___________________________________________________________
CV Therapeutics, Inc.
and
Xxxxx Fargo Bank Minnesota, N.A.
as Rights Agent
First Amended and Restated Rights Agreement
Dated as of July 19, 2000
___________________________________________________________
First Amended and Restated Rights Agreement
This First Amended and Restated Rights Agreement
("Agreement"), dated as of July 19, 2000, between CV
Therapeutics, Inc., a Delaware corporation (the "Company"), and
Xxxxx Fargo Bank Minnesota, N.A. ("Rights Agent").
Pursuant to the Rights Agreement, dated as of February 2,
1999, between the Company and Norwest Bank Minnesota, N.A. (the
"Prior Agreement"), the Board of Directors of the Company
authorized and declared a dividend of one preferred share
purchase right (a "Right") for each Common Share (as such term is
hereinafter defined) outstanding at the close of business on
February 23, 1999 (the "Record Date"), each Right representing
the right to purchase one one-hundredth of a Preferred Share (as
such term is hereinafter defined), upon the terms and subject to
the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common
Share that shall become outstanding between the Record Date and
the earliest to occur of the Distribution Date, the Redemption
Date and the Final Expiration Date (as such terms are hereinafter
defined); provided, however, that Rights may be issued with
respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date in accordance with the provisions
of Section 22 hereof.
By this Agreement, the Board of Directors desires to amend
and restate the Prior Agreement in its entirety to include Xxxxx
Fargo Bank Minnesota, N.A. and make certain other changes.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions
. For purposes of this Agreement, the following terms have
the meanings indicated:
(a) "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 be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the Common Shares then
outstanding. Notwithstanding the foregoing, (A) the term
Acquiring Person shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit or compensation plan of the Company or
any Subsidiary of the Company, (iv) any entity holding Common
Shares for or pursuant to the terms of any such employee benefit
or compensation plan, or (v) an Excluded Person, and (B) no
Person shall become an "Acquiring Person" either (x) as the
result of an acquisition of Common Shares by the Company 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; provided,
however, that if a Person shall become the Beneficial Owner of
15% or more of the Common Shares then outstanding by reason of
share purchases by the Company and shall, following written
notice from, or public disclosure by the Company of such share
purchases by the Company, become the Beneficial Owner of any
additional Common Shares without the prior consent of the Company
and shall then Beneficially
Own more than 15% of the Common
Shares then outstanding, then such Person shall be deemed to be
an "Acquiring Person," or (y) if the Board of Directors
determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently,
and such Person divests, as promptly as practicable (as
determined in good faith by the Board of Directors), but in any
event within five Business Days, following receipt of written
notice from the Company of such event, of Beneficial Ownership of
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 paragraph (a), then such Person
shall no longer be deemed to be an "Acquiring Person" for
purposes of this Agreement; provided, however, that if such
Person shall again become the Beneficial Owner of 15% or more of
the Common Shares then outstanding, such Person shall be deemed
an "Acquiring Person," subject to the exceptions set forth in
this Section 1(a).
(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 is deemed to beneficially own, within the meaning of
Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Rights Agreement;
(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 (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering
of securities and other than agreements between the Company and
any corporate partner pursuant to which the right to purchase
shares is conditioned upon the achievement of research or
development milestones) or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights),
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
pursuant to any agreement, arrangement or understanding;
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 promulgated under 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 with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement
or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a
bona fide public offering of securities) for the
purpose of
acquiring, holding, voting (except to the extent contemplated by
the proviso to Section 1(c)(ii)(B) hereof) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase, "then outstanding," when
used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which
such Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of
California are authorized or obligated by law or executive order
to close.
(e) "Close of Business" on any given date shall mean 5:00 p.m.,
Pacific Time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., Pacific Time, on
the next succeeding Business Day.
(f) "Common Shares" shall mean the shares of common stock, par
value $.001 per share, of the Company; provided, however, that,
"Common Shares," when used in this Agreement in connection with a
specific reference to any Person other than the Company, shall
mean the capital stock (or equity interest) with the greatest
voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(i) "Interested Stockholder" shall mean any Acquiring Person or
any Affiliate or Associate of an Acquiring Person or any other
Person in which any such Acquiring Person, Affiliate or Associate
has an interest, or any other Person acting directly or
indirectly on behalf of or in concert with any such Acquiring
Person, Affiliate or Associate.
(j) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or
otherwise) of such entity.
(k) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.001 per share, of the
Company having the designations and the powers, preferences and
rights, and the qualifications, limitations and restrictions set
forth in the Form of Certificate of Designation attached to this
Agreement as Exhibit A.
