EXHIBIT 4
SECOND AMENDED AND RESTATED RENEWED RIGHTS AGREEMENT
GENZYME CORPORATION
and
American Stock Transfer & Trust Company,
Rights Agent
Second Amended and Restated Renewed Rights Agreement
Dated as of December 18, 2000
SECOND AMENDED AND RESTATED RENEWED RIGHTS AGREEMENT
Second Amended and Restated Renewed Rights Agreement (this
"AGREEMENT"), dated as of December 18, 2000, between Genzyme Corporation, a
Massachusetts corporation (the "COMPANY"), and American Stock Transfer & Trust
Company, (the "RIGHTS AGENT").
This Agreement amends, restates and supersedes the Renewed Rights
Agreement dated as of March 16, 1999 (the "RENEWED AGREEMENT") between the
Company and the Rights Agent as it was amended and restated by the Amended and
Restated Renewed Rights Agreement dated as of June 10, 1999 (the "FIRST RESTATED
AGREEMENT").
WHEREAS, on March 2, 1999, the Board of Directors of the Company (the
"BOARD") (i) deemed it desirable and in the best interest of the Company and its
shareholders for the Company to renew the Company's shareholder rights plan,
(ii) adopted the Renewed Agreement which became effective on March 28, 1999 (the
"EFFECTIVE DATE") upon the expiration of the Company's original shareholder
rights plan, (iii) authorized and declared a dividend distribution of (x) one
GGD Stock Purchase Right (a "GGD STOCK RIGHT") for each share of GGD Stock (as
such term is hereinafter defined) outstanding upon the Effective Date (y) one
GTR Stock Purchase Right (a "GTR STOCK Right") for each share of the Company's
Genzyme Tissue Repair Common Stock (the "GZTR Stock") outstanding upon the
Effective Date and (z) one GMO Stock Purchase Right (a "GMO STOCK RIGHT") for
each share of GMO Stock (as such term is hereinafter defined) outstanding upon
the Effective Date, and (iv) authorized and directed the issuance of one Right
(as such number may be adjusted pursuant to Section 11 hereof) for each Common
Share issued after the Effective Date (whether originally issued or delivered
from the Company's treasury) but prior to the earliest of the "Distribution
Date," the "Redemption Date" and the "Final Expiration Date," each as defined in
this Agreement;
WHEREAS, on May 26, 1999, the Board approved the First Restated
Agreement, an amendment and restatement of the Renewed Agreement, which
became effective upon the creation of the Company's Genzyme Surgical Products
Division Common Stock (the "GZSP STOCK"), and in connection with such First
Restated Agreement, the Board authorized and directed the issuance of one GSP
Stock Purchase Right (a "GSP STOCK RIGHT") for each share of GZSP Stock
issued by the Company (as such number may have been adjusted pursuant to
Section 11 thereof) on or after June 10, 1999 and prior to the earliest of
the Distribution Date, the Redemption Date and the Final Expiration Date;
WHEREAS, on March 2, 2000 the Board approved this Agreement, which is
an amendment and restatement of the First Restated Agreement, effective upon the
(i) cancellation of the GZSP Stock and GZTR Stock and (ii) creation of the GZBX
Stock (as such term is hereinafter defined);
WHEREAS, on the date hereof the (i) cancellation of the GZSP Stock and
GZTR Stock and (ii) creation of the GZBX Stock has become effective;
WHEREAS, in connection with this Agreement, the Board authorized and
directed the issuance of one GZBX Stock Purchase Right (a "GZBX STOCK RIGHT")
for each share of GZBX Stock issued by the Company (as such number may hereafter
be adjusted pursuant to Section 11
hereof) on or after the date hereof and prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date; and
WHEREAS, each GGD Stock Right, GZBX Stock Right and GMO Stock Right
initially represents the right to purchase one one-hundredth of a share of the
Company's Series A Junior Participating Preferred Stock, par value $.01 per
share ("SERIES A PREFERRED STOCK"), one one-hundredth of a share of Series B
Junior Participating Preferred Stock, par value $.01 per share ("SERIES B
PREFERRED STOCK"), and one one-hundredth of a share of Series C Junior
Participating Preferred Stock, par value $.01 per share ("SERIES C PREFERRED
STOCK"), respectively, such preferred shares having the rights and preferences
set forth in the Articles of Organization of the Company, a copy of such terms
being attached hereto as EXHIBIT A, upon the terms and subject to the conditions
herein set forth;
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) (i) "ACQUIRING PERSON" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall become, after the Effective
Date, the Beneficial Owner (as such term is hereinafter defined) of Common
Shares representing 15% or more of the total Voting Rights of all the Common
Shares then outstanding, but shall not include the Company, any Subsidiary (as
such term is hereinafter defined) of the Company, or any employee benefit plan
of the Company or any Subsidiary of the Company, or any entity organized,
appointed or established by the Company holding Common Shares for or pursuant to
the terms of any such plan; PROVIDED, HOWEVER, that if a Person inadvertently
becomes the Beneficial Owner of Common Shares representing 15% or more of such
Voting Rights solely due to an adjustment in the number of votes to which GZBX
Stock or GMO Stock is entitled pursuant to the Company's Articles of
Organization, such Person shall not be an Acquiring Person unless and until such
Person acquires additional Common Shares.
(ii) Notwithstanding the foregoing, a Person shall not become an
"Acquiring Person" solely as the result of an acquisition of Common Shares by
the Company or any Subsidiary which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially owned by
such Person to 15% or more of the Common Shares then outstanding as determined
above; PROVIDED, HOWEVER, that if a Person becomes the Beneficial Owner of 15%
or more of the Common Shares then outstanding as determined above solely by
reason of such a share acquisition by the Company and such Person shall, after
becoming the Beneficial Owner of such Common Shares, become the Beneficial Owner
of any additional Common Shares by any means whatsoever (other than as a result
of the subsequent occurrence of a stock dividend or a subdivision of the Common
Shares into a larger number of shares or a similar transaction), then such
Person shall be deemed to be an "Acquiring Person."
(iii) Notwithstanding the foregoing, if a majority of the Board
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the
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foregoing provisions of this Section 1(a), has become such inadvertently, and
such Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this Section 1(a), then such Person
shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement. The determination of whether such Person's becoming an Acquiring
Person shall have been inadvertent and the determination of whether the
divestment of sufficient shares shall have been made as promptly as practicable
shall be made by the Board.
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), as in effect
on the date of this Agreement.
(c) A Person shall be deemed the "BENEFICIAL OWNER" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights at any time prior to the
occurrence of a Triggering Event, as hereinafter defined, but thereafter
including Rights acquired from and after the Distribution Date (as defined in
Section 3(a) below) other than Rights acquired pursuant to Section 3(a),
11(a)(iv) or 22 hereof), warrants or options, or otherwise; PROVIDED, HOWEVER,
that a Person shall not be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange; or (B) the right
to vote or dispose of or "beneficial ownership" (as defined in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act) of (including pursuant to
any agreement, arrangement or understanding, whether or not in writing);
PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person or
any of such Person's Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting (except to the
extent contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
(d) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the Commonwealth of Massachusetts are authorized
or obligated by law or executive order to close.
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(e) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., Massachusetts
time, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
it shall mean 5:00 P.M., Massachusetts time, on the next succeeding Business
Day.
