Exhibit 8
______________________
CORDIS CORPORATION
and
CHEMICAL MELLON SHAREHOLDER SERVICES L.L.C.,
as Rights Agent
________________________
Rights Agreement
Dated as of October 13, 1995
________________________
Table of Contents
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Section Page
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1 Certain Definitions . . . . . . . . . . . . . . . . 1
2 Appointment of Rights Agent . . . . . . . . . . . . 6
3 Issue of Rights Certificates . . . . . . . . . . . 6
4 Form of Rights Certificates . . . . . . . . . . . . 8
5 Countersignature and Registration . . . . . . . . . 9
6 Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates . . . . . . . . . . . . . . . 10
7 Exercise of Rights; Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . 11
8 Cancellation and Destruction of Rights Certificates 13
9 Reservation and Availability of Common Stock . . . 13
10 Common Stock Record Date . . . . . . . . . . . . . 15
11 Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights . . . . . . . . . . . . . . . 15
12 Certificate of Adjusted Purchase Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . 24
13 Consolidation, Merger or Sale or Transfer of Assets or
Earning Power . . . . . . . . . . . . . . . . . . 24
14 Fractional Rights and Fractional Shares . . . . . . 27
15 Rights of Action . . . . . . . . . . . . . . . . . 28
16 Agreement of Rights Holders . . . . . . . . . . . . 28
17 Rights Certificate Holder Not Deemed a Shareholder 29
18 Duties of Rights Agent . . . . . . . . . . . . . . 29
19 Compensation and Indemnification of the Rights Agent 32
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20 Merger or Consolidation or Change of Name of Rights Agent 32
21 Change of Rights Agent . . . . . . . . . . . . . . 33
22 Issuance of New Rights Certificates . . . . . . . . 34
23 Redemption . . . . . . . . . . . . . . . . . . . . 35
24 Exchange . . . . . . . . . . . . . . . . . . . . . 36
25 Notice of Certain Events . . . . . . . . . . . . . 37
26 Notices . . . . . . . . . . . . . . . . . . . . . . 38
27 Supplements and Amendments . . . . . . . . . . . . 39
28 Successors . . . . . . . . . . . . . . . . . . . . 40
29 Determinations and Actions by the Board of Directors,
etc. . . . . . . . . . . . . . . . . . . . . . . 40
30 Benefits of this Agreement . . . . . . . . . . . . 40
31 Severability . . . . . . . . . . . . . . . . . . . 40
32 Governing Law . . . . . . . . . . . . . . . . . . . 41
33 Counterparts . . . . . . . . . . . . . . . . . . . 41
34 Descriptive Headings . . . . . . . . . . . . . . . 41
EXHIBIT A -- Form of Rights Certificate
EXHIBIT B -- Summary of Rights to Purchase Common Stock
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RIGHTS AGREEMENT
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Agreement, dated as of October 13, 1995 (the "Agreement"), between
Cordis Corporation, a Florida corporation (the "Company"), and Chemical
Mellon Shareholder Services L.L.C. (the "Rights Agent").
WHEREAS, on October 12, 1995 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
dividend distribution of one Right for each share of Common Stock (as
hereinafter defined) of the Company outstanding at the Close of Business on
October 23, 1995 (the "Record Date"), and has authorized the issuance of
one Right with respect to each share of Common Stock of the Company issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter defined),
each Right initially representing the right to purchase one share of Common
Stock upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
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the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates
and Associates (as such terms are hereinafter defined) of such
Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 15% or more of the shares of Common
Stock then outstanding, but shall not include (i) the Company,
(ii) any Subsidiary of the Company, or (iii) any employee
benefit plan of the Company or any Subsidiary of the Company,
or any Person or entity holding shares of Common Stock for or
pursuant to the terms of any such plan to the extent, and only
to the extent, of such shares so held. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the
result of an acquisition of shares of Common Stock by the
Company which, by reducing the number of shares of Common Stock
outstanding, increases the proportionate number of shares of
Common Stock beneficially owned by such Person to 15% or more
of the shares of Common Stock of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial
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Owner of 15% or more of the Common Stock of the Company then
outstanding by reason of share purchases by the Company and
shall, after such share purchases by
the Company, become the Beneficial Owner of any additional shares
of Common Stock of the Company, then such Person shall be deemed
to be an "Acquiring Person" if such Person is then the Beneficial
Owner of 15% or more of the Common Stock then outstanding.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of
1934, as amended, as in effect on the date of this Agreement
(the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange
rights, other rights (other than these Rights), warrants
or options, or otherwise; provided, however, that a Person
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shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase
or exchange; or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering
Event, or (C) securities issuable upon exercise of Rights
from and after the occurrence of a Triggering Event which
Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made
with respect to any Original Rights;
(ii) which 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 General Rules and
Regulations under the Exchange Act), including pursuant to
any agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person shall not
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be deemed the "Beneficial Owner" of, or to "beneficially
own," any
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security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing), for the purpose
of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (c)) or disposing of
any voting securities of the Company; provided, however,
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that nothing in this paragraph (c) shall cause a person
engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own," any
securities acquired through such person's participation in
good faith in a firm commitment underwriting until the
expiration of forty days after the date of such
acquisition.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order
to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that
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if such date is not a Business Day it shall mean 5:00 P.M., New
York City time, on the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the shares of common stock, $1.00 par value, of the
Company. "Common Stock" when used with reference to any Person
other than the Company shall mean the class of capital stock
with the greatest aggregate voting power, or the class of
equity securities or other equity interests having power to
control or direct the management of such Person.
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(h) "Company" shall mean Cordis Corporation, a Florida
corporation.
