EXHIBIT 1
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
BETWEEN
ACCREDO HEALTH, INCORPORATED
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY, AS RIGHTS AGENT
APRIL 17, 2003
TABLE OF CONTENTS
ARTICLE I - CERTAIN DEFINITIONS...................................................................1
ARTICLE II - THE RIGHTS...........................................................................4
2.1 Summary of Rights.......................................................................4
2.2 Issuance of Rights Certificates; Legend.................................................4
2.3 Exercise of Rights; Separation of Rights................................................5
2.4 Adjustments to Exercise Price; Number of Rights.........................................6
2.5 Date on Which Exercise is Effective.....................................................7
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates...................7
2.7 Registration, Registration of Transfer and Exchange.....................................7
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates...............................8
2.9 Persons Deemed Owners...................................................................8
2.10 Delivery and Cancellation of Certificates...............................................8
2.11 Agreement of Rights Holders.............................................................9
ARTICLE III - ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS......................9
3.1 Flip-In.................................................................................9
3.2 Flip-Over..............................................................................11
ARTICLE IV - THE RIGHTS AGENT....................................................................11
4.1 General................................................................................11
4.2 Merger or Consolidation or Change of Name of Rights Agent..............................11
4.3 Duties of Rights Agent.................................................................12
4.4 Change of Rights Agent.................................................................13
ARTICLE V - MISCELLANEOUS........................................................................14
5.1 Termination............................................................................14
5.2 Expiration.............................................................................14
5.3 Issuance of New Rights Certificates....................................................14
5.4 Supplements and Amendments.............................................................14
5.5 Fractional Shares......................................................................15
5.6 Rights of Action.......................................................................15
5.7 Holder of Rights Not Deemed a Stockholder..............................................15
5.8 Notice of Proposed Actions.............................................................15
5.9 Notices................................................................................15
5.10 Suspension of Exercisability...........................................................16
5.11 Costs of Enforcement...................................................................16
5.12 Successors.............................................................................16
5.13 Benefits of this Agreement.............................................................16
5.14 Determination and Actions by the Board of Directors, etc...............................16
5.15 Descriptive Headings...................................................................16
5.16 Governing Law..........................................................................16
5.17 Counterparts...........................................................................17
5.18 Severability...........................................................................17
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
THIS STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to
time, this "Agreement") is made and entered into as of April 22, 2003, but shall
be effective as of April 17, 2003, between Accredo Health, Incorporated, a
Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company, as rights agent (the "Rights Agent," which term shall include any
successor rights agent hereunder).
W I T N E S S E T H:
WHEREAS, on April 17, 2003, the Board of Directors of the Company has
(a) authorized and declared a dividend of one right ("Right") in respect of each
share of Common Stock (as hereinafter defined) held of record as of the Close of
Business (as hereinafter defined) on April 28, 2003 (the "Record Time") and (b)
as provided in Section 2.4, authorized the issuance of one Right in respect of
each share of Common Stock issued after the Record Time and prior to the
Separation Time (as hereinafter defined);
WHEREAS, subject to Sections 3.1, 5.1 and 5.10, each Right entitles the
holder thereof, after the Separation Time, to purchase securities of the Company
(or, in certain cases, of certain other entities) pursuant to the terms and
subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
15% or more of the outstanding shares of Common Stock; provided, however, that
the term "Acquiring Person" shall not include any Person (i) who is the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock on the
date of this Agreement or who shall become the Beneficial Owner of 15% or more
of the outstanding shares of Common Stock solely as a result of an acquisition
by the Company of shares of Common Stock, until such time hereafter or
thereafter as any such Person shall become the Beneficial Owner (other than by
means of a stock dividend or stock split) of any additional shares of Common
Stock, (ii) who is the Beneficial Owner of 15% or more of the outstanding shares
of Common Stock but who acquired Beneficial Ownership of shares of Common Stock
without any plan or intention to seek or affect control of the Company, if such
Person promptly enters into an irrevocable commitment promptly to divest, and
thereafter promptly divests (without exercising or retaining any power,
including voting power, with respect to such shares), sufficient shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) so that such Person ceases to be the Beneficial Owner of 15%
or more of the outstanding shares of Common Stock or (iii) who Beneficially Owns
shares of Common Stock consisting solely of one or more of (A) shares of Common
Stock Beneficially Owned pursuant to the grant or exercise of an option granted
to such Person by the Company in connection with an agreement to merge with, or
acquire, the Company entered into prior to a Flip-In Date, (B) shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) Beneficially Owned by such Person or its Affiliates or Associates
at the time of grant of such option or (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired by
Affiliates or Associates of such Person after the time of such grant which, in
the aggregate, amount to less than 1% of the outstanding shares of Common Stock.