(l) "Purchase Price" shall have the meaning set forth in
Section 7(b) hereof.
(m) "Redemption Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such; provided, however that, if such
Person is determined not to have become an Acquiring Person
pursuant to
clause (y) of Subsection 1(a)(B) hereof, then no
Shares Acquisition Date shall be deemed to have occurred.
(o) "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 interest is owned, directly or
indirectly, by such Person.
(p) "Transaction" shall mean any merger, consolidation or sale
of assets described in Section 13(a) hereof or any acquisition of
Common Shares which would result in a Person becoming an
Acquiring Person or a Principal Party (as such term is
hereinafter defined).
(q) "Transaction Person" with respect to a Transaction shall
mean (i) any Person who (x) is or will become an Acquiring Person
or a Principal Party (as such term is hereinafter defined) if the
Transaction were to be consummated and (y) directly or indirectly
proposed or nominated a director of the Company which director is
in office at the time of consideration of the Transaction, or
(ii) an Affiliate or Associate of such a Person.
Section 2. Appointment of Rights Agent
.
The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issue of Right Certificates
.
(a) Until the earlier of (i) the Shares Acquisition Date or
(ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time
as any Person becomes an Acquiring Person) after the date of the
commencement (determined in accordance with Rule 14d-2 under the
Exchange Act) by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any entity holding
Common Shares for or pursuant to the terms of any such plan) 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 holding Common Shares for or pursuant
to the terms of any such plan) to commence, a tender or exchange
offer (which intention to commence remains in effect for five
Business Days after such announcement), the consummation of which
would result in any Person becoming an Acquiring Person
(including any such date which is after the date of this
Agreement and prior to the issuance of the Rights, the earlier of
such dates being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced by the certificates for Common
Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the Rights (and the
right to receive Right Certificates therefor) 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 Common
Shares 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 "Right Certificate"), evidencing one Right for each Common
Share so held, subject to the adjustment provisions of Section 11
of this Rights Agreement. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send (directly or through the Rights Agent or
its transfer agent) a copy of a Summary of Rights to Purchase
Preferred Shares, in substantially the form of Exhibit C hereto
(the "Summary of Rights"), by first-class, postage-prepaid mail,
to each record holder of Common Shares as of the Close of
Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for
Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof.
Until the Distribution Date (or the earlier of the Redemption
Date and the Final Expiration Date), the surrender for transfer
of any certificate for Common Shares outstanding on the Record
Date shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred
to in the last sentence of this paragraph (c)) after the Record
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
First Amended and Restated Rights Agreement between CV
Therapeutics, Inc. (the "Corporation") and Xxxxx Fargo
Bank Minnesota, N.A., as Rights Agent (the "Rights
Agent"), dated as of July 19, 2000, as amended from
time to time (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a
copy of which is on file at the principal executive
offices of the Corporation. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate.
The Corporation will mail to the holder of this
certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor
addressed to the Secretary of the Corporation. As
described in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person or an Affiliate
or Associate thereof (as defined in the Rights
Agreement) and certain related persons, whether
currently held by or on behalf of such Person or by any
subsequent holder, shall become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by such certificates shall be
evidenced by such certificates alone, 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 after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common
Shares which are no longer outstanding. Notwithstanding this
Section 3(c), the omission of a legend shall not affect the
enforceability of any part of this Rights Agreement or the rights
of any holder of the Rights.
Section 4. Form of Right Certificates
.
(a) The Right Certificates (and the form of election to purchase
Preferred Shares, the form of assignment and the form of
certification to be printed on the reverse thereof) shall be
substantially the same 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 to conform to usage. Subject to the provisions of
Sections 7, 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.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights which are null and void
pursuant to Section 11(a)(ii) hereof and any Right Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence shall contain (to the
extent feasible) the following legend:
The Rights represented by this Right Certificate
are or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Right
Certificate and the Rights represented hereby are null
and void.
The provisions of Section 11(a)(ii) hereof shall be
operative whether or not the foregoing legend is contained on any
such Right Certificate.
Section 5. Countersignature and Registration
. The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive
Officer, its President, its Vice Chairman of the Board, its Chief
Financial Officer, or any of its Vice Presidents, either manually
or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be
valid for any purpose unless 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; 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.
Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office designated for such purpose,
books for registration and transfer of the Right Certificates
issued hereunder. Such books shall show the names and addresses
of the respective holders of the Right Certificates, the number
of Rights evidenced 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
. Subject to the provisions of Section 11(a)(ii),
Section 14 and Section 24 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 as the Right Certificate or Right Certificates
surrendered then entitled such holder 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 purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
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 reasonably request.
Thereupon the Rights Agent shall, subject to Section 11(a)(ii),
Section 14 and Section 24 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.