(i) "Continuing Director" shall mean (i) any member of the
Board of Directors of the Company, while such Person is a
member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a
representative of any Acquiring Person or of any such Affiliate
or Associate, and was a member of the Board as of the date of
this Agreement, or (ii) any Person who subsequently becomes a
member of the Board, while such Person is a member of the
Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing
Directors.
(j) "Distribution Date" shall mean the earlier of (i) the
Close of Business on the tenth day after the Stock Acquisition
Date (or, if the tenth day after the Stock Acquisition Date
occurs before the Record Date, the close of business on the
Record Date), or (ii) the Close of Business on the tenth
Business Day (or, if such tenth Business Day occurs before the
Record Date, the Close of Business on the Record Date), or such
specified or unspecified later date on or after the Record Date
as may be determined by action of a majority of the Continuing
Directors, after the date that a tender or exchange offer by
any Person (other than the Company, any Subsidiary of the
Company or any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity holding
shares of Common Stock for or pursuant to the terms of any such
plan) is first published or sent or given within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would
be the beneficial owner of 15% or more of the outstanding
shares of Common Stock.
(k) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended as in effect on the date of this Agreement.
(l) "Exchange Date" shall have the meaning set forth in
Section 7(a) hereof.
(m) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
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(n) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(o) "Outside Directors" shall mean the Continuing Directors
who are not officers of the Company.
(p) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(q) "Principal Party" shall have the meaning set forth in
section 13(b) hereof.
(r) "Purchase Price" shall have the meanings set forth in
Sections 4(a) and 11(a)(ii) hereof.
(s) "Record Date" shall mean the close of business on
October 23, 1995.
(t) "Redemption Period" shall have the meaning set forth in
Section 23(a) hereof.
(u) "Rights Agent" shall mean Chemical Mellon Shareholder
Services L.L.C.
(v) "Rights Certificate" shall have the meaning set forth in
Section 3 hereof.
(w) "Rights Dividend Declaration Date" shall mean the close of
business on October 12, 1995.
(x) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.
(y) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(z) "Securities Act" shall mean the Securities Act of 1933, as
amended as in effect on the date of this Agreement.
(aa) "Stock 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) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
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(bb) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly
or indirectly, by such Person, or is otherwise controlled by
such Person.
(cc) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby
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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 Stock) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
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(a) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Common Stock,
in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of
Common Stock as of the Close of Business on the Record Date at the address
of such holder shown on the records of the Company. With respect to
certificates for shares of Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until
the Distribution Date (or the earlier Expiration Date or Final Expiration
Date), the transfer of any certificate representing shares of Common Stock
in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with the shares of Common Stock
represented thereby.
(b) Rights shall be issued in respect of all shares of Common
Stock issued (whether originally issued or from the Company's treasury)
after the Record Date but prior to the earlier of the Distribution Date or
the Expiration Date or the Final Expiration Date. Rights shall also be
issued to the extent provided in Section 22 in respect of all shares of
Common Stock which are issued (whether originally issued or from the
Company's treasury) after the Distribution Date and prior to the Expiration
Date. Certificates representing such shares of Common Stock shall also be
deemed to be certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights
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Agreement between Cordis Corporation (the "Company")
and Chemical Mellon Shareholder Services L.L.C. (the
"Rights Agent") dated as of October 13, 1995 (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 as in effect on the date of mailing
without charge promptly after the receipt of a written
request therefor.
Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person or any Affiliate
or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf
of such Person or by any subsequent holder, may become
null and void. The Rights shall not be exercisable, and
shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the
issuance to such holder, or the exercise by such holder,
of the Rights in such jurisdiction shall not have been
obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the
Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of
Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any such certificate shall also constitute the transfer
of the Rights associated with the Common Stock represented thereby.
(c) Until the Distribution Date (i) the Rights will be evidenced
(subject to the provisions of paragraph (a) of this Section 3) by the
certificates for Common Stock registered in the names of the holders
thereof (which certificates for Common Stock shall also be deemed to be
Rights Certificates) and not by separate Rights Certificates, and (ii) the
Rights will be transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the Company).
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(d) As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of
the Company, a Rights Certificate, in substantially the form of Exhibit A
hereto, evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment
in the number of Rights per share of Common Stock has been made pursuant to
Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
Section 4. Form of Rights Certificates.
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(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever issued, shall be dated as of the Record Date, and on
their face shall entitle the holders thereof to purchase such number of
shares of Common Stock as shall be set forth therein at the price set forth
therein (such exercise price per share, the "Purchase Price"), but the
amount and type of securities purchasable upon exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section 3(d) or
Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) 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
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Rights or (B) a transfer which a majority of the Continuing Directors has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Rights 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
Rights Certificate and the Rights represented hereby
may become null and void in the circumstances specified
in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
---------------------------------
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice-President
either manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by the Company
with the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any
Rights Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall
be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
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Section 6. Transfer, Split Up, Combination and Exchange of Rights
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Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
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(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the earlier
of the Expiration Date or Final Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for
another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of shares of Common Stock (or following a
Triggering Event, other securities, cash, or other assets, as the case may
be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Certificates to
be transferred, split up, combined or exchanged at the principal office of
the Rights Agent. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any
such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14 hereof, countersign and deliver
to the person entitled thereto a Rights Certificate or Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will execute and deliver a new Rights Certificate of like tenor to
the Rights Agent for countersignature and delivery to the registered owner
in lieu of the Rights Certificate so lost, stolen, destroyed, or mutilated.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of
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Rights.
------
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions
on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form
of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights
Agent, together with payment of the Purchase Price for each share of Common
Stock as to which the Rights are exercised, at or prior to the earlier of
(i) the close of business on October 13, 2005 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, or (iii) the time at which such Rights are exchanged
(the "Exchange Date") as provided in Section 24 hereof, or (iv) the time at
which the Rights expire pursuant to Section 13(d) hereof (the earliest of
(i), (ii), (iii) and (iv) being herein referred to as the "Expiration
Date").