In addition, the Company, any
wholly owned Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly owned Subsidiary of the Company
shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as
amended (the "Securities Exchange Act"), as such Rule is in effect on the date
of this Agreement.
A Person shall be deemed the "Beneficial Owner" of, and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities of which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner pursuant to Rule 13d-3 and 13d-5 under the Securities
Exchange Act, as such Rules are in effect on the date of this Agreement as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, other rights (other than the
Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to have "Beneficial Ownership"
of, or to "Beneficially Own," any security (i) solely because such security has
been tendered pursuant to a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such tendered security is
accepted for payment or exchange or (ii) solely because such Person or any of
such Person's Affiliates or Associates has or shares the power to vote or direct
the voting of such security pursuant to a revocable proxy given in response to a
public proxy or consent solicitation made to more than ten holders of shares of
a class of stock of the Company registered under Section 12 of the Securities
Exchange Act and pursuant to, and in accordance with, the applicable rules and
regulations under the Securities Exchange Act, except if such power (or the
arrangements relating thereto) is then reportable under Item 6 of Schedule 13D
under the Securities Exchange Act (or any similar provision of a comparable or
successor report). Notwithstanding the foregoing, no officer or director of the
Company shall be deemed to Beneficially Own any securities of any other Person
by virtue of any actions such officer or director takes in such capacity. For
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any time, including for purposes of determining the
percentage of the outstanding shares of Common Stock with respect to which a
Person is the Beneficial Owner, shall be made in accordance with the provisions
of Rule 13d-3(d)(1) under the Securities Exchange Act.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Atlanta, Georgia are generally authorized
or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m. Atlanta,
Georgia time on such date (or, if such date is not a Business Day, 5:00 p.m.
Atlanta, Georgia time on the next succeeding Business Day).
"Common Stock" shall mean the shares of Common Stock, par value $0.01
per share, of the Company.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c).
"Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole Right.
Until adjustment thereof in accordance with the terms hereof, the Exercise Price
shall equal $100.00.
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Termination Time, (iii) April 28, 2013 and (iv) the time of a merger of
the Company into another corporation pursuant to an agreement entered into prior
to a Flip-In Date.
"Flip-In Date" shall mean the tenth Business Day after any Stock
Acquisition Date or such earlier or later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Flip-In
Date that would otherwise have occurred.
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"Flip-Over Entity" for purposes of Section 3.2, shall mean (i) in the
case of a Flip-Over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, any other party to such Flip-Over Transaction or Event and (ii) in
the case of a Flip-Over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the assets or
earning power being transferred in such Flip-Over Transaction or Event; provided
in all cases if such Person is a subsidiary of another Person, the ultimate
controlling Person that is not an individual shall be the Flip-Over Entity.
"Flip-Over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other Persons similarly responsible for direction of the business and
affairs) of the Flip-Over Entity.
"Flip-Over Transaction or Event" shall mean a transaction or series of
transactions after a Flip-In Date in which, directly or indirectly, (i) the
Company shall consolidate or merge or participate in a share exchange with any
other Person if, at the time of the consolidation, merger or share exchange or
at the time the Company enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring Person Controls the Board
of Directors of the Company and either (A) any term of or arrangement concerning
the treatment of shares of capital stock in such consolidation, merger or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of the Common Stock or (B) the Person
with whom the transaction or series of transactions occurs is the Acquiring
Person or an Affiliate or Associate of the Acquiring Person or (ii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer) assets (A) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (B) generating more than
50% of the operating income or cash flow, of the Company and its Subsidiaries
(taken as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons which are Affiliates
or Associates or otherwise acting in concert, if, at the time of the entry by
the Company (or any such Subsidiary) into an agreement with respect to such sale
or transfer of assets, the Acquiring Person Controls the Board of Directors of
the Company. An Acquiring Person shall be deemed to "Control" the Company's
Board of Directors when, following a Flip-In Date, the Persons who were
directors of the Company before the Flip-In Date shall cease to constitute a
majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.4 shall have caused the closing prices used to determine the Market Price on
any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, 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, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by The Nasdaq Stock Market, Inc.'s Nasdaq
National Market or such other system then in use, or, if on any such date the
securities are not listed or admitted to trading on any national securities
exchange or 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
securities selected by the Board of Directors of the Company; provided, however,
that if on any such date the securities are not listed or admitted to trading on
a national securities exchange or traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith by the
Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
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"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act, as
such Rule is in effect on the date of this Agreement), corporation or other
entity.
"Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $1.00 per share, of the Company created by the
Certificate of Designation, Preferences and Rights in substantially the form set
forth in Exhibit B hereto, appropriately completed.
