) Event, to the extent reasonably practical, cause to be
reserved and kept available, out of its authorized but unissued shares of
preferred stock, Company Common Stock and/or other securities or its authorized
and issued shares held in its treasury, the number of shares of Preferred Stock
(and, following the
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occurrence of a Section 11(a)(ii) Event, Company Common Stock and/or other
securities) that, as provided in this Agreement, will be sufficient to permit
the exercise in full of all outstanding Rights. Upon the occurrence of any
events resulting in an increase in the aggregate number of shares of Preferred
Stock (or other equity securities of the Company) issuable upon exercise of all
outstanding Rights above the number then reserved, the Company shall make
appropriate increases in the number of shares so reserved to the extent
reasonably practicable.
(b) If the shares of Preferred Stock (and, following the occurrence
of a Section 11(a)(ii) Event, Company Common Stock and/or other securities) to
be issued and delivered upon the exercise of the Rights may be listed on any
national securities exchange or automated quotation system, the Company shall
use its best efforts to cause, from and after the time that the Rights become
exercisable, all securities reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts:
(i) as soon as practicable following the earliest date after
the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance with Section 11(a)(iii) hereof of the consideration
to be delivered by the Company upon exercise of the Rights or, if so
required by law, as soon as practicable following the Distribution Date
(such date being the "Registration Date"), to file a registration
statement on an appropriate form under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the securities that may be
acquired upon exercise of the Rights (the "Registration Statement"),
(ii) to cause the Registration Statement to become effective
as soon as practicable after such filing,
(iii) to cause the Registration Statement to continue to be
effective (and to include a prospectus complying with the requirements of
the Securities Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for the securities covered by the
Registration Statement, and (B) the Expiration Date, and
(iv) to take as soon as practicable following the Registration
Date such action as may be required to ensure that any acquisition of
securities upon exercise of the Rights complies with any applicable state
securities or "blue sky" laws.
The Company may temporarily suspend, for a period of time not to exceed 120 days
after the Registration Date, the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective.
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(d) The Company shall take all such action as may be necessary to
ensure that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities (subject to payment of the Purchase Price), duly
and validly authorized and issued and fully paid and nonassessable.
(e) The Company shall pay any documentary, stamp or other tax or
charge imposed in connection with the issuance or delivery of the Rights
Certificates or of any Preferred Stock (or any other securities or assets, as
the case may be) upon the exercise of Rights; provided, however, the Company
shall not be required to pay any such tax or charge imposed in connection with
the issuance or delivery of Units of Preferred Stock, or any certificates or
depositary receipts for such Units of Preferred Stock (or, following the
occurrence of a Triggering Event, any other securities, cash or assets, as the
case may be) to any Person other than the registered holder of the Rights
Certificates evidencing the Rights surrendered for exercise. The Company shall
not be required to issue or deliver any certificates or depositary receipts for
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
any other securities, cash or assets, as the case may be) to, or in a name other
than that of, the registered holder upon the exercise 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 Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax or charge is
due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate or depositary receipt for Units of Preferred Stock (or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Units of
Preferred Stock (or other securities) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes or charges) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
other securities, as the case may be) transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such securities
on, and such certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock (or other securities) transfer books of the Company
are open; further provided, however, that if delivery of Units of Preferred
Stock (or other securities, as the case may be) is delayed pursuant to Section
9(c) hereof, such Persons shall be deemed to have become the record holders of
such Units of Preferred Stock (or other securities) only when such Units (or
other securities) first become deliverable. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to securities for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of securities
purchasable upon exercise of each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
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(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided for herein, including this Section 11(a) and Section 7(e)
hereof, the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Preferred Stock or other
capital stock, as the case may be, issuable on such date upon exercise of the
Rights, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or other capital stock, as the case may be, that, if such Right
had been exercised immediately prior to such date and at a time when the
transfer books of the Company were still open, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs that would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) In the event any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person, other than
pursuant to any transaction set forth in Section 13(a) hereof, then,
immediately upon the occurrence of such event (a "Section 11(a)(ii)
Event"), each holder of a Right (except as otherwise provided herein,
including Section 7(e) hereof) shall thereafter have the right to receive,
upon exercise of such Right at the then-current Purchase Price in
accordance with the terms of this Agreement, in lieu of the number of
Units of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event (whether or not
such Right was then exercisable), such number of Units of Preferred Stock
as shall equal the result obtained by:
(A) multiplying the then-current Purchase Price by the
number of Units of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event (whether or not such Right was then exercisable) (such product
thereafter being, for all purposes of this Agreement, other than
Section 13 hereof, the "Purchase Price"), and
(B) dividing that product by 50% of the current market
price (determined pursuant to Section 11(d) hereof) per Unit of
Preferred Stock on the date of such first occurrence
(such Units of Preferred Stock being the "Adjustment Shares"); provided,
however, that the Purchase Price and the number of Units of Preferred
Stock so receivable upon exercise of a Right shall, following the Section
11(a)(ii) Event, be subject to further adjustment as appropriate in
accordance with this Section 11. Notwithstanding the foregoing, the Rights
shall not be exercisable until the time period during which the Rights may
be redeemed pursuant to Section 23 hereof shall have expired. From and
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after the occurrence of a Section 13(a) Event, any Rights that have not
theretofore been exercised pursuant to this Section 11(a)(ii) shall
thereafter be exercisable only in connection with Section 13 and not
pursuant to this Section 11(a)(ii).
(iii) The Company, by the vote of a majority of the Board of
Directors, may at its option substitute for a Unit of Preferred Stock
issuable upon the exercise of Rights in accordance with the foregoing
subparagraph (ii), shares of Company Common Stock or fractions thereof
having a current market price (as determined by Section 11(d) hereof)
equal to the current market price of a Unit of Preferred Stock on the date
of the Section 11(a)(ii) Event. In the event that the number of shares of
Preferred Stock (or, if the Company shall have determined to substitute
shares of Company Common Stock for Units of Preferred Stock pursuant to
the preceding sentence, Company Common Stock) that are authorized by the
Company's Amended and Restated Certificate of Incorporation, but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights, is not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall, to the extent permitted by applicable law:
(A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess being the
"Spread"), and
(B) with respect to each Right (other than Rights that
have become void pursuant to Section 7(e)), make adequate provision
to substitute, in whole or in part, for such Adjustment Shares, upon
exercise of a Right and payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) shares of
Company Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock (such other shares being "common stock
equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate
value that, when added to the value of the Units of Preferred Stock
actually issued upon exercise of such Right, shall have an aggregate
value equal to the Current Value (less the amount of any reduction
in such Purchase Price), where such aggregate value has been
determined by a majority of the Board of Directors, after receiving
advice from a nationally recognized investment banking firm;
provided, however, that if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days
following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption pursuant
to Section 23(a) expires (such 30 day period, as it may be extended
hereunder, being referred to herein as the "Substitution Period," and the
later of (x) and (y) being referred to herein as the "Section 11(a)(iii)
Trigger Date"), then, subject to Section 34 hereof, the Company shall be
obligated (to the extent permitted by applicable law) to deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, Units of Preferred Stock (to the extent available) and
then, if necessary, shares (or fractions of shares, at the discretion of
the
-16-
Board of Directors) of Company Common Stock and cash, or a combination
thereof, which Units of Preferred Stock, shares (or fractions of shares)
of Company Common Stock and/or cash shall have an aggregate value equal to
the Spread. If a majority of the Board of Directors determines in good
faith that it is likely that sufficient additional shares of Preferred
Stock or Company Common Stock could be authorized for issuance upon
exercise in full of the Rights, then the Substitution Period may be
extended to the extent necessary, but not more than 90 days after the
Section 11(a)(iii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares.