(f) "COMMON SHARES" when used with reference to the Company shall mean the GGD
Stock, the GZBX Stock and/or the GMO Stock, as the context requires, or any
other shares of capital stock of the Company into which GGD Stock, GZBX Stock
and/or GMO Stock may be reclassified or changed; PROVIDED, HOWEVER, that "Common
Shares" shall mean all of the GGD Stock, the GZBX Stock and/or GMO Stock (or any
other shares of capital stock into which GGD Stock, GZBX Stock and/or GMO Stock
may be reclassified or changed) whenever a determination of whether a Person
shall have become the Beneficial Owner of, or shall have made a tender or
exchange offer for, Common Shares representing a specified percentage of the
total Voting Rights of all the Common Shares then outstanding is required to be
made herein. "Common Shares" when used with reference to any Person other than
the Company shall mean the capital stock with the greatest voting power of such
other Person or equity interest having power to control or direct the management
of such Person, or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately controls such first-mentioned Person.
(g) "FINAL EXPIRATION DATE" shall mean the close of business on March 28, 2009.
(h) "GGD STOCK" shall mean the Genzyme General Division Common Stock, par value
$.01 per share, of the Company.
(i) "GMO STOCK" shall mean the Genzyme Molecular Oncology Division Common Stock,
par value $.01 per share, of the Company.
(j) "GZBX STOCK" shall mean the Genzyme Biosurgery Division Common Stock, par
value $.01 per share, of the Company.
(k) "PERSON" shall mean any individual, firm, corporation or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(l) "PREFERRED SHARES" shall mean shares of Series A Preferred Stock, Series B
Preferred Stock and/or Series C Preferred Stock as the context requires.
(m) "REDEMPTION DATE" shall mean the time at which Rights are redeemed as
provided in Section 23 hereof.
(n) "RIGHTS" shall mean GGD Stock Rights, GZBX Stock Rights and/or GMO Stock
Rights as the context requires.
(o) "SHARES ACQUISITION DATE" shall mean the first date of public announcement
by the Company that an Acquiring Person has become such.
(p) "SUBSIDIARY" of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interests is beneficially owned, directly or indirectly, by such Person.
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(q) "TRIGGERING EVENT" shall mean a Person becoming an Acquiring Person.
(r) "VOTING RIGHTS" when used with reference to the capital stock of, or units
of equity interest in, any Person shall mean the right under ordinary
circumstances to vote in the election of directors of such Person (if such
Person is a corporation) or to participate in the management and control of such
Person (if such Person is not a corporation).
(s) The following terms shall have the meanings indicated in the following
Sections of this Agreement:
(i) "ACT" - Section 9(b).
(ii) "ADJUSTMENT SHARES" - Section 11(b).
(iii) "AGREEMENT"-- Preamble.
(iv) "BOARD" - Preamble.
(v) "COMPANY" - Preamble.
(vi) "CURRENT VALUE" - Section 11(c)(i).
(vii) "DISTRIBUTION DATE" - Section 3(a).
(viii) "EFFECTIVE DATE"-- Preamble.
(ix) "EXCHANGE ACT" - Section 1(b)
(x) "EXCHANGE CONSIDERATION" - Section 11(c)(ii)(A).
(xi) "EXTENSION DATE" - Section 26.
(xii) "FIRST RESTATED AGREEMENT" - Preamble.
(xiii) "GGD STOCK RIGHT" - Preamble.
(xiv) "GGD STOCK RIGHT CERTIFICATE" - Section 3(a).
(xv) "GMO STOCK RIGHT" - Preamble.
(xvi) "GMO STOCK RIGHT CERTIFICATE" - Section 3(a).
(xvii) "GZBX STOCK RIGHT" - Preamble.
(xviii) "GZBX STOCK RIGHT CERTIFICATE" - Section 3(a).
(xix) "NASDAQ" - Section 11(d).
(xx) "NYSE" - Section 11(d).
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(xxi) "PRINCIPAL PARTY" - Section 13(b).
(xxii) "PURCHASE PRICE" - Sections 4, 7, 11(b) and 13(a).
(xxiii) "REDEMPTION PRICE" - Section 23(a)(i).
(xxiv) "RENEWED AGREEMENT" - Preamble.
(xxv) "RESTATEMENT DATE" - the date of this Agreement.
(xxvi) "RIGHTS AGENT" - Preamble.
(xxvii) "SERIES A PREFERRED STOCK" - Preamble.
(xxviii) "SERIES B PREFERRED STOCK" - Preamble.
(xxix) "SERIES C PREFERRED STOCK" - Preamble.
(xxx) "SPREAD" - Section 11(c).
(xxxi) "SUBSTITUTION PERIOD" - Section 11(c).
(xxxii) "TRADING DAY" - Section 11(d)(i).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent to act as agent for the Company and the holders of the Rights (who, in
accordance with Section 3 hereof, shall prior to the Distribution Date also be
the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. Upon prior written
notice to the Rights Agent, the Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable (the term "RIGHTS Agent"
being used herein to refer, collectively, to the Rights Agent together with any
such co-Rights Agent).
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth day (or such
later date as may be determined by the Board) after the Shares Acquisition Date
or (ii) the close of business on the tenth Business Day (or such later date as
may be determined by the Board) after the date of the commencement of, or of the
first public announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity organized, appointed or
established by the Company holding Common Shares for or pursuant to the terms of
any such plan) to commence, within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, a tender or exchange offer the
consummation of which would result in beneficial ownership by a Person of Common
Shares representing 15% or more of the total Voting Rights of all the
outstanding Common Shares (the earliest of such dates being herein referred to
as the "DISTRIBUTION DATE"), (x) the GGD Stock Rights, GZBX Stock Rights and GMO
Stock Rights will be evidenced by the certificates for GGD Stock, GZBX Stock and
GMO Stock, respectively,
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registered in the names of the holders thereof (which certificates for GGD
Stock, GZBX Stock and GMO Stock shall also be deemed to be certificates for GGD
Stock Rights, GZBX Stock Rights and GMO Stock Rights, respectively) and not by
separate Right Certificates, and (y) the right to receive Right Certificates
will be transferable only in connection with the transfer of Common Shares. As
soon as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of GGD Stock, GZBX Stock
and GMO Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a right certificate,
in substantially the form of EXHIBIT B hereto (a "GGD STOCK RIGHT CERTIFICATE,"
"GZBX STOCK RIGHT CERTIFICATE" or "GMO STOCK RIGHT CERTIFICATE," as the case may
be), evidencing one GGD Stock Right for each share of GGD Stock so held, one
GZBX Stock Right for each share of GZBX Stock so held and one GMO Stock Right
for each share of GMO Stock so held. In the event that an adjustment in the
number of Rights per Common Share has been made pursuant to Section 11(a)
hereof, at the time of distribution of the Right Certificates, the Company shall
make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Right Certificates representing only whole numbers
of Rights are distributed and cash is paid in lieu of any fractional Rights. As
of the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
1. Until the earliest of the Distribution Date, the
Redemption Date or Final Expiration Date, the surrender for
transfer of any certificate for Common Shares shall also
constitute the transfer of the Rights associated with the
Common Shares represented thereby.
2. With respect to certificates for Common Shares of
the Company outstanding immediately prior to the Restatement
Date, until the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date, the Rights will
be evidenced by certificates for Common Shares as legended
pursuant to the terms of the Renewed Agreement, and the
registered holders of the Common Shares of the Company shall
also be the registered holders of the associated Rights.
3. Certificates for Common Shares which become
outstanding (including, without limitation, reacquired Common
Shares referred to in the last sentence of the following
paragraph (b) of this Section 3) on or after the Restatement
Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Renewed Rights Agreement
between Genzyme Corporation & American Stock Transfer & Trust
Company (the "Rights Agreement"), as such Rights Agreement may
from time to time be amended and/or restated, the terms of
which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of
Genzyme Corporation. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be
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evidenced by separate certificates and will no longer be
evidenced by this certificate. Genzyme Corporation will mail
to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request
therefor. Under certain circumstances, Rights beneficially
owned by Acquiring Persons (as defined in the Rights
Agreement) and any subsequent holder of such Rights may become
null and void.
