Exhibit 4.4
RIGHTS AGREEMENT
between
UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
and
FIRST UNION NATIONAL BANK
as Rights Agent
Dated as of _____________, 2001
TABLE OF CONTENTS
SECTION 1. CERTAIN DEFINITIONS..........................................................1
SECTION 2. APPOINTMENT OF RIGHTS AGENT.................................................10
SECTION 3. ISSUE OF RIGHT CERTIFICATES.................................................11
SECTION 4. FORM OF RIGHT CERTIFICATES..................................................13
SECTION 5. EXECUTION, AUTHENTICATION AND DELIVERY......................................15
SECTION 6. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.........................16
SECTION 7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHT CERTIFICATES....................17
SECTION 8. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS...............18
SECTION 9. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES..........................21
SECTION 10. RESERVATION AND AVAILABILITY OF SHARES...................................21
SECTION 11. RECORD DATE..............................................................22
SECTION 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.......23
SECTION 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES...............33
SECTION 14. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.....33
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES..................................35
SECTION 16. RIGHTS OF ACTION.........................................................37
SECTION 17. AGREEMENT OF RIGHT HOLDERS...............................................38
SECTION 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER........................39
SECTION 19. CONCERNING THE RIGHTS AGENT..............................................39
SECTION 20. DUTIES OF RIGHTS AGENT...................................................40
SECTION 21. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT................43
SECTION 22. CHANGE OF RIGHTS AGENT...................................................44
SECTION 23. ISSUANCE OF NEW RIGHT CERTIFICATES.......................................45
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SECTION 24. REDEMPTION...............................................................45
SECTION 25. MANDATORY REDEMPTION AND EXCHANGE........................................46
SECTION 26. NOTICE OF CERTAIN EVENTS.................................................48
SECTION 27. SECURITIES LAWS REGISTRATIONS............................................49
SECTION 28. NOTICES..................................................................50
SECTION 29. SUPPLEMENTS AND AMENDMENTS...............................................51
SECTION 30. SUCCESSORS...............................................................52
SECTION 31. BENEFITS OF THIS AGREEMENT...............................................52
SECTION 32. SEVERABILITY.............................................................53
SECTION 33. GOVERNING LAW............................................................53
SECTION 34. COUNTERPARTS.............................................................53
SECTION 35. DESCRIPTIVE HEADINGS.....................................................53
SECTION 36. BOARD OF DIRECTORS.......................................................53
EXHIBITS
EXHIBIT A - Certificate of Designation of Series A
Junior Participating Preferred Stock
EXHIBIT B - Form of Right Certificate
EXHIBIT C - Summary of Rights to Purchase Preferred Shares
ii
RIGHTS AGREEMENT
This Rights Agreement (this "Agreement"), dated as of _______________,
2001, is between United Surgical Partners International, Inc., a Delaware
corporation (the "Company"), and First Union National Bank, as Rights Agent.
WHEREAS, the Board of Directors, having determined its actions to be in
the interests of the Company, has authorized the creation of Rights, has
authorized and directed the issuance to the holders of record of Common Shares
of the Company outstanding as of the Close of Business on June 13, 2001
(the "Record Date"), of one Right with respect to each Common Share of the
Company outstanding on the Record Date, and has further authorized and directed
the issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earlier of the Distribution Date,
the Redemption Date and the Final Expiration Date; and
WHEREAS, the Board of Directors has authorized and directed that the
terms and conditions under which the Rights are to be distributed, including
without limitation those affecting the exercise thereof, the securities or other
property to be acquired thereby and the purchase price to be paid therefor,
shall be set forth in a written agreement between the Company and a rights
agent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the Voting Shares then
outstanding, but shall not include the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company or any trustee of or fiduciary with respect to any such
plan when acting in such capacity.
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Notwithstanding the foregoing, no member of the WCAS Group shall be
considered an "Acquiring Person" unless, on any date subsequent to
the date hereof and prior to becoming such, the WCAS Group,
collectively, shall have been the Beneficial Owner of less than 15%
of the Voting Shares then outstanding. Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" solely as the result of
an acquisition of Voting Shares by the Company which, by reducing the
number of shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to the amount of Voting Shares
necessary for such person to become an Acquiring Person; PROVIDED,
HOWEVER, that, if a Person shall become the Beneficial Owner of the
amount of Voting Shares necessary for such person to become an
Acquiring Person by reason of share purchases by the Company and shall,
after such share purchases by the Company and at a time when such
Person is the Beneficial Owner of the amount of Voting Shares necessary
for such person to become an Acquiring Person, become the Beneficial
Owner of any additional Voting Shares, then such Person shall be deemed
to be an "Acquiring Person." Notwithstanding the foregoing, if the
Board of Directors determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable, but
in any event within the time period directed by the Board of Directors,
a sufficient number of Common Shares so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement. Nothing
in this Section 1(a) shall affect the effect or application of
Section 8(e).
(b) "Agreement" shall mean this Rights Agreement as the
same may be hereafter amended from time to time.
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(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "own beneficially" any securities which (without
duplication):
(1) such Person or any of such Person's
Affiliates or Associates has the right to acquire (whether
such right is exercisable immediately or only after the
passage of time, compliance with regulatory requirements, the
fulfillment of a condition or otherwise) pursuant to any oral
or written agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling
group members (A) with respect to a bona fide public offering
of securities or (B) in connection with a placement of
securities pursuant to Rule 144A under the Securities Act), or
upon the exercise of conversion rights, exchange rights,
rights (other than these Rights), warrants or options, or
otherwise; or the right to vote pursuant to any agreement,
arrangement or understanding; PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to
beneficially own, (i) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (ii)
securities issuable upon exercise of Rights at any time prior
to any Person becoming an Acquiring Person;
(2) such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the Exchange Act) or
has a "pecuniary interest" or an "indirect pecuniary interest"
in (as determined pursuant to Rule 16a-1(a)(2) of
the Exchange Act), in either case including pursuant to any
agreement, arrangement
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or understanding, whether or not in writing; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial
Owner of, or to "beneficially own," any security under this
subparagraph (2) as a result of an agreement, arrangement
or understanding to vote such security (A) which arises
solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act and (B) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(3) are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any oral or
written agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling
group members (A) with respect to a bona fide public offering
of securities or (B) in connection with a placement of
securities pursuant to Rule 144A under the Securities Act) for
the purpose of acquiring, holding, voting (other than voting
pursuant to a revocable proxy as contemplated by the proviso
to subparagraph (2) of this paragraph) or disposing of any
securities of the Company.
Notwithstanding anything in this definition to the contrary, the phrase
"then outstanding," when used with reference to a Person's Beneficial Ownership
of securities of the Company (or to the number of such securities "beneficially
owned"), shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially hereunder.
(e) "Board of Directors" means the Board of Directors of
the Company.
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(f) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of
Texas are authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Dallas, Texas time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 P.M., Dallas, Texas time,
on the next succeeding Business Day.
(h) "Closing Price", with respect to any security, shall
mean the last sale price, regular way, on a specific Trading Day or, in
case no such sale takes place on such Trading Day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange or, if such security is not then listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such
security is listed or admitted to trading or, if such security is not
then listed or admitted to trading on any national securities exchange,
the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations
System or such other system then in use, or, if on any such Trading Day
such security is not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in such security selected by the Board of
Directors. If such security is not publicly held or so listed or
traded, "Closing Price" shall mean the fair value per unit of such
security as determined in good faith by the Board of Directors, whose
determination shall be described and the Closing Price set forth in a
statement filed with the Rights Agent.
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(i) "Common Shares" when used with reference to the
Company shall mean shares of capital stock of the Company which have no
preference over any other class of stock with respect to dividends or
assets, which are not redeemable at the option of the Company and with
respect to which no sinking, purchase or similar fund is provided and
shall initially mean the shares of Common Stock, par value $.01 per
share, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall, if used with reference to a
corporation, mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person and, if used with reference to any
other Person, mean the equity interest in such Person (or, if the net
worth determined in accordance with generally accepted accounting
principles of another Person (other than an individual) which controls
such first-mentioned Person is greater than such first-mentioned
Person, then such other Person) with the greatest voting power or
managerial power with respect to the business and affairs of such
Person. Common Shares used without reference to the Company or any
other Person shall be deemed to refer to Common Shares of the Company
unless the context otherwise requires.
(j) "Company" shall mean United Surgical Partners
International, Inc., a Delaware corporation, and its successors.
(k) "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its
President, its Chief Executive Officer or a Vice President, and by its
Chief Financial Officer, its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Rights Agent.
(l) "Corporate Trust Office" means the principal office
of the Rights Agent at which it administers its corporate trust
business, which, in the case of First Union National Bank, shall, until
hereafter changed, be its office at 0000 X. XX Xxxxxx Xxxx., 0X0,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000.
