EXHIBIT 4.4
AGOURON PHARMACEUTICALS, INC.
and
XXXXX XXXXXX SHAREHOLDER SERVICES, L.L.C.
Rights Agent
___________________
Rights Agreement
Dated as of November 7, 1996
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TABLE OF CONTENTS
Page
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . 1
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . 4
3. Issue of Rights Certificates . . . . . . . . . . . . . . . . . 4
4. Form of Rights Certificates . . . . . . . . . . . . . . . . . 6
5. Countersignature and Registration . . . . . . . . . . . . . . 7
6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates . . . . . . . . . . . . . . 7
7. Exercise of Rights; Purchase Price; Expiration Date
of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
8. Cancellation and Destruction of Rights Certificates . . . . . 10
9. Reservation and Availability of Preferred Stock . . . . . . . .10
10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . 12
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights . . . . . . . . . . . . . . . . . . 12
12. Certificate of Adjusted Purchase Price or Number of
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power . . . . . . . . . . . . . . . . . . . 20
14. Additional Covenants . . . . . . . . . . . . . . . . . . . . 23
15. Fractional Rights and Fractional Shares . . . . . . . . . . . 24
16. Rights of Action . . . . . . . . . . . . . . . . . . . . . . 25
17. Agreement of Rights Holders . . . . . . . . . . . . . . . . . 26
18. Rights Certificate Holder Not Deemed a Shareholder . . . . . . 26
19. Concerning the Rights Agent . . . . . . . . . . . . . . . . . 27
20. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . 27
21. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . 28
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22. Change of Rights Agent . . . . . . . . . . . . . . . . . . . 30
23. Issuance of New Rights Certificates . . . . . . . . . . . . . 31
24. Redemption, Termination and Exchange . . . . . . . . . . . . 32
25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . 35
26. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
27. Supplements and Amendments . . . . . . . . . . . . . . . . . . 36
28. Determination and Actions by the Board of
Directors, etc. . . . . . . . . . . . . . . . . . . . . . . . 37
29. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . 37
30. Benefits of This Agreement . . . . . . . . . . . . . . . . . . 37
31. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 38
32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 38
33. Counterpartsb . . . . . . . . . . . . . . . . . . . . . . . . 38
34. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . 38
Exhibit A - Certificate of Designation, Preferences and
Rights of Series B Participating Preferred
Stock . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Rights Certificate. . . . . . . . . . . . . . B-1
Exhibit C - Form of Summary of Rights. . . . . . . . . . . . . . . C-1
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of November 7, 1996 by and between
AGOURON PHARMACEUTICALS, INC., a California corporation (the "Company"), and
XXXXX XXXXXX SHAREHOLDER SERVICES, L.L.C., a New Jersey limited liability
company (the "Rights Agent"),
W I T N E S S E T H:
WHEREAS, on November 7, 1996, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as hereinafter
defined) for each share of Common Stock, no par value, of the Company (the
"Common Stock") outstanding as of the close of business on November 21, 1996
(the "Record Date"), and contemplates the issuance of one Right (subject to
adjustment as provided herein) for each share of Common Stock of the Company
issued between the Record Date and the earlier of the Distribution Date and
the Expiration Date, as such terms are hereinafter defined (with Rights also
to be issued in connection with certain issuances of Common Stock after the
Distribution Date, as provided more fully herein), each Right representing
the right to purchase one one-ten thousandth of a share of Series B
Participating Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of Certificate of Designation, Preferences
and Rights attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth (the "Rights"):
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term
is hereinafter defined) and Associates (as such term is hereinafter defined)
of such Person, shall be the Beneficial Owner (as such term is hereinafter
defined) of securities representing fifteen percent (15%) or more of the
shares of Common Stock then outstanding or who was such a Beneficial Owner at
any time after the date hereof, whether or not such Person continues to be
the Beneficial Owner of securities representing fifteen percent (15%) or more
of the outstanding shares of Common Stock. Notwithstanding the foregoing,
(i) in no event shall a Person who or which, together with all Affiliates and
Associates of such Person, is the Beneficial Owner of less than fifteen
percent (15%) of the Company's outstanding shares of Common Stock become an
Acquiring Person solely as a result of a reduction of the number of shares of
outstanding Common Stock, including repurchases of outstanding shares of
Common Stock by the Company, which reduction
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increases the percentage of outstanding shares of Common Stock beneficially
owned by such Person (provided that any subsequent increase in the amount of
Common Stock beneficially owned by such Person, together with all Affiliates
and Associates of such Person, without the prior approval of the Company
shall cause such Person to be an Acquiring Person); (ii) the term Acquiring
Person shall not mean (A) the Company, (B) any subsidiary of the Company (as
such term is hereinafter defined), (C) any employee benefit plan of the
Company or any of its subsidiaries, or (D) any entity holding securities of
the Company organized, appointed or established by the Company or any of its
subsidiaries for or pursuant to the terms of any such plan; and (iii) no
Person shall be deemed to be an Acquiring Person if (A) within five (5)
business days after such Person would otherwise have become an Acquiring
Person (but for the operation of this clause (iii)), such Person notifies the
Board of Directors that such Person did so inadvertently and within two (2)
business days after such notification, such Person is the Beneficial Owner of
less than fifteen percent (15%) of the outstanding shares of Common Stock or
(B) by reason of such Person's Beneficial Ownership of fifteen percent (15%)
or more of the outstanding shares of Common Stock on the date hereof if prior
to the Record Date, such Person notifies the Board of Directors that such
Person is no longer the Beneficial Owner of fifteen percent (15%) or more of
the then outstanding shares of Common Stock.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right or obligation to acquire (whether such right or
obligation is exercisable or effective immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding (whether or
not in writing) or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a tender or exchange
offer made by such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for payment or exchange; or (B)
the right to vote pursuant to any agreement, arrangement or understanding
(whether or not in writing); provided,
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however, that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) 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 rules and
regulations of the Exchange Act and (2) 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) (other than
customary agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or with which
such Person or any of such Person's Affiliates have otherwise formed a group,
for the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in clause (B) of subparagraph (ii) of this paragraph (c))
or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 p.m.,
Pacific time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., Pacific time, on the next succeeding
Business Day.
(f) "Common Stock" shall mean the Common Stock, no par value, of the
Company, except that "Common Stock" when used with reference to stock issued
by any Person other than the Company shall mean the capital stock with the
greatest voting power, or the equity securities or other equity interest
having power to control or direct the management, of such Person or, if such
Person is a subsidiary of another Person, of the Person which ultimately
controls such first-mentioned Person and which has issued and outstanding
such capital stock, equity securities or equity interests.
(g) "Distribution Date" shall have the meaning as set forth in
Section 3(a) hereof.
(h) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, joint venture, association, trust or
other entity.
(i) "Preferred Stock" shall mean the Series B Participating
Preferred Stock, no par value, of the Company.
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(j) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person
has become such.
(k) A "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 voting interests is owned, directly or indirectly, by such
Person, or which is otherwise controlled by such Person.
(l) "Voting power" shall mean the voting power of all securities of
the Company then outstanding and generally entitled to vote for the election
of directors of the Company.
2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution
Date also be the holders of the Common 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. In the event the Company appoints one or more
Co-Rights Agents, the respective duties of the Rights Agents and any Co-
Rights Agents shall be as the Company shall determine.
3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Stock Acquisition Date or (ii) the
tenth day (or such later date as may be determined by action of the Board of
Directors) after the date of the commencement of, or first public
announcement of the intent of any Person (other than the Company, any
subsidiary of the Company, or any employee benefit plan of the Company or any
of its subsidiaries) to commence (which intention to commence remains in
effect for five (5) Business Days after such announcement), a tender or
exchange offer which would result in such Person becoming an Acquiring Person
(including any such date which is on or after the date of this Agreement and
prior to the issuance of the Rights) (the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights shall be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (y) the Rights
(and the right to receive certificates therefor) shall be transferable only
in connection with the transfer of the underlying shares of Common Stock. As
soon as practicable after the Distribution Date, the Rights Agent shall send
by first-class, insured, postage prepaid mail, to each record holder of the
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 certificate for
Rights, in
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substantially the form of Exhibit B hereto (the "Rights Certificates"),
evidencing one Right for each share of Common Stock so held. As of and after
the Distribution Date, the Rights shall be evidenced solely by such Rights
Certificates.