"Separation Time" shall mean the Close of Business on the earlier of
(i) the tenth Business Day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Separation
Time that would otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-In Date; provided, that
if the foregoing results in the Separation Time being prior to the Record Time,
the Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
canceled, terminated or otherwise withdrawn prior to the Separation Time without
the purchase of any shares of Common Stock pursuant thereto, such offer shall be
deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has become
such.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity interests is Beneficially Owned, directly or
indirectly, by such Person.
"Termination Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Trading Day," when used with respect to any securities, shall mean a
day on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a day on which The Nasdaq Stock
Market, Inc.'s Nasdaq National Market or such other system then in use is open
for the transaction of business or, if such securities are not listed or
admitted to trading on any national securities exchange or quoted on any such
system, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
2.2 Issuance of Rights Certificates; Legend. (a) Certificates for
the Common Stock issued after the Record Time but prior to the Separation Time
shall evidence, in addition to the Common Stock represented by such certificate,
one Right for each share of Common Stock represented thereby and shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
"Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Stockholder Protection
Rights Agreement, effective as of April 17, 2003 (as such may be
amended from time to time, the "Rights Agreement"), between Accredo
Health, Incorporated (the "Company") and American Stock Transfer &
Trust Company, as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of
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the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be terminated, may become exercisable for
securities or assets of the Company or of another entity, may be
exchanged for shares of Common Stock or other securities or assets of
the Company, may expire, may become void (if they are "Beneficially
Owned" by an "Acquiring Person" or an Affiliate or Associate thereof,
as such terms are defined in the Rights Agreement, or by any transferee
of any of the foregoing) or may be evidenced by separate certificates
and may no longer be evidenced by this certificate. The Company will
mail or arrange for the mailing of a copy of the Rights Agreement to
the holder of this certificate without charge promptly after the
receipt of a written request therefor."
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence, in addition to the Common Stock represented
by such certificate, one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.
(b) Subject to Sections 2.4 and 5.3, one Right shall be issued in
respect of (i) each share of Common Stock outstanding as of the Record Time and
(ii) each additional share of Common Stock that becomes outstanding (whether by
original issuance or out of treasury, but other than in a transaction
contemplated by Section 2.4) after the Record Time but prior to the Separation
Time. To the extent provided in Section 5.3, Rights shall be issued by the
Company in respect of shares of Common Stock that are issued or sold by the
Company after the Separation Time.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to
Sections 3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each
Right will entitle the holder thereof, after the Separation Time and prior to
the Expiration Time, to purchase, for the Exercise Price, one ten-thousandth
(1/10,000th) of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate that evidences the share of
Common Stock with which it is associated (together, in the case of certificates
issued prior to the Record Time, with the letter or notice mailed to the record
holder thereof pursuant to Section 2.1) and will be transferable only together
with, and will be transferred by a transfer (whether with or without such letter
or notice) of, such associated share of Common Stock, and the surrender for
transfer of any certificates representing outstanding Common Stock will also
constitute the surrender for transfer of the Rights associated with the Common
Stock represented by such certificate.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1 and 5.10,
after the Separation Time and prior to the Expiration Time, the Rights (i) may
be exercised and (ii) may be transferred independently of shares of Common
Stock. Promptly following the Separation Time, the Rights Agent will mail to
each holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become void pursuant to Section 3.1(b)), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having 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
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which the
Rights may from time to time be listed or traded, or to conform to usage, and
(y) a disclosure statement describing the Rights.
(d) Subject to Sections 3.1, 5.1 and 5.10, Rights may be exercised
on any Business Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate, duly completed, accompanied by payment
by certified or official bank check or money order payable to the order of the
Company, of a sum equal to the Exercise Price multiplied by the number of Rights
being exercised and a sum sufficient to cover any transfer tax or charge that
may be payable in respect of any transfer involved in the transfer or delivery
of Rights Certificates or the issuance or delivery of certificates for shares or
depositary receipts (or both) in a name other than that of the holder of the
Rights being exercised.