(b) Each Right shall entitle the registered holder thereof to
purchase one share of Common Stock, and the Purchase Price for each share
of Common Stock pursuant to the exercise of a Right shall initially be
$375, and shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the
United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one share of Common Stock to be purchased and an
amount equal to any applicable transfer tax required to be paid by the
registered holder of such Rights Certificate in cash, or by certified
check, cashier's check or bank draft payable to the order of the Company,
the Rights Agent shall, subject to Section 18 (j) hereof, thereupon
promptly (i) (A) requisition from any transfer agent of the shares of
Common Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the total number of shares of Common Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company shall have elected to deposit
the total number of shares of Common Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of shares of Common
Stock as are to be purchased (in which case certificates for the shares of
Common Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will direct the
depositary to comply with such request, (ii) requisition from the Company
the amount of cash, if any,
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to be paid in lieu of issuance of fractional shares in accordance with
Section 14, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (iv) after receipt thereof,
promptly deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. In the event that the Company is
obligated to issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary so
that such securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, which a majority of the Continuing
Directors, in their sole discretion, determines is or was involved in or
caused or facilitated, directly or indirectly (including through any change
in the Board), such Section 11(a)(ii) Event, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) 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 a majority of the
Continuing Directors has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 7(e), shall become null and void without any further action,
and no holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise.
The Company shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights Certificates or other Person as a
result of its failure to make any determinations with respect to an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
- 12 -
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
---------------------------------------------------
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation or
in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any provisions of this Rights Agreement.
The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other
Rights Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
--------------------------------------------
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Common Stock (and following the occurrence of a Triggering Event, out of
its authorized and unissued shares of Common Stock and/or other securities)
or out of any authorized and issued shares held in its Treasury, the number
of shares of Common Stock (and following the occurrence of a Triggering
Event, shares of Common Stock and/or other securities) that, as provided in
this Agreement, including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock issuable and
deliverable upon the exercise of Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
- 13 -
Company upon exercise of the Rights has been determined in accordance with
this Agreement, a registration statement under the Securities Act of 1933
(the "Act"), with respect to the Common Stock or other securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date. The Company
will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. In
addition, if the Company shall determine that a registration statement is
required following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights until such time as a registration
statement has been declared effective. Upon any suspension of
exercisability of Rights referred to in this Section 9(c), the Company
shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such
holder, or the exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable, or the exercise thereof
shall not be permitted under applicable law or a registration statement
shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be
duly authorized and validly issued and fully paid and non-assessable.
(e) 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
Rights Certificates or of any certificates for a number of shares of Common
Stock 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 Rights Certificates to a Person other than, or the
issuance or delivery of certificates for a number of shares of Common Stock
in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered
- 14 -
for exercise or to issue or deliver any certificates for a number of shares
of Common Stock in a name other than that of the registered holder upon the
exercise of any Rights until any such tax shall have been paid (any such
tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Common Stock Record Date. Each person in whose name
------------------------
any certificate for a number of shares of Common Stock (or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of shares of
Common Stock (or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made; provided,
--------
however, that if the date of such surrender and payment is a date upon
-------
which the Common Stock (or other securities, as the case may be) transfer
books of the Company are closed, such person shall be deemed to have become
the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Common Stock (or other
securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a shareholder of
the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and
----------------------------------------
Kind of Shares or Number of Rights. The Purchase Price, the number and
----------------------------------
kind of shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding Common Stock,
(C) combine the outstanding Common Stock into a smaller number of shares,
or (D) issue any shares of its capital stock in a reclassification of the
Common Stock (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 11(a) and
Section 7(e) hereof, 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
Common Stock or the number and kind of shares of capital stock issuable on
such date, as the case may be, shall be proportionately
- 15 -
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the aggregate adjusted Purchase Price
then in effect necessary to exercise a Right in full, the aggregate number
and kind of shares of Common Stock or the number and kind of shares of
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Common Stock (or
other capital stock, as the case may be) transfer books of the Company were
open, he would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination, or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Sections 23 and 24 of the Agreement, in the
event that 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 Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such plan), alone or
together with its Affiliates and Associates, shall, at any time after the
Rights Dividend Declaration Date, become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a transaction
set forth in Section 13(a) hereof, or is an acquisition of shares of Common
Stock pursuant to a cash tender offer made pursuant to Section 14(d) of the
Exchange Act for all outstanding shares of Common Stock (other than shares
of Common Stock beneficially owned by the person making the offer or by its
Affiliates or Associates) at a price and on terms determined by at least a
majority of the Outside Directors, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair to
shareholders (taking into account all factors which such members of the
Board deem relevant including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (b) otherwise in the best
interests of the Company and its shareholders, proper provision shall be
made so that promptly following the Redemption Period (as defined in
Section 23(a)), each holder of a Right (except as provided below and in
Section 7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof and the payment of an amount equal to the then current
Purchase Price in accordance with the terms of this Agreement, such number
of shares of Common Stock of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then number of
shares of Common Stock for which a Right was or would have been exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event,
whether or not such Right was then exercisable, and (y) dividing that
product (which, following such first occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement except to the extent set forth in Section
- 16 -
13 hereof) by 50% of the current market price per share of Common Stock
(determined pursuant to Section 11(d) hereof) on the date of such first
occurrence (such number of shares, the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
which is authorized by the Company's Restated Articles of Incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full of
the Rights in accordance with the foregoing subparagraph (ii), the Board
shall (acting by at least a majority of the Continuing Directors), to the
extent permitted by applicable law and any material agreements then in
effect to which the Company is a party: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute for some or all of the
Adjustment Shares, upon exercise of a Right and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) other
equity securities of the Company, including, without limitation, shares, or
units of shares, of preferred stock which the Board of Directors has deemed
to have the same value as shares of Common Stock (such shares of equity
securities being herein called "common stock 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 based upon
the advice of an investment banking firm selected by the Board of
Directors; provided, however, if the Company shall not have made adequate
-------- -------
provision to deliver value pursuant to clause (B) above within thirty
(30) days following the later of (x) the first occurrence of a
Section 11(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger 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, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If, upon the
occurrence of a Section 11(a)(ii) Event, the Board of Directors shall
determine in good faith that it is likely that sufficient additional shares
of Common Stock could be authorized for issuance upon exercise in full of
the Rights, then if the Board so elects, the thirty (30) day period set
forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, the "Substitution
Period"). To the extent that action is to be taken pursuant to the
preceding provisions of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability
of
- 17 -
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 the first sentence of this
Section 11(a)(iii) and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common
Stock shall be the current market price (as determined pursuant to
Section 11(d) hereof) per share of the Common Stock on the
Section 11(a)(ii) Trigger Date and the value of any "common stock
equivalent" shall be deemed to have the same value as the Common Stock on
such date. The Board may, but shall not be required to, establish
procedures to allocate the right to receive shares of Common Stock upon the
exercise of the Rights among holders of Rights pursuant to this Section
11(a)(iii).
