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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PathoGenesis Corporation
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(Exact name of registrant as specified in its charter)
Delaware 91-1542150
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(State of incorporation (IRS Employer
or organization) Identification No.)
201 Elliott Avenue West, Seattle, Washington 98119
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on
To Be So Registered Which Each Class Is To Be Registered
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None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Right
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(Title of Class)
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ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED
On April 13, 1999, the Board of Directors of PathoGenesis Corporation
(the "Company") amended the Rights Agreement (the "Rights Agreement"), dated as
of June 26, 1997, as amended March 8, 1998, by and between the Company and
Harris Trust and Savings Bank, as Rights Agent (the "Rights Agent"). As
amended, each Preferred Stock Purchase Right (a "Right") entitles the registered
holder to purchase from the Company one one-thousandth (1/1000) of a share of
preferred stock of the Company, designated as Series A Junior Preferred Stock
(the "Preferred Stock"), at a price of $250 per one one-thousandth (1/1000) of a
share (the "Exercise Price").
As discussed below, the Rights are not currently exercisable, and
separate rights certificates have not been sent to stockholders. Until the
Distribution Date (as defined below), the Rights will automatically trade with
the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors in the
manner described below, become exercisable upon the close of business on the day
(the "Distribution Date"), which is the earlier of (i) the tenth day following a
public announcement that a person or group of affiliated or associated persons,
with certain exceptions set forth below, has acquired beneficial ownership of
15% or more of the outstanding voting stock of the Company (an "Acquiring
Person"), and (ii) the tenth business day (or such later date as may be
determined by the Board of Directors prior to such time as any person or group
of affiliated or associated persons becomes an Acquiring Person) after the date
of the commencement or announcement of a person's or group's intention to
commence a tender or exchange offer the consummation of which would result in
the ownership of 15% or more of the Company's outstanding voting stock (even if
no shares are actually purchased pursuant to such offer).
Prior to such time, the Rights will not be exercisable, will not be
represented by a separate certificate, and will not be transferable apart from
the Company's Common Stock, but will instead be evidenced, with respect to any
of the Common Stock certificates outstanding as of July 10, 1997, by such Common
Stock certificate outstanding at that time, and with respect to any of the
Common Stock certificates issued after such date by such Common Stock
certificate, which will contain a legend incorporating the Rights Agreement by
reference.
An Acquiring Person does not include (A) the Company, (B) any
subsidiary of the Company, (C) any employee benefit plan or employee stock plan
of the Company or of any subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Common Stock for or pursuant to the
terms of any such plan, (D) any person or group whose ownership of 15% or more
of the shares of voting stock of the Company then outstanding results solely
from (i) a transaction or series of related transactions specifically approved
by the Board of Directors prior to such person or group otherwise becoming an
Acquiring Person, or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of any additional voting stock
unless such acquisition of additional voting stock will not result in such
person or group becoming an Acquiring Person by reason of clause (i) or (ii)
above).
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Until the Distribution Date (or earlier redemption or expiration of
the Rights), the surrender for transfer of any of the Common Stock certificates
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 ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate certificates alone
will evidence the Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. The
Rights will expire at the close of business on June 26, 2007, unless earlier
redeemed by the Company as described below.
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Company's preferred stock. The Preferred
Stock may not be issued except upon exercise of Rights. Each share of Preferred
Stock will be entitled to receive when, as and if declared, a quarterly dividend
in an amount equal to the greater of $100 per share or 1,000 times the cash
dividends declared on the Company's Common Stock. In addition, each share of
Preferred Stock is entitled to 1,000 times any non-cash dividends (other than
dividends payable in equity securities or certain rights or warrants) declared
on each share of Common Stock, in like kind. In the event of the liquidation of
the Company, the holders of Preferred Stock will be entitled to receive, for
each share of Preferred Stock, a payment in an amount equal to the greater of
$250 per one one-thousandth share of Preferred Stock or 1,000 times the payment
made per share of Common Stock. Each share of Preferred Stock will have 1,000
votes, voting together with the Common Stock. In the event of any merger,
consolidation or other transaction in which Common Stock is exchanged, each
share of Preferred Stock will be entitled to receive 1,000 times the amount
received per share of Common Stock. The rights of Preferred Stock as to
dividends, liquidation and voting are protected by anti-dilution provisions.