To the extent that the Company determines that some action need be
taken pursuant to the second and/or third sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights and (y)
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
pursuant to such second sentence and to determine the value thereof. If
any such suspension occurs, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at the time such suspension is
no longer in effect. For purposes of this Section 11(a)(iii), the value of
a Unit of Preferred Stock or share of Company Common Stock shall be the
current market price (as determined pursuant to Section 11(d) hereof) per
Unit of Preferred Stock or share of Company Common Stock, as the case may
be, on the Section 11(a)(iii) Trigger Date and the value of any common
stock equivalent shall be deemed to have the same value as a Unit of
Preferred Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within 45 calendar days after
such record date) shares of Preferred Stock (or shares having substantially the
same rights, privileges and preferences as shares of Preferred Stock
("Equivalent Preferred Stock")) or securities convertible into Preferred Stock
or Equivalent Preferred Stock at a price per share of Preferred Stock or per
share of Equivalent Preferred Stock (or having a conversion price per share, if
a security convertible into Preferred Stock or Equivalent Preferred Stock) less
than the current market price (as determined pursuant to Section 11(d) hereof)
per share of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying:
(i) the Purchase Price in effect immediately prior to such
record date, by
(ii) a fraction, (A) the numerator of which shall be the sum
of the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock that the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price, and (B) the denominator of which
shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional
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shares of Preferred Stock and/or Equivalent Preferred Stock to be offered
for subscription or purchase (or into which the convertible securities so
to be offered are initially convertible).
In case such subscription price may be paid by delivery of consideration, part
or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by a majority of the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. Shares of Preferred Stock
owned by or held for the account of the Company or any Subsidiary shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed, and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price that would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of shares of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend paid out of funds legally available
therefor), assets (other than a dividend payable in shares of Preferred Stock,
but including any dividend payable in stock other than Preferred Stock) or
subscription rights, options or warrants (excluding those referred to in Section
11(b) hereof), the Purchase Price to be in effect after such record date shall
be determined by multiplying:
(i) the Purchase Price in effect immediately prior to such
record date, by
(ii) a fraction, (A) the numerator of which shall be the
current market price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock on such record date, less the fair market value
(as determined in good faith by a majority of the Board of Directors,
whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes) of the cash, assets
or evidences of indebtedness so to be distributed or of such subscription
rights, options or warrants distributable in respect of a share of
Preferred Stock and (B) the denominator of which shall be such current
market price per share of Preferred Stock.
Such adjustments shall be made successively whenever such a record date is
fixed, and in the event that such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price that would have been in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" per share of Company Common Stock or Common Stock on any
date shall be deemed to be the average of the daily closing prices per
share of such shares for the 30 consecutive Trading Days immediately prior
to such date; provided, however, if prior to the expiration of such
requisite 30 Trading Day period the issuer announces either (A) a dividend
or distribution on such shares payable in such shares or securities
convertible into such shares (other than the Rights), or (B) any
subdivision, combination or reclassification of such shares, and the
ex-dividend date for such dividend or distribution
-18-
or the record date for such subdivision, combination or reclassification,
as the case may be, shall not have occurred prior to the commencement of
the requisite 30 Trading Day period, then, and in each such case, the
"current market price" shall be properly adjusted to take into account
such event. The closing price for each day shall be:
(x) if the shares are listed or admitted to trading on a
national securities exchange or interdealer quotation system, the
last sale price, regular way, or, in the case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange or interdealer
quotation system on which such shares are listed or admitted to
trading, or
(y) if such shares are not listed or admitted to trading
on any national securities exchange or interdealer quotation system,
the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported
by the Nasdaq National Market ("Nasdaq") or such other system then
in use, or
(z) if on any such date such shares are not quoted by
any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market
in such shares selected by a majority of the Board of Directors.
If on any such date no market maker is making a market in such shares, or
if such shares are not publicly held or so listed or traded, "current
market price" per share shall mean the fair value per share as determined
in good faith by a majority of the Board of Directors, whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. The term "Trading Day" shall mean, if such
shares are listed or admitted to trading on any national securities
exchange, a day on which the principal national securities exchange on
which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted,
a Business Day.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in
the same manner as set forth for Company Common Stock in clause (i) of
this Section 11(d) (other than the penultimate sentence thereof). If the
current market price per share of Preferred Stock cannot be determined in
the manner provided above or if the Preferred Stock is not publicly held
or listed or traded in a manner described in clause (i) of this Section
11(d), the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to (A) 100 (as such amount may
be appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to Company Common Stock occurring after
the date of this Agreement) multiplied by (B) the current market price per
share of Company Common Stock. If neither Company Common Stock nor
Preferred Stock is publicly held or so listed or traded, "current market
price" per share of the Preferred Stock shall mean the fair value per
share as determined in good
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faith by a majority of the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the
"current market price" of a Unit of Preferred Stock shall be equal to (A)
the current market price of one share of Preferred Stock divided by (B)
100.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments that by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-thousandth of a share of Company Common Stock or
Common Stock or other share or one one hundred-thousandth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction that
mandates such adjustment and (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section
11(a)(ii) or 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (d), (e), (g), (h), (i), (j), (k), (l) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Preferred Stock
(or other securities or amount of cash or combination thereof) that may be
acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Units of Preferred
Stock (calculated to the nearest one ten-thousandth of a Unit) obtained by (i)
multiplying (x) the number of Units of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any adjustment of
the Purchase Price, to adjust the number of Rights, in lieu of any adjustment in
the number of Units of Preferred Stock that may be acquired upon the exercise of
a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Units of Preferred Stock for which
a Right was exercisable immediately prior to such
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adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing (x) the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the (y) Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten days later than the date of
such public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be so distributed shall
be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of Units of Preferred Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per Unit and the number of Units of Preferred
Stock that were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par or stated value, if any, of the number of Units
of Preferred Stock or other shares of capital stock issuable upon exercise of
the Rights, the Company shall take any corporate action that may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue such fully paid and nonassessable number of Units of Preferred Stock or
other shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of that number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
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(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment a majority of the Board of
Directors shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities that by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock,
shall not be taxable to such holders or shall reduce the taxes payable by such
holders.