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(m) "Distribution Date" shall mean the Close of Business
on the earlier of (1) the tenth Business Day after the Shares
Acquisition Date or (2) the tenth Business Day (or such later date as
may be determined by action of the Board of Directors prior to such
time as any Person becomes an Acquiring Person) after the date of
commencement by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any trustee of or fiduciary with respect
to any such plan when acting in such capacity) of, or after the date of
the first public announcement of, the intent of any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, or any trustee of
or fiduciary with respect to any such plan when acting in such
capacity) to commence a tender or exchange offer, the consummation of
which would result in any Person becoming an Acquiring Person;
PROVIDED, HOWEVER, that an occurrence described in clause (2) of this
definition above shall not cause the occurrence of the Distribution
Date if the Board of Directors shall, prior to the Close of Business on
such tenth Business Day (or such later date as described in clause (2)
above), determine that such tender or exchange offer is spurious,
unless, thereafter, the Board of Directors shall make a contrary
determination, in which event the Distribution Date shall occur on the
later to occur of the Close of Business on such tenth Business Day (or
the Close of Business on such later date as described in clause (2)
above) and the Close of Business on the date of such latter
determination.
(n) "Exchange Act" shall mean the Securities Exchange Act
of 1934 and any successor statute thereto.
(o) "Final Expiration Date" shall mean the Close of
Business on _________________, 2011.
(p) "Person" shall mean any individual, firm,
corporation, partnership, limited partnership, limited liability
company, joint venture, association, trust, unincorporated
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organization, group or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(q) "Preferred Shares" shall mean shares of Series A
Junior Participating Preferred Stock, par value $.01 per share, of the
Company having the rights and preferences set forth in the form of
Certificate of Designation of Series A Junior Participating Preferred
Stock attached hereto as EXHIBIT A, and, to the extent that there is
not a sufficient number of shares of Series A Junior Participating
Preferred Shares outstanding to permit the full exercise of the Rights,
any other authorized shares of preferred stock, par value $.01 per
share, of the Company having rights and preferences substantially
identical to such Series A Preferred Shares.
(r) "Purchase Price" shall mean the initial price at
which the holder of a Right may, subject to the terms and conditions of
this Agreement, purchase one one-thousandth (1/1000) of a Preferred
Share (which initial price is set forth in Section 8(b) hereof), as
such price shall be adjusted pursuant to the terms of this Agreement.
(s) "Record Date" shall have the meaning provided in the
recitals to this Agreement.
(t) "Redemption Date" shall mean the time at which the
Rights are redeemed pursuant to Section 24 herein or the time at which
all of the Rights are mandatorily redeemed and exchanged pursuant to
Section 25 hereof.
(u) "Redemption Price" shall have the meaning specified
in Section 24(b) herein.
(v) "Right" shall mean one preferred share purchase right
which initially represents the right of the registered holder thereof
to purchase one one-thousandth (1/1000) of a Preferred Share upon the
terms and subject to the conditions set forth herein.
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(w) "Right Certificate" shall mean a certificate, in
substantially the form of EXHIBIT B attached to this Agreement,
evidencing the Rights registered in the name of the holder thereof.
(x) "Rights Agent" shall mean First Union National Bank
and any successor thereto appointed in accordance with the terms
hereof, in its capacity as agent for the Company and the holders of the
Rights pursuant to this Agreement.
(y) "Rights Register" and "Rights Registrar" shall have
the meanings specified in Section 6.
(z) "Securities Act" shall mean the Securities Act of
1933 and any successor statute thereto.
(aa) "Shares Acquisition Date" shall mean the first date
of public announcement (which for purposes of this definition shall
include without limitation a report filed pursuant to Section 13(d) or
Section 16(a) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(bb) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the outstanding capital stock or
other equity interests having ordinary voting power in the election of
directors or similar officials is owned, directly or indirectly, by
such Person.
(cc) "Summary of Rights" shall mean a Summary of Rights to
Purchase Preferred Shares in substantially the form attached as EXHIBIT
C to this Agreement.
(dd) "Trading Day" shall mean a day on which the principal
national securities exchange on which any of the Voting Shares are
listed or admitted to trading is open for the transaction of business
or, if none of the Voting Shares is listed or admitted to trading on
any national stock exchange, a Business Day.
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(ee) "Voting Shares" shall mean (1) the Common Shares of
the Company and (2) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or entitled to
vote together with the Common Shares in respect of any merger or
consolidation of the Company, any sale of all or substantially all of
the Company's assets or any liquidation, dissolution or winding up of
the Company. Whenever any provision of this Agreement requires a
determination of whether a number of Voting Shares comprising a
specified percentage of such Voting Shares is, was or will be
beneficially owned or has been voted, tendered, acquired, sold or
otherwise disposed of or a determination of whether a Person has
offered or proposed to acquire a number of Voting Shares comprising
such specified percentage, the number of Voting Shares comprising such
specified percentage of Voting Shares shall in every such case be
deemed to be the number of Voting Shares comprising the specified
percentage of all the Company's then outstanding Voting Shares.
(ff) "WCAS Group" shall mean, collectively, Welsh, Carson,
Xxxxxxxx & Xxxxx VII, L.P. and its Affiliates and Associates.
(gg) "Wholly-Owned Subsidiary" of a Person shall mean any
corporation or other entity all the outstanding capital stock or other
equity interests of which having ordinary voting power in the election
of directors or similar officials (other than directors' qualifying
shares or similar interests) are owned, directly or indirectly, by such
Person.
Section 2. APPOINTMENT OF RIGHTS AGENT The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares of the Company) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
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Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until the Distribution
Date, (1) outstanding Rights will be evidenced (subject to the provisions of
paragraph (b) of this Section 3) (A) with respect to Common Shares that are held
in certificated form, by the certificates for outstanding Common Shares of the
Company and not by separate Right Certificates and (B) with respect to Common
Shares that are held in book-entry form, by a notation in the records of the
Rights Agent (and the records of the Company's transfer agent if different from
the Rights Agent), and (2) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares of the
Company. As soon as practicable after the Distribution Date, the Company will
prepare and execute, and the Rights Agent will countersign and send, by
first-class, insured, postage-prepaid mail, to each record holder of Common
Shares of the Company as of the Close of Business on the Distribution Date, at
the address of such holder shown on the stock transfer records of the Company, a
Right Certificate evidencing one Right for each Common Share so held, subject to
adjustments as provided herein. From and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon thereafter as
practicable, the Company will send a copy of a Summary of Rights, by
first-class, postage-prepaid mail, to each record holder of Common Shares of the
Company as of the Close of Business on the Record Date, at the address of such
holder shown on the stock transfer records of the Company. With respect to
Common Shares outstanding on the Record Date, the certificates evidencing such
Common Shares shall thereafter also evidence the outstanding Rights (as such
Rights may be amended or supplemented) distributed with respect thereto until
the Distribution Date and the registered holders of Common Shares shall also be
the registered holders of the associated Rights. Until the Distribution Date
(or, if earlier, the Redemption Date or Final Expiration Date), the surrender
for registration of transfer or exchange of (1) any certificate for Common
Shares outstanding as of the Close of Business on the Record Date, with or
without a copy of the Summary of Rights attached thereto, and (2) any Common
Shares held
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in book-entry form, shall also constitute the surrender for registration of
transfer or exchange of the outstanding Rights associated with the Common
Shares represented thereby.
(c) The Company agrees that, at any time after the Record
Date and prior to the Distribution Date (or, if earlier, the Redemption Date or
Final Expiration Date) at which it issues any of its Common Shares upon original
issue or out of treasury, it will concurrently distribute to the holder of such
Common Shares one Right for each such Common Share, which Right shall be subject
to the terms and provisions of this Agreement and will evidence the right to
purchase the same number of one one-thousandth (1/1000) of a Preferred Share at
the same Purchase Price as the Rights then outstanding.
(d) Certificates for Common Shares issued after the
Record Date but prior to the earliest of the Distribution Date, the Redemption
Date and the Final Expiration Date, whether upon registration of transfer or
exchange of Common Shares outstanding on the Record Date or upon original issue
or out of treasury thereafter, shall also be deemed to be certificates for the
Rights and shall have impressed on, printed on, written on or otherwise affixed
to them the following legend or such similar legend as the Company may deem
appropriate and as is not inconsistent with the provisions of this Agreement:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement between
United Surgical Partners International, Inc. (the "Company") and
First Union National Bank, dated as of _______________, 2001, as it may
be amended (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after receipt
of a written request therefor. As described in the Rights Agreement,
Rights issued to or acquired by any Acquiring Person or any Affiliate
or Associate thereof (each as defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent
holder, shall, under certain circumstances, become null and void.
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With respect to certificates containing the foregoing legend, until the earlier
of the Distribution Date or the Final Expiration Date, outstanding Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender of any such certificate
for registration of transfer or exchange of the Common Shares evidenced thereby
shall also constitute surrender for registration of transfer or exchange of the
outstanding Rights (as such Rights may be amended or supplemented) associated
with the Common Shares represented thereby. The failure to print the foregoing
legend on any certificate or any other defect therein shall not affect in any
manner whatsoever the application or interpretation of the provisions of Section
8(e) hereof.