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 issue, execute and deliver a new Right Certificate of like
tenor to the Rights Agent for countersignature and delivery to
the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Notwithstanding any other provisions 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 Rights Certificates.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) 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 on the reverse side thereof duly executed,
to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Purchase Price for
each one one-hundredth of a Preferred Share (or such other number
of shares or other securities) as to which the Rights are
exercised, at or prior to the earliest of (i) the Close of
Business on February 1, 2009 (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in
Section 23 hereof
(the "Redemption Date"), or (iii) the time at
which such Rights are exchanged as provided in Section 24 hereof.
(b) The purchase price (the "Purchase Price") for each one one-
hundredth of a Preferred Share pursuant to the exercise of a
Right shall initially be $500.00 and shall be subject 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 duly executed,
accompanied by payment of the Purchase Price for the shares 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 by certified check, cashier's
check, bank draft or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly
(i) (A) requisition from any transfer agent for 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, in its sole discretion, shall have elected to deposit
the Preferred Shares issuable upon exercise of the Rights
hereunder into a depository, 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) 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, 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
securities of the Company other than Preferred Shares (including
Common Shares) of the Company pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that such
other securities are available for distribution by the Rights
Agent, if and when appropriate.
In addition, in the case of an exercise of the Rights by a
holder pursuant to Section 11(a)(ii) hereof, the Rights Agent
shall return such Right Certificate to the registered holder
thereof after imprinting, stamping or otherwise indicating
thereon that the rights represented by such Right Certificate no
longer include the rights provided by Section 11(a)(ii) hereof,
and, if fewer than all the Rights represented by such Right
Certificate were so exercised, the Rights Agent shall indicate on
the Right Certificate the number of Rights represented thereby
which continue to include the rights provided by Section
11(a)(ii) hereof.
(d) In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its
treasury,
the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance with
this Section 7.
(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 certification following the form of election to
purchase set forth on the reverse side of the Rights 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 reasonably 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 canceled form, or, if
delivered or surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Right Certificates to the
Company approximately one and one-half years after the
cancellation date, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the
Company.
Section 9. Availability of Preferred Shares
. The Company covenants and agrees that so long as the
Preferred Shares (and, after the time a person becomes an
Acquiring Person, Common Shares or any other securities) issuable
upon the exercise of the Rights may be listed on any national
securities exchange or quotation system, the Company shall use
its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be
listed on such exchange or quotation system upon official notice
of issuance upon such exercise.
The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares
(or Common Shares and other securities, as the case may be)
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 nonassessable shares or other securities.
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 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 reasonable satisfaction that no such
tax is due.
As soon as practicable after the Distribution Date, the
Company shall use its best efforts to:
(a) prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to
the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, will use its best efforts to cause
such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the Final Expiration Date; and
(i) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or
appropriate.
Section 10. Preferred Shares Record Date
. Each person in whose name any certificate for Preferred
Shares or other securities 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 other securities represented
thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly
surrendered with the forms of election and certification duly
executed 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 other securities 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
other securities transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a
Right Certificate, as such, shall not be entitled to any rights
of a holder of Preferred 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 of Purchase Price, Number of Shares or
Number of Rights
. The Purchase Price, the number of Preferred Shares
covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this
Section 11.
(a)
(i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred Shares
into a smaller number of Preferred Shares or (D) issue any shares
of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving Company), except
as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and
kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and
at a time when the Preferred Shares transfer books of the Company
were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Section 24 hereof and the provisions of the next
paragraph of this Section 11(a)(ii), in the event any Person
shall become an Acquiring Person, each holder of a Right shall,
for a period of 60 days after the later of such time any Person
becomes an Acquiring Person or the effective date of an
appropriate registration statement under the Act pursuant to
Section 9 hereof (provided, however that, if at any time prior to
the expiration or termination of the Rights there shall be a
temporary restraining order, a preliminary injunction, an
injunction, or temporary suspension by the Board of Directors, or
similar obstacle to exercise of the Rights (the "Injunction")
which prevents exercise of the Rights, a new 60-day period shall
commence on the date the Injunction is removed), have a right to
receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and
in lieu of Preferred Shares, such number of Common Shares as
shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share
market price of the Common Shares (determined pursuant to
Section 11(d) hereof) on the date such Person became an Acquiring
Person; provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject
to the provisions of Section 13 hereof, then only the provisions
of Section 13 hereof shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). In the event that any Person
shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the
Rights.