(n) The Company shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a wholly owned Subsidiary of
the Company in a transaction that complies with Section 11(o) hereof), (ii)
merge with or into any other Person (other than a wholly owned Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof), or (iii) sell
or transfer (or permit any Subsidiary to sell or transfer), in one transaction,
or a series of transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of its
wholly owned Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), if:
(x) at the time of or immediately after such consolidation,
merger, sale or transfer there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that
would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, or
(y) prior to, simultaneously with or immediately after such
consolidation, merger, sale or transfer, the Person that
constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have distributed or otherwise
transferred to its stockholders or other persons holding an equity
interest in such Person Rights previously owned by such Person or
any of its Affiliates and Associates.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23, Section 26 or Section 34 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend on
the outstanding shares of Company Common Stock payable in shares of Company
Common Stock, (ii) subdivide the outstanding shares of Company Common Stock or
(iii) combine the outstanding shares of Company Common Stock into a smaller
number of shares, the number of Rights associated with each share of Company
Common Stock then outstanding, or issued or delivered thereafter prior to the
Distribution Date or in accordance with Section 22 hereof, shall be
proportionately adjusted so that the number of
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Rights thereafter associated with each share of Company Common Stock following
any such event shall equal the result obtained by multiplying:
(x) the number of Rights associated with each share of Company
Common Stock immediately prior to such event, by
(y) a fraction, (A) the numerator of which shall be the total
number of shares of Company Common Stock outstanding immediately
prior to the occurrence of the event and (B) the denominator of
which shall be the total number of shares of Company Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Company Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Company Common Stock) in accordance with Section 25 hereof.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of such
adjustment or the force or effect of the requirement for such adjustment. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the first occurrence of a Section
11(a)(ii) Event, directly or indirectly, either:
(x) the Company shall consolidate with, or merge with and
into, any other Person (other than a wholly owned Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger,
(y) any Person (other than a wholly owned Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company
shall be the continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all or part
of the outstanding shares of Company Common Stock shall be changed into or
exchanged for stock or other securities of the Company or any other Person
or cash or any other property, or
(z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer) to any Person
or Persons (other than the Company or any of its wholly owned Subsidiaries
in one or more transactions each of which complies with Section 11(o)
hereof), in one or more transactions, assets or earning
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power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole)
(any such event being a "Section 13 Event"), then, and in each such case:
(i) each holder of a Right (other than Rights that have become
void as provided in Section 7(e) hereof) shall thereafter have the right
to receive, upon the exercise thereof at the then-current Purchase Price,
in accordance with this Agreement and in lieu of Units of Preferred Stock
or shares of Company Common Stock, such number of validly authorized and
issued, fully paid, nonassessable and freely tradeable shares of Common
Stock of the Principal Party, which shares shall not be subject to any
liens, encumbrances, rights of call or first refusal, transfer
restrictions or other adverse claims, as shall be equal to the result
obtained by:
(A) multiplying (x) the then-current Purchase Price by
(y) the number of Units of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section
13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying (x) the number
of such Units for which a Right would be exercisable hereunder but
for the occurrence of such Section 11(a)(ii) Event by (y) the
Purchase Price that would be in effect hereunder but for such first
occurrence), and
(B) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be the "Purchase Price" for
all purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of
such Section 13 Event;
provided, however, that the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) and the number of shares of
Common Stock of such Principal Party so receivable upon exercise of a
Right shall be subject to further adjustment as appropriate in accordance
with Section 11(f) hereof to reflect any events occurring in respect of
the Common Stock of such Principal Party after the occurrence of such
Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party in all respects, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of
its Common Stock in accordance with Section 9 hereof) in connection with
the consummation of any such transaction as may be necessary to assure
that the provisions of this Agreement shall
-24-
thereafter be applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the exercise of the
Rights;
(v) such Principal Party shall take such steps as may be
necessary to assure that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder
of a Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Purchase Price, such cash, shares, rights,
warrants and other property that such holder would have been entitled to
receive had it, at the time of such transaction, owned the shares of
Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise of the Rights in accordance with the terms hereof
for such cash, shares, rights, warrants and other property; and
(vi) the provisions of Section 11(a)(ii) hereof shall be of no
further effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a) hereof, (A) the Person that is
the issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer of Common Stock that has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof) and (B)
if no securities are so issued, the Person that is the other party to such
merger or consolidation, or, if there is more than one such Person, the
Person the Common Stock of which has the highest aggregate current market
price (determined pursuant to Section 11(d) hereof); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a) hereof, the Person that is the party
receiving the largest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a
party to such transaction or transactions receives the same portion of the
assets or earning power transferred pursuant to such transaction or
transactions or if the Person receiving the largest portion of the assets
or earning power cannot be determined, whichever Person the Common Stock
of which has the highest aggregate current market price (determined
pursuant to Section 11(d) hereof);
provided, however, that in any such case:
(1) if the Common Stock of such Person is not at such time and
has not been continuously over the preceding twelve-month period
registered under Section 12 of the Exchange Act ("Registered Common
Stock") or such Person is not a corporation, and such Person is a direct
or indirect Subsidiary of another Person that has Registered Common Stock
outstanding, "Principal Party" shall refer to such other Person;
-25-
(2) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is a
direct or indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person that has Registered Common Stock
outstanding, "Principal Party" shall refer to the ultimate parent entity
of such first-mentioned Person;
(3) if such Person is directly or indirectly controlled by
more than one Person, and one or more of such other Persons has Registered
Common Stock outstanding, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Registered Common Stock having the
highest aggregate current market price (determined pursuant to Section
11(d) hereof); and
(4) if such Person is directly or indirectly controlled by
more than one Person, and none of such other Persons has Registered Common
Stock outstanding, "Principal Party" shall refer to whichever ultimate
parent entity is the corporation having the greatest stockholders' equity
or, if no such ultimate parent entity is a corporation, shall refer to
whichever ultimate parent entity is the entity having the greatest net
assets.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13, and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that the Principal Party, as soon as practicable after the
date of such Section 13 Event, at its own expense, shall:
(i) (A) file on an appropriate form a registration statement
under the Securities Act with respect to the Rights and the Common Stock
that may be acquired upon exercise of the Rights, (B) use its best efforts
to cause such registration statement to become effective as soon as
practicable after filing and remain effective (and to include a prospectus
complying with the requirements of the Securities Act) until the
Expiration Date, and (C) take such action as may be required to assure
that any acquisition of such Common Stock upon the exercise of the Rights
complies with any applicable state securities or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under
the Exchange Act.