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(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.3(d), and subject to
Sections 3.1, 5.1 and 5.10, the Rights Agent promptly will (i)(A) requisition
from the Company's transfer agent(s) stock certificates evidencing such number
of shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agents to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 not to issue certificates
representing fractional shares, requisition from the depositary selected by the
Company depositary receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid in lieu of
fractional shares in accordance with Section 5.5 and (ii) after receipt of such
certificates, depositary receipts and/or cash, deliver the same to or upon the
order of the registered holder of such Rights Certificate, registered (in the
case of certificates or depositary receipts) in such name or names as may be
designated by such holder. In the event that the Company elects pursuant to
Section 3.1(e) to issue other securities and/or assets of the Company upon
exercise of the Rights, the Company will make all arrangements necessary so that
such other securities and/or assets of the Company are available for
distribution by the Rights Agent, if and when appropriate.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933, as amended, or the Securities
Exchange Act, and the rules and regulations thereunder, and any other applicable
law, rule or regulation, in connection with the issuance of any shares upon
exercise of Rights; and (iii) pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Company shall not be required to pay any
transfer tax or charge that may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the
event the Company shall at any time after the Record Time and prior to the
Separation Time (i) declare or pay a dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one share of
Common Stock immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof (assuming for such purpose that the
Company would issue a fraction of a share of Common Stock, as applicable, and
without giving effect to any requirement that cash be paid in lieu of the
issuance of any fractional share interest) and (y) each Right held prior to such
adjustment will become that number of Rights equal to the Expansion Factor, and
the adjusted number of Rights will be deemed to be distributed among the shares
of Common Stock with respect to which the original Rights were associated (if
they remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
(b) In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue or distribute any securities or
assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or recapitalization (including
any such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
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(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.4 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received such a
certificate.
Rights Certificates shall represent the right to purchase the
securities purchasable under the terms of this Agreement, including any
adjustment or change in the securities purchasable upon exercise of the Rights,
even though such certificates may continue to express the right to purchase the
securities purchasable at the time of issuance of the initial Rights
Certificates.
2.5 Date on Which Exercise is Effective. Each person in whose name
any certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock 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 stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, Chief Executive Officer, President or one
of its Executive Vice Presidents or Senior Vice Presidents, under its corporate
seal reproduced thereon and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Rights Certificates
may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at the time of such signature the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature and delivery
of such Rights Certificates.
Promptly after the Separation Time, the Company will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by
the Company to the Rights Agent for countersignature, and, subject to Section
3.1(b), an authorized signatory of the Rights Agent shall manually countersign
and deliver such Rights Certificates to the holders of the Rights pursuant to
Section 2.3(c). No Rights Certificate shall be valid for any purpose unless
manually countersigned by an authorized signatory of the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After
the Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of this Section 2.7(a) and Sections 2.7(c) and
2.7(d), the Company will execute and the Rights Agent will countersign and
deliver, in the name of the holder or the designated transferee or transferees,
as required pursuant to the holder's instructions, one or more new Rights
Certificates evidencing the same aggregate number of Rights as did the Rights
Certificate so surrendered.
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(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificates until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
thereof, or the Affiliates or Associates of such Beneficial Owner (or former
Beneficial Owner), as the Company shall reasonably request. As a condition to
the issuance of any new Rights Certificate under this Section 2.7, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto.
(d) The Company shall not be required to register the transfer or
exchange of any Rights after such Rights have become void under Section 3.1(b),
been exchanged under Section 3.1(c) or been terminated under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a)
If any mutilated Rights Certificate is surrendered to the Rights Agent prior to
the Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the
Company shall execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.8, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section
2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall evidence
an original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and, subject to Section 3.1(b), shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any Person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly canceled by
the Rights Agent. The Company may at any time
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deliver to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Rights Certificates so delivered shall be promptly
canceled by the Rights Agent. No Rights Certificates shall be countersigned in
lieu of or in exchange for any Rights Certificates canceled as provided in this
Section 2.10, except as expressly permitted by this Agreement. The Rights Agent
shall return all canceled Rights Certificates to the Company.