Notwithstanding anything in this Agreement to the contrary,
from and after the time any Person becomes an Acquiring Person,
any Rights beneficially owned by (i) such Acquiring Person or an
Associate or Affiliate of such Acquiring Person, (ii) a
transferee of such Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person
became such, or (iii) a transferee of such Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person's 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 of Directors of the
Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 11(a)(ii), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of
this Section 11(a)(ii) and Section 4(b) hereof are complied with,
but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder. No Right
Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant
to the preceding sentence or any Associate or Affiliate thereof
or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights
Agent for transfer to an Acquiring Person whose Rights would be
void pursuant to the preceding sentence shall be canceled.
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if a majority of the
Board of Directors then in office determines that such action is
necessary or appropriate and not contrary to the interests of
holders of Rights, elect to (and, in the event that the Board of
Directors has not exercised the exchange right contained in
Section 24(c) hereof and there are not sufficient treasury shares
and authorized but unissued Common Shares to permit the exercise
in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall) take all such action as may
be necessary to authorize, issue or pay, upon the exercise of the
Rights, cash (including by way of a reduction of the Purchase
Price), property, Common Shares, other securities or any
combination thereof having an aggregate value equal to the value
of the Common Shares which otherwise would have been issuable
pursuant to Section 11(a)(ii) hereof, which aggregate value shall
be determined by a nationally recognized investment banking firm
selected by a majority of the Board of Directors then in office.
For purposes of the preceding sentence, the value of the Common
Shares shall be determined pursuant to Section 11(d) hereof. Any
such election by the Board of Directors must be made within 60
days following the date on which the event described in Section
11(a)(ii) hereof shall have occurred. Following the occurrence
of the event described in Section 11(a)(ii) hereof, a majority of
the Board of Directors then in office may suspend the
exercisability of the Rights for a period of up to 60 days
following the date on which the event described in Section
11(a)(ii) hereof shall have occurred to the extent that such
directors have not determined whether to exercise their rights of
election under this Section 11(a)(iii). 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.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares
entitling them to subscribe for or purchase Preferred Shares (or
shares having the same designations and the powers, preferences
and rights, and the qualifications, limitations and restrictions
as the Preferred Shares ("equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent
preferred shares) less than the then current per
share market
price of the Preferred Shares (as such term is hereinafter
defined) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number
of Preferred Shares which the aggregate offering price of the
total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on such
record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights,
options or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving Company) of evidences of indebtedness or assets (other
than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the then current per share market price of the Preferred Shares
(as such term is hereinafter defined) on such record date, less
the fair market value (as determined in good faith by the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to one Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares; provided,
however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d)
(i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to
be the average of the daily closing prices per share of such
Security for the 30
consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market
price of the Security is determined during a period following the
announcement by the issuer of such Security of (A) a dividend or
distribution on such Security payable in shares of such Security
or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security or
securities convertible into such shares, or (C) any subdivision,
combination or reclassification of such Security and prior to the
expiration of 30 Trading Days 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 per share market price shall be
appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which the Security is listed or admitted to trading or as
reported on the Nasdaq National Market or, if the Security is not
listed or admitted to trading on any national securities exchange
or reported on the Nasdaq National Market, 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
National Association of Securities Dealers, Inc. Automated
Quotations System ("Nasdaq") or such other system then in use,
or, if on any such date the Security is 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
Security selected by the Board of Directors of the Company or, if
on any such date no professional market maker is making a market
in the Security, the price as determined in good faith by the
Board of Directors. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in
Section 11(d)(i) hereof. If the Preferred Shares are not
publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current
per share market price of the Common Shares as determined
pursuant to Section 11(d)(i) hereof (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof) multiplied by one hundred. If
neither the Common Shares nor the 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 of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least
1% in the Purchase Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one one-hundredth of a
Preferred
Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from
the date of the transaction which requires such adjustment or
(ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital
stock of the Company other than Preferred Shares, thereafter the
number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in
Sections 11(a) through 11(c) hereof, inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to
the Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-hundredths of a Preferred Share purchasable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in
Section 11(b) and Section 11(c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred
Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-
hundredths of a Preferred Share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one one-
hundredths of a Preferred Share 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 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(i), 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 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.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-hundredths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the
Purchase Price and the number of one one-hundredths of a
Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) 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
nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until
the occurrence of such event the issuing to the holder of any
Right exercised after such record date of the Preferred Shares
and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive
such additional shares upon the occurrence of the event requiring
such adjustment.
(m) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any
action the purpose of which is to, or if at the time such action
is taken it is reasonably foreseeable that the effect of such
action is to, materially diminish or eliminate the benefits
intended to be afforded by the Rights. Any such action taken by
the Company during any period after any Person becomes an
Acquiring Person but prior to the Distribution Date shall be null
and void unless such action could be taken under this Section
11(m) from and after the Distribution Date.