As soon as practicable following the Record Date, the Company shall send
a copy of a Summary of Rights, in substantially the form attached hereto as
Exhibit C (the "Summary of Rights"), by first-class, postage prepaid mail, to
each record holder of the 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 the Common Stock outstanding as of
the Record Date, until the Distribution Date (or earlier redemption,
expiration or termination of the Rights), the Rights shall be evidenced by
such certificates for the Common Stock together with the Summary of Rights
and the registered holders of the Common Stock shall also be the registered
holders of the associated Rights. Until the Distribution Date (or earlier
redemption, expiration or termination of the Rights), the surrender for
transfer of any of the certificates for the Common Stock outstanding on the
Record Date, even without a copy of the Summary of Rights attached thereto,
shall also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
(b) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock)
after the Record Date, but prior to the earlier of the Distribution Date or
the Expiration Date (as such term is hereinafter defined), shall be deemed
also to be certificates for Rights, and shall have impressed, printed,
stamped, written or otherwise affixed onto them the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Agouron Pharmaceuticals,
Inc. (the "Company") and Xxxxx Xxxxxx Shareholder Services, L.L.C. (the
"Rights Agent") dated as of November 7, 1996 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may expire, or may be evidenced by separate Certificates and will
no longer be evidenced by this Certificate. The Company will mail to the
holder of this certificate a copy of the Rights Agreement without charge
within five (5) days after receipt of a written request therefor. Under
certain circumstances, Rights issued to Acquiring Persons (as defined in the
Rights Agreement) or certain related Persons and any subsequent holder of
such Rights may become null and void.
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With respect to such certificates containing the foregoing legend, until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock represented by such
certificate.
4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
shares and of assignment and certificates to be printed on the reverse
thereof) shall each be substantially in the form set forth in Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange 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 23
hereof, the Rights Certificates, whenever distributed, shall be dated as of
the Record Date, and on their face shall entitle the holders thereof to
purchase such number of one one-ten thousandths of a share of Preferred Stock
as shall be set forth therein at the price per one one-ten thousandth of a
share set forth therein (the "Purchase Price"), but the number of such shares
and the Purchase Price shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) hereof
that represents Rights beneficially owned by an Acquiring Person or any
Associate or Affiliate thereof and any Rights Certificate issued at any time
upon the transfer of any Rights to such an Acquiring Person or any Associate
or Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate, and any Rights Certificate issued pursuant to Section 6 or Section
11 upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain the following legend:
The Rights represented by this Rights Certificate were issued to a Person who
was an Acquiring Person or an Affiliate or an Associate of an Acquiring
Person, as such terms are defined in the Rights Agreement. This Rights
Certificate and the Rights represented hereby may become void under the
circumstances specified in Section 7(e) of the Rights Agreement.
The provisions of Section 7(e) of this Rights Agreement shall be operative
whether or not the foregoing legend is contained on any such Rights
Certificate.
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5. Countersignature and Registration. The Rights Certificates
shall be executed on behalf of the Company by its President or any Vice
President, either manually or by facsimile signature, and shall 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 countersigned by the
Rights Agent, either manually or by facsimile signature, 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 Certificates 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.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for such purpose, books for registration
and transfer of the 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.
6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
Subject to the provisions of Section 15 hereof, at any time after the close
of business on the Distribution Date, and at or prior to the close of
business on the Expiration Date, any Rights Certificate or Certificates may
be transferred, split up, combined or exchanged for another Rights
Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of shares of Preferred Stock as the Rights Certificate
or Rights Certificates surrendered then entitled such holder 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 Rights Certificates to
be transferred, split up, combined or exchanged at the principal office of
the Rights Agent. Thereupon the Rights Agent shall countersign and deliver
to the Person entitled thereto a Rights Certificate or Rights 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.
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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 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, and, in case of loss, theft
or destruction, of indemnity or security reasonably satisfactory to them, and
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 shall 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.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon presentation of the Rights
Certificate, with the appropriate form of election to purchase 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 one
one-ten thousandth of a share of Preferred Stock (or such other number of
shares or other securities) as to which the Rights are exercised, at or prior
to the earliest of (i) the close of business on November 21, 1996 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided
in Section 24 hereof, (iii) the consummation of a transaction contemplated by
Section 13(d) hereof, or (iv) the time at which the Rights are exchanged as
provided in Section 24(c) hereof (such earliest time being herein referred to
as the "Expiration Date"). Notwithstanding any other provision of this
Agreement, any Person who prior to the Distribution Date becomes a record
holder of shares of Common Stock may exercise all of the rights of a
registered holder of a Rights Certificate with respect to the Rights
associated with such shares of Common Stock in accordance with and subject to
the provisions of this Agreement, including the provisions of Section 7(e)
hereof, as of the date such Person becomes a record holder of shares of
Common
Stock.
(b) The Purchase Price for each one one-ten thousandth share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$500.00, 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 appropriate form of election to
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purchase duly executed, accompanied by payment of the Purchase Price for the
shares (or other securities or property) to be purchased and an amount equal
to any applicable transfer tax (as determined by the Rights Agent) in cash,
or by certified check or bank draft payable to the order of the Company, the
Rights Agent shall, subject to Section 21(k), thereupon promptly (i)(A)
requisition from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent) certificates for the
number of shares of Preferred Stock to be purchased, and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests,
or (B) if the Company, in its sole discretion, shall have elected to deposit
the shares of Preferred Stock issuable upon exercise of the Rights hereunder
into a depositary, requisition from the depositary agent depositary receipts
representing such number of one one-ten thousandths of a share of Preferred
Stock as are to be purchased (in which case certificates for the shares of
Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company shall direct the
depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash, if any, to be paid in lieu
of issuance of fractional shares in accordance with Section 15, (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) when appropriate, after receipt promptly deliver such
cash 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 of the Company, and/or distribute other property pursuant to
Section 11(a), the Company shall make all arrangements necessary so that such
other securities and/or property are available for distribution by the Rights
Agent, if and when appropriate. In addition, in the case of an exercise of
the Rights by a holder pursuant to Section 11(a)(ii), the Rights Agent shall
return such Rights Certificate to the registered holder thereof after
imprinting, stamping or otherwise indicating thereon that the rights
represented by such Rights Certificate no longer include the rights provided
by Section 11(a)(ii) of the Rights Agreement and if less than all the Rights
represented by such Rights Certificate were so exercised, the Rights Agent
shall indicate on the Rights Certificate the number of Rights represented
thereby which continue to include the rights provided by Section 11(a)(ii).
(d) In case the registered holder of any Rights Certificate shall
exercise (except pursuant to Section 11(a)(ii)) 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 the registered holder of such Rights Certificate or to his duly
authorized assigns, subject to the provisions of Section 15 hereof.
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(e) Notwithstanding anything in this Agreement to the contrary, if
there occurs any of the events set forth in Section 11(a)(ii) or Section
13(a) then any Rights that are or were on or after the Distribution Date
beneficially owned by an Acquiring Person or any Associate or Affiliate of an
Acquiring Person shall become null and void, without any further action, and
any holder of such Rights shall thereafter have no rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise.
(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 the certificate
contained in the appropriate form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise shall
have been properly completed and duly executed by the registered holder
thereof and the Company shall have been provided with 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.
