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EXHIBIT 1
FIRST AMENDMENT TO RIGHTS AGREEMENT
This Amendment is made as of May 11, 2001 between CIMA LABS INC., a
Delaware corporation (the "Company"), and Xxxxx Fargo Bank Minnesota, N.A., a
national banking association (the "Rights Agent"), to the Rights Agreement dated
as of March 14, 1997 (the "Original Agreement") between the Company and the
Rights Agent.
WHEREAS, the Company and the Rights Agent have entered into the
Original Agreement; and
WHEREAS, the Board of Directors of the Company has determined to amend
the Original Agreement in accordance with Section 27 thereof.
ACCORDINGLY, in consideration of the premises and the mutual agreements
set forth in this Amendment, the parties hereby agree as follows:
1. Sections 1(e), 1(j), 1(q) and 1(r) of the Original Agreement
are deleted in their entirety.
2. The first paragraph of Section 11(a)(ii) of the Original
Agreement is amended in its entirety to read as follows:
(ii) Subject to Section 24 hereof, in the event any Person
shall become an Acquiring Person, each holder of a Right shall have a
right to receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-hundredths
of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of the Company as shall equal the
result obtained by (A) multiplying the then current Purchase Price by
the number of one one-hundredths of a Preferred Share for which a Right
is then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares (determined
pursuant to Section 11(d) hereof) on the date such Person became an
Acquiring Person; provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this
Section 11(a)(ii). In the event that any Person shall become an
Acquiring Person and the Rights shall then be outstanding, the Company
shall not take any action which would eliminate or diminish the
benefits intended to be afforded by the Rights.
3. Section 12 of the Original Agreement is amended in its
entirety to read as follows:
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SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Sections 11
and 13 hereof, the Company shall (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 Common Shares or the Preferred
Shares a copy of such certificate and (c) if such adjustment is made
after the Distribution Date, mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 25 hereof. The
Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be
deemed to have knowledge of any adjustment unless and until it shall
have received such certificate.
4. Section 21 of the Original Agreement is amended in its
entirety to read as follows:
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent
or any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing mailed to
the Company and to each transfer agent for the Common Shares or
Preferred Shares by registered or certified mail, and, if such notice
is mailed after the Distribution Date, to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent for the Common Shares or Preferred
Shares by registered or certified mail, and, if such notice is mailed
after the Distribution Date, to the holders of the Right Certificates
by first-class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of
the United States or of any other state of the United States that is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal
or state authority and that has at the time of its appointment as
Rights Agent, a combined capital and surplus of at least $50 million.
After its 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
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thereof in writing with the predecessor Rights Agent and each transfer
agent for the Common Shares or Preferred Shares, and, if such notice is
filed after the Distribution Date, mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
5. Section 23(b)(i) of the Original Agreement is hereby amended
in its entirety to read as follows:
(b) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the Shares 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 $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price"), and the
Company may, at its option, pay the Redemption Price in Common Shares
(based on the "current per share market price," as such term is defined
in Section 11(d) hereof, of the Common Shares at the time of
redemption), cash or any other form of consideration deemed appropriate
by the Board of Directors. The redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and subject
to such conditions as the Board of Directors in its sole discretion may
establish.
6. Section 23(b)(ii) of the Original Agreement is hereby deleted
in its entirety.
7. All references in the Original Agreement to "Norwest Bank
Minnesota, N.A." are hereby changed to "Xxxxx Fargo Bank Minnesota, N.A."
8. The Original Agreement shall remain in full force and effect
without amendment, except for this Amendment and any other amendment made in
accordance with Section 27 of the Original Agreement. All terms used in this
Amendment that are defined in the Original Agreement but are not defined herein
shall have the meanings ascribed to them in the Original Agreement. The Summary
of Rights contained in Exhibit C to the Original Agreement is a summary of the
Original Agreement without regard to this Amendment and does not limit or affect
this Amendment in any way. All references in the Original Agreement to "this
Agreement," "the Agreement," or "hereof" and all references in this Amendment to
"the Agreement" shall hereafter be deemed to be references to the Original
Agreement as amended by this Amendment and any other amendment made in
accordance with Section 27 of the Original Agreement. Without limiting anything
stated in the Original Agreement, all references in the Original Agreement to
(a) adjustments in the number of fractional Preferred Shares purchasable upon
the exercise of a Right or (b) any other adjustments resulting from a dividend
on Common Shares payable in Common Shares or a subdivision, combination, or
consolidation of Common Shares or other events occurring "after the date of this
Agreement," "after the date of the Agreement," or "after the date
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hereof" shall be deemed to be references to adjustments resulting from
occurrences after March 14, 1997, the date of adoption of the Original
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed, all as of the day and year first above written.
CIMA LABS INC.
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
Vice President and Chief Financial Officer
XXXXX FARGO BANK MINNESOTA, N.A.
By: /s/ Xxxxx X. Xxxxxx
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Title: Vice President
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