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within forty-five (45) calendar days after such
record date) to subscribe for or purchase Common Stock (or shares having
the same rights, privileges and preferences as the shares of Common Stock
("equivalent common stock") or securities convertible into Common Stock at
a price per share of Common Stock or per share of equivalent common stock
(or having a conversion price per share of Common Stock, if a security
convertible into Common Stock) less than the current per share market price
of the Common Stock (as defined in Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding on such record date, plus the number of
shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock and/or equivalent common stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price,
and the denominator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares of
Common Stock and/or equivalent common stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the
Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Common Stock owned by or held for
the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights or
warrants are not so
- 18 -
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Common Stock (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, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a
dividend payable in Common Stock, but including any dividend payable in
stock other than Common Stock), or subscription rights or warrants
(excluding those referred to in Section 11(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 current per share market
price of the Common Stock (as defined in Section 11(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 cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Common Stock and the denominator of which
shall be such current per share market price of the Common Stock. Such
adjustment shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current
market price" of the Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for the
30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market price" per share
of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of Common Stock for the ten (10) consecutive
Trading Days immediately following such date; provided, however, that in
-------- -------
the event that the current market price of the Common Stock is determined
during a period following the announcement by the issuer of such Common
Stock of (i) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into such Common
Stock (other than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set
forth above, after the ex-dividend date for such dividend or distribution,
or the record date for such subdivision, combination or reclassification,
then, and in each such case, the "current market price" shall be
appropriately adjusted to take into account ex-dividend trading. The
closing
- 19 -
price for each day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the shares of
Common Stock are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
shares of Common Stock are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market
maker making a market in the shares of Common Stock selected by the Board
of Directors of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors shall be used. The term
"Trading Day" shall mean a day on which the principal national securities
exchange on which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business, or, if the shares of
Common Stock are not listed or admitted to trading on any national
securities exchange, the term "Trading Day" shall mean a Monday, Tuesday,
Wednesday, Thursday or Friday on which banking institutions in the State of
New York are not authorized or obligated by law or executive order to
close. If the Common Stock is not publicly held or not listed or traded,
"current market price" shall mean the fair value per share as determined in
good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in such
price; provided, however, that any adjustments which by reason of this
-------- -------
Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest ten-
thousandth of a share of Common Stock or other share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), an adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires such adjustment
or (ii) the Expiration Date.
- 20 -
(f) If as a result of an adjustment made pursuant to
Section 11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than Common Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the Purchase
Price thereof 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 Common Stock contained in Sections 11(a), (b), (c), (e),
(g), (h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Common Stock shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common
Stock purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that fraction of a shares (or number of shares) of Common Stock (calculated
to the nearest one-thousandth) obtained by (i) multiplying (x) the number
of shares covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common Stock issuable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment
of the number of Rights shall be exercisable for the number of shares of
Common Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public
- 21 -
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear,
at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the fraction of a share (or number of shares) of Common Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase
Price per share and the number of shares which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then-par value, if any, of the number
of shares of Common Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully
paid and non-assessable such number of shares of Common Stock at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date the number of shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the number of shares of Common Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment; provided,
--------
however, that the Company shall deliver to such holder a due xxxx or other
-------
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
- 22 -
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any (i) consolidation or
subdivision of the Common Stock, (ii) issuance wholly for cash of any
shares of Common Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Common Stock or securities
which by their terms are convertible into or exchangeable for Common Stock,
(iv) stock dividends or (v) issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company
to holders of its Common Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which complies with
Section 11(o) hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the Person
who constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof,
take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded
by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend
on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock into a smaller number
of shares, the number of Rights associated with each share of Common Stock
then
- 23 -
outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any
such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the occurrence of such
event.
Section 12. Certificate of Adjusted Purchase Price or
-----------------------------------------
Number of Shares. Whenever an adjustment is made as provided in
----------------
Sections 11 and 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment, and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained and shall not
be deemed to have knowledge of any adjustment unless and until it shall
have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer
-----------------------------------------
of Assets or Earning Power.