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 any of its
agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the 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 canceled Rights Certificates to
the Company, or shall, at the written request of the Company, destroy such
canceled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
9. Reservation and Availability of Preferred Stock. The Company
covenants and agrees that it shall cause to be reserved and kept available
out of its authorized and unissued shares of Preferred Stock, or any
authorized and issued shares of Preferred Stock held in its treasury, the
number of shares of Preferred Stock that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the occurrence of an
event specified in Sections 11 and 13, shall so reserve and keep available a
sufficient number of shares of Common Stock (and/or other securities) which
may be required to permit the exercise in full of the Rights pursuant to this
Agreement.
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So long as the shares of Preferred Stock (and, after the occurrence of
an event specified in Section 11 and 13, any other securities) issuable upon
the exercise of the Rights may be listed on any national securities exchange
or national quotation system, the Company shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all shares
(or other securities) reserved for such issuance to be listed on such
exchange or system upon official notice of issuance upon such exercise.
The Company covenants and agrees that it shall take all such action as
may be necessary to ensure that all shares of Preferred Stock and/or other
securities delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such shares or other securities (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable shares or securities.
The Company further covenants and agrees that it shall 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 shares of Preferred Stock and/or other securities
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 in respect of the
issuance or delivery of the shares of Preferred Stock and/or other securities
in a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to issue or
deliver any certificates for shares of Preferred Stock, and/or other
securities in a name other than that of the registered holder upon the
exercise of any Rights until 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.
The Company shall use its best efforts to (a) file, if required by law,
as soon as practicable following the Distribution Date, a registration
statement under the Securities Act of 1933, as amended (the "Act"), with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (b) cause such registration statement to become effective
as soon as practicable after such filing, and (c) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act and the rules and regulations thereunder) until the
Expiration Date (unless and until the Company shall have received an opinion
of counsel to the effect that the maintenance of such registration statement
in effect is no longer necessary). The Company will also take such action as
may be appropriate under the blue sky laws of the various states.
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10. Preferred Stock Record Date. Each Person in whose name any
certificate for shares of Preferred Stock (or other securities) is issued
upon the exercise of Rights shall for all purposes be deemed to have become
the holder of record of the shares of Preferred Stock (or other securities)
represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly presented and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such presentation and payment is a
date upon which the Preferred Stock (or other securities) transfer books of
the Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or other securities)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, 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.
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number 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 Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock,
(C) combine the outstanding Preferred Stock into a smaller number of shares
or (D) issue any shares of its capital stock in a reclassification of the
Preferred 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 in
Section 7(e), the Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of capital stock issuable
on such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock and other securities which, if
such Right had been exercised immediately prior to such date and at a time
when the Preferred Stock 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 Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section
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11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24(c) of this Agreement, in the event any
Person, alone or together with its Affiliates and Associates, shall become an
Acquiring Person (except pursuant to a tender or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined by at
least a majority of the members of the Board of Directors who are not
officers of the Company and are not Acquiring Persons or Affiliates or
Associates thereof to be in the best interests of the Company and its
shareholders (other than the Person or an Affiliate or Associate thereof on
whose behalf the offer is being made) (a "Permitted Offer")), then, promptly
following the first occurrence of an event described in this Section
11(a)(ii), proper provision shall be made so that each holder of a Right,
except as provided in Section 7(e) hereof, shall, for a period of sixty (60)
days after the later of the occurrence of any such event and the effective
date of an appropriate registration statement pursuant to Section 9, have a
right to receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of shares of Preferred
Stock, 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 one one-ten thousandths of a share of Preferred Stock for
which a Right is then exercisable and (y) dividing that product by fifty
percent (50%) of the current market price per one share of Common Stock
(determined pursuant to Section 11(d)) on the date of the occurrence of the
event set forth in this
subparagraph (ii) (such number of shares being referred to as the "number of
Adjustment Shares"); provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this Section
11(a)(ii); and provided, further, that such sixty (60) day period shall not
be deemed to run during any period in which the exercise of the Rights or the
fulfillment by the Company or the Rights Agent of its or their obligations
under their Agreement shall be enjoined or otherwise prohibited in full or in
part by any court or other governmental agency or body.
(iii) In lieu of issuing shares of Common Stock in accordance with
Section 11(a)(ii) hereof, the Company may, if a majority of the Board of
Directors then in office determines that such action is necessary or
appropriate and not contrary to the interests of holders of Rights, elect to
(and, in the event that the Board of Directors has not exercised the exchange
right contained in Section 24(c) hereof and there are not sufficient treasury
shares and authorized but unissued shares of Common Stock to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii), the Company shall) take all such action as may be necessary to
authorize, issue or pay, upon the exercise of the Rights, cash (including by
way of a reduction of the Purchase
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[PAGE]
Price), property, shares of Common Stock, other securities or any combination
thereof having an aggregate value equal to the value of the shares of Common
Stock which otherwise would have been issuable pursuant to Section 11(a)(ii),
which aggregate value shall be determined by a nationally recognized
investment banking firm selected by a majority of the Board of Directors.
For purposes of the preceding sentence, the value of the Common Stock shall
be determined pursuant to Section 11(d) hereof and the value of any preferred
stock or preference stock which a majority of the Board of Directors
determines to be a "common stock equivalent" shall be deemed to have the same
value as the Common Stock. Any such election by the Board of Directors must
be made and publicly announced within sixty (60) days following the date on
which the event described in Section 11(a)(ii) shall have occurred.
Following the occurrence of the event described in Section 11(a)(ii) hereof,
a majority of the Board of Directors then in office may suspend the
exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 11(a)(ii) shall have
occurred to the extent that such directors have not determined whether to
exercise their rights of election under this Section 11(a)(iii). In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within forty-five (45) calendar days after such record
date) to subscribe for or purchase Preferred Stock (or shares having the same
or more favorable rights, privileges and preferences as the Preferred Stock
("equivalent preferred stock")) or securities convertible into Preferred
Stock or equivalent preferred stock at a price per share of Preferred Stock
or per share of equivalent preferred stock (or having a conversion price per
share, if a security convertible into Preferred Stock or equivalent preferred
stock) less than the current market price (as defined in Section 11(d)) per
share of Preferred Stock 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 Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock and/or equivalent preferred stock 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 Preferred Stock outstanding on such record
date, plus the number of additional shares of Preferred Stock and/or
equivalent preferred 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
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[PAGE]
other than cash, the value of such consideration shall be determined
reasonably and with good faith to the holders of Rights by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent and conclusive for all purposes. Shares of Preferred 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 issued, the Purchase Price shall be adjusted to
be the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing 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
Preferred Stock, but including any dividend payable in stock other than
Preferred 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 market price (as defined in Section 11(d)) per share of
Preferred Stock on such record date, less the fair market value (as
determined reasonably and with good faith to the holders of Rights by the
Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent and conclusive for all purposes) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants distributable in respect of one share of Preferred Stock and the
denominator of which shall be the current market price (as defined in Section
11(d)) per share of the Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would be in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, other than
in Section 11(a)(iii), 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 such Common Stock for the thirty (30) consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date; provided,
however, that in the event that the current per share market price of the
Common Stock is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or securities convertible into
shares of such Common Stock or (B) any
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[PAGE]
subdivision, combination or reclassification of such Common Stock, and prior
to the expiration of thirty (30) Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the "current
market price" shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the 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 Nasdaq National
Market 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 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
reasonably and with good faith by the Board of Directors of the Company shall
be used and shall be binding on the Rights Agent. 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, a Business Day. If
the Common Stock is not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share determined
reasonably and with good faith to the holders of Rights by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent.
(ii) For the purpose of any computation hereunder, the "current
market price" per share (or one one-ten thousandth of a share) of Preferred
Stock shall be determined in the same manner as set forth above for the
Common Stock in Section 11(d) (other than the last sentence thereof). If the
current market price per share (or one one-ten thousandth of a share) of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner
described in Section 11(d)(i), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 10,000
(as such number may be appropriately adjusted for such events as stock
splits, stock dividends
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[PAGE]
and recapitalization with respect to the Common Stock occurring after the
date of this Agreement) multiplied by the current market price per share of
the Common Stock and the "current market price" per one one-ten thousandth of
a share of Preferred Stock shall be equal to the current market price per
share of the Common Stock (as appropriately adjusted). If neither the Common
Stock nor the Preferred Stock is publicly held or so listed or traded,
"current market price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes.