(e) If the Company purchases or acquires any of its
Common Shares after the Record Date, but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES. (a) The form of Right
Certificates (and the forms of election to purchase Preferred Shares (or other
securities) and of assignment to be printed on the reverse thereof) shall in
form and substance be substantially the same as EXHIBIT B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, as may be required to comply
with any applicable law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which the Rights may from
time to time be listed or as may be necessary to conform to usage. Subject to
the provisions of Section 23 hereof, the Right Certificates, whenever issued,
shall be dated as of the date of authentication thereof, but, regardless of any
adjustments of the Purchase Price or the number of Preferred Shares (or other
securities) as to which a Right is exercisable (whether pursuant to this
Agreement or any future amendments or supplements to this Agreement), or both,
occurring after the Record Date and prior to the date of such authentication,
such Right Certificates may, on their face,
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without invalidating or otherwise affecting any such adjustment, expressly
entitle the holders thereof to purchase such number of Preferred Shares at
the Purchase Price per one one-thousandth (1/1000) of a Preferred Share as to
which a Right would be exercisable if the Distribution Date were the Record
Date; no adjustment of the Purchase Price or the number of Preferred Shares
(or other securities) as to which a Right is exercisable, or both, effected
subsequent to the date of authentication of any Right Certificate shall be
invalidated or otherwise affected by the fact that such adjustment is not
expressly reflected on the face or in the provisions of such Right
Certificate.
(b) Pending the preparation of definitive Right Certificates, the
Company may execute, and upon Company Order the Rights Agent shall authenticate
and send, by first-class, insured, postage-prepaid mail, to each record holder
of Common Shares of the Company as of the Close of Business on the Distribution
Date, temporary Right Certificates which are printed, lithographed, typewritten,
mimeographed or otherwise produced substantially of the tenor of the definitive
Right Certificates in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Right Certificates may determine, as evidenced by their execution
of such Right Certificates.
(c) If temporary Right Certificates are issued, the Company will
cause definitive Right Certificates to be prepared without unreasonable delay.
After the preparation of definitive Right Certificates, the temporary Right
Certificates shall be exchangeable for definitive Right Certificates, upon
surrender of the temporary Right Certificates at the Corporate Trust Office of
the Rights Agent, without charge to the holder. Upon surrender for cancellation
of any one or more temporary Right Certificates, the Company shall execute and
the Rights Agent shall authenticate and deliver in exchange therefor one or more
definitive Right Certificates, evidencing a like number of Rights. Until so
exchanged, the temporary Right Certificates shall in all respects be entitled to
the same benefits under this Agreement as definitive Right Certificates.
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(d) Any Right Certificate issued pursuant to Section 3(a) or
Section 23 hereof that represents Rights beneficially owned by (1) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (2) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (3) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 8(e) hereof, and any Right Certificate issued pursuant to
Section 6 or Section 7 hereof upon transfer, exchange, replacement or adjustment
of any other Right Certificate referred to in this sentence, shall contain (to
the extent feasible) the following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section
8(e) of such Agreement.
Section 5. EXECUTION, AUTHENTICATION AND DELIVERY. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its President, its Chief Executive Officer or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Right
Certificates may be manual or facsimile.
(b) Right Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of
-15-
such Right Certificates or did not hold such offices at the date of
authentication of such Right Certificates. At any time and from time to time
after the execution and delivery of this Agreement and prior to the
Distribution Date, the Company may deliver Right Certificates executed by the
Company to the Rights Agent for authentication, together with a Company Order
for the authentication and delivery of such Right Certificates; and the
Rights Agent in accordance with such Company Order shall authenticate and
deliver such Right Certificates as provided in this Agreement and not
otherwise.
(c) No Right Certificate shall be entitled to any benefit under
this Agreement or be valid or obligatory for any purpose unless there appears on
such Right Certificate a certificate of authentication substantially in the form
provided for herein executed by the Rights Agent by manual signature, and such
certificate upon any Right Certificate shall be conclusive evidence, and the
only evidence, that such Right Certificate has been duly authenticated and
delivered hereunder.
Section 6. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. From
and after the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company shall cause to be kept at the
Corporate Trust Office of the Rights Agent a rights register (a "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Right Certificates and of
transfers of Rights. The Rights Agent is hereby appointed the registrar and
transfer agent (the "Rights Registrar") for the purpose of registering Right
Certificates and transfers of Rights as herein provided and the Rights Agent
agrees to maintain such Rights Register in accordance with such regulations so
long as it continues to be designated as Rights Registrar hereunder.
Upon surrender to the Rights Agent for registration of transfer of any
Right Certificate, the Company shall execute, and the Rights Agent shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Right Certificates evidencing a like number of
Rights.
-16-
At the option of the holder, Right Certificates may be exchanged for
other Right Certificates upon surrender of the Right Certificates to be
exchanged to the Rights Agent. Whenever any Right Certificates are so
surrendered for exchange, the Company shall execute, and the Rights Agent shall
authenticate and deliver, the Right Certificates which the holder making the
exchange is entitled to receive.
All Right Certificates issued upon any registration of transfer or
exchange of Right Certificates shall be the valid obligations of the Company,
evidencing the same Rights, and entitled to the same benefits under this
Agreement, as the Right Certificates surrendered upon such registration of
transfer or exchange.
Every Right Certificate presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Rights Agent)
be duly endorsed, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Rights Registrar duly executed, by the
holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Right Certificates, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Right Certificates,
other than exchanges not involving any transfer.
The provisions of this Section 6 shall be subject to the provisions of
Section 4(d), Section 8(e) and Section 15.
Section 7. MUTILATED, DESTROYED, LOST AND STOLEN RIGHT CERTIFICATES.
(a) If any mutilated Right Certificate is surrendered to the Rights Agent, the
Company shall execute and the Rights Agent shall authenticate and deliver in
exchange therefor a new Right Certificate of like tenor, for a like number of
Rights and bearing a registration number not contemporaneously outstanding.
(b) If there shall be delivered to the Company and the Rights
Agent (1) evidence to their satisfaction of the destruction, loss or theft of a
Right Certificate and (2) such security or indemnity,
-17-
if any, as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Rights Agent that such Right Certificate has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Rights Agent
shall authenticate and deliver, in lieu of any such destroyed, lost or stolen
Right Certificate, a new Right Certificate of like tenor, for a like number
of Rights and bearing a registration number not contemporaneously outstanding.
(c) Upon the issuance of any new Right Certificate under this
Section 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 and any
other expenses (including the fees and expenses of the Rights Agent) connected
therewith.
(d) Every new Right Certificate issued pursuant to this Section 7
in lieu of any destroyed, lost or stolen Right Certificate shall constitute an
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Right Certificate shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Agreement equally and
proportionately with any and all other Right Certificates duly issued hereunder.
(e) The provisions of this Section 7 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Right
Certificates.
Section 8. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS. (a) Subject to the provisions of Section 8(e) hereof, the registered
holder of any Right Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at its Corporate Trust Office, together with payment of the Purchase Price
for each one one-thousandth (1/1000) of a Preferred Share (or other securities)
as to which the Rights are exercised, at or prior to the earliest of (1) the
Close of
-18-
Business on the Final Expiration Date, (2) the time of redemption on the
Redemption Date or (3) the time at which such Rights are mandatorily redeemed
and exchanged as provided in Section 25 hereof.
(b) The Purchase Price for each one one-thousandth (1/1000) of
a Preferred Share pursuant to the exercise of a Right shall initially be
$____________, shall be subject to adjustment from time to time as provided
in Sections 12 and 14 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the securities to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of such Right Certificate in accordance with Section 10 in
cash, or by certified check or cashier's check payable to the order of the
Company, the Rights Agent shall thereupon promptly (1) (A) requisition from
any transfer agent of the Preferred Shares (or other securities) certificates
for such number of one one-thousandths of a Preferred Share (or other
securities) as are to be purchased and registered in such name or names as
may be designated by the registered holder of such Right Certificate or, if
appropriate, in the name of a depositary agent or its nominee, and the
Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to deposit the total
number of Preferred Shares issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from such depositary agent appointed by
the Company, depositary receipts representing such number of one
one-thousandths of a Preferred Share as are to be purchased and registered in
such name or names as may be designated by such holder (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with such depositary agent), and the Company
hereby directs such depositary agent to comply with all such requests, (2)
when appropriate, requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares in accordance with Section 15
hereof, (3)
-19-
promptly after receipt of such certificates or depositary receipts registered
in such name or names as may be designated by such holder, cause the same to
be delivered to or upon the order of the registered holder of such Right
Certificate and (4) when appropriate, after receipt, promptly deliver such
cash to or upon the order of such holder. In the event that the Company is
obligated to issue other securities (including Common Shares) of the Company,
pay cash and/or distribute other property pursuant to Section 12(a) hereof,
the Company will make all arrangements necessary so that other securities,
cash and/or other property are available for distribution by the Rights
Agent, if and when appropriate.
(d) If the registered holder of the Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equal to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to
his duly authorized assigns, subject to the provisions of Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
if any Person shall become an Acquiring Person, thereafter any Rights
beneficially owned by (1) such Acquiring Person or an Associate or Affiliate
of such Acquiring Person, (2) a transferee of such Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (3) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a
transfer which at least a majority of the Board of Directors has determined
is part of a plan or an agreement, arrangement or understanding which has as
a primary purpose or effect the avoidance of this Section 8(e), shall become
null and void without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under any
provision of
-20-
this Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 8(e) and Section 4(d) hereof are
complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to any Acquiring Person or its Affiliates,
Associates or transferees hereunder.