(d) In case the Principal Party that is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then current
market price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into,
-26-
Common Stock of such Principal Party at less than such then current market
price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of the Common Stock of such Principal Party pursuant to the
provisions of this Section 13; then, in such event, the Company shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, 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.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall thereafter become exercisable in the manner and for the securities
described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Rights Certificates that evidence fractional Rights. In lieu of
issuing such fractional Rights, there shall be paid to the Persons to which such
fractional Rights would otherwise be issuable an amount in cash equal to such
fraction of the market value of a whole Right. For purposes of this Section
14(a), the market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of the
Rights for any day shall be:
(x) if the Rights are listed or admitted to trading on a
national securities exchange or interdealer quotation system, the last
sale price, regular way, or, in the case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange or interdealer quotation system on which the
Rights are listed or admitted to trading, or
(y) if the Rights are not listed or admitted to trading on
any national securities exchange or interdealer quotation system, the last
quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by Nasdaq or such
other system then in use, or
(z) if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by a majority of the Board of Directors.
If on any such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by a majority
of the Board of Directors shall be
-27-
used and such determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions that are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence such fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock); provided, however, that in lieu of fractions of
shares of Preferred Stock which are integral multiples of one one-hundredth of a
share of Preferred Stock, the Company may provide for the issuance of depositary
receipts pursuant to Section 7(c) hereof. In lieu of such fractional shares of
Preferred Stock that are not integral multiples of one one-hundredth of a share,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the then current market price of a share of Preferred Stock on the
day of exercise, determined in accordance with Section 11(d) hereof.
(c) The Company shall not be required to issue fractions of shares
of Company Common Stock upon exercise of the Rights or to distribute
certificates that evidence fractional shares of Company Common Stock. In lieu of
such fractional shares of Company Common Stock, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one share of Company Common Stock. For purposes of this Section
14(c), the current market value of one share of Company Common Stock shall be
the closing price per share of Company Common Stock (as determined pursuant to
Section 11(d)(i) hereof) on the Trading Day immediately prior to the date of
such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
certificates representing shares of Company Common Stock); and any registered
holder of a Rights Certificate (or, prior to the Distribution Date, of a
certificate representing shares of Company Common Stock), without the consent of
the Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of Company Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company or any
other Person to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
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Section 16. Agreement of Rights Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Company Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Company Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Company Common Stock certificate made by
any Person other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, subject to the last
sentence of Section 7(e) hereof, shall be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or any other Person as a result of its inability to perform any of
its obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree, judgment or ruling lifted or otherwise
overturned as promptly as practicable.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of shares of Preferred
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or, except as provided in Section 24 hereof, to receive
notice of meetings or other actions affecting stockholders, or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof. This Section 17 shall also apply to holders, as
such, of Rights prior to the issuance of Rights Certificates.
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Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable out-of-pocket expenses, including
reasonable fees and disbursements of its counsel, incurred in connection with
the execution and administration of this Agreement and the exercise and
performance of its duties hereunder. The Company shall indemnify the Rights
Agent for, and hold it harmless against, any loss, liability or expense incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement or the exercise or
performance of its duties hereunder, including, without limitation, the
reasonable costs and expenses of defending against a claim of liability
hereunder.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken or omitted by it in connection
with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Preferred Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other
paper or document reasonably believed by it to be genuine and to have been
signed, executed and, where necessary, verified or acknowledged by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the corporate trust or stockholder services businesses of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any document or any further
act on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
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Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or omitting any action hereunder, such fact or matter (unless
other evidence in respect thereof be specified herein) may be deemed to be
conclusively proved and established by a certificate signed by the Chairman of
the Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company and delivered to the Rights Agent; provided, however, that so long
as any Person is an Acquiring Person hereunder, such certificate shall be signed
and delivered by a majority of the Board of Directors; and such certificate
shall be full authorization to the Rights Agent for any action taken or omitted
in good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be responsible for the validity of
this Agreement or the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or for the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or failure by the Company to
satisfy conditions contained in this Agreement or in any Rights Certificate; nor
shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Preferred Stock or any other
securities to be issued pursuant to this Agreement or any Rights Certificate or
as to whether any shares of Preferred Stock or any other securities will, when
so issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company shall perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and
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assurances as may reasonably be required by the Rights Agent for the performance
by the Rights Agent of its duties under this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and shall not be liable for any
action taken, or omitted to be taken by it in good faith in accordance with
instructions of any such officer; provided, however, that so long as any Person
is an Acquiring Person hereunder and the Rights Agent has received written
notice thereof, the Rights Agent shall accept such instructions and advice only
from a majority of the Board of Directors.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or have a pecuniary interest in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties or in the exercise of its rights hereunder
if the Rights Agent shall have reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed, not signed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' prior notice in writing mailed to the Company and to each transfer
agent for the Company Common Stock or Preferred Stock, by registered or
certified mail, and, if such resignation occurs after the Distribution Date, to
the holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' prior notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent for the Company Common Stock or Preferred
Stock, by registered or certified mail, and, if such removal occurs after the
Distribution Date, to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
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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 Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then any
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
any state of the United States in good standing, shall be authorized under
applicable laws to exercise corporate trust or stock transfer or stockholder
service powers and shall be subject to supervision or examination by federal or
state authorities and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000 or (b) an Affiliate of a
corporation described in clause (a). After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or deed;
but the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Company Common Stock or Preferred Stock, and, if such
appointment occurs after the Distribution Date, mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by a majority of the Board of Directors to reflect any
adjustment or change made in accordance with the provisions of this Agreement in
the Purchase Price or the number or kind or class of shares or other securities
or property that may be acquired under the Rights Certificates.
In addition, in connection with the issuance or sale of shares of Company
Common Stock following the Distribution Date and prior to the Expiration Date,
the Company (a) shall, with respect to shares of Company Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by a majority of the Board of Directors, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) no such Rights Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
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Section 23. Redemption and Termination.
(a) Subject to Section 30 hereof, the Company may, at its option,
by action of a majority of the Board of Directors, at any time prior to the
earlier of (i) the Close of Business on the tenth Business Day following the
Stock Acquisition Date or (ii) the Final Expiration Date, redeem all but not
less than all of the then-outstanding Rights at a redemption price of $.001 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being the "Redemption Price"). The Company may, at its option,
by action of a majority of the Board of Directors, pay the Redemption Price
either in shares of Company Common Stock (based on the current market price, as
defined in Section 11(d) hereof, of the shares of Company Common Stock at the
time of redemption) or cash or any other form of consideration deemed
appropriate by the Board of Directors and the redemption of the Rights shall be
effective at such time and on the basis and with such conditions as the Board of
Directors may in its sole discretion establish. Notwithstanding anything in this
Agreement to the contrary, the Rights shall not be exercisable until such time
as the Company's right of redemption has expired.
(b) Immediately upon the action of the Board of Directors ordering
the redemption of the Rights as provided in Section 23(a) above (or at such
later time as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held. The
Company shall promptly give notice of such redemption to the Rights Agent and
the holders of the then-outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Company Common Stock, provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Any notice that is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made.