(n) 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
consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current
market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or
exchangeable for Preferred Shares, dividends on Preferred Shares
payable in Preferred Shares or 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 stockholders.
(o) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in
Common Shares or (ii) effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or
otherwise than by payment of dividends in Common Shares) into a
greater or lesser number of Common Shares, then in any such case
(A) the number of one one-hundredths of a Preferred Share
purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-
hundredths of a Preferred Share so purchasable immediately prior
to such event by a fraction, the numerator of which is the number
of Common Shares outstanding immediately before such event and
the denominator of which is the number of Common Shares
outstanding immediately after such event, and (B) each Common
Share outstanding immediately after such event shall have issued
with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this
Section 11(o) shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or
consolidation is effected.
(p) The exercise of Rights under Section 11(a)(ii) hereof shall
only result in the loss of rights under Section 11(a)(ii) hereof
to the extent so exercised and shall not otherwise affect the
rights represented by the Rights under this Agreement, including
the rights represented by Section 13 hereof.
Section 12. Certificate of Adjusted Purchase Price or Number
of Shares
. Whenever an adjustment is made as provided in Sections 11
and 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement
of the facts accounting for such adjustment, (b) 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 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 Shares Acquisition Date or,
if a Transaction is proposed, the Distribution Date, directly or
indirectly (x) the Company shall consolidate with, or merge with
and into, any Interested Stockholder, or if in such merger or
consolidation all holders of Common Stock are not treated alike,
any other Person, (y) any Interested Person, or if in such merger
or consolidation all holders of Common Stock are not treated
alike, any other 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 (other than,
in the case of either transaction described in (x) or (y), a
merger or consolidation which would result in all of the voting
power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of
the surviving entity) all of the voting power represented by the
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation and the holders of
such securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell, mortgage or
otherwise transfer (or one or more of its subsidiaries shall
sell,
mortgage or otherwise 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 Interested Stockholder or
Stockholders, or if in such transaction all holders of Common
Stock are not treated alike, any other Person, (other than the
Company or any Subsidiary of the Company in one or more
transactions each of which individually and the aggregate does
not violate Section 13(d) hereof) then, and in each such case,
proper provision shall be made so that (i) each holder of a
Right, subject to Section 11(a)(ii) hereof, shall have the right
to receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right is then
exercisable in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of freely tradeable Common
Shares of the Principal Party (as such term is hereinafter
defined), free and clear of liens, rights of call or first
refusal, encumbrances or other adverse claims, as shall be equal
to the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable (without taking into
account any adjustment previously made pursuant to
Section 11(a)(ii) hereof) and dividing that product by (B) 50% of
the then current per share market price of the Common Shares of
such Principal Party (determined pursuant to Section 11(d)
hereof) 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 Principal
Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party; and
(iv) such Principal Party shall take such steps (including, but
not limited to, the reservation of a sufficient number of shares
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 its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a) hereof, the Person
that is the issuer of any securities into which Common Shares are
converted in such merger or consolidation, and if no securities
are so issued, the Person that is the other party to the merger
or consolidation (or, if applicable, the Company, if it is the
surviving Corporation); and
(ii) in the case of any transaction described in (z) of the first
sentence of Section 13(a) hereof, 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 case, (1) if the Common Shares of
such Person are not at such time and have not been continuously
over the preceding 12-month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect
subsidiary or Affiliate of another Person the Common Shares of
which are and have been so registered, "Principal Party" shall
refer to such other Person; (2) if such Person is a subsidiary,
directly or indirectly, or Affiliate 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; and (3) if such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person,
the rules set forth in (1) and (2) above shall apply to each of
the chains of ownership having an interest in such joint venture
as if such party were a "subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear
the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized Common Shares that have not been
issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13 and unless prior
thereto the Company and each Principal Party and each other
Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have (i) 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 (ii) prepared, filed and had declared and
remain effective a registration statement under the Act on the
appropriate form with respect to the Rights and the securities
exercisable upon exercise of the Rights and further providing
that, as soon as practicable after the date of any consolidation,
merger, sale or transfer of assets mentioned in paragraph (a) of
this Section 13, the Principal Party at its own expense will:
(i) cause the registration statement under the Act with respect
to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form to remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or
appropriate;
(iii) list the Rights and the securities purchasable upon
exercise of the Rights on each national securities exchange on
which the Common Shares were listed prior to the consummation of
such consolidation, merger, sale or transfer of assets or on the
Nasdaq National Market if the Common Shares were listed on the
Nasdaq National Market or, if the Common Shares were not listed
on a national securities exchange or the Nasdaq National Market
prior to the consummation of the consolidation, merger, sale or
transfer of assets, on a national securities exchange or the
Nasdaq National Market; and
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates
which comply in all material 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.