Section 9. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up or exchange shall, if surrendered to the Company or to any of its other
agents, be delivered to the Rights Agent for such purpose and for
cancellation or, if surrendered to the Rights Agent for such purpose, shall
be canceled by it. No Right Certificates shall be authenticated in lieu of or
in exchange for any Right Certificates canceled as provided in this Section 9
except as expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Right Certificates to
the Company, or shall, pursuant to a Company Order, destroy such canceled
Right Certificates and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 10. RESERVATION AND AVAILABILITY OF SHARES. (a) The Company
covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Shares or any Preferred Shares held
in its treasury, the number of Preferred Shares that will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) The Company further covenants and agrees that it will, from
and after the Distribution Date, cause to be reserved and kept available out
of its authorized and unissued Common Shares or any Common Shares held in its
treasury, the number of Common Shares of the Company that will be sufficient
to permit the exercise in full of all outstanding Rights if adjusted pursuant
to Section 12(a)(2).
-21-
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares or Common
Shares of the Company issued upon exercise of Rights shall (subject to
payment of the Purchase Price) at the time of delivery of the certificates
representing any such Preferred Shares or Common Shares be duly authorized,
validly issued, fully paid and nonassessable. The Company further covenants
and agrees that it will pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any Preferred Shares (or
depositary receipts therefor) or Common Shares of the Company upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or in respect of the issuance or
delivery of certificates or depositary receipts for the Preferred Shares or
Common Shares of the Company upon exercise of Rights evidenced by Right
Certificates in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for transfer or exercise or to
issue or deliver any certificates or depositary receipts for Preferred Shares
or Common Shares of the Company upon the exercise of any Rights until any
such tax shall have been paid (any such tax being payable by the holder of
such Right Certificate at the time of surrender thereof) or until it has been
established to the Company's satisfaction that no such tax is due.
(d) So long as the Common Shares issuable and deliverable upon
the exercise of the Rights may be listed on any national securities exchange,
the Company shall use its best efforts to promptly cause, from and after such
time as the Rights become exercisable, all Common Shares and other securities
reserved for such issuance to be listed on such exchange upon official notice
of issuance upon such exercise.
Section 11. RECORD DATE. Each Person in whose name any certificate
for Preferred Shares or Common Shares of the Company is issued upon the
exercise of, or upon mandatory redemption and exchange of, Rights shall for
all purposes be deemed to have become the holder of record of the
-22-
Preferred Shares or Common Shares represented thereby on, and such
certificate shall be dated, (a) in the case of the exercise of Rights, the
date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made, or (b) in the case of the mandatory redemption and exchange
of Rights, the date of such mandatory redemption and exchange; PROVIDED,
HOWEVER, that, if the date of such surrender and payment or mandatory
redemption and exchange is a date upon which the transfer books of the
Company for its Preferred Shares or Common Shares, as the case may be, 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 such transfer books of the Company are open. Prior to the
exercise of (or the mandatory redemption and exchange of) the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a holder of Preferred Shares (or Common Shares of the Company)
for which the Rights shall be exercisable, including without limitation the
rights to vote, to receive dividends or other distributions or to exercise
any preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 12. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number and kind of shares of capital stock
of the Company covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 12.
(a) (1) If the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable
in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a reclassification of
the Preferred Shares (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
-23-
12(a), the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable
on such date, shall be proportionately adjusted so that the holder of any
Right exercised thereafter shall be entitled to receive, upon payment of the
Purchase Price for the number of one one-thousandths of a Preferred Share for
which a Right was exercisable immediately prior to such date, the aggregate
number and kind of shares of capital stock which, if such Right had been duly
exercised immediately prior to such date (at a time when the Preferred Shares
transfer books of the Company were open), such holder would have acquired
upon such exercise and been entitled to receive upon payment or effectuation
of such dividend, subdivision, combination or reclassification; PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both Section 12(a)(1) and
Section 12(a)(2), the adjustment provided for in this Section 12(a)(1) shall
be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 12(a)(2).
(2) Subject to action of the Board of
Directors pursuant to Section 25 of this Agreement, if any Person shall
become an Acquiring Person, each holder of a Right shall thereafter have a
right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares
of the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's Common Shares
(determined pursuant to Section 12(d)) on the date such Person became an
Acquiring Person. If any Person shall become an Acquiring Person and the
Rights
-24-
shall then be outstanding, the Company shall not take any action which would
eliminate or diminish the benefits intended to be afforded by the Rights.
(3) In the event that the number of Common
Shares that are authorized by the Company's certificate of incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (2) of this Section
12(a), the Company shall: (A) determine the excess of (1) the value of the
Common Shares issuable upon the exercise of a Right (the "Current Value"),
over (2) the Purchase Price (such excess, the "Spread"), and (B) with respect
to each Right, make adequate provision to substitute for such Common Shares,
upon exercise of the Rights and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) Common Shares or other
equity securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock which the Board of Directors of the
Company has deemed to have the same value as shares of Common Shares (such
shares of preferred stock, "Common Share Equivalents")), (4) debt securities
of the Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm selected by the
Board of Directors of the Company; PROVIDED, HOWEVER, that if the Company
shall not have made adequate provision to deliver value pursuant to clause
(B) above within thirty days following the first occurrence of a Shares
Acquisition Date, then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, Common Shares (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the thirty day
period set forth above may be extended to the extent necessary, but not more
than ninety days after
-25-
the Shares Acquisition Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period, as it
may be extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or second
sentences of this Section 12(a)(3), the Company (x) shall provide, subject to
Section 8(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall
promptly notify the Rights Agent in writing of such suspension and shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect (with prompt written notice to the
Rights Agent that such suspension is no longer in effect). For purposes of
this Section 12(a)(3), the value of Common Shares shall be the current market
price (as determined pursuant to Section 12(d) hereof) per share of the
Common Shares on the Shares Acquisition Date and the value of any Common
Stock Equivalent shall be deemed to have the same value as the Common Shares
on such date.
(b) If the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares (or shares having
the same rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible into or
exchangeable for Preferred Shares or equivalent preferred shares at a price
per Preferred Share or equivalent preferred share (together with any
additional consideration required upon conversion or exchange in the case of
a security convertible into or exchangeable for Preferred Shares or
equivalent preferred shares), less than the current per share market price of
the Preferred Shares (determined pursuant to Section 12(d) on such record
date), the Purchase Price to be
-26-
in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (together with the aggregate of any
additional consideration required upon conversion or exchange in the case of
any convertible or exchangeable securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered
for subscription or purchase (or into or for which the convertible or
exchangeable securities so to be offered are initially convertible or
exchangeable); PROVIDED, HOWEVER, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of one
Right. In case all or part of such subscription or purchase price may be paid
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent. Preferred Shares
owned by or held for the account of the Company or any of its Subsidiaries
shall not be deemed outstanding for the purpose of any computation described
in this Section 12(b). The adjustment described in this Section 12(b) shall
be made successively whenever such a record date is fixed; and, if none of
such rights, options or warrants are so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares (including
any such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend
-27-
payable in Preferred Shares) or subscription rights or warrants (excluding
those referred to in Section 12(b)), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the then current per share market price of the Preferred
Shares (determined pursuant to Section 12(d)) on such record date, less the
fair market value (as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company to
be issued upon the exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and, if such distribution
is not so made, the Purchase Price shall again be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(d) (1) For the purpose of any computation hereunder,
the "current per share market price" of the Common Shares on any date shall
be deemed to be the average of the daily Closing Prices per share of such
Common Shares for the 30 consecutive Trading Days immediately prior to, but
not including, such date; PROVIDED, HOWEVER, that, if the issuer of such
Common Shares shall announce (A) a dividend or distribution on such Common
Shares payable in such Common Shares or securities convertible into such
Common Shares or (B) any subdivision, combination or reclassification of such
Common Shares, and the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, shall
occur during such period of 30 Trading Days, then, and in each such case, the
current per share market price of the Common Shares shall be appropriately
adjusted to reflect the current market price per Common Share equivalent.
-28-
(2) For the purpose of any computation
hereunder, the "current per share market price" of the Preferred Shares shall be
determined in the same manner as set forth above for Common Shares in paragraph
(1) of this Section 12(d). If the current per share market price of the
Preferred Shares cannot be determined in the manner provided above, the "current
per share market price" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares (determined in the
manner provided above) multiplied by one thousand.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 12(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 12 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other share or one ten-millionth of a Preferred Share, as the
case may be, and references herein to the "number of one one-thousandths of a
Preferred Share" (or similar phrases) shall be construed to include fractions of
one one-thousandth of a Preferred Share. Notwithstanding the first sentence of
this Section 12(e), any adjustment required by this Section 12 shall be made no
later than the earlier of (1) three years from the date of the transaction which
requires such adjustment or (2) the thirtieth day preceding the Final Expiration
Date.
(f) If as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the shares contained in this Section 12, and the provisions of this
Agreement, including without limitation Sections 8, 10, 11 and 14, with respect
to the Preferred Shares shall apply on like terms to any such other shares.