(b) Until the Distribution Date, each Right associated with each Common
Share shall be evidenced by the stock certificate representing such Common
Share, and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby. In the event that the Company purchases or acquires any
Common Shares on or after the Effective Date but prior to the Distribution Date,
any Rights associated with such Common Shares shall be deemed cancelled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
(c) Notwithstanding the requirements of Section 3(c), the omission of a legend
shall not affect the enforceability of any part of this Agreement or the rights
of any holder of Rights.
Section 4. FORMS OF RIGHT CERTIFICATES. The GGD Stock Right Certificates, the
GZBX Stock Right Certificates and the GMO Stock Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be in substantially the forms set forth as EXHIBIT
B hereto, and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or quotation system on which the Rights may from time to time be listed
or quoted, or to conform to usage. Subject to the provisions of Sections 11 and
22 hereof, the Right Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preferred Share as shall be set forth
therein at the price per one one-hundredth of a Preferred Share set forth
therein (the "PURCHASE PRICE"), but the number of such one one-hundredths of a
Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President or any Vice President, either manually or
by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Clerk or an Assistant Clerk of
the Company, either manually or by facsimile signature. The Right Certificates
shall be countersigned manually, or, if permitted by the Company, by facsimile
signature, by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company;
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and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office designated for such purposes, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 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 earlier of the Redemption Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be transferred, split up, combined
or exchanged for another Right Certificate or Right Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a Preferred
Share (or, following a Triggering Event, Common Shares, other securities or
property, as the case may be) as the Right Certificate or Right 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 Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purposes.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Right Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall request. Thereupon the Rights Agent
shall (subject to Section 7(e) hereof) countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
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(c) Notwithstanding any other provision hereof, the Company and the Rights Agent
may amend this Rights Agreement to provide for uncertificated Rights in addition
to or in place of Rights evidenced by Right Certificates.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate contained in the form of election to purchase on the reverse
side of the Right Certificate duly executed, to the Rights Agent at the
principal offices of the Rights Agent, together with payment of the Purchase
Price for the Preferred Shares (or other shares, securities or property, as the
case may be) as to which the Rights are exercised, at or prior to the earlier of
the Redemption Date and the Final Expiration Date.
(b) The Purchase Price with respect to each GGD Stock Right shall initially be
$300 for each one one-hundredth of a Series A Preferred Share; with respect to
each GZBX Stock Right shall initially be $80 for each one one-hundredth of a
Series B Preferred Share; with respect to each GMO Stock Right shall initially
be $26 for each one one-hundredth of a Series C Preferred Share; and shall be
subject in each case to adjustment from time to time as provided in Sections 11
and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights, with
the form of election to purchase and the certificate contained in the form of
election to purchase and the Right Certificate duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares (or other shares,
securities or property, as the case may be) to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof in cash, or by certified check
or cashier's check payable to the order of the Company, the Rights Agent shall,
subject to Section 20(k) hereof, thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares certificates for the number of Preferred
Shares to be purchased (and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests), or (B) if the Company shall
have elected to deposit the Preferred Shares issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares 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) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is obligated to
issue other securities (including Common Shares), pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company will make
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all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Right Certificate shall exercise less
than all the Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee from an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such (and any subsequent transferees of such transferee), or (iii) a
transferee of an Acquiring Person (or such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and any holder (including any subsequent holder) of such Rights shall
thereupon have no rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure or inability to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to 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 Right
Certificates shall be issued in lieu thereof except as expressly permitted by
the provisions of this Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
11
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares and/or other securities) or
any Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) held in its treasury, the number of
Preferred Shares (and, following the occurrence of a Triggering Event, Common
Shares and/or other securities) that will be sufficient (in accordance with the
terms of this Agreement, including Section 11(c)(i) hereof) to permit the
exercise in full of all outstanding Rights. Prior to the occurrence of a
Triggering Event, the Company shall not be obliged to cause to be reserved and
kept available out of its authorized and unissued Common Shares or shares of
preferred stock (other than Preferred Shares), any such Common Shares or any
shares of preferred stock (other than Preferred Shares) to permit exercise of
outstanding Rights.
(b) If then required by applicable law, the Company shall use its best efforts
to (i) file, either (A) as soon as practicable following the earliest date after
the occurrence of a Triggering Event as to which the consideration to be
delivered by the Company upon exercise of the Rights has been determined
pursuant to this Agreement, or (B) as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "ACT"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights. If then required
by applicable law, the Company will also take such action as may be appropriate
under the securities or "blue sky" laws of the various states. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days after
the date set forth in clause (i) of this Section 9(b), the exercisability of the
Rights in order to prepare and file such registration statement and permit it to
become effective or to comply with such blue sky laws. Upon any such suspension,
the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained.
(c) The Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Preferred Shares delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such Preferred Shares
(subject to payment of the Purchase Price), be duly and validly authorized and
issued and fully paid and non-assessable shares.
(d) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of
12
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the
date of such surrender and payment is a date upon which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled (in such holder's capacity as such) to any rights of a
shareholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. ADJUSTMENT IN RIGHTS; EXCHANGE OF RIGHTS; CERTAIN COVENANTS. The
Purchase Price, the number of Preferred Shares (or number and kind of other
shares of capital stock, as the case may be) covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) ANTI-DILUTION ADJUSTMENTS; ADJUSTMENTS, GENERALLY.
(i) To preserve the actual or potential economic value of the Rights,
if at any time after the date of this Agreement there shall be any change in the
Common Shares or the Preferred Shares, whether by reason of stock dividends,
stock splits, recapitalizations, reclassifications, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred Shares, as the case
may be (other than the Rights or regular quarterly cash dividends) or otherwise,
then, in each such event adjustments in the number of Preferred Shares (or the
number and kind of other securities) issuable upon exercise of each Right, the
Purchase Price and Redemption Price in effect at such time (including the number
of Rights or fractional Rights associated with each Common Share) shall be made
if and as deemed appropriate by the Board, such that following such adjustments
such event shall not have had the effect of reducing or limiting the benefits
the holders of the Rights would have had absent such event.
(ii) If, as a result of an adjustment made pursuant to this Section 11,
the holder of any Right thereafter exercised shall become entitled to receive
any securities other than Preferred Shares, thereafter the number of such
securities so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
13
practicable to the provisions of Section 11(a)(i), and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such other securities.
(iii) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities relating
to a Right shall evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(iv) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Shares or number or kind of other securities issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms which were expressed in the
initial Right Certificates issued hereunder.
(v) Unless the Board chooses otherwise, no adjustment in the Purchase
Price shall be made if such adjustment would not result in an increase or
decrease of at least 1% in the Purchase Price; PROVIDED, HOWEVER, that any such
adjustments which by reason of this Section 11(a) are not made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest
ten-thousandth of a Common Share or other share or one-millionth of a Preferred
Share as the case may be. Notwithstanding the first sentence of this Section
11(a), any adjustment made under this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction that is the cause of
such adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(vi) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of Preferred Shares or other securities purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share or number of other securities for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement 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 Right Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(a)(vi), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date Right
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 Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the
14
Rights to which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and countersigned in
the manner provided for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
(vii) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
non-assessable Preferred Shares at such adjusted Purchase Price.
(viii) 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 it in its sole discretion shall determine to be advisable in
order that any (a) consolidation or subdivision of the Preferred Shares, (b)
issuance wholly for cash of any Preferred Shares at less than the current market
price, (c) issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, (d)
dividends on Preferred Shares payable in Preferred Shares or (e) issuance of
rights, options or warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Preferred Shares shall not be taxable to
such shareholders.
(ix) In any case which action taken pursuant to Section 11(a)(i)
requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect to such adjustment; PROVIDED, HOWEVER, that the
Company shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional securities upon the
occurrence of the event requiring such adjustment.