(c) The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release announcing
the manner of redemption of the Rights in accordance with this Agreement, and
(ii) mailing payment of the Redemption Price to the registered holders of the
Rights as their last addresses as they appear on the registry books of the
Rights Agent or, prior to the Distribution date, on the registry books of the
transfer agent of the Company Common Stock, and upon such action, all
outstanding Rights and Rights Certificates shall be null and void without any
further action by the Company.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date:
(i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular periodic cash dividend
paid out of funds legally available therefor),
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(ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other securities,
rights or options,
(iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock),
(iv) to effect any consolidation or merger into or with any
other Person (other than a wholly owned Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company and/or any of its wholly owned Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), or
(v) to effect the liquidation, dissolution or winding up of
the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least 20 days prior to the record
date for determining holders of the shares of Preferred Stock for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the shares of Preferred Stock, whichever shall be the
earlier; provided, however, no such notice shall be required pursuant to this
Section 24, if any wholly owned Subsidiary of the Company effects a
consolidation or merger with or into, or effects a sale or other transfer of
assets or earnings power to, any other wholly owned Subsidiary of the Company.
(b) In case any Triggering Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 25 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) or Section 13 hereof, as the case may be, and (ii) all references in
the preceding paragraph (a) to Preferred Stock shall be deemed thereafter to
refer also to Company Common Stock and/or, if appropriate, other securities of
the Company.
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Section 25. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing (including by
facsimile, telex, telegram or cable) and mailed or sent or delivered, if to the
Company, at its address at:
Eyetech Pharmaceuticals, Inc.
0 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: 000-000-0000
Attention: Corporate Secretary
and if to the Rights Agent, at its address at:
American Stock Transfer & Trust Company
0000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Facsimile: 000- 000-0000
Attention: Xxxxxxx Xxxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Company Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date,
and subject to the other provisions of this Section 26, the Company may, in its
sole and absolute discretion, and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of certificates representing Rights or
shares of Company Common Stock. From and after the Distribution Date, subject to
the other provisions of this Section 26, the Company may, in its sole and
absolute discretion, and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order:
(i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein,
(iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereunder in any
manner that the Company may deem necessary or desirable and that shall not
adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person);
-36-
provided, however, that this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) subject to Section 30
hereof, a time period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable, or (B) any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights (other than Acquiring Person
or an Associate or Affiliate of an Acquiring Person).
Upon the delivery of a certificate from an appropriate officer of the
Company that states that the proposed supplement or amendment is in compliance
with the terms of this Section 26, the Rights Agent shall execute such
supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Company Common
Stock.
Section 27. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, the Board of Directors shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power (i) to interpret the provisions of this
Agreement, and (ii) to make all determinations deemed necessary or advisable for
the administration of this Agreement (including, without limitation, a
determination whether to redeem or not redeem the rights or to amend this
Agreement and whether any proposed amendment adversely affects the interest of
the holders of Rights Certificates. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board of Directors or any member thereof to any liability to
the holders of the Rights.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of shares of Company Common Stock).
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Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Board of Directors determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the Rights shall not then be redeemable, the right
of redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth Business Day following the date
of such determination by a majority of the Board of Directors.
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Delaware applicable to contracts executed in and
to be performed entirely in such State.
Section 32. Counterparts. This Agreement may be executed (including by
facsimile) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
Section 33. Descriptive Headings. The headings contained in this Agreement
are for descriptive purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 34. Exchange.
(a) The Company, upon resolution of a majority of the Board of
Directors, may, at its option, at any time after the first occurrence of a
Section 11(a)(ii) Event, exchange all or part of the then-outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to Section 7(e) hereof) for Units of Preferred Stock or shares of
Company Common Stock (at the election of the Board of Directors) at an exchange
ratio of one Unit of Preferred Stock or one share of Company Common Stock, as
the case may be, per Right, as appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being the "Exchange Ratio"). 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 shares
of Company Common Stock aggregating 50% or more of the shares of Company Common
Stock then outstanding. From and after the occurrence of a Section 13(a) Event,
any Rights that theretofore have not been exchanged pursuant to this Section
34(a) shall thereafter be exercisable only in accordance with Section 13 and may
not be exchanged pursuant to this Section 34(a). 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.
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(b) Immediately upon the action of the Board of Directors ordering
the exchange of any Rights pursuant to Section 34(a), and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of Units of Preferred Stock or shares of Company Common Stock, as
the case may be, equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly mail a notice of
any such exchange to all of the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice that is mailed in the manner 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
Units of Preferred Stock or shares of Company Common Stock, as the case may be,
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights that have become void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that the number of shares of Preferred Stock or
Company Common Stock, as the case may be, that are authorized by the Company's
Amended and Restated Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit any exchange of Rights as contemplated in accordance
with this Section 34, the Company, at the election of a majority of the Board of
Directors, shall take all such action as may be necessary to authorize
additional shares of Preferred Stock or Company Common Stock, as the case may
be, for issuance upon exchange of the Rights or shall make adequate provision to
substitute, in whole or in part, (1) cash, (2) other equity securities of the
Company, (3) debt securities of the Company, (4) other assets, or (5) any
combination of the foregoing, having an aggregate value for each Right to be
exchanged equal to the per share market price of one Unit of Preferred Stock or
share of Company Common Stock, as the case may be (determined pursuant to
Section 11(d) hereof) as of the date of a Section 11(a)(ii) Event, where such
aggregate value has been determined by a majority of the Board of Directors. To
the extent that the Company determines that action must be taken pursuant to the
foregoing clauses of this Section 34(c), the Board of Directors may suspend the
exercisability of the Rights for a period of up to 60 days following the date on
which the event described in Section 34(a) shall have occurred, in order to seek
any authorization of additional shares of Company Common Stock and/or to decide
the appropriate form of distribution to be made pursuant to the above provision
and to determine the value thereof.
(d) The Company shall not be required to issue fractions of Units
of Preferred Stock or fractions of shares of Company Common Stock or to
distribute certificates that evidence fractional Units or fractional shares. In
lieu of issuing fractional Units or fractional shares, the Company may pay to
the registered holders of Rights Certificates at the time such Rights are
exchanged as herein provided an amount in cash equal to the same fraction of the
current market price (determined pursuant to Section 11(d) hereof) of one Unit
of Preferred Stock or one share of Company Common Stock, as the case may be, on
the Trading Day immediately prior to the date of exchange pursuant to this
Section 34.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
EYETECH PHARMACEUTICALS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Chief Operating Officer
AMERICAN STOCK TRANSFER
AND TRUST COMPANY
By: /s/ Xxxxxx Xxxxx
-----------------------------
Name: Xxxxxx Xxxxx
Title: Vice President
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EXHIBIT A
TO RIGHTS AGREEMENT
FORM OF RIGHTS CERTIFICATE
Certificate No. ______ ______ Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS
AGREEMENT REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION OR EXCHANGE,
AT THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO,
OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
Rights Certificate
EYETECH PHARMACEUTICALS, INC.