(d) After the Distribution Date, the Company covenants and
agrees that it shall not (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer to, 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, any other Person (other than a Subsidiary of the Company
in a transaction which does not violate Section 11(m) hereof), if
(x) at the time of or after such consolidation, merger or sale
there are any charter or bylaw provisions or any rights, warrants
or other instruments or securities outstanding, agreements in
effect or any other action taken which would diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of
its Affiliates and Associates. The Company shall not consummate
any such consolidation, merger, sale or transfer unless prior
thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing
compliance with this Section 13(d).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights 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 New York Stock
Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, 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 as
reported on the Nasdaq National Market or, if the Rights are not
listed or admitted to trading on any national securities exchange
or reported on the Nasdaq National Market, 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
of Directors of the Company. 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 of
Directors of the Company 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; provided,
however, that holders of such depositary receipts shall have all
of the designations and the powers, preferences and rights, and
the qualifications, limitations and restrictions to which they
are entitled as
beneficial owners of the 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 the purposes of this Section 14(b), the current market value
of a Preferred Share shall be the current per share market price
of the Preferred Shares (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise (or, if not
publicly traded, in accordance with Section 11(d)(ii) hereof).
(c) Following the occurrence of one of the transactions or
events specified in Section 11 hereof giving rise to the right to
receive Common Shares, capital stock equivalents (other than
Preferred Shares) or other securities upon the exercise of a
Right, the Company shall not be required to issue fractions of
Common Shares or units of such Common Shares, capital stock
equivalents or other securities upon exercise of the Rights or to
distribute certificates which evidence fractional Common Shares,
capital stock equivalents or other securities. In lieu of
fractional Common Shares, capital stock equivalents or other
securities, 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 Common Share or unit of such
Common Shares, capital stock equivalents or other securities.
For purposes of this Section 14(c), the current market value
shall be the current per share market price (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise and, if such
capital stock equivalent is not traded, each such capital stock
equivalent shall have the value of one one-hundredth of a
Preferred Share.
(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 may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such 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. Holders of
Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys fees, incurred by them in any
action to enforce the provisions of 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 (subject to the provisions of this Rights Agreement)
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; and
(i) 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.
Section 17. Right Certificate Holder Not Deemed a Stockholder
. 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
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 Section 25 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.
Section 18. Concerning the Rights Agent
. 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 in the premises. The indemnity provided
herein shall survive the expiration of the Rights and the
termination of this Agreement.
The Rights Agent shall be protected and shall incur no
liability 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. In no case will the Rights Agent be liable
for special, indirect, incidental or consequential or
consequential loss or damage at any kind whatsoever (including
but not limited to lost profits), even if the Rights Agent has
been advised of such loss or damage.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent
. 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
shareholder services or 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.
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 of its
choice (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 Chief Executive Officer, the
President, the Chief Financial Officer, any Vice President, the
Treasurer or the Secretary 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(a)(ii) hereof) or any adjustment in the
terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 11, 13, 23 or 24 hereof, 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 pursuant to Section 12 hereof 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 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 nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Financial Officer,
any Vice President, the Secretary 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 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 with respect
to its duties or obligations under this Agreement and the date on
and/or after which such action shall be taken or omitted and the
Rights Agent shall not be liable for any action taken or omitted
in accordance with a proposal included in any such application on
or after the date specified therein (which date shall not be less
than three Business Days after the date indicated in such
application unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking or omitting
any such action, the Rights Agent has received written
instructions in response to such application specifying the
action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though 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.
(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 not been executed, the Rights Agent shall not
take any further action with respect to such requested exercise
of 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 for 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 for 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
either (a) a corporation business trust or limited liability
company organized and doing business under the laws of the United
States or of any other state of the United States which is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by
federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $50 million or (b) a direct or indirect wholly owned
subsidiary of such an entity or its wholly-owning parent. 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 for 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 of Directors 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, in connection with
the issuance or sale of Common Shares following the Distribution
Date and prior to the earlier of the Redemption Date and the
Final Expiration Date, the Company (a) shall with respect to
Common Shares so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement in existence
prior to the Distribution Date, or upon the exercise, conversion
or exchange of securities, notes or debentures issued by the
Company and in existence prior to the Distribution Date, and (b)
may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights
in connection with
such issuance or sale; provided, however, that (i) the Company
shall not be obligated to issue any such Right Certificates if,
and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom
such Right Certificate would be issued, and (ii) no Right
Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption.