(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 the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Section 11 shall
be made to the nearest cent or to the nearest thousandth of a share of Common
Stock or other share or one-ten thousand thousandth of a share of Preferred
Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment or (ii) the Expiration Date.
(f) If as a result of any provision of Section 11(a), the holder of
any Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the shares
contained in Section 11(a) through (c), inclusive, and the provisions of
Sections 7, 9, 10, 13 and 15 hereof with respect to the Preferred 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 Preferred
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 Section 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 number of one
one-ten thousandths of a share of Preferred Stock (calculated to the
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nearest one-millionth) obtained by (i) multiplying (x) the number of one one-
ten thousandths of a share of Preferred Stock covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one one-ten
thousandths of a share of Preferred 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 millionth) 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 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 15 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the 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 number of shares of Preferred 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.
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[PAGE]
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of
Preferred Stock, Common Stock or other securities issuable upon exercise of
the Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable shares of Preferred Stock,
Common Stock or other securities at such adjusted Purchase Price. If upon
any exercise of the Rights, a holder is to receive a combination of Common
Stock and common stock equivalents, a portion of the consideration paid upon
such exercise, equal to at least the then par value, if any, of a share of
Common Stock of the Company, shall be allocated as the payment for each share
of Common Stock of the Company so received.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the shares of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the shares of
Preferred 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.
(m) Anything to the contrary in this Section 11 notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be advisable
in order that any consolidation or subdivision of the Preferred Stock,
issuance wholly for cash of any shares of Preferred Stock at less than the
current market price, issuance wholly for cash of shares of Preferred Stock
or securities which by their terms are convertible into or exchangeable for
shares of Preferred Stock, stock dividends or issuance of rights, options or
warrants referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such
shareholders.
(n) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
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 Common Stock, (iii) combine the outstanding Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of the outstanding Common Stock, the number of Rights
associated with each share of Common Stock then 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
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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.
(o) The exercise of Rights under Section 11(a)(ii) shall only result
in the loss of rights under Section 11(a)(ii) to the extent so exercised and
shall not otherwise affect the rights represented by the Rights under this
Rights Agreement, including the rights represented by Section 13.
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
Preferred Stock and the Common Stock a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Rights Certificate in accordance
with Section 26 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.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) 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, (y) any Person shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger (other than, in the case
of either transaction described in (x) or (y), a merger or consolidation
which would result in all of the voting power represented by the securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into securities of
the surviving entity) all of the voting power represented by the securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation and the holders of such securities not having changed
as a result of such merger or consolidation), or (z) the Company shall sell,
mortgage or otherwise transfer (or one or more of its subsidiaries shall
sell, mortgage or otherwise transfer), in one or more transactions, assets or
earning power aggregating more than fifty
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[PAGE]
percent (50%) of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to any other Person, then, and in each such
case, proper provision shall be made so that (i) following the Distribution
Date, each holder of a Right (other than as provided in Section 7(e) hereof)
shall 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 shares of freely tradable Common Stock of the Principal Party (as
hereinafter defined), free and clear of liens, rights of call or first
refusal, encumbrances or other adverse claims, as shall be equal to the
result obtained by (x) multiplying the then current Purchase Price by the
number of one one-ten thousandths of a share of Preferred Stock for which a
Right is then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and (y) dividing that
product by fifty percent (50%) of the current market price per share of the
Common Stock of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply to such Principal Party; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number
of shares of its Common Stock in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in (x) or (y) of the
first sentence of this Section 13, 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 the merger or consolidation (including, if
applicable, the Company, if it is the surviving corporation); and
(ii) in the case of any transaction described in (z) of the first
sentence in this Section 13, 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, (A) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (12) month period
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registered under Section 12 of the Exchange Act, and such Person is a direct
or indirect subsidiary or Affiliate of another Person, "Principal Party"
shall refer to such other Person; (B) in case such Person is a subsidiary,
directly or indirectly, or Affiliate of more than one Person, the Common
Stock 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; and (C) in case such Person
is owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (A) and (B) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal Parties
in each such chain shall bear the obligations set forth in this Section 13 in
the same ratio as their direct or indirect interests in such Person bear to
the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock that have not been issued or reserved
for issuance to permit the exercise in full of the Rights in accordance with
this Section 13 and unless prior thereto the Company and each Principal Party
and each other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further providing that, as
soon as practicable after the date of any consolidation, merger, sale or
transfer of assets mentioned in paragraph (a) of this Section 13, the
Principal Party at its own expense shall:
(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, will use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing and will use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the Expiration Date;
(ii) use its best efforts to qualify or register the Rights and
the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all material respects with the requirements for registration on Form 10
under the Exchange Act.
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[PAGE]
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. The rights under this Section
13 shall be in addition to the rights to exercise Rights and adjustments
under Section 11(a)(ii) and shall survive any exercise thereunder.
(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 who acquired shares of Common Stock
pursuant to a Permitted Offer (or a wholly owned subsidiary of any such
Person or Persons), (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
Permitted Offer and (iii) the form of consideration being offered to the
remaining holders of Common Stock pursuant to such transaction is the same as
the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this subsection (d), all
Rights hereunder shall expire.
14. Additional Covenants.
(a) The Company covenants and agrees that after the Stock
Acquisition Date it shall not (i) consolidate with, (ii) merge with or into,
or (iii) sell or transfer to any other Person, in one or more transactions,
assets or earning power aggregating more than fifty percent (50%) of the
assets or earning power of the Company and its subsidiaries taken as a whole,
if at the time of or after such consolidation, merger or sale there are any
charter or bylaw provisions or any rights, warrants or other instruments
outstanding or any other action taken which would diminish or otherwise
eliminate the benefits intended to be afforded by the Rights. The Company
shall not consummate any such consolidation, merger or sale unless prior
thereto the Company and such other Person shall have executed and delivered
to the Rights Agent a supplemental agreement evidencing compliance with this
subsection.
(b) The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 24 hereof, take
any action the purpose or effect of which is to diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
15. 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(n), 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
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[PAGE]
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
15(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be the last sale price, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq National Market 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 reasonably and with good faith to the
holders of Rights by the Board of Directors of the Company shall be used and
shall be binding on the Rights Agent.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-ten thousandth of a share of Preferred Stock) upon exercise of the Rights
or to distribute certificates which evidence fractional shares of Preferred
Stock (other than fractions which are integral multiples of one one-ten
thousandth of a share of Preferred Stock). Fractions of shares of Preferred
Stock in integral multiples of one one-ten thousandth of a share of Preferred
Stock may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the shares
of Preferred Stock represented by such depositary receipts. In lieu of
fractional shares of Preferred Stock that are not integral multiples of one
one-ten thousandth of a share of Preferred 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 one-ten thousandth of a share of Preferred
Stock. For purposes of this Section 15(b), the current market value of one
one-ten thousandth of a share of Preferred Stock shall be one one-ten
thousandth of the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii) hereof) for the Trading Day immediately prior
to the date of such exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 or Section 13 giving rise to the right to receive
common stock equivalents (other than Preferred Stock) or other securities
upon the exercise of a Right, the Company shall not be required to issue
fractions of shares or
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[PAGE]
units of such common stock equivalents or other securities upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
such common stock equivalents or other securities. In lieu of fractional
shares or units of such common stock equivalents or other securities, 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 a share or unit of such common
stock equivalent or other securities. For purposes of this Section 15(c),
the current market value shall be determined in the manner set forth in
Section 11(d) hereof for the Trading Day immediately prior to the date of
such exercise and, if such common stock equivalent is not traded, each such
common stock equivalent shall have the value of one one-ten thousandth of a
share of Preferred Stock.