2.11 Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the associated
share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Stock certificate) for registration
of transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void;
(e) this Agreement may be supplemented or amended from time to
time pursuant to Section 2.4(b) or 5.4; and
(f) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of the Rights Agent's inability to
perform any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-In. (a) In the event that prior to the Expiration Time a
Flip-In Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Section 5.10), that number
of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with respect to
the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the
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certification set forth at the end of the form of assignment or notice of
election to exercise and provide such additional evidence of the identity of the
Beneficial Owner and its Affiliates and Associates (or former Beneficial Owners
and their Affiliates and Associates) as the Company shall reasonably request,
then the Company shall be entitled conclusively to deem the Beneficial Owner
thereof to be an Acquiring Person or an Affiliate or Associate thereof or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced thereby to be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at
any time after a Flip-In Date and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Common Stock, elect to exchange all (but not less than all) the then-outstanding
Rights (other than Rights that have become void pursuant to the provisions of
Section 3.1(b)) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right (appropriately adjusted in order to protect the interests
of holders of Rights generally in the event that after the Separation Time an
event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Common Stock) (such exchange ratio,
as adjusted from time to time, being hereinafter referred to as the "Exchange
Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio. Promptly after the action of the Board of Directors electing
to exchange the Rights, the Company shall give notice thereof (specifying the
steps to be taken to receive shares of Common Stock in exchange for Rights) to
the Rights Agent and the holders of the Rights (other than Rights that have
become void pursuant to Section 3.1(b)) outstanding immediately prior thereto by
mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(e) shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of any applicable taxes and other governmental charges payable by the holder was
made; provided, however, that if the date of such surrender and payment is a
date upon which the stock 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 stock
transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one ten-thousandth (1/10,000th) of a share of
Preferred Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock or Preferred Stock of
the Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Company shall either (i) call a
meeting of stockholders seeking approval to cause sufficient additional shares
to be authorized (provided that if such approval is not obtained the Company
will take the action specified in clause (ii) of this sentence) or (ii) take
such action as shall be necessary to ensure and provide, to the extent permitted
by applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, cash, debt or equity securities or other assets
(or a combination thereof) having a fair value equal to twice the Exercise
Price, or (B) without payment of consideration (except as otherwise required by
applicable law), cash, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the Exercise Price, or (y) if
the Board of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-In Date times the Exchange Ratio in
effect on the Flip-In Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
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3.2 Flip-Over. (a) Prior to the Expiration Time, the Company shall
not enter into any agreement with respect to, consummate or permit to occur any
Flip-Over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-Over Entity, for the benefit of the holders
of the Rights (other than holders of Rights that have become void pursuant to
Section 3.1(b)), providing that, upon consummation or occurrence of the
Flip-Over Transaction or Event (i) each Right (other than holders of Rights that
have become void pursuant to Section 3.1(b)) shall thereafter constitute the
right to purchase from the Flip-Over Entity, upon exercise thereof in accordance
with the terms hereof, that number of shares of Flip-Over Stock of the Flip-Over
Entity having an aggregate Market Price on the date of consummation or
occurrence of such Flip-Over Transaction or Event equal to twice the Exercise
Price for an amount in cash equal to the Exercise Price (such right to be
appropriately adjusted in order to protect the interests of the holders of
Rights generally (other than holders of Rights that have become void pursuant to
Section 3.1(b)) in the event that after such date of consummation or occurrence
an event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Flip-Over Stock) and (ii) the
Flip-Over Entity shall thereafter be liable for, and shall assume, by virtue of
such Flip-Over Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to this Agreement. The provisions
of this Section 3.2 shall apply to successive Flip-Over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
terminated pursuant to Section 5.1 in connection therewith, the Company shall
not enter into any agreement with respect to, consummate or permit to occur any
Flip-Over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments that would eliminate or otherwise diminish in any material respect
the benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) 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 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, its directors,
officers, employees and agents for, and to hold each of them harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent or such other indemnified
party, for anything done or suffered or omitted to be done by the Rights Agent
in connection with the acceptance and administration of this Agreement or the
exercise or performance of its duties hereunder, including the costs and
expenses of defending against any claim of liability. The indemnity provided in
this Section 4.1(a) shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent shall be fully 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 or the exercise or
performance of its duties hereunder in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
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.
4.2 Merger or Consolidation or Change of Name of Rights Agent. (a)
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the stockholder services
business of the Rights Agent or any successor Rights Agent, will 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 Person would be eligible for appointment as a successor
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Rights Agent under the provisions of Section 4.4. In case at the time such
successor Rights Agent succeeds to the agency created by this Agreement any of
the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights 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 Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel will
be full and complete authorization and protection to the Rights Agent as to any
action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems 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 a person believed by the Rights Agent to
be the Chairman of the Board, the Chief Executive Officer, the President or any
Executive Vice President or Senior Vice President and by the Chief Financial
Officer, the Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate will be full authorization to the Rights Agent for any action taken,
suffered or omitted in good faith by it under the provisions of this Agreement
in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of any provision of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any certificate
for securities purchasable upon exercise of Rights or Rights Certificate (except
its countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b)) or any adjustment required under any provision of this Agreement
or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights after receipt of the certificate
contemplated by Section 2.4 describing any such adjustment); nor will it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any securities purchasable upon exercise of
Rights or any Rights or as to whether any securities purchasable upon exercise
of Rights will, when issued, be duly and validly authorized, executed, issued
and delivered and fully paid and nonassessable.
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(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
person believed by the Rights Agent to be the Chairman of the Board, the Chief
Executive Officer, the President or any Executive Vice President or Senior Vice
President or the Secretary or any Assistant Secretary or the Treasurer or any
Assistant Treasurer of the Company, and to apply to such persons for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken, suffered or omitted by it in good faith in accordance with
instructions of any such person, or for any delay in acting while awaiting
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, suffered or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, 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 Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will 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 the Rights Agent was not grossly negligent in
the selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or obligations
shall be read into this Agreement against the Rights Agent.
(k) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits).