--------------------------
(a) Subject to Section 23 of this Agreement, in the event that,
following the Stock Acquisition Date, directly or indirectly, (x) the
Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) shall consolidate with, or merge with or into,
the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for stock or other securities of
any other Person or cash or any other property, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies with
Section 11(o) hereof), then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper
- 24 -
provision shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall, upon the expiration of the
Redemption Period (as defined in Section 23(a)), thereafter have the right
to receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of shares of
Common Stock for which a Right was exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of shares of Common Stock for which a Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior
to such first occurrence), and (2) dividing that product (which product,
following the first occurrence of a Section 13 Event, shall be referred to
as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to
Section 11(d) hereof) per share of the shares of Common Stock of such
Principal Party on the date of consummation of such Section 13 Event (or
the fair market value on such date or other securities or property of the
Principal Party, as provided for herein); (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof (other than Sections 11(a)(ii) and 11(a)(iii)) shall
apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) and Section 11(a)(iii)
hereof shall be of no effect following the first occurrence of any
Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person
that is the other party to such merger or consolidation; and
- 25 -
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if
-------- -------
the Common Stock of such Person is not at such time and has not
been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, "Principal
Party" shall refer to such other Person; and (2) in case such
Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and
have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized shares of
its Common Stock which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party
shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of
this Section 13 and further providing that, as soon as practicable after
the date of any such Section 13 Event, the Principal Party will
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will
use its best efforts to cause such registration statement to
(A) become effective as soon as practicable after such filing
and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date;
and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a) hereof.
- 26 -
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons (or a wholly owned subsidiary of any
such Person or Persons) who acquired shares of Common Stock pursuant to a
cash tender offer for all outstanding shares of Common Stock which complies
with the provisions of Section 11(a)(ii) hereof, (ii) the price per share
of Common Stock offered in such transaction is not less than the price per
share of Common Stock paid to all holders of Common Stock whose shares were
purchased pursuant to such cash tender offer and (iii) the form of
consideration being offered to the remaining holders of shares of Common
Stock pursuant to such transaction is the same as the form of consideration
paid pursuant to such cash tender offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
---------------------------------------
(a) The Company shall not be required to issue fractions of
Rights except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of the whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been otherwise
issuable. The closing price for any day shall be the last sale price, or,
in case no such sale takes place on such day, the average of the high bid
and low asked prices, in either case as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no
such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors
of the Company shall be used. In the event the Rights are listed or
admitted to trading on a national securities exchange, the closing price
for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the high bid and low asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to the national
securities exchange on which the Rights are listed or admitted to trading.
- 27 -
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock. For purposes of this
Section 14(b), the current market value of a share of Common Stock shall be
the closing price of a share of Common Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect of
----------------
this Agreement, except the rights of action vested in the Rights Agent
pursuant to Section 18 and Section 20 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of
the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right
to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right
---------------------------
by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied
by a proper
- 28 -
instrument of transfer and with the appropriate form of assignment and the
certificate contained therein duly completed and executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be affected by
any notice to the contrary; and
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any government authority, prohibiting or
otherwise restraining performance of such obligation; provided, however,
--------
the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder.
--------------------------------------------------
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Common
Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the
rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders
(except as provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Duties of Rights Agent. The Rights Agent undertakes
----------------------
the duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
- 29 -
(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 (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be proved
or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the
Board, President, any Vice President, the Treasurer or the Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 7(e) hereof) or any adjustment required under the provisions of
Section 11 or 13 hereof or responsible for the manner, method, or amount of
any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common
- 30 -
Stock will, when so issued, be validly authorized and issued, fully paid
and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the President, a Vice President, the
Secretary or the Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer. Any application by
the Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this Rights Agreement and the
date on or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by,
or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application
(which date shall not be less than five Business Days after the date any
officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written instruction in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect, or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect, or misconduct; provided, however,
-------- -------
reasonable care was exercised in the selection and continued employment
thereof.
- 31 -
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause
1 and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting
with the Company.
Section 19. Compensation and Indemnification of the Rights Agent.
----------------------------------------------------
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution
of this Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs
and expenses of defending against any claim of liability in the premises.
The indemnity provided for hereunder shall survive the expiration of the
Rights and the termination of this Agreement.
(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 Rights Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper person or persons.
Section 20. Merger or Consolidation or Change of Name
-----------------------------------------
of Rights Agent.
---------------
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
- 32 -
succeeding to the corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, however, that such
-------- -------
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and
in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at any such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 21. Change of Rights Agent. The Rights Agent or any
----------------------
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the
Company and to each transfer agent of the Common Stock by registered or
certified mail, and to the holders of the Rights Certificates by first-
class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock by registered or certified mail, and to the
holders of the Rights 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 thirty
(30) days after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the registered holder of any Rights Certificate may
apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be a
- 33 -
corporation organized and doing business under the laws of the United
States or of the States of Florida or New York (or of any other state of
the United States so long as such corporation is authorized to do business
as a banking institution in the States of Florida or New York), in good
standing, having a principal office in the States of Florida or New York
which is authorized under such laws to exercise corporate trust power and
is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital
and surplus of at least $50 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of
any such appointment the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common Stock,
and mail a notice thereof in writing to the registered holders of the
Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
-----------------------------------
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing
Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the Purchase Price per share and the number or
kind of class of shares or other securities or property purchasable under
the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock following the Distribution Date (other than upon exercise
of a Right) and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board, issue Rights Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights Certificate
-------- -------
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof.
- 34 -
Section 23. Redemption.