(b) INITIAL ADJUSTMENT UPON TRIGGERING EVENT. Upon the first occurrence of a
Triggering Event (except as otherwise provided in this Agreement), proper
provision shall be made so that each holder of a Right, except as provided below
and in Section 7(e) hereof, shall thereafter have a right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of Preferred Shares and subject to the provisions of
Section 11(a), such number of shares of GGD Stock in the case of a GGD Stock
Right, GZBX Stock in the case of a GZBX Stock Right, and GMO Stock in the case
of a GMO Stock Right as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to the Triggering
Event (whether or not such Right was then exercisable), and dividing that
product (which, following such Triggering Event, shall be referred to as the
"Purchase Price" for all purposes of this Agreement) by (y) 50% of the then
current per share market price of the GGD Stock, GZBX Stock or GMO Stock in the
case of a GGD Stock Right, Right, GZBX Stock Right or GMO Stock Right,
respectively (determined pursuant to Section 11(d)), on the date of the
occurrence of the Triggering Event (such number of shares being referred to
herein as the "ADJUSTMENT SHARES"). Notwithstanding the foregoing, upon the
occurrence of the Triggering
15
Event, any Rights that are or were on or after the earlier of the Distribution
Date or the date of the Triggering Event beneficially owned by an Acquiring
Person (or any Associate or Affiliate of such Acquiring Person) or by certain
transferees of such Persons as specified in Section 7(e), shall become void and
any holder (including subsequent holders) of such Rights shall thereafter have
no right to exercise such Rights under any provision of this Agreement. Any
Right Certificate issued pursuant to Section 3 or Section 22 hereof that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Right Certificate issued at any time upon the transfer
of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate, and any Right
Certificate issued pursuant to Section 6, 7(d), 7(e) or 22 hereof or this
Section 11 upon transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall contain the following legend:
The Rights represented by this Right Certificate were issued
to a Person who was an Acquiring Person or an Affiliate or an
Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). This Right Certificate and the Rights
represented hereby may become void in the circumstances
specified in the Rights Agreement, including Sections 7(e) and
11(a)(ii) thereof;
PROVIDED that the Rights Agent shall not be under any responsibility to
ascertain the existence of facts that would require the imposition of such
legend but shall be required to impose such legend only if instructed to do so
by the Company or if a holder fails to certify upon transfer or exchange in the
space provided on the Right Certificate that such holder is not an Acquiring
Person or an Affiliate or Associate thereof.
(c) OTHER ADJUSTMENTS UPON OR FOLLOWING TRIGGERING EVENT.
(i) USE OF COMMON EQUIVALENTS OR CASH. In the event that (x) the total
of the Common Shares that are issued but not outstanding and authorized but
unissued (excluding Common Shares reserved for issuance pursuant to the
specific terms of any indenture, option plan or other agreement) is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(b) or 11(c)(ii) hereof, or (y) the total number of Common Shares
available for exercise of the Rights in accordance with Section 11(b) hereof
is sufficient to permit the exercise in full of the Rights in accordance with
Section 11(b) but the Board determines that the exercise of the Rights in
accordance with Section 11(b) above will not afford adequate protection to
the shareholders of the Company and that shareholders should be given an
option to acquire a substitute for the Adjustment Shares, and subject to such
limitations as are necessary to prevent a default under any agreement for
money borrowed as presently constituted to which the Company is a party, then
the Board shall: (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "CURRENT VALUE") over (2)
the Purchase Price (such excess, the "SPREAD"), and (B) with respect to each
Right, make adequate provision to substitute for, or provide an election to
acquire in lieu of, the Adjustment Shares, upon payment of the applicable
Purchase Price (which term shall include any reduced Purchase Price) any
combination of the following having an aggregate value equal to the Current
Value (such aggregate value to be determined by the Board based upon the
advice of a nationally recognized investment banking firm selected by the
Board): (1) voting and other securities of one or more subsidiaries of the
Company, (2) a reduction in the Purchase Price, (3) Common Shares and/or
16
other equity securities of the Company and/or (4) debt securities of the Company
and/or cash and other assets; PROVIDED, HOWEVER, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the first occurrence of a Triggering Event, then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Common Shares (to the
extent available) and, if necessary, cash, which securities and/or cash that in
the aggregate are equal to the Spread. If the Board shall determine in good
faith that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days following the first occurrence of a Triggering Event, in
order that the Company may seek shareholder approval for the authorization of
such additional shares (such period, as it may be extended, the "SUBSTITUTION
PERIOD"). To the extent that the Board determines that some action need be taken
pursuant to the first and/or second sentences of this Section 11(c)(i), 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 first sentence and
to determine the value thereof. In the event of 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. For purposes of this Section 11(c)(i),
the value of the Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d) hereof) of the Common Shares on the date of
the first occurrence of a Triggering Event.
The provisions of this Section 11(c)(i) shall apply only to
Common Shares of the Company and shall not apply to the securities of any other
Person.
(ii) EXCHANGE OPTION.
(A) At any time after the occurrence of a Triggering Event and
prior to the earlier of (i) the time any Person, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more of
the Common Shares then outstanding and (ii) the occurrence of a Section 13(a)
Event, the Board may, at its option, cause the Company to exchange mandatorily
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that shall have become null and void pursuant to the provisions
of Section 7(e) hereof) for consideration per Right consisting of one half of
the securities that would be issuable at such time upon the exercise of one
Right in accordance with Section 11(b) (the consideration issuable per Right
pursuant to this Section 11(c)(ii)(A) being the "EXCHANGE CONSIDERATION"). Any
partial exchange shall be effected on a pro rata basis based on the number of
Rights (other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights. If the Board elects to
exchange all the Rights for Exchange Consideration pursuant to this Section
11(c)(ii)(A) prior to the physical distribution of the Rights Certificates, the
Company may distribute the Exchange Consideration in lieu of distributing Rights
Certificates, in which case for purposes of this Rights Agreement holders of
Rights shall be deemed to have simultaneously received and surrendered for
exchange Rights Certificates on the date of such distribution.
17
(B) Immediately upon the action of the Board ordering the
exchange of any particular Rights pursuant to this Section 11(c)(ii) and without
any further action and without any notice, the right to exercise those
particular Rights shall terminate and the only right a holder shall have
thereafter with respect to any of those particular Rights shall be to receive
the Exchange Consideration. The Company shall promptly give public notice of any
such exchange and in addition, the Company shall promptly mail a notice of any
such exchange to all of the holders of such Rights in accordance with Section 25
of this Agreement; PROVIDED, HOWEVER, that the failure to give, any delay in
giving or any defect in, such notice shall not affect the validity of such
exchange. Each such notice of exchange will state the method by which the
exchange of the Exchange Consideration for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged. In
the event the Exchange Consideration consists of Common Shares, the Company
shall not be required to issue fractions of Common Shares or to distribute
certificates which evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional Common Shares would otherwise
be issuable an amount in cash equal to the product derived by multiplying (x)
the subject fraction, by (y) the last sale price of the Common Shares on the
fifth Trading Day following the public announcement of the exchange by the
Company, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices on such day, in either case on a when issued basis
(taking into account the exchange), as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the Nasdaq National Market (or, if the Common Shares are not so
listed or traded, then as determined in the manner provided in Section 11(d)(i)
for determining "current per share market price," adjusted to take into account
the exchange). In determining whether any particular holder shall be obligated
to receive cash in lieu of a fractional share, the holder shall be entitled to
have all Rights beneficially owned by such holder aggregated so that only one
fractional share shall be attributable to all the Rights so beneficially owned.
(d) COMPUTATION OF CURRENT MARKET PRICE.