(d) Except as otherwise expressly provided herein, the holder of a
Right by the acceptance of the Rights expressly waives his right to receive
any fractional Rights or any fractional shares (other than, in the case of
Preferred Stock, fractions which are integral multiples of one one-ten
thousandth of a share of Preferred Stock) upon exercise of a Right.
16. Rights of Action. All rights of action in respect of this
Agreement, except those rights of action vested in the Rights Agent pursuant
to Section 21, 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 shall be entitled
to specific performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations hereunder of any
Person subject to this Agreement. Holders of Rights shall be entitled to
recover the reasonable costs and expenses, including attorneys' fees,
incurred by them in any action to enforce the provisions of this Agreement.
17. 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:
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[PAGE]
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of 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 instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person
in whose name a 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
shall be affected by any notice to the contrary.
18. 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 shares of Preferred
Stock, Common Stock or any other securities of the Company which may at any
time be issuable upon 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 shareholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in
Section 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 thereof.
19. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and disbursements 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 arising therefrom, directly or
indirectly.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or
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[PAGE]
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.
20. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation or other entity into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation or other entity resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation or other entity succeeding to the corporate trust or shareholder
services business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that such corporation or other entity would be eligible for
appointment as a successor Rights Agent under the provisions of Section 22
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 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 in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been counter signed,
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.
21. 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:
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[PAGE]
(a) The Rights Agent may consult with legal counsel selected by it
(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 the President, any Vice President, the Chief Financial
Officer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder 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 the fact that it has countersigned the
Rights Certificates) 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 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
receipt of certificate pursuant to Section 12 describing any such
adjustment); nor shall it be responsible for any determination by the Board
of Directors of the Company of the current market value of the Rights or
Preferred Stock or Common Stock pursuant to the provisions of Section 15
hereof; 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 Preferred Stock or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Preferred
Stock
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[PAGE]
or other securities will, when so issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the President,
any Vice President, the Secretary, any Assistant Secretary, the Chief
Financial Officer of the Company, and is authorized 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 with respect to its duties or obligations under
this Rights Agreement and the date on and/or after which such action shall be
taken or omitted and the Rights Agent shall not be liable for any action
taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be
less than three (3) Business Days after the date any such officer actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking or omitting any such
action, the Rights Agent has received written instructions in response to
such application specifying the action to be taken or omitted.
(h) The Rights Agent and any 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, omission, default, neglect or
misconduct of any such attorneys or agents or for any loss to the Company or
to the holders of the Rights resulting from any such act, omission, default,
neglect or misconduct, provided reasonable care was exercised in the
selection and continued employment thereof.
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[PAGE]
(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.
22. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days notice in writing mailed to the Company and
to each transfer agent of the Common Stock and Preferred Stock by registered
or certified mail, and to 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 and Preferred 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) a
corporation or other entity organized and doing business under the laws of
the United States or of the State of New York or the State of California (or
of any other state of the United States so long as such corporation or other
entity is authorized to do business as a banking institution in the State of
New York or the State of California), in good standing, having a principal
office in the State of New York or the State of California, which is
authorized under such laws to exercise corporate trust or shareholder
services powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000 or (b) an affiliate of
a corporation or other
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[PAGE]
entity described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment the Company shall mail notice thereof in writing to the
predecessor Rights Agent and each transfer agent of the Common Stock and
Preferred 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 22, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
23. 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 or 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 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 otherwise under
any employee plan or arrangement, which plan or arrangement is existing as of
the Distribution Date, or upon the exercise, conversion or exchange of any
other securities issued by the Company on or prior to the Distribution Date,
and (b) may, in any other case, if deemed necessary or appropriate by the
Board of Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificates 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 Certificates would be
issued, and (ii) no such Rights Certificates shall be issued if, and to the
extent that appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
24. Redemption, Termination and Exchange.
(a) (i) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (x) the Stock Acquisition Date or
(y) 5:00 p.m., Pacific time, on the Final Expiration Date, redeem all but not
less than all of the then
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outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price").
(ii) In addition, and notwithstanding the provisions of Section
24(a)(i), the Board of Directors of the Company may redeem all but not less
than all of the then outstanding Rights at the Redemption Price following the
Stock Acquisition Date but prior to any event described in Section 13(a)
either (x) in connection with any event specified in Section 13(a) in which
all holders of Common Stock are treated alike and not involving (other than
as a holder of Common Stock being treated like all other such holders) an
Acquiring Person or an Affiliate or Associate thereof or any other Person in
which such Acquiring Person or Affiliate or Associate thereof has any
interest, or any other Person acting directly or indirectly on behalf of or
in association with any such Acquiring Person or Affiliate or Associate
thereof, or (y) following the occurrence of an event set forth in, and the
expiration of any period during which the holder of Rights may exercise the
rights under, Section 11(a)(ii) if and for as long as any Acquiring Person
having triggered such event is not thereafter the Beneficial Owner of
securities representing fifteen percent (15%) or more of the outstanding
shares, and at the time of redemption there are no other Persons who are
Acquiring Persons.
(b) In the case of a redemption permitted under Section 24(a)(i),
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. In the case
of a redemption permitted only under Section 24(a)(ii), evidence of which
shall have been filed with the Rights Agent, the right to exercise the Rights
will terminate and represent only the right to receive the Redemption Price
only after ten (10) Business Days following the giving of notice of such
redemption to the holders of such Rights if no event set forth in Section
11(a)(ii) shall have occurred, and, if such event shall have occurred, upon
the later of ten (10) Business Days following the giving of such notice or
the expiration of any period during which the rights under Section 11(a)(ii)
may be exercised. Within ten (10) days after the action of the Board of
Directors ordering any such 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 the Rights Agent and 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
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the notice. Each such notice of redemption will state the method by which
the payment of the Redemption Price will be made.
In the case of a redemption permitted under Section 24(a)(i) or (ii),
the Company may, at its option, discharge all of its obligations with respect
to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights and (ii) mailing payment of the Redemption Price to
the registered holders of the Rights at their last addresses as they appear
on the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the Transfer Agent of the Common Stock, and upon
such action, all outstanding Rights Certificates shall be null and void
without any further action by the Company.
(c) (i) Subject to the limitations of applicable law, 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 7(e) hereof) for (A) 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 (the "Exchange Shares") or (B)
Substitute Consideration (as that term is defined below). The Board of
Directors may determine, in its sole discretion, whether to deliver Exchange
Shares or Substitute Consideration. Notwithstanding the foregoing, the Board
of Directors shall not be empowered to effect such exchange at any time after
any Person (other than the Company, any subsidiary of the Company, any
employee benefit plan of the Company or any such subsidiary, or any entity
holding Common Stock for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of fifty percent (50%) or more of the Common Stock then outstanding.
(ii) In the event the Board of Directors shall determine to deliver
Substitute Consideration in exchange for Rights, the Company shall (A)
determine the value of the Exchange Shares (the "Exchange Value"), and (B)
with respect to each Right to be exchanged, make adequate provision to
substitute for Exchange Shares the following (the "Substitute
Consideration"): (v) cash, (w) Common Stock or common stock equivalents (as
that term is defined in Section 11(a)(iii) hereof) or Preferred Stock or
equivalent preferred stock (as that term is defined in Section 11(b) hereof),
(x) debt securities of the Company, (y) other assets, or (z) any combination
of the foregoing, having an aggregate value equal to the Exchange Value,
where such aggregate value has been determined by the Board of Directors of
the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company. For purposes
of this Section 24(c), the value of a share of Common Stock shall be the
current market price (as determined pursuant to Section 11(d) hereof) per
share of Common Stock on the day that is the later of (x) the first
occurrence of an event described in
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Section 11(a)(ii) hereof and (y) the date on which the Company's right of
redemption pursuant to Section 24(a) expires; and the value of any common
stock equivalent shall be deemed to have the same value as the Common Stock
on such date.
(iii) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to this Section 24(c),
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 Exchange Shares or Substitute Consideration for
each Right exchanged by such holder. The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give, or
any defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. 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 7(e)
hereof) held by each holder of Rights.