----------
(a) The Board of Directors of the Company may, at its option, at
any time during the period commencing on the Rights Dividend Declaration
Date and ending on the earlier of (i) the Close of Business on the tenth
day following the Stock Acquisition Date (or, if the Stock Acquisition Date
shall have occurred prior to the Record Date, the Close of Business on the
tenth day following the Record Date), as such period may be extended or
shortened in the discretion of the Board of Directors (the "Redemption
Period") or (ii) the Final Expiration Date, cause the Company to redeem all
but not less than all the then outstanding Rights at a redemption price of
$.005 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to as the
"Redemption Price"); provided, however, that, if the Board of Directors
-------- -------
authorizes redemption of the Rights or a change in the Redemption Period in
either of the circumstances set forth in clauses (i) and (ii) below, then
there must be Continuing Directors then in office and such authorization
shall require the concurrence of a majority of such Continuing Directors:
(i) such authorization occurs on or after the time a Person becomes an
Acquiring Person, or (ii) such authorization occurs on or after the date of
a change (resulting from a proxy or consent solicitation or from a vote or
written consent(s)) in a majority of the directors in office at the
commencement of such solicitation, or prior to such vote or consent(s), if
any Person who is a participant in such solicitation, vote or consent(s)
has stated (or, if a majority of the directors in office at the
commencement of such solicitation or prior to such vote or consent(s) has
determined in good faith) that such Person (or any of its Affiliates or
Associates) intends to take, or may consider taking, any action which would
result in such Person becoming an Acquiring Person or which would cause the
occurrence of a Triggering Event unless, concurrently with such a proxy or
consent solicitation or such vote or consent(s), effected in compliance
with applicable law and regulations, such Person (or one or more of its
Affiliates or Associates) is making a cash tender offer pursuant to a
Schedule 14D-1 (or any successor form) filed with the Securities and
Exchange Commission for all outstanding shares of Common Stock not
beneficially owned by such Person (or by its Affiliates or Associates) in
compliance with Section 11(a)(ii). If, following the occurrence of a Stock
Acquisition Date and following the expiration of the Company's right of
redemption hereunder (i) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Common Stock in
one transaction or series of transactions, not directly or indirectly
involving the Company or any of its Subsidiaries, which did not result in
the occurrence of a Triggering Event such that such Person is thereafter a
Beneficial Owner of 10% or less of the outstanding shares of Common Stock,
(ii) there are no other Persons, immediately following the occurrence of
the event described in clause (i), who are Acquiring Persons, and (iii) the
Board of Directors (with the concurrence of
- 35 -
a majority of the Continuing Directors) shall so approve, then the
Company's right of redemption shall be reinstated and thereafter be subject
to the provisions of this Section 23. Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event or a Section 13
Event until such time as the Company's right of redemption hereunder has
expired. The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the current market price of the Common
Stock at the time of redemption) or any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses
as they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
Section 24. Exchange.
--------
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 11(a)(ii) or Section 7(e) hereof) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice
- 36 -
of any such exchange; provided, however, that the failure to give, or any
-------- -------
defect in, such notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) or Section 7(e) hereof) held by each holder
of Rights.
(c) In the event that there shall not be sufficient Common Stock
issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares, the
Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this paragraph (d), the
current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
------------------------
(a) In case the Company shall propose, at any time after the
Distribution Date (i) to pay any dividend payable in stock of any class to
the holders of Common Stock or to make any other distribution to the
holders of Common Stock (other than a regular quarterly cash dividend out
of earnings or retained earnings), or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification
involving only the subdivision of outstanding Common Stock), or (iv) to
effect any consolidation or merger into or with, or to effect any sale or
other transfer (or to permit one or more of its subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of
the assets or earning power of the Company and its subsidiaries (taken as a
whole) to, any other Person, or (v) to effect the liquidation, dissolution
or winding up of the Company, then, in
- 37 -
each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take
place and the date of participation therein by the holders of the shares of
Common Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for determining holders of
the shares of Common Stock for purposes of such action and in the case of
any such other action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the shares of Common Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of the occurrence of such event
which shall specify the event and the consequences of the event to holders
of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Common Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate other securities.
Section 26. Notices. Notices or demands authorized by this
-------
Agreement to be given or made by the Rights Agent or by the holder of any
Rights Certificate to, or on behalf of, the Company, shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as
follows:
Cordis Corporation
X.X. Xxx 000000
Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made
- 38 -
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Chemical Mellon Shareholder Services L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to any such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. Prior to the
--------------------------
Distribution Date and subject to the penultimate sentence of this
Section 27, the Company may (acting by at least a majority of the
Continuing Directors), and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common
Stock. From and after the Distribution Date and subject to the penultimate
sentence of this Section 27, the Company may (acting by at least a majority
of the Continuing Directors), and the Rights Agent shall at any time and
from time to time, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period
hereunder, or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person or an Affiliate or Associate of any such
Person); provided, however, that this Agreement may not be supplemented or
-------- -------
amended to lengthen (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any
other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders
of Rights (other than an Acquiring Person or an Affiliate or Associate of
any such Person). 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 27, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final Expiration
Date, the Purchase Price or the number of shares of
- 39 -
Common Stock for which a Right is exercisable. Prior to the Distribution
Date, the interests of the holders of Rights shall be deemed coincident
with the interests of the holders of shares of Common Stock.
Section 28. 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 29. Determinations and Actions by the Board of
------------------------------------------
Directors, etc. For all purposes of this Agreement, any calculation of the
--------------
number of shares of Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors (with, where specifically provided for herein, the
concurrence of the Continuing Directors or Outside Directors) shall have
the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board (with,
where specifically provided for herein, the concurrence of the Continuing
Directors or Outside Directors) or to the Company, or as may be necessary
or advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including without limitation a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board (with,
where specifically provided for herein, the concurrence of the Continuing
Directors or Outside Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject any director to any
liability to the holders of the Rights.