-29-
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall, whether
or not the Right Certificate evidencing such Rights reflects such adjusted
Purchase Price, evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-thousandths of a Preferred Share purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 12(i), upon each adjustment of the Purchase Price
pursuant to Section 12(b) or 12(c), each Right outstanding immediately prior to
the making of such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price per one one-thousandth of a Preferred Share, that
number of one one-thousandths of a Preferred Share obtained by (1) multiplying
(x) the number of one-thousandths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (2) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights outstanding in
lieu of any adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each Right outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment of the Purchase Price. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record
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date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. Until such record date,
however, any adjustment in the number of one one-thousandths of a Preferred
Share for which a Right shall be exercisable made as required by this Agreement
shall remain in effect. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 12(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 15 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and authenticated in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the number of
one one-thousandths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-thousandth of the amount of
consideration per Preferred Share determined by the Board of Directors to be
capital, or below one one-thousandth of the par value, if any, per Preferred
Share issuable upon exercise of the Rights, the Company agrees to take such
corporate action as is within its power, including without limitation
appropriate action by its Board of
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Directors, and which is, in the opinion of its counsel, necessary in order that
the Company may validly and legally issue fully paid and nonassessable one
one-thousandths of Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 12 shall require
that an adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such record
date of the Preferred Shares or other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Shares
or other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
PROVIDED, HOWEVER, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 12 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 12, as and to the extent that it in its sole discretion shall determine
to be advisable in order that any combination or subdivision of the Preferred
Shares, issuance wholly for cash of any of the Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to in subsection (b) of this Section 12, hereafter
effected by the Company to holders of its Preferred Shares shall not be taxable
to such stockholders.
(n) If at any time prior to the Distribution Date, the
Company shall (1) declare or pay any dividend on the Common Shares payable in
Common Shares or (2) effect a subdivision or combination of the Common Shares
(by reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (A) the
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Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision or combination shall be adjusted by
multiplying such Purchase Price by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares outstanding immediately
after such event, and (B) the number of Rights outstanding immediately after
such event shall be adjusted, either through cancellation of outstanding Rights
or through distribution of additional Rights (but without duplication of the
Company's obligations under Section 3(c)), so that the certificate evidencing
each Common Share outstanding immediately after such event shall also evidence
the associated Right to purchase the same number of one one-thousandths of a
Preferred Share as to which a Right would have entitled the holder thereof to
purchase immediately prior to such event. The adjustment provided for in this
Section 12(n) shall be made successively whenever such a dividend is declared or
paid or such a subdivision or combination is effected. If an event occurs which
would require an adjustment under Section 12(a)(2) and this Section 12(n), the
adjustments provided for in this Section 12(n) shall be in addition and prior to
any adjustment required pursuant to Section 12(a)(2).
Section 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 12 or 14 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Shares of
the Company and the Preferred Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of record of a Right Certificate in
accordance with Section 28 hereof.
Section 14. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER. If, directly or indirectly at any time after a Person has become
an Acquiring Person, (a) the Company shall consolidate with, or merge with and
into, any other Person, (b) any Person shall merge with and into the Company and
the Company shall be the continuing or surviving corporation of such merger
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and, in connection with any such merger, all or part of the Common Shares of the
Company shall be changed into or exchanged for stock or other securities of any
other Person (or the Company) or cash or any other property, or (c) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one or a series of two or more transactions, assets
of the Company or its Subsidiaries which constitute more than 50% of the assets
or which produce more than 50% of the earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or any Affiliate or Associate of
such Person other than the Company or one or more of its Wholly-Owned
Subsidiaries, then, and in each such case, the Company agrees that, as a
condition to engaging in any such transaction, it will make or cause to be made
proper provision so that (1) each holder of a Right (except as otherwise
provided herein) shall thereafter have the right to receive, upon the exercise
thereof in accordance with the terms of this Agreement and in lieu of Preferred
Shares, such number of Common Shares of such other Person (including the Company
as successor thereto or as the surviving corporation) or, if such other Person
is a Subsidiary of another Person, of the Person or Persons (other than
individuals) which ultimately control such first-mentioned Person, as shall be
equal to the result obtained by (x) multiplying the then current Purchase Price
by the number of one one-thousandths of a Preferred Share for which a Right is
then exercisable (without taking into account any adjustment previously made
pursuant to Section 12(a)(2)) and dividing that product by (y) 50% of the
current per share market price of the Common Shares of such other Person
(determined pursuant to Section 12(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (2) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (3) the term "Company", as used herein,
shall thereafter be deemed to refer to such issuer; and (4) such issuer shall
take such steps (including without limitation the reservation of a sufficient
number of shares of its Common Shares in accordance with Section 10) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall
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thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not enter into any transaction of the kind referred to in this
Section 14 if at the time of such transaction there are outstanding any rights,
warrants, instruments or securities or any agreement, understanding or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and such issuer shall
have executed and delivered to the Rights Agent an agreement supplemental to
this Agreement complying with the provisions of this Section 14. The provisions
of this Section 14 shall similarly apply to successive mergers or consolidations
or sales or other transfers. For the purposes of this Section 14, 50% of the
assets of the Company and its Subsidiaries shall be determined by reference to
the book value of such assets as set forth in the most recent consolidated
balance sheet of the Company and its Subsidiaries (which need not be audited)
and 50% of the earning power of the Company and its Subsidiaries shall be
determined by reference to the mathematical average of the operating income
resulting from the operations of the Company and its Subsidiaries for the two
most recent full fiscal years as set forth in the consolidated and consolidating
financial statements of the Company and its Subsidiaries for such years;
PROVIDED, HOWEVER, that, if the Company has, during such period, engaged in one
or more transactions to which purchase accounting is applicable, such
determination shall be made by reference to the pro forma operating income of
the Company and its Subsidiaries giving effect to such transactions as if they
had occurred at the commencement of such two-year period.
Section 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The Company
shall not be required to issue or distribute Right Certificates which evidence
fractional Rights. If, on the Distribution Date or thereafter, as a result of
any adjustment effected pursuant to Section 12(i) or otherwise hereunder, a
Person would otherwise be entitled to receive a Right Certificate evidencing a
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fractional Right, the Company shall, in lieu thereof, pay or cause to be paid to
such Person an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purpose of this Section 15(a), the current
market value of a whole Right shall be the Closing Price of the Rights for the
Trading Day immediately prior to, but not including, the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company shall not be required to issue fractions
of Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares. If, on the Distribution Date or thereafter, as a result of
any adjustment effected hereunder in the number of one one-thousandths of a
Preferred Share as to which a Right has become exercisable, a Person would
otherwise be entitled to receive a fractional Preferred Share that is not an
integral multiple of one one-thousandth of a Preferred Share, the Company shall,
in lieu thereof, pay to such Person at the time such Right is exercised as
herein provided an amount in cash equal to the same fraction (which is not an
integral multiple of one one-thousandth of a Preferred Share) of the current
market value of one Preferred Share. For purposes of this Section 15(b), the
current market value of a Preferred Share shall be the Closing Price of a
Preferred Share for the Trading Day immediately prior to, but not including, the
date of such exercise.
(c) Should any adjustment contemplated by Section
12(a)(2) or any mandatory redemption and exchange contemplated by Section 25
occur, the Company shall not be required to
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issue fractions of Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. If after any such
adjustment or mandatory redemption and exchange, a Person would otherwise be
entitled to receive a fractional Common Share of the Company upon exercise of
any Right Certificate or upon mandatory redemption and exchange as contemplated
by Section 25, the Company shall, in lieu thereof, pay to such Person at the
time such Right is exercised as herein provided or upon such mandatory
redemption and exchange an amount in cash equal to the same fraction of the
current market value of one Common Share. For purposes of this Section 15(c),
the current market value of a Common Share shall be the Closing Price of a
Common Share for the Trading Day immediately prior to the date of such exercise
or the date of such mandatory redemption and exchange.
(d) The holder of a Right by the acceptance thereof
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise or mandatory redemption and exchange of a Right (except as
provided above).
Section 16. RIGHTS OF ACTION. (a) All rights of action in respect of
the obligations and duties owed to the holders of the Rights under this
Agreement are vested in the registered holders of the Rights; and, without the
consent of the Rights Agent or of the holder of any other Rights, any registered
holder of any Rights may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding, judicial or
otherwise, against the Company to enforce, or otherwise to act in respect of,
such holder's right to exercise such Rights in the manner provided in the Right
Certificate evidencing such Rights 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.
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(b) No right or remedy herein conferred upon or reserved
to the registered holder of Rights is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy, whether hereunder or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
(c) No delay or omission of any registered holder of
Rights to exercise any right or remedy accruing hereunder shall impair any such
right or remedy or constitute a waiver of any default hereunder or an
acquiescence therein. Every right and remedy given hereunder or by law to such
holders may be exercised from time to time, and as often as may be deemed
expedient, by such holders.
Section 17. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares of the
Company;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the Corporate Trust Office of the Rights Agent duly endorsed or accompanied
by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or the Rights Agent)
for all
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purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether
interlocutory or final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, the Company must use its best efforts to have any such order,
decree, judgment or ruling lifted or otherwise overturned as soon as possible.
Section 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right (whether or not then evidenced by a Right
Certificate) shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of Preferred Shares, Common Shares of the Company or any
other securities of the Company which may at any time be issuable on the
exercise (or mandatory redemption and exchange) of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon any such holder, as such, any of the rights of a
stockholder of the Company, including without limitation any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, to give or withhold consent to any corporate action, to receive
notice of meetings or other actions affecting stockholders (except as provided
in Section 26) or to receive dividends or subscription rights or otherwise.
Section 19. CONCERNING THE RIGHTS AGENT. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements
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incurred in the administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises.