This certifies that ____________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of June 10, 2005, as amended from time to time
(the "Rights Agreement") (terms defined therein being used herein with the same
meaning unless otherwise defined herein), between Eyetech Pharmaceuticals, Inc.,
a Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company, as Rights Agent (which term shall include any successor Rights Agent
under the Rights Agreement), to purchase from the Company at any time after the
Distribution Date and prior to the Expiration Date, at the office of the Rights
Agent, one one-hundredth of a fully paid and nonassessable share of Series A
Preferred Stock, par value $.01 per share (the "Preferred Stock"), of the
Company at the Purchase Price initially of $150.00 per one one-hundredth share
of Preferred Stock (each such one one-hundredth of a share being a "Unit"), upon
presentation and surrender of this Rights Certificate with the Election to
Purchase and related certificate duly executed. The number of Rights evidenced
by this Rights Certificate (and the number and kind of shares which may be
purchased upon exercise thereof) and the Purchase Price per Unit set forth
above, are the number and Purchase Price as of June 21, 2005, based on the
Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person or (ii) under certain
circumstances described in the Rights Agreement, a direct or indirect transferee
of any such Acquiring Person, Associate or Affiliate, including a transferee of
any person who, after such transfer, becomes an Acquiring Person or an Affiliate
or Associate of an Acquiring Person, such Rights shall become null and void and
no holder hereof
A-1
shall have any right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or receive common stock, cash or other
assets, all as provided in the Rights Agreement.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock or other securities that may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including a
Triggering Event.
This Rights Certificate is subject to all of the terms and conditions of
the Rights Agreement, which terms and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement reference is
hereby made for a full description of the rights, limitations of rights,
obligations, duties and immunities hereunder of the Rights Agent, the Company
and the holders of the Rights Certificates, which limitations of rights include
the temporary suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement
are on file at the principal office of the Rights Agent and are available from
the Rights Agent upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
and date evidencing an aggregate number of Rights equal to the aggregate number
of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company under certain circumstances at
its option at a redemption price of $.001 per Right (as such amount may be
adjusted pursuant to the Rights Agreement), at any time prior to the earlier of
the close of business on (i) the tenth business day following the Stock
Acquisition Date and (ii) the Final Expiration Date. The Rights will not be
exercisable until such time as the Company's right of redemption has expired. In
addition, subject to the provisions of the Rights Agreement, the Rights may be
exchanged, in whole or in part, for Units of Preferred Stock or shares of the
Common Stock of the Company. Immediately upon the action of the Board of
Directors of the Company authorizing any such exchange, and without any further
action or any notice, the Rights (other than Rights which are not subject to
such exchange) will terminate and the Rights will only enable holders to receive
the shares issuable upon such exchange.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may, at the
election of the Company be evidenced by
A-2
depositary receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities that may at any time be issuable on the exercise
hereof, nor shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends of subscription rights, or otherwise, until
the Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of __________ __, 20__
EYETECH PHARMACEUTICALS, INC.
By: _________________________
Name:
Title:
By: _________________________
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER
AND TRUST COMPANY
as Rights Agent
By: _____________________________
Name:
Title:
A-3
(Form of Reverse Side of Rights Certificate)
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED _______________________________ hereby sells, assigns
and transfers unto:____________________________________________________________
____________________________________ (Please print name and address of
transferee) this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_____________________ Attorney, to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Dated: __________ __, ____
__________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes in (1)
and (2) that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: __________ __, ____
__________________________
Signature
Signature Guaranteed:
A-4
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an approved eligible financial
institution acceptable to the Rights Agent in its sole discretion or by a
participant in the Securities Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the Beneficial Owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and, in the case of an
Assignment, will affix a legend to that effect on any Rights Certificates issued
in exchange for this Rights Certificate.
A-5
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights represented by the Rights Certificate.)
To: Eyetech Pharmaceuticals, Inc.
The undersigned hereby irrevocably elects to exercise ____________________
Rights represented by this Rights Certificate to purchase the Units of Preferred
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person or other property which may be issuable upon the
exercise of the Rights) and requests that certificates for such Units (or such
other securities) be issued in the name of and delivered to:
_______________________________
_______________________________
(Please print name and address)
____________________________________________________________
(Please insert social security or other identifying number).
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
_______________________________
_______________________________
(Please print name and address)
____________________________________________________________
(Please insert social security or other identifying number).
Dated: __________ __, ____
__________________________
Signature
Signature Guaranteed:
A-6
Certificate
The undersigned hereby certifies by checking the appropriate boxes in (1)
and (2) that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or an Associate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated: __________ __, ___
__________________________
Signature
Signature Guaranteed:
NOTICE
The signature in the foregoing Election to Purchase and Certificate must
conform to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
Signatures must be guaranteed by an approved eligible financial
institution acceptable to the Rights Agent in its sole discretion or by a
participant in the Securities Transfer Agents Medallion Program, the Stock
Exchange Medallion Program or the New York Stock Exchange Medallion Program.
In the event the certification set forth above is not completed, the
Company will deem the Beneficial Owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and the election to purchase
will not be honored.
A-7
EXHIBIT B
TO RIGHTS AGREEMENT
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO,
OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY
AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT), WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On June 8, 2005, the Board of Directors of Eyetech Pharmaceuticals, Inc.
(the "Company") authorized and declared a dividend of one right ("Right") for
each outstanding share of its Common Stock, par value $.01 per share (the
"Company Common Stock"), to stockholders of record at the close of business on
June 21, 2005 (the "Record Date"), and authorized the issuance of one Right for
each share of Company Common Stock issued by the Company (except as otherwise
provided in the Rights Agreement, as defined below) between the Record Date and
the Distribution Date (as defined below). Each Right entitles the registered
holder, subject to the terms of the Rights Agreement (as defined below), to
purchase from the Company one one-hundredth of a share (a "Unit") of Series A
Preferred Stock, par value $.01 per share (the "Preferred Stock"), at a purchase
price of $150.00 per Unit, subject to adjustment. The purchase price is payable
in cash or by certified or bank check or money order payable to the order of the
Company. The description and terms of the Rights are set forth in a Rights
Agreement between the Company and American Stock Transfer & Trust Company, as
Rights Agent, dated as of June 10, 2005, as amended from time to time (the
"Rights Agreement").
Copies of the Rights Agreement and the Certificate of Designation for the
Preferred Stock have been filed with the Securities and Exchange Commission as
exhibits to a Registration Statement on Form 8-A dated June 13, 2005. Copies of
the Rights Agreement and the Certificate of Designation are available free of
charge from the Company. This summary description of the Rights and the
Preferred Stock does not purport to be complete and is qualified in its entirety
by reference to all of the provisions of the Rights Agreement and the
Certificate of Designation, including the definitions therein of certain terms,
which Rights Agreement and Certificate of Designation are incorporated herein by
reference.