(i) For the purpose of any computation hereunder, other than
computations made pursuant to 11(c)(i) hereof, the "current per share market
price" of the Common Shares on any date shall be deemed to be the average of the
daily closing prices per share of such Common Shares for the 30 consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date and for purposes of computations made pursuant to Section 11(c)(i) hereof,
the "current per share market price" of the Common Shares on any date shall be
deemed to be the average of the daily closing prices per Common Share for the 10
consecutive Trading Days immediately following such date; PROVIDED, HOWEVER,
that in the event that the current per share market price of the Common Shares
is determined during a period following the announcement by the issuer of such
Common Shares of (A) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares, or (B) any
subdivision, combination or reclassification of such Common Shares, and prior to
the expiration of the requisite 30 or 10 Trading Day period, as the case may be,
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the current market price shall be appropriately adjusted to reflect the
current market price per Common Share equivalent. The closing price for
18
each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange (the "NYSE") or, if the Common Shares are
not listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Shares are listed
or admitted to trading or, if the Common Shares are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by The Nasdaq ("NASDAQ") system or such other system then in
use, or, if on any such date the Common 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 the Common Shares selected by the
Board. If on any such date no market maker is making a market in the GGD Stock,
the GZSP Stock or the GMO Stock, the fair value of such shares on such date as
determined in good faith by the Board shall be used. The term "TRADING DAY"
shall mean a day on which the principal national securities exchange on which
the Common Shares are listed or admitted to trading is open for the transaction
of business or, if the Common Shares are not listed or admitted to trading on
any national securities exchange, a Business Day. If the Common Shares are not
publicly held or not so listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current per
share market price" of the Preferred Shares shall be determined in the same
manner as set forth above for Common Shares in Section 11(d)(i) (other than the
last sentence thereof). If the current per share market price of the Preferred
Shares of any series cannot be determined in the manner provided above, the
"current per share market price" of the shares of Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock shall be conclusively
deemed to be the current per share market price of the shares of GGD Stock, GZBX
Stock and GMO Stock, respectively (appropriately adjusted to reflect any stock
splits, stock dividends, recapitalizations or similar transactions occurring
after the date hereof), multiplied by one hundred. If neither the applicable
Common Shares nor the applicable Preferred Shares are publicly held or so listed
or traded, "current per share market price" shall mean the fair value per share
as determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(e) CERTAIN COVENANTS. The Company covenants and agrees that, after the
Distribution Date, it:
(i) will not, and shall not permit any Subsidiary to, (i) consolidate
with, (ii) merge with or into, or (iii) sell or transfer, in one or more
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 if at the time of or immediately after such consolidation, merger
or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
19
(ii) will not, except as permitted by Section 23 or Section 26 hereof,
take (or permit any Subsidiary to take) any action which at the time it is
reasonably foreseeable will diminish substantially or otherwise eliminate the
benefits intended to be afforded by the Rights, PROVIDED, HOWEVER, that the
issuance of additional Rights pursuant hereto, including by action of the Board
under Section 22 hereof, shall not be deemed to violate this Section 11(e)(ii).
Section 12. CERTIFICATE OF ADJUSTMENT. Whenever an adjustment is made as
provided in Sections 11 and 13 hereof, the Company shall promptly (a) 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) 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 such adjustment
unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following the Distribution Date, directly or indirectly,
any transactions specified in the following clause (i), (ii) or (iii) of this
Section 13(a) shall be consummated:
(i) the Company shall consolidate with, or merge with and into, any
other Person and the Company shall not be the continuing or surviving
corporation of any such consolidation or merger;
(ii) any Person shall consolidate with the Company, or merge with and
into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property;
or
(iii) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more 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 or any Subsidiary of the Company; PROVIDED,
HOWEVER, that this clause (iii) of Section 13(a) hereof shall not apply to the
pro rata distribution by the Company of assets (including securities) of the
Company or any of its Subsidiaries to all holders of Common Shares of the
Company in accordance with each such holder's interest in such assets prior to
the distribution;
then, and in each such case, proper provision shall be made so that (i)
each holder of a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof in accordance with the
terms of this Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable Common Shares of the Principal Party
(as hereinafter defined), not subject to any rights of first refusal, redemption
or repurchase, as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable immediately prior to the first
occurrence of any of the events described in clauses (i),
20
(ii) or (iii) of this Section 13(a) (a "SECTION 13(a) EVENT"), or, if a
Triggering Event has occurred prior to the Section 13(a) Event, multiplying the
number of such fractional shares for which a Right was exercisable immediately
prior to the Triggering Event hereof by the Purchase Price immediately prior to
such Triggering Event, and dividing that product (which, following the Section
13(a) Event, shall thereafter be referred to as the "Purchase Price" for all
purposes of this Agreement) by (2) 50% of the then current per share market
price of the Common Shares of such other Person (determined pursuant to Section
11(d)) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such issuer, 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(a) Event;
(iv) such Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of Sections 11(b) and
11(c)(i) hereof shall thereafter be of no effect following the first occurrence
of a Section 13(a) Event. The Company shall not enter into any transaction of
the kind referred to in this Section 13(a) if at the time of such transaction
there are any rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the consummation of such
transaction, would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
(b) "PRINCIPAL PARTY" shall mean
(i) in the case of any transaction described in clause (i) or (ii) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such merger
or consolidation, and if no securities are so issued, the Person that is the
other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (iii) of the
first sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Shares having the greatest aggregate
market value.
(c) The Company shall not consummate any such consolidation, merger, sale or
transfer unless the Principal Party shall have a sufficient number of authorized
Common Shares, which have not been issued or reserved for issuance, to permit
the exercise in full of the Rights in accordance
21
with this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Final Expiration Date; 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.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that one of
the transactions described in Section 13(a) hereof shall occur at any time after
the occurrence of a Triggering Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in Section
13(a).
(d) Notwithstanding any other provision of this Agreement, no adjustment to the
number or kind of shares (or fractions of a share), cash or other property for
which a Right is exercisable or the number of Rights outstanding or associated
with any Common Share or any similar or other adjustment shall be made or be
effective if such adjustment would have the effect of reducing or limiting the
benefits the holders of the Rights would have had absent such adjustment,
including, without limitation, the benefits under Sections 11 and 13, unless the
terms of this Agreement are amended so as to preserve such benefits, PROVIDED
that this paragraph shall not prevent any change prior to the Distribution Date
permitted by Section 26(a) and PROVIDED that this Section 13(d) shall not be
deemed to limit or impair the right to engage in an exchange pursuant to Section
11(c)(ii).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights except prior
to the Distribution Date as the Board may in its discretion determine in
effecting an adjustment in the number of Rights pursuant to Section 11(a)
hereof, or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered holders of
the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the NYSE
22
or, if the Rights are not listed or admitted to trading on the NYSE, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the 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, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board. If on any such
date no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth of a
Preferred Share) upon exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share). Fractions of Preferred
Shares in integral multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
PROVIDED that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For purposes of this Section 14(b),
the current market value of a Preferred Share shall be the closing price of a
Preferred Share (as determined pursuant to the second sentence of Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event, the Company shall not be
required to issue fractions of Common Shares upon exercise of the Rights or to
distribute certificates that evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Common
Share. For purposes of this Section 14(c), the current market value of one
Common Share shall be the closing price of one Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise of
a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Sections 18 and
20 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and institute and maintain any
23
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right 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 will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHT 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 the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable only on
the registry books of the Rights Agent if surrendered at the principal office of
the Rights Agent, duly endorsed or accompanied by a proper instrument of
transfer;
(c) the Company and the Rights Agent may deem and treat the person in whose name
the Right Certificate (or, prior to the Distribution Date, the associated Common
Shares certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing
on the Right Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected by any notice to
the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree 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.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as
such, of any Right Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Preferred Shares 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
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
24
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 expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without 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, including
the costs and expenses of defending against any claim of liability which may
arise under this Agreement. The indemnity provided herein shall survive the
expiration of the Rights and the termination of this Rights Agreement.