(b) The Rights Agent shall be protected and shall incur
no liability for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in reliance upon any
Right Certificate or certificate for Preferred Shares, Common Shares or other
securities of the Company, Company Order, 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 executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of its counsel as set forth in
Section 20 hereof.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
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established by a certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company or any other Person only for its own negligence, bad faith or willful
misconduct. 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), even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its authentication thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not have any responsibility
with respect to the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or with respect to
the validity or execution of any Right Certificate (except its authentication
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 12(a)(2) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Sections 3, 12, 14, 24 and 25, or the ascertainment of
the existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Right Certificates after
actual notice that such change or adjustment is required);
-41-
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares to be issued pursuant to this Agreement or any Right Certificate
or as to whether any Preferred Shares or Common Shares will, when issued, be
duly authorized, validly issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken or
suffered to be taken by it in good faith in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss of the Company resulting from any such
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act, default, neglect or misconduct provided reasonable care was exercised in
the selection and continued employment thereof.
Section 21. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
Any corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the corporate trust or stock
transfer business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. If at the time such successor
Rights Agent shall succeed to the agency created by this Agreement any of the
Right Certificates shall have been authenticated but not delivered, any such
successor Rights Agent may adopt the authentication of the predecessor Rights
Agent and deliver such Right Certificates so authenticated, and, if at that time
any of the Right Certificates shall not have been authenticated, any successor
Rights Agent may authenticate such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
If at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been authenticated but not
delivered, the Rights Agent may adopt the authentication under its prior name
and deliver Right Certificates so authenticated; and, in case at that time any
of the Right Certificates shall not have been authenticated, the Rights Agent
may authenticate such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
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Section 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
for the Common Shares of the Company and the Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent for the Common Shares of
the Company and the Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the registered holder of a
Right Certificate (or, prior to the Distribution Date, of Common Shares), then
any registered holder of a Right Certificate (or, prior to the Distribution
Date, of Common Shares) may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be either (a) a Person organized and
doing business under the laws of the United States or of any state of the United
States, which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (b) an Affiliate of a
Person described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than
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the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent
for the Common Shares of the Company and the Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 22, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
Section 23. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind or class of shares or
other securities purchasable under the Right Certificates made in accordance
with the provisions of this Agreement.
Section 24. REDEMPTION. (a) The Rights may be redeemed by action of the
Board of Directors pursuant to paragraph (b) of this Section 24, or may be
redeemed and exchanged by action of the Board of Directors pursuant to Section
25 herein, but shall not be redeemed in any other manner.
(b) The Board of Directors may, at its option, at any
time prior to the time any Person becomes an Acquiring Person redeem all but not
less than all of the then outstanding Rights at a redemption price of one
thousandth of one cent ($0.00001) per Right then outstanding, appropriately
adjusted to reflect any adjustment in the number of Rights outstanding pursuant
to Section 12(i) herein (such redemption price being hereinafter referred to as
the "Redemption Price"). Any such redemption of the Rights by the Board of
Directors may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(c) The right of the registered holders of Right
Certificates to exercise the Rights evidenced thereby or, if the Distribution
Date has not theretofore occurred, the inchoate right of the
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registered holders of Rights to exercise the same shall, without notice to such
holders or to the Rights Agent and without further action, terminate and be of
no further force or effect effective as of the time of adoption by the Board of
Directors of a resolution authorizing and directing the redemption of the
Rights pursuant to paragraph (b) of this Section 24 (or, alternatively, if the
Board of Directors qualified such action as to time, basis or conditions, then
at such time, on such basis and with such conditions as the Board of Directors
may have established pursuant to such paragraph (b)); thereafter, the only
right of the holders of Rights shall be to receive the Redemption Price. The
Company shall promptly give public notice of any redemption resolution pursuant
to paragraph (b) of this Section 24; PROVIDED, HOWEVER, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after the adoption of any redemption resolution
pursuant to paragraph (b) of this Section 24, the Company shall give notice of
such redemption to the holders of the then outstanding Rights by mailing such
notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agents for the Common Shares. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption shall state the
method by which the payment of the Redemption Price will be made.
(d) Neither the Company nor any of its Affiliates or
Associates may acquire (other than, in the case of such Affiliates and
Associates, in their capacity as holders of Common Shares of the Company),
redeem or purchase for value any Rights at any time in any manner other than as
specifically set forth in this Section 24 or in Section 25 herein, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.
Section 25. MANDATORY REDEMPTION AND EXCHANGE. (a) The Board of
Directors may, at its option, at any time after any Person becomes an Acquiring
Person, issue Common Shares of the Company in mandatory redemption of, and in
exchange for, all or part of the then outstanding and
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exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 8(e) hereof) at an exchange ratio of
one Common Share for each two Common Shares for which each Right is then
exercisable pursuant to the provisions of Section 12(a)(2) hereof.
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such redemption and exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any such Subsidiary, or any trustee of or fiduciary with respect
to any such plan when acting in such capacity), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or more of
the Voting Shares then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the mandatory redemption and exchange of any Rights pursuant to
subsection (a) of this Section 25 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive such number of Common
Shares as is provided in paragraph (a) of this Section 25. The Company shall
promptly give public notice of any such redemption and exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such redemption and exchange. The Company promptly shall
mail a notice of any such redemption and exchange to all the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
mandatory redemption and exchange shall state the method by which the redemption
and exchange of the Common Shares for Rights will be effected and, in the event
of any partial redemption and exchange, the number of Rights which will be
redeemed and exchanged. Any partial redemption and exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become null
and void pursuant to the provisions of Section 8(e) hereof) held by each holder
of Rights.
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(c) In any mandatory redemption and exchange pursuant to
this Section 25, the Company, at its option, may substitute Preferred Shares (or
equivalent preferred shares, as such term is defined in Section 12(b) hereof)
for Common Shares, at the initial rate of one one-thousandth of a Preferred
Share (or equivalent preferred share) for each Common Share, as appropriately
adjusted.
(d) In any exchange pursuant to this Section 25, the
Company, at its option, may substitute for any Common Shares exchangeable for a
Right (i) Common Share Equivalents, (ii) cash, (iii) debt securities of the
Company, (iv) other assets, or (v) any combination of the foregoing, having an
aggregate value which the Board of Directors shall have determined in good faith
to be equal to the current market price of one Common Share (determined pursuant
to Section 12(d) hereof) on the Trading Day immediately preceding the date of
exchange pursuant to this Section 25.
Section 26. NOTICE OF CERTAIN EVENTS. If the Company shall, on
or after the Distribution Date, propose (a) to pay any dividend or other
distribution payable in stock of any class of the Company or any Subsidiary of
the Company to the holders of its Preferred Shares, (b) to distribute to the
holders of its Preferred Shares rights or warrants to subscribe for or to
purchase any additional Preferred Shares or shares of stock of any class or any
other securities, rights or options, (c) to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly cash dividend),
(d) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (e) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its Subsidiaries
(determined as provided in Section 14 herein) to, any other Person (other than
the Company or a Wholly-Owned Subsidiary or Wholly-Owned Subsidiaries), (f) to
effect the liquidation, dissolution or winding up of the Company or (g) if the
Rights have theretofore become exercisable with respect to Common Shares
pursuant to Section 12(a)(2) herein, to declare or pay any dividend or other
distribution on the Common Shares payable
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in Common Shares or in stock of any other class of the Company or any
Subsidiary of the Company or to effect a subdivision or combination of the
Common Shares (by reclassification or otherwise than by payment of dividends
in Common Shares) then, in each such case, the Company shall give to each holder
of a Right Certificate, in accordance with Section 28 hereof, notice of such
proposed action, which shall specify the date of authorization by the Board of
Directors of, and record date for, such stock dividend or such distribution of
rights or warrants or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, winding up, subdivision or
combination is to take place and the date of participation therein by the
holders of the Common Shares of the Company or the Preferred Shares, or both, if
any such date is to be fixed. Such notice shall be so given in the case of any
action covered by clause (a), (b) or (g) above at least 20 days prior to the
record date for determining holders of the Preferred Shares or of the Common
Shares of the Company, as the case may be, for purposes of such action, and in
the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Preferred Shares or Common Shares of the Company, as the case may
be, whichever shall be the earlier.
If any of the events set forth in Section 12(a)(2) of this Agreement
shall occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in accordance with
Section 28 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
12(a)(2) hereof.
Section 27. SECURITIES LAWS REGISTRATIONS. To the extent legally
required, the Company agrees that it will prepare and file, as soon as
practicable following the Distribution Date, and will use its best efforts to
cause to be declared effective, a registration statement under the Securities
Act registering the offering, sale and delivery of the Preferred Shares issuable
upon exercise of the Rights, and the Company will, thereafter, use its best
efforts to maintain such registration statement
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(or another) continuously in effect so long as any Rights remain outstanding
and exercisable with respect to Preferred Shares. Should the Rights become
exercisable with respect to securities of the Company or one of its
Subsidiaries other than Preferred Shares, the Company agrees that it will, to
the extent legally required, promptly thereafter prepare and file, or cause to
be prepared and filed, and will use its best efforts to cause to be declared
effective, a registration statement under such Act registering the offering,
sale and delivery of such other securities and the Company will, thereafter, use
its best efforts to maintain such registration statement (or another)
continuously in effect so long as any outstanding Rights are exercisable with
respect to such securities. The Company further agrees to use its best efforts,
from and after the Distribution Date, to qualify or register for sale the
Preferred Shares or other securities of the Company or one of its Subsidiaries
issuable upon exercise of the Rights under the securities or "blue sky" laws (to
the extent legally required thereunder) of all jurisdictions in which registered
holders of Right Certificates reside determined by reference to the Rights
Register. The Company may temporarily suspend, for a period of time not to
exceed ninety days after the Distribution Date, the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective. Upon any such suspension the Company shall promptly notify the Rights
Agent in writing of such suspension and shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect (with prompt written notice to the Rights Agent that such suspension is
no longer in effect). Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained, the
exercise thereof shall not be permitted under applicable law or a registration
statement shall not have been declared effective.