(l) 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.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after 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 any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then
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the holder of any Rights may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the State
of Georgia or any other State of the United States, in good standing, which is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement 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 $100,000,000 or (b) an
Affiliate of a corporation described in the immediately preceding clause (a).
After appointment, the successor Rights Agent will 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 will file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock,
and mail a notice thereof in writing to the holders of the Rights. Failure to
give any notice provided for in this Section 4.4, 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.
ARTICLE V
MISCELLANEOUS
5.1 Termination. (a) The Board of Directors of the Company may, at
its option, at any time prior to the close of business on the Flip-In Date elect
to terminate the Rights without any payment to any holder thereof.
(b) Immediately upon the action of the Board of Directors of the
Company electing to terminate the Rights (or, if the resolution of the Board of
Directors electing to terminate the Rights states that the termination will not
be effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter be null and void.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged, as
provided in Section 3.1.
5.3 Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of Common Stock or to
options, in each case issued or granted prior to, and outstanding at, the
Separation Time, the Company shall issue to the holders of such shares of Common
Stock, Rights Certificates representing the appropriate number of Rights in
connection with the issuance or sale of such shares of Common Stock; provided,
however, in each case, (i) no such Rights Certificate shall be issued, if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or to the Person to whom such Rights Certificates would be issued, (ii)
no such Rights Certificates shall be issued if, and to the extent that,
appropriate adjustment shall have otherwise been made in lieu of the issuance
thereof, and (iii) the Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or Associate of an Acquiring
Person or any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights (i) prior to the Close of Business on the Flip-In Date, in
any respect and (ii) after the Close of Business on the Flip-In Date, to make
any changes that the Company may deem necessary or desirable and that shall not
materially adversely affect the interests of the holders of Rights generally
(other than an Acquiring Person or an Affiliate or an Associate of an Acquiring
Person)
-14-
or in order to cure any ambiguity or to correct or supplement any provision
contained herein that may be inconsistent with any other provisions herein or
otherwise defective. The Rights Agent will duly execute and deliver any
supplement or amendment hereto requested by the Company upon receipt of a
certificate from the Company that such supplement or amendment satisfies the
terms of the preceding sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement shall be effective without
the consent of the Rights Agent.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise of Rights, the Company
shall, in lieu thereof, in the sole discretion of the Board of Directors, either
(a) evidence such fractional shares by depositary receipts issued pursuant to an
appropriate agreement between the Company and a depositary selected by it,
providing that each holder of a depositary receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled as a
beneficial owner of such fractional share, or (b) sell such shares on behalf of
the holders of Rights and pay to the registered holder of such Rights the
appropriate fraction of price per share received upon such sale.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Section 3.1(b)), rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Rights, may, on such
holder's own behalf and for such holder's own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the manner provided in such
holder's Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and 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.
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such,
of any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
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 5.8), or to receive dividends or subscription rights, or
otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose
after the Separation Time and prior to the Expiration Time (i) to effect or
permit occurrence of any Flip-Over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section
5.9, a notice of such proposed action, which shall specify the date on which
such Flip-Over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Accredo Health, Incorporated
0000 Xxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
-15-
Any notice or demand authorized or required by this Agreement to be
given or made by the Company or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
Notices or demands authorized or required by this Agreement to be given
or made by the Company or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the Separation
Time, on the registry books of the transfer agent for the Common Stock. Any
notice that is mailed in the manner herein provided shall be deemed given on the
third Business Day after mailing, whether or not the holder receives the notice.
Failure to give a notice pursuant to the provisions of this Agreement shall not
affect the validity of any action taken hereunder.
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 2.3(g) or Section 3.1 or otherwise to comply with federal or state
securities laws, the Company may suspend the exercisability of the Rights for 90
days and any additional period that may be reasonable in order to take such
action or comply with such laws. In the event of any such suspension, the
Company shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
5.11 Costs of Enforcement. The Company agrees that if the Company
or any other Person the securities of which are purchasable upon exercise of
Rights fails to fulfill any of its obligations pursuant to this Agreement, then
the Company or such Person will reimburse the holder of any Rights for the costs
and expenses (including legal fees) incurred by such holder in actions to
enforce such holder's rights pursuant to any Rights or this Agreement.
5.12 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.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, etc. 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 to 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. 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 Company, the Rights Agent, the holders of
the Rights and all other parties, and (y) not subject the Board of Directors of
the Company to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT 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.
-16-
5.17 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.
5.18 Severability. If any term or provision of this Agreement or
the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or unenforceable.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
-17-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ACCREDO HEALTH, INCORPORATED
By: /s/ Xxxxxx X. Xxxx, Xx.
----------------------------------------------------
Name: Xxxxxx X. Xxxx, Xx.