(b) The Rights Agent shall be fully indemnified against, shall be protected from
and shall incur no liability or expense for, or in respect of any action taken,
suffered or omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof. Such
indemnity shall specifically include any loss, liability or expense which the
Rights Agent may suffer in administering this Agreement against a Person who was
an Acquiring Person or an Affiliate or an Associate of an Acquiring Person and
any costs and expenses of defending against any claim of liability from such
Person, Acquiring Person or Affiliate or Associate of such Acquiring Person.
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 business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
PROVIDED that such 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 Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
25
(b) In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
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 Right 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 be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any one of the Chairman of the Board, the President,
any Vice President, the Treasurer or the Clerk of the Company and delivered to
the Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own 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 Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the validity or execution
of any Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 11(b) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
3, 11, 13 or 23, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after receipt of a certificate furnished
pursuant to Section 13 describing such change or adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any
26
Preferred Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver or
cause to be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any one of the
Chairman of the Board, the President, any Vice President, the Clerk or the
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the specified effective date in the case of an
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of
the Company or become peculiarly interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its rights if there shall
be reasonable grounds for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
27
(k) If, with respect to any Right Certificate surrendered to the Rights Agent
for exercise or transfer, the certificate attached to the form of assignment or
form of election to purchase, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/or 2 on such certificate
attached to the form of assignment or form of election to purchase, 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' notice in writing mailed to the Company and to each transfer agent of the
Common Shares or Preferred Shares by registered or certified mail, and 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 of the Common Shares or Preferred Shares by registered or
certified mail, and 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 in good standing, which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares or Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 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.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement. In addition, the Company may, if deemed necessary or
28
appropriate by the Board, issue Right Certificates in connection with the
issuance or sale of Common Shares following the Distribution Date.
Section 23. REDEMPTION.
(a) (i) The Board may, at its option, at any time prior to 5:00 p.m.,
Massachusetts time, on the earlier of (A) the tenth day following the Shares
Acquisition Date (or such later date as may be determined by the Board) or (B)
the Final Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.001 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"). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 11(b) or 11(c)
at a time when the Rights are then redeemable hereunder.
(ii) Following the occurrence of a Shares Acquisition Date but prior to
any event described in Section 13(a), the Board may redeem all but not less than
all of the then outstanding Rights at the Redemption Price in connection with
any event, not involving an Acquiring Person or an Affiliate or Associate of an
Acquiring Person, that either (A) is of the type specified in Section 13(a) or
(B) involves a Person merging into the Company or otherwise combining with the
Company, where the Company shall be the continuing or surviving corporation of
such merger or combination and the Common Shares of the Company shall remain
outstanding and not changed into or exchanged for stock or other securities of
any other Person or the Company or cash or any other property,
(b) In the case of a redemption permitted under Section 23(a), immediately upon
the action of the Board ordering the redemption of the Rights, evidence of which
shall have been filed with the Rights Agent and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within ten days after the action of the Company ordering the redemption
of the Rights, the Company shall give notice of such redemption to the holders
of the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the Transfer Agent
for the Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption shall state the method by which the payment of the
Redemption Price will be made.
Section 24. NOTICE OF CERTAIN EVENTS. In case the Company shall propose, at any
time after the Distribution Date, (a) to pay any dividend payable in stock of
any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend) or (b) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, or (c) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), or (d) to effect any consolidation or merger into or with, 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 50% or more
of the assets or earning power of the Company and
29
its Subsidiaries (taken as a whole) to, any other Person, or (e) to effect the
liquidation, dissolution or winding up of the Company, or (f) to declare or pay
any dividend on any series of Common Shares payable in Common Shares of the same
series or to effect a subdivision, combination or consolidation of any series of
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares on the Common Shares of the same series), then, in each such case,
the Company shall give to each holder of a Right Certificate, 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, or 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 Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (a) or (b) above at least 20
days prior to the record date for determining holders of the Preferred Shares
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 Common Shares and/or Preferred
Shares, whichever shall be the earlier.
In case any Triggering Event or Section 13(a) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate, 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 or 13 hereof,
and (ii) all references in the preceding paragraph to Preferred Shares shall be
deemed thereafter to refer to Common Shares and/or, if appropriate, other
securities.
Section 25. NOTICES. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Right Certificate to or on
the Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
Genzyme Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Chief Legal Officer
With a copy to: Xxxx Xxxxxxxx, Esquire
Xxxxxx & Dodge LLP
Xxx Xxxxxx Xxxxxx
Xxxxxx, XX 00000
30
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Xx. Xxxxxxx X'Xxxxx
American Stock Transfer & Trust Company
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate 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.
(a) Prior to the Distribution Date, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of certificates representing Common Shares.
(b) From and after the Distribution Date, the Company and the Rights Agent
shall, if the Company shall so direct, supplement or amend this Agreement
without the approval of any holders of Right 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 extend the period of redemption provided in Section 23 hereof (which
amendment shall set forth a date after which the Rights are no longer redeemable
("EXTENSION DATE") unless the Rights are further amended prior to the Extension
Date to further extend the time during which the Rights are redeemable, and
which amendment may provide for the termination of the right of redemption prior
to any Extension Date), or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Right Certificates (other
than an Acquiring Person or an Affiliate or Associate of an Acquiring Person),
PROVIDED, this Agreement may not be supplemented or amended pursuant to clause
(iii) of this sentence after the period for redemption of the Rights pursuant to
Section 23 hereof shall have expired.
(c) Upon the delivery of a certificate from an appropriate officer of the
Company, which 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. Notwithstanding anything contained in this Agreement to
the contrary, no supplement or amendment shall be made which changes the
redemption price or the number of shares of Common Stock of the Company for
which a Right is exercisable. Prior to the Distribution Date, the interests of
the holders of GGD Stock Rights, GZBX Stock Rights and GMO Stock Rights shall be
deemed coincident with the interests of the holders of GGD Stock, GZBX Stock and
GMO Stock, respectively.
31
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.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. The Board
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or the Company,
or as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (i) interpret the
provisions of this Agreement and (ii) make all determinations deemed necessary
or advisable for the administration of this Agreement (including a determination
to redeem or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (ii) below, all omissions with respect to the foregoing) which are done
or made by the Board in good faith, shall (i) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Right Certificates and all
other parties, and (ii) not subject the Board to any liability to the holders of
the Right Certificates.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) 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 Right Certificates (and, prior to the Distribution Date, the Common Shares).
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, notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or authority to
be invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
close of business on the tenth day following the date of such determination by
the Board.
Section 31. GOVERNING LAW. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Massachusetts and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 32. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
32
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[CORPORATE SEAL] GENZYME CORPORATION
Attest
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxx
------------------------- ------------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxx Xxxxx
Title: Assistant Clerk Title: Executive Vice President
[CORPORATE SEAL] AMERICAN STOCK TRANSFER &
TRUST COMPANY
Attest
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------- ------------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
33
EXHIBIT A - TERMS OF THE JUNIOR PARTICIPATING PREFERRED STOCK
TERMS OF THE
SERIES A, SERIES B AND SERIES C
JUNIOR PARTICIPATING PREFERRED STOCK
OF
GENZYME CORPORATION
G. DESCRIPTION OF THE PREFERRED STOCK
1. UNDESIGNATED PREFERRED STOCK. Shares of Preferred Stock may be
issued from time to time in one or more series. The Board of Directors may
determine, in whole or in part, the preferences, voting powers, qualifications
and special or relative rights or privileges of any such series before the
issuance of any shares of that series. The Board of Directors shall determine
the number of shares constituting each series of Preferred Stock and each series
shall have a distinguishing designation.
2. TERMS OF THE SERIES A, SERIES B AND SERIES C JUNIOR PARTICIPATING
PREFERRED STOCK.