Section 30. 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 Certificates
(and, prior to the Distribution Date, the registered holders of the Common
Stock) any legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of
Common Stock).
Section 31. Severability. If any term, provision, covenant or
------------
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms,
- 40 -
provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
-------- -------
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors determines in its good faith
judgment that severing the invalid language from this Agreement would
materially and adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated
and shall not expire until the Close of Business on the tenth day following
the date of such determination by the Board of Directors.
Section 32. Governing Law. This Agreement, each Right and each
-------------
Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Florida and for all purposes shall be
governed by and construed in accordance with laws of such State.
Section 33. Counterparts. This Agreement may be executed in any
------------
number of counterparts. It shall not be necessary that the signature of or
on behalf of each party appears on each counterpart, but it shall be
sufficient that the signature of or on behalf of each party appears on one
or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in any proof of
this Agreement to produce or account for more than a number of counterparts
containing the respective signatures of or on behalf of all of the parties.
Section 34. Descriptive Headings. Descriptive headings of the
--------------------
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
- 41 -
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
CORDIS CORPORATION
Attest:
By /s/ Xxx Xxxxx Xxxxxxxx By /s/ Xxxxxx X. Xxxxxxx
------------------------------ ----------------------
Name: Xxx Xxxxx Xxxxxxxx Name: Xxxxxx X. Xxxxxxx
------------------ ----------------------
Title: Secretary Title: President, Chief Executive
--------- --------------------------
Officer and Chairman
--------------------
of the Board
------------
CHEMICAL MELLON
SHAREHOLDER SERVICES L.L.C.
Attest:
By /s/ Xxxxx Xxxxxxxxx By /s/ Xxxxx Sandauer
--------------------- ---------------------------
Name: Xxxxx Xxxxxxxxx Name: Xxxxx Sandauer
--------------- ----------------------
Title: Account Officer Title: Assistant Vice President
--------------- ------------------------
- 42 -
Exhibit A
---------
[Form of Rights Certificate]
Certificate No. R Rights
----------------
NOT EXERCISABLE AFTER OCTOBER 13, 2005 OR
EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.005 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. THE RIGHTS SHALL NOT BE
EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD,
BY A HOLDER IN ANY JURISDICTION WHERE THE
REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH
HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF
THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE
BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED
BY THIS RIGHTS 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 RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]*/
--
--------------------
*/ The portion of the legend in brackets shall be inserted only if
--
applicable and shall replace the preceding sentence.
Rights Certificate
CORDIS CORPORATION
This certifies that , or
-------------------------------------
registered assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of
October 13, 1995 (the "Rights Agreement"), between Cordis Corporation, a
Florida corporation (the "Company"), and Chemical Mellon Shareholder
Services L.L.C. (the "Rights Agent"), to purchase from the Company at any
time prior to October 13, 2005 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one share
of Common Stock, $1.00 par value (the "Common Stock"), of the Company, at a
purchase price of $___ per share (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to
Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase Price as of
, 199 , based on the Common Stock as constituted at such
------------------ -
date, and are subject to adjustment upon the happening of certain events as
provided in the Rights Agreement.
From and after the occurrence of an event described in
Section 11(a)(ii) of the Rights Agreement, the Rights evidenced by this
Rights Certificate beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Person (as such terms are defined in the
Rights Agreement), which the Continuing Directors (as defined in the Rights
Agreement), in their sole discretion, determines is or was involved in or
caused or facilitated, directly or indirectly (including through any change
in the Board), such Section 11(a)(ii) Event, (ii) a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person
who, concurrently with or after such transfer, became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person shall become null and
void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
The Rights evidenced by this Rights Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any
jurisdiction where the requisite qualification to the issuance to such
holder, or the exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of shares of Common Stock or other securities, which may be
purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening
of certain events, including Triggering Events (as such term is defined in
the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent and
are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of
Common Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If
this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $.005 per Right at any time prior to the earlier
of the close of business on (i) the tenth day following the Stock
Acquisition Date (as such time period may be changed in the discretion of
the Company's Board of Directors pursuant to the Rights Agreement), and
(ii) the Final Expiration Date (as defined in the Rights Agreement). Under
certain circumstances set forth in the Rights Agreement, the decision to
redeem (or to change such time period) shall require the concurrence of a
majority of the Continuing Directors. After the expiration of the
redemption period, the Company's right of redemption may be reinstated if
an Acquiring Person reduces his beneficial ownership to 10% or less of the
outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company, and such reinstatement is approved
by the Company's Board of Directors (with the concurrence of a majority of
the Continuing Directors).
- 2 -
At any time after a person becomes an Acquiring Person, the Board
of Directors of the Company may exchange the Rights (other than Rights
owned by such Acquiring Person which have become void), in whole or in
part, at an exchange ratio of one share of Common Stock per Right (subject
to adjustment).
No fractional shares of Common Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled
to vote or receive dividends or be deemed for any purpose the holder of
shares of Common Stock 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 shareholder 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 Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of , 19
--------------------- --- --
ATTEST: CORDIS CORPORATION
------------------------------------- By:
-----------------------
Name:
-----------------
Title:
-----------------
- 3 -
Countersigned:
-------------------------------------
-------------------------------------
By:
------------------------------------
Authorized Signature
- 4 -
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED
--------------------------------------------------------------
hereby sells, assigns and transfers unto
----------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
---------------------
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: , 19
--------------------- --
------------------------------------
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: , 19
-------------------- -- --------------------------------
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To:
--------------------------------------------------
The undersigned hereby irrevocably elects to exercise
------------
Rights represented by this Rights Certificate to purchase the shares of
Common Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares
be issued in the name of and delivered to:
----------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------
Please insert social security
or other identifying number:
-----------------------------------
If such number of Rights shall not be all the Rights evidenced by
this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
----------------------------------------------------------------
(Please print name and address)
----------------------------------------------------------------
Please insert social security
or other identifying number:
-----------------------------------
----------------------------------------------------------------
Dated: , 19
---------------- --
------------------------------
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: , 19
------------------ -- -------------------------------
Signature
Signature Guaranteed:
NOTICE
------
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement
or any change whatsoever.