(a) The Rights may be redeemed by action of the Board of
Directors pursuant to Section 23(b) hereof and shall not be
redeemed in any other manner.
(b)
(i) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of such time as any Person becoming
an Acquiring Person or the Final Expiration Date, redeem all but
not less than all of the then outstanding Rights at a redemption
price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"), and the Company may, at
its option, pay the Redemption Price in Common Shares (based on
the "current per-share market price," as such term is defined in
Section 11(d) hereof, of the Common Shares at the time of
redemption), cash or any other form of consideration deemed
appropriate by the Board of Directors. The redemption of the
Rights by the Board of Directors may be made effective at such
time, on such basis and subject to such conditions as the Board
of Directors in its sole discretion may establish.
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to
Section 11(a)(ii) hereof prior to the expiration or termination
of the Company's right of redemption under this Section 23(b)(i).
(ii) In addition, the Board of Directors of the Company may, at
its option, at any time after the time a Person becomes an
Acquiring Person and the expiration of any period during which
the holder of Rights may exercise the rights under Section
11(a)(ii) hereof but prior to any event described in clause (x),
(y) or (z) of the first sentence of Section 13 hereof, redeem all
but not less than all of the then outstanding Rights at the
Redemption Price (x) in connection with any merger, consolidation
or sale or other transfer (in one transaction or in a series of
related transactions) of assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its
subsidiaries (taken as a whole) in which all holders of Common
Shares are treated alike and not involving (other than as a
holder of Common Shares being treated like all other such
holders) an Interested Stockholder or a Transaction Person or
(y)(A) if and for so long as the Acquiring Person is not
thereafter the Beneficial Owner of 15% or more of the then
outstanding Common Shares, and (B) at the time of redemption no
other Persons are Acquiring Persons.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to
Section 23(b) hereof, 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. The Company shall promptly give
public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after
such action of the Board of Directors ordering the redemption of
the Rights pursuant to Section 23(b) hereof, the Company shall
mail a notice of redemption to all the holders of the then
outstanding Rights 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, provided, however, that failure to give,
or any defect in, any such notice shall not affect the validity
of such redemption. 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 will state
the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights
at any time in any manner other than that specifically set forth
in this Section 23 or in Section 24 hereof, and other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
(d) The Company may, at its option, discharge all of its
obligations with respect to any redemption of the Rights by
(i) issuing a press release announcing the manner of redemption
of the Rights and (ii) mailing payment of the Redemption Price to
the registered holders of the Rights at their last addresses as
they appear on the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer
agent for the Common Shares, and upon such action, all
outstanding Right Certificates shall be null and void without any
further action by the Company.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the
provisions of Section 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or
any entity holding Common Shares for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to
Section 24(a) hereof and without any further action and without
any notice, the right to exercise such Rights shall terminate and
the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the
Common Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) hereof) held by
each holder of Rights.
(c) In lieu of issuing Common Shares in accordance with Section
24(a) hereof, the Company may, if a majority of the Board of
Directors then in office determines that such action is necessary
or appropriate and not contrary to the interests of the holders
of Rights, elect to (and, in the event that there are not
sufficient treasury shares and authorized but unissued Common
Shares to permit any exchange of the Rights in accordance with
Section 24(a) hereof, the Company shall) take all such action as
may be necessary to authorize, issue or pay, upon the exchange of
the Rights, cash (including by way of a reduction of the Purchase
Price), property, Common Shares, other securities or any
combination thereof having an aggregate value equal to the value
of the Common Shares which otherwise would have been issuable
pursuant to Section 24(a) hereof, which aggregate value shall be
determined by a nationally recognized investment banking firm
selected by a majority of the Board of Directors then in office.
For purposes of the preceding sentence, the value of the Common
Shares shall be determined pursuant to Section 11(d) hereof. Any
election pursuant to this Section 24(c) by the Board of Directors
must be made within 60 days following the date on which the event
described in Section 11(a)(ii) hereof shall have occurred.
Following the occurrence on the event described in Section
11(a)(ii) hereof, a majority of the Board of Directors then in
office may suspend the exercisability of the Rights for a period
of up to 60 days following the date on which the event described
in Section 11(a)(ii) hereof shall have occurred to the extent
that such directors have not determined whether to exercise their
rights of election under this Section 24(c). 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.
(d) 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
Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole Common
Share. For the purposes of this Section 24(d), the current
market value of a whole Common Share shall be the closing price
of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately after
the date of the first public announcement by the Company that an
exchange is to be effected pursuant to this Section 24.