(a) AUTHORIZED AMOUNTS AND DESIGNATIONS. Two million (2,000,000) shares
of Preferred Stock of the Corporation are designated as Series A Junior
Participating Preferred Stock (the "Series A Preferred Stock"), one million
(1,000,000) shares of Preferred Stock are designated as Series B Junior
Participating Preferred Stock (the "Series B Preferred Stock") and four hundred
thousand (400,000) shares of Preferred Stock are designated as Series C Junior
Participating Preferred Stock (the "Series C Preferred Stock" and, together with
the Series A Preferred Stock, the Series B Preferred Stock and any other series
of Preferred Stock so designated by the Corporation's Board of Directors, the
"Junior Preferred Stock"). To the extent legally permitted, such numbers of
shares may be increased or decreased by vote of the Board of Directors, provided
that no decrease shall reduce the number of shares of Junior Preferred Stock of
any series to a number less than the number of shares of such series then
outstanding plus the number of shares of such series reserved for issuance upon
the exercise of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Corporation convertible into such
series of Junior Preferred Stock.
(b) SERIES A PREFERRED STOCK. A description of the Series A Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
(1) Dividends and Distributions.
A-1
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of all
shares of common stock of the Corporation (the "Common Shares"), and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend on shares of the GGD Stock payable
in shares of GGD Stock or a subdivision of the outstanding shares of GGD Stock
(by reclassification or otherwise), declared on the GGD Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time after December 18, 2000 declare or pay any dividend on shares
of GGD Stock payable in shares of GGD Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GGD Stock (by
reclassification or otherwise than by payment of a dividend in shares of GGD
Stock) into a greater or lesser number of shares of GGD Stock, then in each such
case the amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GGD Stock outstanding immediately
after such event and the denominator of which is the number of shares of GGD
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in Section
IV.G.2(b)(1)(A) immediately after it declares a dividend or distribution on any
shares of GGD Stock (other than a dividend payable in shares of GGD Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GGD Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such
A-2
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date for
the determination of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
(2) VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after December 18, 2000 declare or pay any dividend on any shares of GGD Stock
payable in shares of GGD Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GGD Stock (by reclassification or
otherwise than by payment of a dividend in shares of GGD Stock) into a greater
or lesser number of shares of GGD Stock, then in each such case the number of
votes per share to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GGD
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GGD Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in any vote
of the Board of Directors of the Corporation creating a series of Preferred
Stock, or by law, the holders of shares of Series A Preferred Stock and the
holders of Common Shares and any other capital stock of the Corporation having
general voting rights shall vote together as one series on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise
provided by law, holders of Series A Preferred Stock shall have no voting
rights.
(3) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series A
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GGD Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
A Preferred Stock, except distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
December 18, 2000 declare or pay any dividend on shares of GGD Stock payable in
shares of GGD Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GGD Stock (by
A-3
reclassification or otherwise than by payment of a dividend in shares of GGD
Stock) into a greater or lesser number of shares of GGD Stock, then in each such
case the aggregate amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the proviso in clause (1) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of GGD Stock
outstanding immediately after such event and the denominator of which is the
number of shares of GGD Stock that were outstanding immediately prior to such
event.
(4) CONSOLIDATION, MERGER, ETC. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which Common Shares are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of GGD Stock is changed or exchanged. In
the event the Corporation shall at any time after December 18, 2000 declare or
pay any dividend on any shares of GGD Stock payable in shares of GGD Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of GGD Stock (by reclassification or otherwise than by payment of a dividend in
shares of GGD Stock) into a greater or lesser number of shares of GGD Stock,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series A Preferred Stock shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GGD Stock outstanding immediately after such event and the
denominator of which is the number of shares of GGD Stock that were outstanding
immediately prior to such event.
(c) SERIES B PREFERRED STOCK. A description of the Series B Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
(5) DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series B Preferred Stock with respect to dividends, the holders
of shares of Series B Preferred Stock, in preference to the holders of all
Common Shares, and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on each Quarterly
Dividend Payment Date commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series B Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend on shares of the GBS Stock payable
in shares of GBS Stock or a subdivision of the outstanding shares of GBS Stock
(by reclassification or otherwise), declared on the GBS Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series B
A-4
Preferred Stock. In the event the Corporation shall at any time after December
18, 2000 declare or pay any dividend on any shares of GBS Stock payable in
shares of GBS Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of GBS Stock (by reclassification or otherwise than by
payment of a dividend in shares of GBS Stock) into a greater or lesser number of
shares of GBS Stock, then in each such case the amount to which holders of
shares of Series B Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of GBS
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GBS Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in Section
IV.G.2(c)(1)(A) immediately after it declares a dividend or distribution on any
shares of GBS Stock (other than a dividend payable in shares of GBS Stock),
provided that, in the event no dividend or distribution shall have been declared
on the GBS Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
(6) VOTING RIGHTS. The holders of shares of Series B Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GBS Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after December 18, 2000 declare or pay any dividend on shares of GBS
Stock payable in shares of GBS Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GBS Stock (by reclassification or
otherwise than by payment of a dividend
A-5
in shares of GBS Stock) into a greater or lesser number of shares of GBS Stock,
then in each such case the number of votes per share to which holders of shares
of Series B Preferred Stock were entitled immediately prior to such event shall
be adjusted by multiplying such number by a fraction, the numerator of which is
the number of shares of GBS Stock outstanding immediately after such event and
the denominator of which is the number of shares of GBS Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any vote
of the Board of Directors of the Corporation creating a series of Preferred
Stock, or by law, the holders of shares of Series B Preferred Stock and the
holders of Common Shares and any other capital stock of the Corporation having
general voting rights shall vote together as one series on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise
provided by law, holders of Series B Preferred Stock shall have no voting
rights.
(7) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GBS Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
B Preferred Stock, except distributions made ratably on the Series B Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
December 18, 2000 declare or pay any dividend on any shares of GBS Stock payable
in shares of GBS Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of GBS Stock (by reclassification or otherwise than by
payment of a dividend in shares of GBS Stock) into a greater or lesser number of
shares of GBS Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GBS Stock outstanding immediately after such event and the
denominator of which is the number of shares of GBS Stock that were outstanding
immediately prior to such event.
(8) CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of
A-6
GBS Stock is changed or exchanged. In the event the Corporation shall at any
time after December 18, 2000 declare or pay any dividend on any shares of GBS
Stock payable in shares of GBS Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of GBS Stock (by reclassification or
otherwise than by payment of a dividend in shares of GBS Stock) into a greater
or lesser number of shares of GBS Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series B Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of GBS Stock
outstanding immediately after such event and the denominator of which is the
number of shares of GBS Stock that were outstanding immediately prior to such
event.
(d) SERIES C PREFERRED STOCK. A description of the Series C Preferred
Stock and a statement of its preferences, voting powers, qualifications and
special or relative rights or privileges is as follows:
(9) DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the Series C Preferred Stock with respect to dividends, the holders
of shares of Series C Preferred Stock, in preference to the holders of Common
Shares, and of any other junior stock, shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on Quarterly Dividend Payment Date,
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series C Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b)
subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend on shares of the GMO Stock payable in
shares of GMO Stock or a subdivision of the outstanding shares of GMO Stock (by
reclassification or otherwise), declared on the GMO Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series C Preferred Stock. In the event the Corporation
shall at any time after December 18, 2000 declare or pay any dividend on any
shares of GMO Stock payable in shares of GMO Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GMO Stock (by
reclassification or otherwise than by payment of a dividend in shares of GMO
Stock) into a greater or lesser number of shares of GMO Stock, then in each such
case the amount to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of GMO Stock outstanding immediately
after such event and the denominator of which is the number of shares of GMO
Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in Section
IV.G.2(d)(1)(A) immediately after it declares a dividend or distribution on any
shares of GMO Stock (other than a dividend payable in shares of GMO Stock),
provided that, in the event no dividend or distribution shall have been declared
on
A-7
the GMO Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series C Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the date of
issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series C Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series C Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series C Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
(10) VOTING RIGHTS. The holders of shares of Series C
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series C Preferred Stock shall entitle the
holder thereof to 100 times the number of votes to which the holder of each
outstanding share of GMO Stock is then entitled on all matters submitted to a
vote of the stockholders of the Corporation. In the event the Corporation shall
at any time after December 18, 2000 declare or pay any dividend on any shares of
GMO Stock payable in shares of GMO Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of GMO Stock (by reclassification or
otherwise than by payment of a dividend in shares of GMO Stock) into a greater
or lesser number of shares of GMO Stock, then in each such case the number of
votes per share to which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of GMO
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GMO Stock that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in any vote
of the Board of Directors of the Corporation creating a series of Preferred
Stock, or by law, the holders of shares of Series C Preferred Stock and the
holders of Common Shares and any other capital stock of the Corporation having
general voting rights shall vote together as one series on all matters submitted
to a vote of stockholders of the Corporation.