Section 28. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be
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sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
United Surgical Partners International, Inc.
00000 Xxxxxxx Xxxx, Xxxxx 000 Xxxxx
Xxxxxx, Xxxxx 00000
Subject to the provisions of Section 22 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
First Union National Bank
Shareholder Services Group
0000 X. XX Xxxxxx Xxxx., 0X0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the Rights
Register of the Company or, prior to the Distribution Date, on the stock
transfer records for the Common Shares of the Company.
Section 29. SUPPLEMENTS AND AMENDMENTS. The Company may from time
to time supplement or amend this Agreement (which supplement or amendment shall
be evidenced by a writing signed by the Company and the Rights Agent) without
the approval of any holders of any certificates representing Common Shares or
any holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, to make any other provisions in regard to
matters or questions arising hereunder, or to add, delete, modify or otherwise
amend any provision, which the Company may deem necessary or desirable,
including without limitation extending the Final Expiration Date; PROVIDED THAT
the period during which the Rights may be redeemed may not be
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extended at a time when the Rights are not then redeemable; PROVIDED FURTHER,
HOWEVER, that, from and after the Shares Acquisition Date, any such amendment or
supplement shall not materially and adversely affect the interests of the
holders of Right Certificates other than an Acquiring Person or transferees
of such Acquiring Person. Without limiting the foregoing, the Board of
Directors may by resolution adopted at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the threshold set
forth in the definition of Acquiring Person herein from 15% to a percentage
not less than the greater of any percentage greater than the largest
percentage of the outstanding Voting Shares then known to the Company to be
beneficially owned by any Person (other than the WCAS Group (unless and until
such time as the WCAS Group is the Beneficial Owner of less than 15% of the
Voting Shares then outstanding) the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company,
or any trustee of or fiduciary with respect to any such plan when acting in
such capacity) and 10%, if the Board of Directors shall determine that a
Person whose interests are adverse to the Company and its stockholders may
seek to acquire control of the Company. Upon the delivery of a certificate
from an appropriate officer of the Company, which states that the proposed
supplement or amendment is in compliance with the terms of this Section 29 and,
provided such supplement or amendment does not change or increase the Rights
Agent's rights, duties, liabilities or obligations hereunder, the Rights Agent
shall execute such supplement or amendment.
Section 30. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 31. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for
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the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights.
Section 32. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 33. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 34. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 35. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 36. BOARD OF DIRECTORS. The Board of Directors shall have
the exclusive power and authority to administer this Agreement and to exercise
the rights and powers specifically granted to the Board of Directors or to the
Company. All such actions, calculations, interpretations and determinations that
are done or made by the Board of Directors in good faith shall be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other Persons. The Rights Agent shall always be
entitled to assume that the Company's Board of Directors acted in good faith and
shall be fully protected and incur no liability in reliance thereon.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
Attest:
By:_________________________________________ By:______________________________________________________
Secretary Title:
FIRST UNION NATIONAL BANK,
as Rights Agent
Attest:
By:_________________________________________ By:______________________________________________________
Authorized Officer Authorized Officer
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
United Surgical Partners International, Inc., a Delaware corporation
(the "Corporation"), through the undersigned duly authorized officer, in
accordance with the provisions of Sections 103 and 151 of the General
Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
That, the Board of Directors of the Corporation on ____________, 2001,
pursuant to the authority conferred upon the Board of Directors by the Second
Amended and Restated Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation") and in accordance with the provisions of Section
151 of the General Corporation Law of the State of Delaware, adopted the
following resolution creating a series of ________ shares of Preferred Stock,
par value $.01 per share:
RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of Article IV, Section IV.B. of its Certificate of Incorporation, a
series of the Preferred Stock of the Corporation, par value $.01 per share, be,
and it hereby is, created and that the voting powers, designations, 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:
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Junior Preferred Stock") and the number of shares constituting the Series A
Junior Preferred Stock shall be ________. Such number of shares may be increased
or decreased by resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of shares of Series A Junior Preferred Stock to a number
less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Junior Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series A Junior Preferred Stock with respect to dividends, the holders of
shares of Series A Junior Preferred Stock, in preference to the holders of
A-1
Common Stock, par value $0.01 per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable on the first business day of February,
May, August and November in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date") as provided in paragraphs (b) and (c) of
this Section 2 in an amount per share (rounded to the nearest cent) equal to the
greater of (1) $1.00 in cash or (2) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share amount (payable in
cash) of all cash dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend Payment Date or
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A Junior Preferred Stock.
If the Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Series A Junior
Preferred Stock were entitled immediately prior to such event under clause (2)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
(b) The Corporation shall declare a dividend or distribution on
the Series A Junior Preferred Stock as provided in paragraph (a) of this Section
2 immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); PROVIDED that, if no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share payable in cash
on the Series A Junior Preferred Stock shall nevertheless accrue and be
cumulative on the outstanding shares of Series A Junior Preferred Stock as
provided in paragraph (c) of this Section 2.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Junior Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Junior Preferred Stock in an amount less than the total amount of such dividends
at the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A Junior
Preferred Stock shall have the following voting rights:
A-2
(a) Subject to the provisions for adjustment hereinafter set
forth, each share of Series A Junior Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the stockholders of
the Corporation. If the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares of
Common Stock, then in each such case the number of votes per share to which
holders of shares of Series A Junior Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that was outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in the Certificate of
Incorporation, as it may be amended from time to time, in any other Certificate
of Designation creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Junior Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(c) Except as set forth herein or as otherwise provided by law,
holders of Series A Junior Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series A Junior
Preferred Stock outstanding shall have been paid in full, or declared and a sum
sufficient for the payment therefor be set apart for payment and be in the
process of payment, the Corporation shall not:
(1) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Junior Preferred Stock;
(2) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Junior Preferred Stock, except dividends paid ratably on the
Series A Junior Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(3) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Junior Preferred Stock, PROVIDED that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such junior stock
in exchange for shares of any
A-3
stock of the Corporation ranking junior (as to both dividends and upon
dissolution, liquidation or winding up) to the Series A Junior
Preferred Stock; or
(4) redeem or purchase or otherwise acquire for
consideration any shares of Series A Junior Preferred Stock or any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the holders of the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Junior Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designation creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (a) to the holders of shares of stock ranking junior (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
to the Series A Junior Preferred Stock unless, prior thereto, the holders of
Series A Junior Preferred Stock shall have received an amount per share (rounded
to the nearest cent) equal to the greater of (1) $1,000 per share, or (2) an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount to be distributed per share to holders
of Common Stock, plus, in either case, an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (b) to the holders of stock ranking on a parity (either as to
dividends or as to amounts payable upon liquidation, dissolution or winding up)
with the Series A Junior Preferred Stock, except distributions made ratably on
the Series A Junior Preferred Stock and all such parity stock in proportion to
the total amounts to which the holders of all such Shares are entitled upon such
liquidation, dissolution or winding up. If the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Junior Preferred Stock were
entitled immediately prior to such event under the proviso in clause (a)(2) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
A-4
Section 7. CONSOLIDATION, MERGER, ETC. If the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, or any combination thereof, then in any
such case each share of Series A Junior Preferred Stock shall at the same time
be similarly exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount of stock, securities, cash or any other property (payable in
kind), or any combination thereof, as the case may be, into which or for which
each share of Common Stock is changed or exchanged. If the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that was
outstanding immediately prior to such event.
Section 8. REDEMPTION. The shares of Series A Junior Preferred Stock
shall not be redeemable. So long as any shares of Series A Junior Preferred
Stock remain outstanding, the Corporation shall not purchase or otherwise
acquire for consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Preferred Stock unless the Corporation shall substantially concurrently also
purchase or acquire for consideration a proportionate number of shares of Series
A Junior Preferred Stock.
Section 9. RANK. The Series A Junior Preferred Stock shall rank, with
respect to payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's Preferred Stock; provided that
any class or series of the Corporation's Preferred Stock hereafter created may
expressly provide that such class or series shall be pari passu with the Series
A Preferred Stock with respect to the payment of dividends and distributions,
voting rights and/or distributions upon liquidation, dissolution or winding up
of the Corporation.
Section 10. AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences, privileges or special rights of the Series A
Junior Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Junior Preferred Stock, voting together as a single class.