Exhibit B
---------
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On October 12, 1995, the Board of Directors of Cordis Corporation
(the "Company") declared a dividend distribution of one Right for each
outstanding share of common stock, $1.00 par value (the "Common Stock"), of
the Company. The distribution is payable to shareholders of record on
October 23, 1995. Each Right, when exercisable, entitles the registered
holder to purchase from the Company one share of Common Stock at a price of
$375 per share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement
(the "Rights Agreement") between the Company and Chemical Mellon
Shareholder Services L.L.C., as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate
certificates evidencing the Rights will be distributed. The Rights will
separate from the Common Stock and a distribution of Rights Certificates
will occur upon the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common
Stock (the "Stock Acquisition Date") or (ii) 10 business days (or such
later date as the Continuing Directors may determine) following the
commencement of a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being called
the "Distribution Date").
Until the Distribution Date, the Rights (i) will be evidenced by
the Common Stock certificates, and will be transferred with and only with
the Common Stock certificates, (ii) new Common Stock certificates issued
after October 23, 1995 upon transfer or new issuance of the Common Stock
will contain a notation incorporating the Rights Agreement by reference,
and (iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on October 13, 2005, unless earlier
redeemed or exchanged by the Company as described below. The Rights will
not be exercisable by a holder in any jurisdiction where the requisite
qualification to the issuance to such holder, or the exercise by such
holder, of the Rights has not been obtained or is not obtainable.
As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed
to holders of record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates alone
will evidence the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution
Date will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15% or
more of the then outstanding shares of Common Stock (except pursuant to an
offer for all outstanding shares of Common Stock which the Outside
Directors determine to be fair to and otherwise in the best interests of
the Company and its shareholders), each holder of a Right will, after the
end of the Redemption Period referred to below, have the right to exercise
the Right by purchasing, for an amount equal to the Purchase Price, Common
Stock (or, in certain circumstances, cash, property or other securities of
the Company) having a value equal to two times such amount.
Notwithstanding any of the foregoing, following the occurrence of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned
by any Acquiring Person will be null and void. However, Rights are not
exercisable following the occurrence of the events set forth above until
such time as the Rights are no longer redeemable by the Company as set
forth below.
For example, at a Purchase Price of $375 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to
purchase $750 worth of Common Stock (or other consideration, as noted
above) for $375. Assuming that the Common Stock had a per share value of
$83 at such time, the holder of each valid Right would be entitled to
purchase 9 shares of Common Stock for $375.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other
than a merger which follows an offer described in the second preceding
paragraph), or (ii) 50% or more of the Company's assets or earning power is
sold or transferred,
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each holder of a Right (except Rights which previously have been voided as
set forth above) shall, after the end of the Redemption Period referred to
below, have the right to receive, upon exercise, Common Stock of the
acquiring company having a value equal to two times the Purchase Price of
the Right, e.g., Common Stock of the acquiring company having a value of $750.
----
At any time after a person or group of affiliated or associated
persons becomes an Acquiring Person, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by such person or group
which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock per Right (subject to adjustment).
The Purchase Price payable, and the number of shares of Common
Stock or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of the Common Stock, (ii) upon the grant to holders of the
Common Stock of certain rights or warrants to subscribe for Common Stock or
convertible securities at less than the current market price of the Common
Stock or (iii) upon the distribution to holders of the Common Stock of
evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred
to above).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares will be issued and in lieu
thereof, an adjustment in cash will be made based on the market price of
the Common Stock on the last trading date prior to the date of exercise.
In general, the Board of Directors may cause the Company to redeem
the Rights in whole, but not in part, at any time during the period
commencing on October 12, 1995 and ending on the tenth day following the
Stock Acquisition Date, as such period may be extended or shortened by the
Board (the "Redemption Period") at a price of $.005 per Right (payable in
cash, Common Stock or other consideration deemed appropriate by the Board
of Directors). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem the Rights will require the concurrence
of a majority of the Continuing Directors. After the redemption period has
expired, the Company's right of redemption may be reinstated (with the
concurrence of the Continuing Directors) if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the Company
and there are no other Acquiring Persons. Immediately upon the action of
the Board of Directors of the Company ordering redemption of the Rights,
with, where required, the concurrence of the
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Continuing Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.005 redemption price.
The term "Continuing Director" means any member of the Board of
Directors of the Company who was a member of the Board prior to the date of
the Rights Agreement, and any person who is subsequently elected to the
Board if such person is recommended or approved by a majority of the
Continuing Directors, but shall not include an Acquiring Person or an
affiliate or associate of an Acquiring Person, or any representative of the
foregoing entities. The term "Outside Directors" means "Continuing
Directors" who are not officers of the Company.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the
Rights will not be subject to federal taxation to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize
taxable income in the event that the Rights become exercisable for Common
Stock (or other consideration) of the Company or for Common Stock of the
acquiring company as set forth above.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution
Date. After the Distribution Date, the provisions of the Rights Agreement
may be amended by the Board in order to cure any ambiguity, defect or
inconsistency or to make changes which do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the Rights
Agreement; provided however, no amendment to adjust the time period
-------- -------
governing redemption may be made at such time as the Rights are not
redeemable.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Current Report on Form 8-K. A
copy of the Rights Agreement is available free of charge from the Company.
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.
* * *
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