(e) 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
exchange 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; provided,
however, that holders of such depositary receipts shall have all
of the designations and the powers, preferences and rights, and
the qualifications, limitations and restrictions to which they
are entitled as
beneficial owners of the 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 the purposes of this Section 24(e), the current market value
of a Preferred Share shall be one hundred (100) times the closing
price of a Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day
immediately after the date of the first public announcement by
the Company that an exchange is to be effected pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) 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),
(ii) 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, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only
the subdivision of outstanding Preferred Shares), (iv) 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 its Subsidiaries (taken as a whole), to any other
Person, (v) to effect the liquidation, dissolution or winding up
of the Company, or (vi) to declare or pay any dividend on the
Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give
to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purpose 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 the 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 (i) or (ii) above at least 10 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 10 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 the Preferred Shares, whichever shall be the
earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of
such event, which notice shall describe the event and the
consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.
Section 26. 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:
CV Therapeutics, Inc.
0000 Xxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
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:
Xxxxx Fargo Bank Minnesota, N.A.
000 Xxxxx Xxxxxxx Xxxxxxxx
Xxxxx Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Manager, Administration
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 27. Supplements and Amendments
. 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 the Rights. From and after the Distribution Date, the
Company and the Rights Agent shall, if the Company so directs,
from time to time supplement or amend any provision of this
Agreement without the approval of any holders of Right
Certificates in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, or (iii) change
any other provisions with respect to the Rights which the Company
may deem necessary or desirable; provided, however, that no such
supplement or amendment shall be made which would adversely
affect the interests of the holders of Rights (other than the
interests of an Acquiring Person or its Affiliates or
Associates). Any supplement or amendment adopted during any
period after any Person has become an Acquiring Person but prior
to the Distribution Date shall become null and void unless such
supplement or amendment could have been adopted by the Company
from and after the Distribution Date. Any such supplement or
amendment shall be evidenced by a writing signed by the Company
and the Rights Agent. Upon 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 27, the Rights Agent shall execute such supplement or
amendment unless the Rights Agent shall have determined in good
faith that such supplement or amendment would adversely affect
its interest under this Agreement. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Shares.
Section 28. Determination and Actions by the Board of
Directors, etc.
For all purposes of this Agreement, any calculation of the
number of Common Shares outstanding at any particular time,
including for purposes of determining the particular percentage
of such outstanding Common Shares or any other securities of
which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act as in effect
on the date of this Agreement. The Board of Directors of the
Company 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 (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the
Rights Agent and the holders of the Rights, and (y) not subject
the Board to any liability to the holders of the Rights.
Section 29. Successors
. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
Section 30. 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 31. Severability
. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
Section 32. Governing Law
. This Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of
the State of Delaware 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 33. Counterparts
. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. 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.
In Witness Whereof, parties whereto have caused this
Agreement to be duly executed, all as of the day and year first
above written.
Attest: CV Therapeutics, Inc.
/s/ Xxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxx
Xxxx X. Xxxxxxxxx Xxxxx X. Xxxxx
Secretary Chairman of the Board and Chief
Executive Officer
Attest: Xxxxx Fargo Bank Minnesota,
N.A.
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxxx X. Van Dell
Print Name: Xxxxxx Xxxxxx Print Name: Xxxxx X. Van Dell
Title: Officer Title: AVP
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 4
Section 3. Issue of Right Certificates 4
Section 4. Form of Right Certificates 6
Section 5. Countersignature and Registration 7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. 8
Section 8. Cancellation and Destruction of Right Certificates 10
Section 9. Availability of Preferred Shares 10
Section 10. Preferred Shares Record Date 11
Section 11.Adjustment of Purchase Price, Number of Shares or
Number of Rights 11
Section 12.Certificate of Adjusted Purchase Price or Number of Shares 18
Section 13.Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. 18
Section 14. Fractional Rights and Fractional Shares. 21
Section 15. Rights of Action 23
Section 16. Agreement of Right Holders 23
Section 17. Right Certificate Holder Not Deemed a Stockholder 23
Section 18. Concerning the Rights Agent 24
Section 19.Merger or Consolidation or Change of Name of Rights Agent 24
Section 20. Duties of Rights Agent 25
Section 21. Change of Rights Agent 27
Section 22. Issuance of New Right Certificates 27
Section 23. Redemption. 28
Section 24. Exchange. 29
Section 25. Notice of Certain Events. 31
Section 26. Notices 32
Section 27. Supplements and Amendments 33
Section 28.Determination and Actions by the Board of Directors, etc. 33
Section 29. Successors 33
Section 30. Benefits of this Agreement 33
Section 31. Severability 34
Section 32. Governing Law 34
Section 33. Counterparts 34
Section 34. Descriptive Headings 34
Exhibit A - Certificate of Designation
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