Title: Senior Vice President and General Counsel
AMERICAN STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Counsel
-1-
EXHIBIT A
(Form of Rights Certificate)
Certificate No. R- _______ Rights
THE RIGHTS ARE SUBJECT TO TERMINATION OR MANDATORY EXCHANGE, AT THE OPTION OF
THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT(AS DEFINED BELOW).
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF
ANY OF THE FOREGOING WILL BE VOID.
Rights Certificate
ACCREDO HEALTH, INCORPORATED
This certifies that _______________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Stockholder Protection Rights Agreement, effective as of April
17, 2003 (as amended from time to time, the "Rights Agreement"), between Accredo
Health, Incorporated, a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company as rights agent (the "Rights Agent," which term shall
include any successor rights agent under the Rights Agreement), to purchase from
the Company at any time after the Separation Time (as such term is defined in
the Rights Agreement) and prior to the Close of Business on April 28, 2003, one
ten-thousandth (1/10,000) of a fully paid share of Series A Junior Participating
Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the
Company (subject to adjustment as provided in the Rights Agreement) at the
Exercise Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed at the principal
office of the Rights Agent. The Exercise Price shall initially be $100.00 per
Right and shall be subject to adjustment in certain events as provided in the
Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to purchase securities of an
entity other than the Company or securities or assets of the Company other than
Preferred Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request. Capitalized terms used in this
Rights Certificate and not otherwise defined herein shall have the meanings
ascribed to such terms in the Rights Agreement.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced by this
Certificate may be (a) terminated by the Company under certain circumstances, at
its option, or (b) exchanged by the Company under certain circumstances, at its
option, for one share of Common Stock or one ten-thousandth (1/10,000) of a
share of Preferred Stock) per Right (or, in certain cases, other securities or
assets of the Company), subject in each case to adjustment in certain events as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of any securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Rights evidenced by this Rights Certificate shall have been exercised
or exchanged as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Date:
ATTEST: ACCREDO HEALTH, INCORPORATED
By:
------------------------------- --------------------------------
Secretary
Countersigned:
-------------------------------
By:
-----------------------------
Authorized Officer
-2-
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED, _______________________________ hereby sells,
assigns and transfers unto
------------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________________
attorney-in-fact, to transfer the within Rights Certificate on the books of the
within-named company, with full power of substitution.
Dated: ___________________, _____.
Signature Guaranteed:
-------------------------------------
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of the Company and all
holders of Rights and shares of Common Stock, that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
--------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise the Rights Certificate.)
TO: ACCREDO HEALTH, INCORPORATED
The undersigned hereby irrevocably elects to exercise _________________ whole
Rights represented by the attached Rights Certificate to purchase the shares of
Series A Junior Participating Preferred Stock issuable upon the exercise of such
Rights and requests that certificates for such shares be issued in the name of
and delivered to:
Name:
--------------------------------------------------------
Address:
-----------------------------------------------------
Social Security or other Taxpayer ID No.:
--------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Name:
--------------------------------------------------------
Address:
-----------------------------------------------------
Social Security or other Taxpayer ID No.:
--------------------
Dated: _________________, ______
Signature Guaranteed:
----------------------------------------
Signature
(Signature must correspond to name
as written upon the face of this
Rights Certificate in every particular,
without alteration or enlargement or any
change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
--------------------------------------------------------------------------------
(to be completed if true)
The undersigned hereby represents, for the benefit of the Company and all
holders of Rights and shares of Common Stock, that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
-----------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of
the foregoing and accordingly will deem the Rights evidenced by such Rights
Certificate to be void and not transferable or exercisable.
A-3
Exhibit B
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
ACCREDO HEALTH, INCORPORATED
Pursuant to Section 151 of the
Delaware General Corporation Law
Accredo Health, Incorporated, a corporation organized under the laws of
the State of Delaware (the "Corporation"), hereby certifies that, pursuant to
the authority conferred upon the Board of Directors by the Certificate of
Incorporation, as amended, of the Corporation, the Board of Directors on April
17, 2003, adopted the following resolution creating a series of one hundred
thousand (100,000) shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (the "Board") in accordance with the
provisions of its Certificate of Incorporation, as amended, a series of
Preferred Stock of the Corporation be and it hereby is created, and that the
designation and amount thereof and the voting rights or powers, preferences and
relative, participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are as
follows:
1. Series A Junior Participating Preferred Stock. There is hereby
established a series of Preferred Stock, par value $1.00 per share, of the
Corporation, and the designation and certain terms, powers, preferences and
other rights of the shares of such series, and certain qualifications,
limitations and restrictions thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series
shall be "Series A Junior Participating Preferred Stock" (hereinafter called
"this Series"). Each share of this Series shall be identical in all respects
with the other shares of this Series except as to the dates from and after which
dividends thereon shall be cumulative.