(iv) In the event that there shall not be sufficient shares of
Common Stock or Preferred Stock issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24(c), the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock or Preferred Stock
for issuance upon exchange of the Rights.
(v) 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 of Common Stock,
the Company shall pay to the registered holders of the Rights Certificates
with regard to which such fractional shares of Common Stock 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
Section 24(c)(v), 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 Section 11(d) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24(c).
25. Notice of Certain Events. In case the Company shall propose (a)
to pay any dividend payable in stock of any class to the holders of Preferred
Stock or to make any other distribution to the holders of Preferred Stock
(other than a regular quarterly
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[PAGE]
dividend out of earnings or retained earnings of the Company) or (b) to offer
to the holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock), or
(d) to effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
fifty percent (50%) of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to, any other Person, or (e) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, 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 Preferred 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 (a) or (b) above at least twenty (20) days prior to the
record date for determining holders of the shares of Preferred 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 Preferred
Stock whichever shall be the earlier.
In case any of the events set forth in Section 11(a)(ii) or 13(a) of this
Agreement shall occur, then, in any such case, the Company or the Principal
Party, as the case may be, shall as soon as practicable thereafter give to
each holder of a Rights Certificate, 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) or
13(a) hereof, as the case may be.
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 the Company shall be sufficiently given or made if sent by first-
class mail, postage prepaid, or sent by nationwide overnight delivery,
addressed (until another address is filed in writing with the Rights Agent)
as follows:
Agouron Pharmaceuticals, Inc.
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xx Xxxxx, XX 00000
Attention: President
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[PAGE]
Subject to the provisions of Section 22, 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 if sent by first-class mail, postage prepaid, or sent by nationwide
overnight delivery, addressed (until another address is filed in writing with
the Company) as follows:
Xxxxx Xxxxxx Shareholder Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attention: Compliance Area
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,
or sent by nationwide overnight delivery, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Each such notice or demand shall be effective (i) if given by mail,
three (3) days after the notice or demand is deposited in the mails with
first class postage prepaid, addressed as specified herein, (ii) if given by
nationwide overnight delivery, the date of delivery at the address specified
herein or (iii) if given by any other means, the date of delivery at the
address specified herein.
27. Supplements and Amendments. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without approval of
any holders of Rights or Rights Certificates in order (a) to cure any
ambiguity, (b) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (c) prior
to the Distribution Date, to change or supplement any provision hereunder in
any manner which the Company may deem necessary or desirable, or (d) on or
following the Distribution Date, to change or supplement any provision
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. 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 unless the Rights Agent shall have determined in
good faith that such supplement or amendment would adversely affect its
interests under this Agreement. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
28. Determination 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
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[PAGE]
time, including for purposes of determining the particular percentage of such
outstanding shares of Common Stock or any other securities of which any
Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement. Except as
otherwise provided herein, the Board of Directors of the Company shall have
the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board, or the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (a)
interpret the provisions of this Agreement, and (b) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend
the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions
with respect to the foregoing) which are done or made by the Board in good
faith, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights Certificates and all other parties, and (y)
not subject the Board to any liability to the holders of the Rights
Certificates.
29. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure
to the benefit of their respective successors and assigns hereunder.
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 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, the Common
Stock).
31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
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 California and for all purposes shall be governed by and
construed in accordance with the laws of such state applicable to contracts
to be made and to be performed entirely within such state.
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[PAGE]
33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but
one and the same instrument.
34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: AGOURON PHARMACEUTICALS, INC.
/s/ Xxxxx Xxxxxxx /s/ Xxxx X. Xxxxxxxx
By -------------------------------- By --------------------------------
President Vice President
Title ----------------------------- Title ----------------------------
Attest: XXXXX XXXXXX SHAREHOLDER
SERVICES, L.L.C.
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxx X. Lug
By -------------------------------- By --------------------------------
Assistant Vice President Vice President
Title ----------------------------- Title ----------------------------
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[PAGE]
EXHIBIT A
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS
OF SERIES B PARTICIPATING PREFERRED STOCK
OF
AGOURON PHARMACEUTICALS, INC.
We, Xxxxx Xxxxxxx, President, and Xxxx X. Xxxxxxxx, Secretary, of
Agouron Pharmaceuticals, Inc., a corporation organized and existing under the
General Corporation Law of the State of California, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Articles of Incorporation of the Corporation, the said Board of Directors
on November 7, 1996 adopted the following resolution creating a series of two
thousand (2,000) shares of Preferred Stock designated as Series B
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of its
Articles of Incorporation, a series of Preferred Stock of the Corporation be
and it hereby is created, and that the designation and amount thereof and the
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
1. Designation and Amount. The shares of such series shall be
designated as "Series B Participating Preferred Stock," no par value, and the
number of shares constituting such series shall be two thousand (2,000). Such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
Series B Participating Preferred Stock to a number less than that of the
shares then outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series B Participating Preferred Stock with respect to dividends,
the holders of shares of Series B Participating Preferred Stock in preference
to the holders of shares of Common Stock, no par value (the "Common Stock"),
of the
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[PAGE]
Corporation and any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first
day of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Participating Preferred Stock in an amount
per share (rounded to the nearest cent) equal to the greater of (i) $100, or
(ii) subject to the provision for adjustment hereinafter set forth, 10,000
times the aggregate per share amount of all cash dividends, and 10,000 times
the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series B Participating Preferred Stock. In
the event the Corporation shall at any time after the close of business on
November 7, 1996 (the "Rights Declaration Date") (A) declare any dividend on
Common Stock payable in shares of Common Stock, (B) subdivide the outstanding
Common Stock, or (C) combine the outstanding Common Stock into a smaller
number of shares, by reclassification or otherwise, then in each such case
the amount to which holders of shares of Series B Participating Preferred
Stock were entitled immediately prior to such event under clause (ii) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution on the
Series B Participating Preferred Stock as provided in paragraph (a) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $100 per share
on the Series B Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series B
Participating Preferred Stock unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
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[PAGE]
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Participating Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date in either of which events such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of
Series B Participating Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall
be allocated pro rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series B Participating Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be no more than thirty (30) days prior to the date
fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series B Participating
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Participating Preferred Stock shall entitle the holder
thereof to 10,000 votes on all matters submitted to a vote of the
shareholders of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock into a greater number of shares, or (iii) combine the
outstanding Common Stock into a smaller number of shares, by reclassification
or otherwise, then in each such case the number of votes per share to which
holders of shares of Series B Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number
by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock outstanding immediately prior to such event.
(b) Except as otherwise provided herein or by law, the holders of
shares of Series B Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a
vote of shareholders of the Corporation.
(c) (i) If at any time dividends on any Series B Participating
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the occurrence of such contingency shall xxxx the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current quarterly dividend period on
all shares of Series B Participating Preferred Stock then outstanding
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[PAGE]
shall have been declared and paid or set apart for payment. During each
default period, all holders of Preferred Stock (including holders of the
Series B Participating Preferred Stock) with dividends in arrears in an
amount equal to six quarterly dividends thereon, voting as a class,
irrespective of series, shall have the right to elect one Director.