The Rights Agreement
Certificates; Distribution Date. Initially, the Rights will attach to all
certificates representing shares of outstanding Company Common Stock, and no
separate Rights Certificates will be distributed. Subject to the provisions of
the Rights Agreement, the Rights will separate from the Company Common Stock and
the "Distribution Date" will occur upon the earlier of (i) ten business days
following a public announcement (the date of such announcement being the
B-1
"Stock Acquisition Date") that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired or otherwise obtained beneficial
ownership of 15% or more of the then-outstanding shares of Company Common Stock,
and (ii) ten business days (or such later date as may be determined by action of
the Board of Directors prior to such time as any person becomes an Acquiring
Person) following the commencement of a tender offer or exchange offer that
would result in a person or group becoming an Acquiring Person. Until the
Distribution Date, (i) the Rights will be evidenced by Company Common Stock
certificates and will be transferred with and only with such Company Common
Stock certificates, (ii) new Company Common Stock certificates issued after the
Record Date (also including shares distributed from Treasury) will contain a
notation incorporating the Rights Agreement by reference and (iii) the surrender
for transfer of any certificates representing outstanding Company Common Stock
will also constitute the transfer of the Rights associated with the Company
Common Stock represented by such certificates.
An "Acquiring Person" does not include certain persons specified in the
Rights Agreement.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on June 20, 2015 unless earlier redeemed or exchanged
by the Company as described below. Under certain circumstances the
exercisability of the Rights may be suspended. In no event, however, will the
Rights be exercisable prior to the expiration of the period in which the Rights
may be redeemed as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date (and to each initial holder of certain shares
of Company Common Stock issued after the Distribution Date) and, thereafter, the
separate Rights Certificates alone will represent the Rights.
Flip-In. If a person becomes an Acquiring Person, then each holder of a
Right will thereafter have the right to receive, upon exercise, Units of
Preferred Stock or, at the option of the Company, shares of Company Common Stock
(or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right. The
exercise price is the purchase price multiplied by the number of Units of
Preferred Stock issuable upon exercise of a Right prior to the event described
in this paragraph. Notwithstanding any of the foregoing, following the
occurrence of the event set forth in this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person or any affiliate or associate thereof
(or certain transferees of any thereof) will be null and void.
Flip-Over. If, at any time following the date that any person becomes an
Acquiring Person, (i) the Company is acquired in a merger or other business
combination transaction and the Company is not the surviving corporation, (ii)
any person merges with the Company and all or part of the Company Common Stock
is converted or exchanged for securities, cash or property of the Company or any
other person or (iii) 50% or more of the Company's assets or earning power is
sold or transferred, each holder of a Right (except Rights that previously have
been
B-2
voided as described above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the exercise price of the Right.
Redemption. At any time until ten business days following the Stock
Acquisition Date, the Board of Directors may redeem the Rights in whole, but not
in part, at a price of $.001 per Right (subject to adjustment in certain events)
payable, at the election of the Board of Directors, in cash, shares of Company
Common Stock or other consideration considered appropriate by the Board of
Directors. Immediately upon the action of the Board of Directors ordering the
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the redemption price.
Exchange. The Company may, at any time after there is an Acquiring Person,
until the time specified in the Rights Agreement, exchange all or part of the
then-outstanding and exercisable Rights (other than Rights that shall have
become null and void) for Units of Preferred Stock or shares of Company Common
Stock pursuant to a one-for-one exchange ratio, subject to adjustment.
No Stockholder Rights; Taxation. 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. While
the distribution of the Rights will not be taxable to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for Units of Preferred
Stock (or other consideration) or for common stock of the acquiring company or
in the event of the redemption of Rights as set forth above.
Amendment. Any of the provisions of the Rights Agreement may be amended
without the approval of the holders of the Rights or Company Common Stock at any
time prior to the Distribution Date. After such date, the provisions of the
Rights Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to shorten or lengthen any time period under the Rights
Agreement, or to make changes that do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person); provided,
that no such amendment shall be made to lengthen (i) the time period governing
redemption at such time as the Rights are not redeemable or (ii) any other time
period unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights.
Description of Preferred Stock
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
If, as and when declared by the Board of Directors, each Unit of Preferred
Stock will have a minimum dividend equal to the per share dividend declared on
the Company Common Stock.
B-3
In the event of liquidation, the holder of a Unit of Preferred Stock will
receive a preferred liquidation payment equal to the greater of $0.01 per Unit
and the per share amount paid in respect of a share of the Company Common Stock.
Each Unit of Preferred Stock will have one vote, voting together with the
Company Common Stock.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Preferred Stock with respect to dividends,
liquidation and voting, and in the event of mergers and consolidations, are
protected by customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation and
voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right should approximate the economic value
of one share of Company Common Stock.
B-4
EXHIBIT C
TO RIGHTS AGREEMENT
CERTIFICATE OF DESIGNATION
OF THE
SERIES A PREFERRED STOCK
OF
EYETECH PHARMACEUTICALS, INC.
The undersigned officers of Eyetech Pharmaceuticals, Inc., a Delaware
corporation (the "Corporation"), CERTIFY:
That, pursuant to the authority conferred upon the Board of Directors of
the Corporation by its Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation"), the said Board of Directors, at a duly called
meeting held on June 8, 2005, at which a quorum was present and acted
throughout, adopted the following resolution, which resolution remains in full
force and effect on the date hereof, creating a series of Preferred Stock having
a par value of $.01 per share, designated as Series A Preferred Stock (the
"Series A Preferred Stock"), out of the Corporation's shares of preferred stock,
par value of $.01 per share (the "Preferred Stock"):
RESOLVED, that pursuant to the authority vested in the Board of Directors
in accordance with the provisions of its Certificate of Incorporation, the Board
of Directors hereby creates, authorizes and provides for 600,000 shares of its
authorized Preferred Stock to be designated and issued as the "Series A
Preferred Stock", having the voting powers, designation, relative,
participating, optional and other special rights, preferences and
qualifications, limitations and restrictions that are set forth as follows:
1. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any other series of preferred stock or any other shares of stock of
the Corporation ranking prior and superior to the shares of Series A Preferred
Stock with respect to dividends, each holder of one one-hundredth (1/100) of a
share (a "Unit") of Series A Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
that purpose, an amount per Unit (rounded to the nearest cent) equal to (a)
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the Common Stock, and
(b) subject to the provision for adjustment hereinafter set forth, an amount per
Unit equal to the aggregate per share amount of all non-cash dividends or other
distributions (other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock, by reclassification or
otherwise) declared on shares of Common Stock, in each instance, at such time as
such dividends are payable in respect of the Common Stock. In the event that the
Corporation shall at any time after June 8, 2005 (the "Rights Declaration Date")
(i) declare any dividend on outstanding shares of Common Stock payable in shares
of Common Stock, (ii) subdivide outstanding shares of Common Stock or
1
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amount to which the holder of a Unit of
Series A Preferred Stock was entitled immediately prior to such event under
clause (a) or (b) of the preceding sentence shall be adjusted by multiplying
such amount by a fraction (y) the numerator of which shall be the number of
shares of Common Stock that are outstanding immediately after such event and (z)
the denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
Units of Series A Preferred Stock as provided in paragraph (A) above at the same
time as it declares a dividend or distribution on the shares of Common Stock
(other than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock, by reclassification or otherwise).