(ii) The number of shares in this Series shall initially
be one hundred thousand (100,000), which number may from time to time be
increased or decreased (but not below the number then outstanding) by the Board
of Directors. Shares of this Series purchased by the Corporation shall be
canceled and shall revert to authorized but unissued shares of Preferred Stock
undesignated as to series. Shares of this Series may be issued in fractional
shares, which fractional shares shall entitle the holder, in proportion to such
holder's fractional share, to all rights of a holder of a whole share of this
Series.
(iii) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by the Board of
Directors, but only out of funds legally available therefor, dividends, (A) on
each date that dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) are payable on or in
respect of Common Stock comprising part of the Reference Package (as defined
below), in an amount per whole share of this Series equal to the aggregate
amount of dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) that would be payable
on such date to a holder of the Reference Package and (B) on the last day of
March, June, September and December in each year, in an amount per whole share
of this Series equal to the excess (if any) of $1.00 over the aggregate
dividends paid per whole share of this Series during the three-month period
ending on such last day. Each such dividend shall be paid to the holders of
record of shares of this Series on the date, not exceeding 60 days preceding
such dividend or distribution payment date, fixed for that purpose by the Board
of Directors in advance of payment of each particular dividend or distribution.
Dividends on each full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is originally issued;
provided that any such full or fractional share originally issued after a
dividend record date and on or prior to the dividend payment date to which such
record date relates shall not be entitled to receive the dividend payable on
such dividend payment date or any amount in respect of the period from such
original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 10,000
shares of Common Stock, par value $.01 per share ("Common Stock"), of the
Corporation. In the event the Corporation shall at any time (A) declare or pay a
dividend on any Common Stock payable in Common Stock, (B) subdivide any Common
Stock or (C) combine any Common Stock into a smaller number of shares, then and
in each such case the Reference Package after such event shall be the Common
Stock that a holder of the Reference Package immediately prior to such event
would hold thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock ranking
junior to this Series as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made upon the
Common Stock or upon any other stock ranking junior to this Series as to
dividends or upon liquidation, nor shall any Common Stock nor any other stock of
the Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise acquired for
any consideration (or any moneys be paid to or made available for a sinking fund
for the redemption of any shares of any such stock) by the Corporation (except
by conversion into or exchange for stock of the Corporation ranking junior to
this Series as to dividends and upon liquidation), unless, in each case, the
full cumulative dividends (including the dividend to be due upon payment of such
dividend, distribution, redemption, purchase or other acquisition) on all
outstanding shares of this Series shall have been, or shall contemporaneously
be, paid.
(iv) In the event of any merger, consolidation,
reclassification or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of this Series shall at the same time
be similarly exchanged or changed in an amount per whole share equal to the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, that a holder of the Reference Package would be
entitled to receive as a result of such transaction.
(v) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
the holders of full and fractional shares of this Series shall be entitled,
before any distribution or payment is made on any date to the holders of the
Common Stock or any other stock of the Corporation ranking junior to this Series
upon liquidation, to be paid in full an amount per whole share of this Series
equal to the greater of (A) $1.00 or (B) the aggregate amount distributed or to
be distributed prior to such date in connection with such liquidation,
dissolution or winding up to a holder of the Reference Package (such greater
amount being hereinafter referred to as the "Liquidation Preference"), together
with accrued dividends to such distribution or payment date, whether or not
earned or declared. If such payment shall have been made in full to all holders
of shares of this Series, the holders of shares of this Series as such shall
have no right or claim to any of the remaining assets of the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to the first paragraph of this Section (v), no such
distribution shall be made on account of any shares of any other class or series
of Preferred Stock ranking on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate distributive amounts
shall be paid on account of the shares of this Series, ratably in proportion to
the full distributable, amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of assets of the Corporation available for distribution
to its stockholders all amounts to which such holders are entitled pursuant to
the first paragraph of this Section (v) before any payment shall be made to the
holders of Common Stock or any other stock of the Corporation ranking junior
upon liquidation to this Series.
For the purposes of this Section (v), the consolidation or
merger of, or binding share exchange by,
A-2
the Corporation with any other corporation shall not be deemed to constitute a
liquidation, dissolution or winding up of the corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of
stockholders required by law or by the Certificate of Incorporation of the
Corporation, each whole share of this Series shall, on any matter, vote as a
class with any other capital stock comprising part of the Reference Package and
voting on such matter and shall have the number of votes thereon that a holder
of the Reference Package would have.
IN WITNESS WHEREOF, Accredo Health, Incorporated has caused this
Certificate of Designation to be executed as of April ___, 2003.
ACCREDO HEALTH, INCORPORATED
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
A-3