(ii) During any default period, such voting right of the holders of
Series B Participating Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(c) or
at any annual meeting of shareholders, and thereafter at annual meetings of
shareholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless
the holders of ten percent (10%) in number of shares of Preferred Stock
outstanding shall be present in person or by proxy. The absence of a quorum
of the holders of Common Stock shall not affect the exercise by the holders
of Preferred Stock of such voting right. At any meeting at which the holders
of Preferred Stock shall exercise such voting right initially during an
existing default period, they shall have the right, voting as a class, to
elect one Director to fill such vacancy, if any, in the Board of Directors as
may then exist for one Director or, if such right is exercised at an annual
meeting, to elect one Director. If the number which may be so elected at any
special meeting does not amount to the required number, the holders of the
Preferred Stock shall have the right to make such increase in the number of
Directors as shall be necessary to permit the election by them of their
Director. After the holders of the Preferred Stock shall have exercised
their right to elect one Director in any default period and during the
continuance of such period, the number of Directors shall not be increased or
decreased except by vote of the holders of Preferred Stock as herein provided
or pursuant to the rights of any equity securities ranking senior to or pari
passu with the Series B Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an existing
default period, have previously exercised their right to elect one Director,
the Board of Directors may order, or any shareholder or shareholders owning
in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request,
the calling of a special meeting of the holders of Preferred Stock, which
meeting shall thereupon be called by the President, a Vice President or the
Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote pursuant to
this paragraph (c)(iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address as the same
appears on
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[PAGE]
the books of the Corporation. Such meeting shall be called for a time not
earlier than ten (10) days and not later than sixty (60) days after such
order or request or in default of the calling of such meeting within sixty
(60) days
after such order or request, such meeting may be called on similar notice by
any shareholder or shareholders owning in the aggregate not less than ten
percent (10%) of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (c)(iii), no such special
meeting shall be called during the period within sixty (60) days immediately
preceding the date fixed for the next annual meeting of the shareholders.
(iv) In any default period, the holders of Common Stock, and other
classes of stock of the Corporation, if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect one Director voting
as a class, after the exercise of which right (x) the Director so elected by
the holders of Preferred Stock shall continue in office until his or her
successor shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except
as provided in paragraph (c)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors (if any) theretofore elected by the
holders of the class of stock which elected the Director whose office shall
have become vacant. References in this paragraph (c) to Directors elected by
the holders of a particular class of stock shall include Directors elected by
such Directors to fill vacancies as provided in clause (y) of the foregoing
sentence.
(v) Immediately upon the expiration of a default period, (x) the right of
the holders of Preferred Stock as a class to elect one Director shall cease,
(y) the term of the Director elected by the holders of Preferred Stock as a
class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in, or pursuant to, the Articles of Incorporation or
Bylaws irrespective of any increase made pursuant to the provisions of
paragraph (c)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the Articles of
Incorporation or Bylaws). Any vacancy or vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding sentence
may be filled by a majority of the remaining Directors, even though less than
a quorum.
(d) Except as set forth herein, holders of Series B Participating
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with holders
of Common Stock as set forth herein) for taking any corporate action.
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[PAGE]
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Participating Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Participating
Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series B Participating Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Participating
Preferred Stock except dividends paid ratably on the Series B Participating
Preferred Stock and all such parity stock on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Participating Preferred Stock
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series B Participating
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of Series
B Participating Preferred Stock or any shares of stock ranking on a parity
with the Series B Participating Preferred Stock except in accordance with a
purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
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[PAGE]
5. Reacquired Shares. Any shares of Series B Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Participating
Preferred Stock unless, prior thereto, the holders of shares of Series B
Participating Preferred Stock shall have received per share, the greater of
10,000 times $1.00 or 10,000 times the payment made per share of Common
Stock, plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment (the "Series B
Liquidation Preference"). Following the payment of the full amount of the
Series B Liquidation Preference, no additional distributions shall be made to
the holders of shares of Series B Participating Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an amount
per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series B Liquidation Preference by (ii) 10,000 (as
appropriately adjusted as set forth in subparagraph (c) below to reflect such
events as stock splits, stock dividends and recapitalization with respect to
the Common Stock) (such number in clause (ii), the "Adjustment Number").
Following the payment of the full amount of the Series B Liquidation
Preference and the Common Adjustment in respect of all outstanding shares of
Series B Participating Preferred Stock and Common Stock, respectively,
holders of Series B Participating Preferred Stock and holders of shares of
Common Stock shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number to 1
with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(b) In the event there are not sufficient assets available to permit
payment in full of the Series B Liquidation Preference and the liquidation
preferences of all other series of Preferred Stock, if any, which rank on a
parity with the Series B Participating Preferred Stock then such remaining
assets shall be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. In the event there
are not sufficient assets available to permit payment
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[PAGE]
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(c) In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, by
reclassification or otherwise, then in each such case the Adjustment Number
in effect immediately prior to such event shall be adjusted by multiplying
such Adjustment Number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares
of Series B Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 10,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (a) declare any dividend on Common
Stock payable in shares of Common Stock, (b) subdivide the outstanding Common
Stock, or (c) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series B Participating
Preferred Stock shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event.
8. Redemption. The shares of Series B Participating Preferred Stock
shall not be redeemable.
9. Ranking. The Series B Participating Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
10. Amendment. The Articles of Incorporation and the Bylaws of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series B
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the
A-8
[PAGE]
holders of at least sixty-six and two-thirds percent (66-2/3%) of the
outstanding shares of Series B Participating Preferred Stock voting
separately as a class.
11. Fractional Shares. Series B Participating Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series B Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this 7th day
of November, 1996.
----------------------------
President
Attest:
----------------------------
Secretary
A-9
[PAGE]
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R-______________ _____________ Rights
NOT EXERCISABLE AFTER NOVEMBER 21, 2006 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE WERE ISSUED TO
A PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN
ACQUIRING PERSON, AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT. THIS
RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID UNDER
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(E) OF THE RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
AGOURON PHARMACEUTICALS, INC.
This certifies that ___________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the
owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of November 7, 1996 (the "Rights Agreement") between
Agouron Pharmaceuticals, Inc., a California corporation (the "Company"), and
Xxxxx Xxxxxx Shareholder Services, L.L.C. (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 p.m. (Pacific time) on
November 21, 2006, at the office of the Rights Agent designated for such
purpose, one one-ten thousandth of a fully paid, nonassessable share of
Series B Participating Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $500.00 per one one-ten thousandth of a share
(the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the appropriate Form of Election to purchase and 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 set forth above, are the number and
Purchase Price as of the close of business on November 21, 1996, based on the
Preferred Stock as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number of
shares of Preferred 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.
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[PAGE]
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal office of the
Company and are also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may
be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred 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
(other than pursuant to Section 11(a)(ii) of the Rights Agreement) 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. If this Rights Certificate shall be exercised in whole or in part
pursuant to Section 11(a)(ii) of the Rights Agreement, the holder shall be
entitled to receive this Rights Certificate duly marked to indicate that such
exercise has occurred as set forth in the Rights Agreement.
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 $.001 per Right. Subject to the provisions of the Rights
Agreement, the Company, at its option, may elect to mail payment of the
redemption price to the registered holder of the Right at the time of
redemption, in which event this certificate may become void without any
further action by the Company.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-ten thousandth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in
the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred 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 shareholders at
any meeting thereof, or to give or withhold
B-2
[PAGE]
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (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: _______________________ .
Attest: AGOURON PHARMACEUTICALS, INC.
By ___________________________
Title ___________________________ Title ________________________
Countersigned:
XXXXX XXXXXX SHAREHOLDER
SERVICES, L.L.C.
By ___________________________
B-3
[PAGE]
[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: ___________________________.
___________________________
Signature
Signature Guaranteed:
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[PAGE]
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate / / are
/ / are not being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined 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 subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: _____________________.
___________________________
Signature
NOTICE
The signature to the foregoing Assignment 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.
B-5
[PAGE]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To AGOURON PHARMACEUTICALS, INC.:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase the shares of Common Stock
(or such other securities of the Company) issuable upon the exercise of the
Rights and requests that certificates for such shares be issued in the name
of:
____________________________________________________________________________
(Please insert social security or other identifying number)
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
The Rights Certificate indicating the balance, if any, of such Rights
which may still be exercised pursuant to Section 11(a)(ii) of the Rights
Agreement shall be returned to the undersigned unless such Person requests
that the Rights Certificate be registered in the name of and delivered to:
____________________________________________________________________________
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
_____________________________________________________________________________
_____________________________________________________________________________
(Please print name and address)
Dated: _____________________.