A-5
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its President, and attested by its Secretary, this
____ day of _______________, 2001.
UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
ATTEST:
By:________________________________
Name:______________________________
Title:_____________________________
A-6
EXHIBIT B
Form of Right Certificate
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER ____________, 2011 OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.00001 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS
(AS DEFINED IN SECTION 1 OF THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
This certifies that _____________________________, or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of _____________, 2001 (the
"Rights Agreement"), between UNITED SURGICAL PARTNERS INTERNATIONAL, INC., a
Delaware corporation (the "Company"), and First Union National Bank (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 p.m., Dallas, Texas time, on ____________, 2011, at the Corporate
Trust Office of the Rights Agent (or at the office of its successor as Rights
Agent), one one-thousandth (1/1000) of a fully paid non-assessable share of
Series A Junior Participating Preferred Stock, par value $0.01 per share (the
"Preferred Shares"), of the Company, at a purchase price of [$________] per
one one-thousandth (1/1000) of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-thousandths of a Preferred Share
which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of
____________, 2001, based on the Preferred Shares as constituted at such
date. As provided in the Rights Agreement, the Purchase Price and the number
of one one-thousandths of a Preferred Share which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the Corporate Trust Office of the Rights Agent.
B-1
This Right Certificate, with or without other Right Certificates, upon
surrender at the Corporate Trust Office of the Rights Agent, may be exchanged
for another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate (i) may be redeemed by the Company at a redemption price of
$.00001 per Right or (ii) may be exchanged by the Company in whole or in part
for Preferred Shares or shares of the Company's common stock, par value $0.01
per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be entitled to any benefit under the
Rights Agreement or be valid or obligatory for any purpose until it shall have
been authenticated by the Rights Agent.
B-2
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of ___________________, ____.
ATTEST: UNITED SURGICAL PARTNERS
INTERNATIONAL, INC.
[SEAL]
________________________________ By: ____________________________________
Name:___________________________ Name:___________________________________
Title:__________________________ Title:__________________________________
Authentication:
This is one of the Right Certificates referred to in the within-mentioned Rights
Agreement.
First Union National Bank,
as Rights Agent
By:______________________________
Authorized Signature
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _____________________________ hereby sells, assigns
and transfers unto _____________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint __________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated as of ___________________, ____.
--------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
---------------------------------
Signature
B-4
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
TO UNITED SURGICAL PARTNERS INTERNATIONAL, INC.
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other securities) issuable upon the exercise of such Rights and requests
that certificates for such Preferred Shares (or other securities) be issued in
the name of:
Please insert social security or other identifying number:
---------------------
--------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
---------------------
--------------------------------------------------------------------------------
(Please print name and address)
Dated as of _____________, ____.
-----------------------------------------
Signature
B-5
[Form of Reverse Side of Right Certificate -- continued]
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
[To be executed if statement is correct]
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
-----------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Form of Assignment or Form of Election
to Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On _____________, 2001, the Board of Directors of United Surgical
Partners International, Inc. (the "Company"), authorized the issuance of one
preferred share purchase right (a "Right") with respect to each outstanding
share of common stock, $0.01 par value (the "Common Shares"), of the Company.
The rights were issued on ____________, 2001 to the holders of record of
Common Shares on that date. Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, $.01 par value (the "Preferred Shares"), of
the Company at a price of $[____] per one one-thousandth of a Preferred Share
(the "Purchase Price"), subject to adjustment. The description and terms of
the Rights are set forth in a Rights Agreement (the "Rights Agreement") dated
as of ____________, 2001, between the Company and First Union National Bank,
as Rights Agent (the "Rights Agent").
DETACHMENT OF RIGHTS; EXERCISE. Initially, the Rights will attach to
all Common Share certificates representing outstanding shares and no separate
Right Certificate will be distributed. The Rights will separate from the Common
Shares and a "Distribution Date" will occur upon close of Business (as defined
in the Rights Agreement) on the earlier of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
has become an Acquiring Person, or (ii) 10 business days following the
commencement or announcement of an intention to commence a tender offer or
exchange offer the consummation of which would result in a person or group
becoming an Acquiring Person, subject to the right of the Board of Directors to
defer the occurrence of a Distribution Date upon the occurrence of an event
described in this clause (ii).
In general, a person becomes an Acquiring Person if such person or a
group of which such person is a member (i) becomes the beneficial owner of 15%
or more of the Company's outstanding common stock, or (ii) in the case of Welsh,
Carson, Xxxxxxxx & Xxxxx VII, L.P. together with its affiliates (collectively,
the "WCAS Group"), becomes the beneficial owner of 15% or more of the Company's
outstanding common stock at any time after the WCAS Group shall have been the
beneficial owner of less than 15% of the Company's outstanding common stock.
Until the Distribution Date (or earlier redemption or expiration of
the Rights) (i) the Rights will be evidenced with respect to any of the
Common Shares outstanding on June 13, 2001, by the certificates representing
such Common Shares with a copy of this Summary of Rights attached thereto,
(ii) the Rights will be transferred with and only with the Common Shares,
(iii) new Common Share certificates issued after June 13, 2001, upon transfer
or new issuance of the Common Shares will contain a notation incorporating
the Rights Agreement by reference, and (iv) the surrender for transfer of any
certificates for Common Shares outstanding as of June 13, 2001, even without
such notation or a copy of this Summary of Rights being attached thereto,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will thereafter
evidence the Rights.
C-1
The Rights are not exercisable until the Distribution Date. The Rights
will expire on ____________, 2011 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
If a person or group were to become an Acquiring Person, then each
Right then outstanding (other than Rights beneficially owned by the Acquiring
Person which would become null and void) would become a right to buy that number
of Common Shares (or under certain circumstances, the equivalent number of one
one-thousandths of a Preferred Share or other assets or securities of the
Company) that at the time of such acquisition would have a market value of two
times the Purchase Price of the Right.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person, if the Company were acquired in a merger or other
business combination transaction or more than 50% of its consolidated assets or
earning power were sold, proper provision will be made so that each holder of a
Right will thereafter have the right to receive, upon the exercise thereof at
the then current Purchase Price of the Right, that number of shares of common
stock of the acquiring company which at the time of such transaction would have
a market value of two times the Purchase Price of the Right.
PREFERRED SHARES. The dividend and liquidation rights, and the
non-redemption feature, of the Preferred Shares are designed so that the value
of one one-thousandth of a Preferred Share purchasable upon exercise of each
Right will approximate the value of one Common Share. The Preferred Shares
issuable upon exercise of the Rights will be non-redeemable and rank junior to
all other series of the Company's preferred stock. Each whole Preferred Share
will be entitled to receive a quarterly preferential dividend in an amount per
share equal to the greater of (i) $1.00 in cash, or (ii) in the aggregate, 1,000
times the dividend declared on each Common Share. In the event of liquidation,
the holders of the Preferred Shares will be entitled to receive a preferential
liquidation payment equal to the greater of (i) $1,000 per share, or (ii) in the
aggregate, 1,000 times the payment made on each Common Share. In the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged for or changed into other stock or securities, cash or other property,
each whole Preferred Share will be entitled to receive 1,000 times the amount
received per Common Share. Each whole Preferred Share shall be entitled to 1,000
votes on all matters submitted to a vote of the stockholders of the Company, and
Preferred Shares shall generally vote together as one class with the Common
Stock and any other capital stock entitled to vote thereon on all matters
submitted to a vote of stockholders of the Company.
The offer and sale of the Preferred Shares issuable upon exercise of
the Rights will be registered with the Securities and Exchange Commission and
such registration will not be effective until the Rights become exercisable.
ANTIDILUTION AND OTHER ADJUSTMENTS. The number of one one-thousandths
of a Preferred Share or other securities or property issuable upon exercise of
the Rights, and the Purchase Price payable, are subject to customary adjustments
from time to time to prevent dilution.
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or
C-2
subdivisions, consolidations or combinations of the Common Shares occurring, in
any such case, prior to the Distribution Date.
EXCHANGE OPTION. At any time after a person or group of affiliated or
associated persons has become an Acquiring Person and before the acquisition by
a person or group of 50% or more of the outstanding Voting Shares, the Board of
Directors may, at its option, issue Common Shares (or Preferred Shares) in
mandatory redemption of, and in exchange for, all or part of the then
outstanding and exercisable Rights (other than Rights owned by such person or
group which would become null and void) at an exchange ratio of one Common Share
(or one one-thousandth of a Preferred Share) for each two Common Shares for
which each Right then outstanding is then exercisable, subject to adjustment.
REDEMPTION OF RIGHTS. At any time prior to the time that a person or
group has become an Acquiring Person, the Board of Directors of the Company may
redeem all but not less than all the then outstanding Rights at a price of
$0.00001 per Right (the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish. Immediately upon the action
of the Board of Directors ordering redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of Rights
will be to receive the Redemption Price.
NO RIGHTS AS STOCKHOLDER. Until a Right is exercised, the holder
thereof, as such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive dividends.
AMENDMENT OF RIGHTS. The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the holders of the
Rights, including an amendment to extend the Final Expiration Date, and,
provided a Distribution Date has not occurred, to extend the period during which
the Rights may be redeemed, except that after the first public announcement that
a person or group has become an Acquiring Person, no such amendment may
materially and adversely affect the interests of the holders of the Rights other
than the Acquiring Person and transferees of the Acquiring Person.
THIS SUMMARY DESCRIPTION OF THE RIGHTS DOES NOT PURPORT TO BE COMPLETE
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE RIGHTS AGREEMENT, WHICH IS
HEREBY INCORPORATED HEREIN BY REFERENCE.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
_________________, 2001. A copy of the Rights Agreement is available free of
charge from the Company.
C-3