(C) Except as set forth herein or as otherwise
provided by law, holders of Series C Preferred Stock shall have no voting
rights.
A-8
(11) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C
Preferred Stock unless, prior thereto, the holders of shares of Series C
Preferred Stock shall have received $100 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, provided that the holders of shares of Series C
Preferred Stock shall be entitled to receive an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of shares of
GMO Stock, or (2) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the Series
C Preferred Stock, except distributions made ratably on the Series C Preferred
Stock and all other such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
December 18, 2000 declare or pay any dividend on any shares of GMO Stock payable
in shares of GMO Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of GMO Stock (by reclassification or otherwise than by
payment of a dividend in shares of GMO Stock) into a greater or lesser number of
shares of GMO Stock, then in each such case the aggregate amount to which
holders of shares of Series C Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of GMO Stock outstanding immediately after such event and the
denominator of which is the number of shares of GMO Stock that were outstanding
immediately prior to such event.
(12) CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
Common Shares are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series C
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of GMO Stock is changed or exchanged. In the event the Corporation
shall at any time after December 18, 2000 declare or pay any dividend on shares
of GMO Stock payable in shares of GMO Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of GMO Stock (by
reclassification or otherwise than by payment of a dividend in shares of GMO
Stock) into a greater or lesser number of shares of GMO Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series C Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of GMO
Stock outstanding immediately after such event and the denominator of which is
the number of shares of GMO Stock that were outstanding immediately prior to
such event.
A-9
(e) GENERAL PROVISIONS. Except as otherwise specifically provided in a
particular series of Junior Preferred Stock, the following provisions shall
apply to all series of Junior Preferred Stock:
(13) CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Junior Preferred Stock are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Junior Preferred Stock outstanding shall have been
paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any
other distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock;
(ii) declare or pay dividends, or make any
other distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Junior
Preferred Stock, except dividends paid ratably on the Junior Preferred Stock and
all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise
acquire for consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Junior
Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Junior Preferred Stock; or
(iv) redeem, purchase or otherwise acquire
for consideration any shares of Junior Preferred Stock, or any shares of stock
ranking on a parity with the Junior Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
(14) 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 Section
IV.G.2(e)(1)(A) purchase or otherwise acquire such shares at such time and in
such manner.
(f) REACQUIRED SHARES. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as shares of the same series of Preferred
Stock or as part of a new series of Preferred Stock, subject to the conditions
A-10
and restrictions on issuance set forth herein, in any vote of the Board of
Directors of the Corporation creating a series of Preferred Stock, or as
otherwise required by law.
(g) REDEMPTION. The shares of Junior Preferred Stock shall not
be redeemable.
(h) RANK. The Series A Preferred Stock, the Series B Preferred
Stock and the Series C Preferred Stock shall rank equally with respect to the
payment of dividends and the distribution of assets together with any other
series of the Corporation's Preferred Stock that specifically provide that they
shall rank equally with Junior Preferred Stock. The Junior Preferred Stock shall
rank junior with respect to the payment of dividends and the distribution of
assets to all series of the Corporation's Preferred Stock that specifically
provide that they shall rank prior to the Junior Preferred Stock. Nothing herein
shall preclude the Board from creating any series of Preferred Stock ranking on
a parity with or prior to the Junior Preferred Stock as to the payment of
dividends or the distribution of assets.
(i) AMENDMENT. The Articles of Organization of the Corporation
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the holders of Junior Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of each outstanding series of Junior Preferred Stock, voting
together as a single series, provided that, any two or more series of Junior
Preferred Stock that are adversely affected in the same manner shall vote
together as a single class.
(j) FRACTIONAL SHARES. The Junior Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of the Junior Preferred Stock.
A-11
EXHIBIT B -- FORM OF RIGHT CERTIFICATE
Certificate No [GGD/GZBX/GMO]R- _________ Rights
NOT EXERCISABLE AFTER MARCH 28, 2009 OR EARLIER IF REDEMPTION
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.001 PER
RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 7(e) AND 11(b) OF
THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHT
CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING
PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT,
INCLUDING SECTION 7(e) AND SECTION 11(b) THEREOF.]1
Right Certificate
GENZYME CORPORATION
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Second
Amended and Restated Renewed Rights Agreement, dated as of December 18, 2000
(the "Rights Agreement"), between Genzyme Corporation, a Massachusetts
corporation (the "Company"), and American Stock Transfer & Trust Company (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
Massachusetts time, on March 28, 2009 at the office of the Rights Agent
designated for such purposes, or at the office of its successor as Rights Agent,
one one-hundredth of a fully paid non-assessable share of Series [A/B/C] Junior
Participating Preferred Stock (the "Preferred Shares") of the Company, at a
purchase price of $[300.00/80.00/26.00] per one one-hundredth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The number of
--------
(1) The portion of the legend in brackets shall be inserted only if
applicable.
Rights evidenced by this Right Certificate (and the number of one one-hundredths
of a Preferred Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase Price
as of ___________, based on the Preferred Shares as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person (as such terms are defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
rights shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of any such Triggering
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purposes, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may, but are not required to, be redeemed by the Company at
a redemption price of $.001 per Right.
No fractional Preferred Shares 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 Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the
Rights Plan - 2
Company which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ____________, ____.
[CORPORATE SEAL]
GENZYME CORPORATION
ATTEST
By:
----------------------------- -----------------------------------
Clerk Name:
Title:
Countersigned:
[ ]
By:
--------------------------
Authorized Signature
Rights Plan - 3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED_______________________ hereby sells, assigns and
transfers unto_______________________________________________________
(Please print name and address of transferee)
___________________ this Right Certificate, together with all right, title
and interest therein, and does hereby irrevocably constitute and appoint
_____________________________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ,
---------------- -----
-------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended.
--------------------------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right 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 pursuant to the Rights Agreement);
Rights Plan - 4
Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,
----------------- ---- ------------------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
--------------------------------------------------------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: GENZYME CORPORATION
The undersigned hereby irrevocably elects to exercise Rights_________
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new
Rights Plan - 5
Form of Reverse Side of Right Certificate -- continued
--------------------------------------------------------------------------------
Right Certificate for the balance remaining of such Rights shall be registered
in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: ,
------------- ----
--------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate in every particular,
without alteration or enlargement or any
change whatsoever)
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any
Rights Plan - 6
Form of Reverse Side of Right Certificate - continued
--------------------------------------------------------------------------------
such Acquiring Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ,
----------------- ----- -------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signatures in the foregoing Forms of Assignment and Election must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the Certificates set forth above in the Forms of
Assignment and Election are not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
and in the case of an Assignment, will affix a legend to that effect on any
Right Certificates issued in exchange for this Right Certificate.
Rights Plan - 7