_______________________________
Signature
Signature Guaranteed:
B-6
[PAGE]
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 Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
(2) 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 Acquiring Person (as such terms are
defined in the Rights Agreement);
(3) 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 an Acquiring Person.
Dated: ______________________.
____________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase 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.
B-7
[PAGE]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To AGOURON PHARMACEUTICALS, INC.:
The undersigned hereby irrevocably elects to exercise ___________ Rights
represented by this Rights Certificate to purchase the shares of Preferred
Stock (or such other securities of the Company or any other Person) issuable
upon the exercise of the Rights and requests that certificates for such
shares be issued in the name of:
_____________________________________________________________________________
(Please insert social security or other identifying number)
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
The Rights Certificate indicating the balance, if any, of such Rights
which may still be exercised pursuant to Section 11(a)(ii) of the Rights
Agreement shall be returned to the undersigned unless such Person requests
that the Rights Certificate be registered in the name of and delivered to:
_____________________________________________________________________________
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
_____________________________________________________________________________
(Please print name and address)
_____________________________________________________________________________
Dated: __________________.
______________________________
Signature
Signature Guaranteed:
B-8
[PAGE]
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate / / are
/ / are not being sold, assigned and transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined 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 subsquently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: __________________.
_________________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase must correspond to
the name as written upon the fact of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-9
[PAGE]
EXHIBIT C
SUMMARY OF RIGHTS
On November 7, 1996 the Board of Directors of Agouron Pharmaceuticals,
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of common stock, no par value (the "Common Stock"), of the
Company to shareholders of record at the close of business on November 21,
1996 (the "Record Date"). Except as set forth below, each Right, when
exercisable, entitles the registered holder to purchase from the Company one
one-ten thousandth share of a new series of preferred stock, designated as
Series B Participating Preferred Stock, no par value (the "Preferred Stock"),
at a price of $500.00 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 Xxxxx
Xxxxxx Shareholder Services, L.L.C., as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights certificates
will be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earliest of (a) 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 securities having fifteen percent (15%) or more of the voting power of all
outstanding voting securities of the Company or (b) ten (10) days (unless
such date is extended by the Board of Directors) following the commencement
of (or a public announcement of an intention to make) a tender offer or
exchange offer which would result in any Person or group and related Persons
becoming an Acquiring Person.
Until the Distribution Date the Rights will be evidenced, with respect
to any of the Common Stock certificates outstanding as of the Record Date, by
such Common Stock certificate together with this Summary of Rights. The
Rights Agreement provides that, until the Distribution Date, the Rights will
be transferred with and only with Common Stock certificates. From as soon as
practicable after the Record Date and until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Stock certificates issued
after the Record Date upon transfer or new issuance of the Common Stock will
contain a notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any certificates for Common Stock outstanding
as of the Record Date (with or without this Summary of Rights attached) will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. 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
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[PAGE]
Stock as of the close of business on the Distribution Date, and the separate
Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on the earliest of (a) November 21, 2006, (b) consummation of a
merger transaction with a Person or group who acquired Common Stock pursuant
to a Permitted Offer (as defined below), and is offering in the merger the
same price per share and form of consideration paid in the Permitted Offer,
or (c) redemption or exchange of the Rights by the Company as described
below.
The Purchase Price payable, and the number of shares of Preferred 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 Preferred Stock, (ii) upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for Preferred Stock, certain
convertible securities or securities having the same or more favorable
rights, privileges and preferences as the Preferred Stock at less than the
current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding
regular quarterly cash dividends out of earnings or retained
earnings) or of subscription rights or warrants (other than those referred to
above).
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction
(whether or not the Company is the surviving corporation) or fifty percent
(50%) or more of the Company's assets or earning power are sold (in one
transaction or a series of transactions), proper provision shall be made so
that each holder of a Right (other than an Acquiring Person) shall thereafter
have the right to receive, upon the exercise thereof at the then current
exercise price of the Right, that number of shares of common stock of either
the Company, in the event that it is the surviving corporation of a merger or
consolidation, or the acquiring company (or, in the event there is more than
one acquiring company, the acquiring company receiving the greatest portion
of the assets or earning power transferred) which at the time of such
transaction would have a market value of two times the exercise price of the
Right (such right being called the "Merger Right"). In the event that a
Person becomes the beneficial owner of securities having fifteen percent
(15%) or more of the voting power of all then outstanding voting securities
of the Company (unless pursuant to a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined prior
to the date of the first acceptance of payment for any of such shares by at
least a majority of the members of the Board of Directors who are not
officers of the Company and are not Acquiring Persons or Affiliates or
Associates
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[PAGE]
thereof to be both adequate and otherwise in the best interests of the
Company and its shareholders (a "Permitted Offer")), then proper provision
shall be made so that each holder of a Right will for a sixty (60) day period
(subject to extension under certain circumstances) thereafter have the right
to receive upon exercise that number of shares of Common Stock having a
market value of two times the exercise price of the Right, to the extent
available, and then (after all authorized and unreserved shares of Common
Stock have been issued) a common stock equivalent (such as Preferred Stock or
another equity security with at least the same economic value as the Common
Stock) having a market value of two times the exercise price of the Right,
with Common Stock to the extent available being issued first (such right
being called the "Subscription Right"). The holder of a Right will continue
to have the Merger Right whether or not such holder exercises the
Subscription Right. Notwithstanding the foregoing, upon the occurrence of
any of the events giving rise to the exercisability of the Merger Right or
the Subscription Right, any Rights that are or were at any time after the
Distribution Date owned by an Acquiring Person shall immediately become null
and void.
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least one
percent (1%) in such Purchase Price. No fractions of 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.
At any time prior to the earlier to occur of (i) a Person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $.001 per Right (the
"Redemption Price"), which redemption shall be effective upon the action of
the Board of Directors. Additionally, the Company may thereafter redeem the
then outstanding Rights in whole, but not in part, at the Redemption Price
(A) if such redemption is incidental to a merger or other business
combination transaction or series of transactions involving the Company but
not involving an Acquiring Person or certain related Persons or (B) following
an event giving rise to, and the expiration of the exercise period for, the
Subscription Right if and for as long as an Acquiring Person beneficially
owns securities representing less than fifteen percent (15%) of the voting
power of the Company's voting securities. The redemption of Rights described
in the preceding sentence shall be effective only as of such time when the
Subscription Right is not exercisable, and in any event, only after ten (10)
Business Days prior notice. Upon the effective date of the redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Subject to applicable law, the Board of Directors, at its option, may at
any time after a Person becomes an Acquiring Person
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[PAGE]
(but not after the acquisition by such Person of fifty percent (50%) or more
of the outstanding Common Stock), exchange all or part of the then
outstanding and exercisable rights (except for Rights which have become void)
for shares of Common Stock equivalent to one share of Common Stock per Right
or, alternatively, for substitute consideration consisting of cash,
securities of the Company or other assets (or any combination thereof).
The Preferred Stock purchasable upon exercise of the Rights will be
nonredeemable and junior to any other series of preferred stock the Company
may issue (unless otherwise provided in the terms of such stock). Each share
of Preferred Stock will have a preferential quarterly dividend in an amount
equal to 10,000 times the dividend declared on each share of Common Stock,
but in no event less than $100. In the event of liquidation, the holders of
Preferred Stock will receive a preferred liquidation payment equal to the
greater of 10,000 times $1.00 or 10,000 times the payment made per each share
of Common Stock. Each share of Preferred Stock will have 10,000 votes,
voting together with the shares of Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 10,000
times the amount and type of consideration received per share of Common
Stock. The rights of the Preferred Stock as to dividends, liquidation and
voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions. Fractional shares of Preferred Stock will
be issuable; however, the Company may elect to distribute depositary receipts
in lieu of such fractional shares. In lieu of fractional shares other than
fractions that are multiples of one one-ten thousandth of a share, an
adjustment in cash will be made based on the market price of the Preferred
Stock on the last trading date prior to the date of exercise.
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.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. 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
incorporated herein by reference.
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[PAGE]