(C) Declared but unpaid dividends shall not bear interest.
Dividends paid on Units of Series A Preferred Stock in an amount less than the
aggregate amount of all such dividends at the time declared and payable on such
Units shall be allocated pro rata on a Unit-by-Unit basis among all Units of
Series A Preferred Stock at the time outstanding. The Board of Directors may fix
a record date for the determination of holders of Units of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
2. Voting Rights. The holders of Units of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each Unit of Series A Preferred Stock shall entitle the holder thereof to one
vote on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall, at any time after the Rights Declaration
Date, (i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or
(iii) combine the outstanding shares of Common Stock into a smaller number of
shares, then in each such case the number of votes per Unit to which holders of
Units of Series A Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction (y) the numerator of
which shall be the number of shares of Common Stock outstanding immediately
after such event and (z) the denominator of which shall be the number of shares
of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or the Bylaws of the Corporation or as required by law, the
holders of Units of Series A Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
3. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on Units of Series A Preferred Stock as provided herein
are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on
outstanding Units of Series A Preferred Stock shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, or make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of junior stock;
(ii) declare or pay dividends on, or make any other
distributions on, any shares of parity stock, except dividends paid ratably on
Units of Series A Preferred Stock and shares of all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to which
the holders of such Units and all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any parity stock, provided, however, that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any junior stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any Units of Series A Preferred Stock, or any shares of parity
stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
Units and shares of parity stock upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the respective
series and classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation, unless the Corporation could, under paragraph (A) of
this Section 3, purchase or otherwise acquire such shares at such time and in
such manner.
4. Reacquired Shares. Any Units of Series A Preferred Stock purchased
or otherwise acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof. All such Units
shall, upon their cancellation, become authorized but unissued shares (or
fractions of shares) of Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on issuance set
forth herein.
5. Liquidation, Dissolution or Winding Up.
(A) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation, no distribution shall be made (i) to the holders
of shares of junior stock, unless the holders of Units of Series A Preferred
Stock shall have received, subject to adjustment as hereinafter provided in
paragraph (B), the greater of either (a) $0.01 per Unit plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not earned or
declared, to the date of such payment, or (b) the amount equal to the aggregate
per share amount to be distributed to holders of shares of Common Stock, or (ii)
to the holders of shares of parity stock, unless simultaneously therewith
distributions are made ratably on Units of Series A Preferred Stock and all
other shares of such parity stock in proportion to the total amounts to which
the holders of Units of Series A Preferred Stock are entitled under clause
(i)(a) of this
sentence and to which the holders of shares of such parity stock are entitled,
in each case upon such liquidation, dissolution or winding up.
(B) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide outstanding shares of
Common Stock, or (iii) combine outstanding shares of Common Stock into a smaller
number of shares, then in each such case the aggregate amount to which holders
of Units of Series A Preferred Stock were entitled immediately prior to such
event pursuant to clause (i)(b) of paragraph (A) of this Section 5 shall be
adjusted by multiplying such amount by a fraction (y) the numerator of which
shall be the number of shares of Common Stock that are outstanding immediately
after such event and (z) the denominator of which shall be the number of shares
of Common Stock that were outstanding immediately prior to such event.
6. Consolidation, Merger, etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares
of Common Stock are exchanged for or converted into other stock or securities,
cash and/or any other property, then in any such case Units of Series A
Preferred Stock shall at the same time be similarly exchanged for or converted
into an amount per Unit (subject to the provision for adjustment hereinafter set
forth) equal to the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is converted or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide outstanding shares of Common Stock, or (iii) combine outstanding
Common Stock into a smaller number of shares, then in each such case the amount
set forth in the immediately preceding sentence with respect to the exchange or
conversion of Units of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction (y) the numerator of which shall be the number of
shares of Common Stock that are outstanding immediately after such event and (z)
the denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
7. Redemption. The Units of Series A Preferred Stock and shares of
Series A Preferred Stock shall not be redeemable.
8. Ranking. The Units of Series A Preferred Stock and shares of Series
A Preferred Stock shall rank junior to all other series of the Preferred Stock
and to any other class of Preferred Stock that hereafter may be issued by the
Corporation as to the payment of dividends and the distribution of assets,
unless the terms of any such series or class shall provide otherwise.
9. Fractional Shares. The Series A Preferred Stock may be issued in
Units or other fractions of a share, which Units or other fractions shall
entitle the holder, in proportion to such holder's Units or other fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
Preferred Stock.
10. Amendment. At any time when any Units of Series A Preferred Stock
are outstanding, neither the Certificate of Incorporation of the Corporation nor
this Certificate of Designation shall be amended in any manner that would
materially alter or change the powers,
preferences or special rights of the Units of Series A Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of a majority
or more of the outstanding Units of Series A Preferred Stock, voting separately
as a class.
11. Certain Definitions. As used in this resolution with respect to the
Series A Preferred Stock, the following terms shall have the following meanings:
(A) The term "Common Stock" shall mean the class of stock
designated as the common stock, par value $.01 per share, of the Corporation at
the date hereof or any other class of stock resulting from successive changes or
reclassification of the common stock.
(B) The term "junior stock" (i) as used in Section 3, shall mean
the Common Stock and any other class or series of capital stock of the
Corporation hereafter authorized or issued over which the Series A Preferred
Stock has preference or priority as to the payment of dividends or in the
distribution of assets on any liquidation, dissolution or winding up of the
Corporation and (ii) as used in Section 5, shall mean the Common Stock and any
other class or series of capital stock of the Corporation over which the Series
A Preferred Stock has preference or priority in the distribution of assets on
any liquidation, dissolution or winding up of the Corporation.
(C) The term "parity stock" (i) as used in Section 3, shall mean
any class or series of stock of the Corporation hereafter authorized or issued
ranking pari passu with the SERIES A Preferred Stock as to the payment of
dividends and (ii) as used in Section 5, shall mean any class or series of
capital stock of the Corporation ranking pari passu with the Series A Preferred
Stock in the distribution of assets on any liquidation, dissolution or winding
up.
IN WITNESS WHEREOF, Eyetech Pharmaceuticals, Inc. has caused this
Certificate of Designation to be signed by its Chief Operating Officer and its
Assistant Secretary as of June 10, 2005.
EYETECH PHARMACEUTICALS, INC.
By: ___________________________
Name: Xxxx X. Xxxxxx
Title: Chief Operating Officer
By: ___________________________
Name: Xxxxxx X. Xxxxxxx
Title: Assistant Secretary