The Exercise Price, 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 in the event of stock
dividends, stock splits, reclassifications, or certain distributions with
respect to the Preferred Stock. The number of outstanding Rights and the number
of one one-thousandth of a share of Preferred Stock issuable upon exercise of
each Right are also subject to adjustment if, prior to the Distribution Date,
there is a stock split of the Common Stock or a stock dividend on the Common
Stock payable in Common Stock or subdivisions, consolidations or combinations of
the Common Stock. With certain exceptions, no adjustment in the Exercise Price
will be required until cumulative adjustments require an adjustment of at least
1% in such Exercise Price. No fractional shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-thousandth
of a share of Preferred Stock, which may, at the election of the Company, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Stock on the last
trading day prior to the date of exercise.
Unless the Rights are earlier redeemed or exchanged, or prior to such
transaction the Board of Directors approves such transaction, if the Company at
any time after the Distribution Date were to be acquired in a merger or other
business combination (in which any
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shares of Common Stock are changed into or exchanged for other securities or
assets) or more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement provides that proper
provision will be made so that each holder of record of a Right will from and
after such date have the right to receive, upon payment of the Exercise Price,
that number of shares of common stock of the acquiring company having a market
value at the time of such transaction equal to two times the Exercise Price.
In addition, unless the Rights are earlier redeemed or exchanged, in
the event that a person or group becomes the beneficial owner of 15% or more of
the Company's voting stock (other than pursuant to a tender or exchange offer (a
"Qualifying Tender Offer") for all outstanding shares of Common Stock that is
approved by the Board of Directors prior to any person becoming an Acquiring
Person, after taking into account the long-term value of the Company and all
other factors they consider relevant in the circumstances), the Rights Agreement
provides that proper provisions will be made so that each holder of record of a
Right, other than the Acquiring Person (whose Rights will thereupon become null
and void), will thereafter have the right to receive, upon payment of the
Exercise Price, in lieu of Preferred Stock, that number of shares of the Common
Stock having a market value at the time of the transaction equal to two times
the Exercise Price.
At any time on or prior to the close of business on the earlier of (i)
the time that a person has become an Acquiring Person or (ii) June 26, 2007, the
Company may redeem the Rights in whole, but not in part, at a price of $0.01 per
Right, subject to adjustment (the "Redemption Price").
Immediately upon the effective time of the action of the Board of
Directors of the Company authorizing 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.
The Board of Directors may, at its option, exchange all or part of the
then outstanding and exercisable Rights (other than those held by the Acquiring
Person) for shares of Common Stock at a ratio of one share of Common Stock per
Right, as adjusted; provided, however, that such Rights cannot be exchanged once
a Person, together with such Person's Affiliates and Associates, becomes the
owner of 50% or more of the shares of Common Stock then outstanding. If the
Board of Directors authorizes such an exchange, the Rights will immediately
cease to be exercisable.
For as long as the Rights are then redeemable, the Company, by a
majority of the directors then in office, may, except with respect to the
Redemption Price or date of expiration of the Rights, amend the Rights in any
manner, including an amendment to extend the time period in which the Rights may
be redeemed. However, at any time from and after such time as any Person
becomes an Acquiring Person no amendment or supplement may adversely affect the
interest of the holders of the Rights.
Until a Right is exercised, the holder, as such, will have no rights
as a stockholder of the Company, including, without limitation, the right to
vote or to receive dividends.
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The Rights Agreement and the Amendments thereto, dated as of March 8,
1998 and April 13, 1999, are attached hereto as exhibits. The foregoing
description of Rights and the Rights Agreement, as amended, is qualified in its
entirety by reference to such exhibits. All capitalized terms not defined
herein shall have the meanings ascribed to them in the Rights Agreement, as
amended.
ITEM 2. EXHIBITS
Number Description
4.1(b) Rights Agreement dated as of June 26, 1997, between
PathoGenesis Corporation and Harris Trust and Savings Bank, as
Rights Agent, including the Form of Right Certificate as
Exhibit B (incorporated by reference to Exhibit 1 to
PathoGenesis' Current Report on Form 8-K filed on July 10,
1997).
4.1(bb) First Amendment, dated as of March 8, 1998, to Rights
Agreement between PathoGenesis Corporation and Harris Trust
and Savings Bank, as Rights Agent (incorporated by reference
to Exhibit 4.1(bb) to PathoGenesis' Annual Report on Form 10-K
for 1997).
4.1(bbb) Amendment of Rights Plan, dated as of April 13, 1999, between
PathoGenesis Corporation and Harris Trust and Savings Bank, as
Rights Agent.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereto duly authorized.
Date: April 15, 1999
PATHOGENESIS CORPORATION
By: /s/ Alan R. Meyer
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Alan R. Meyer
Chief Financial Officer
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EXHIBIT 4.1(bbb)
AMENDMENT OF RIGHTS PLAN
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AMENDMENT (this "Amendment"), dated as of April 13, 1999, to the
Rights Agreement (the "Rights Agreement"), dated as of June 26, 1997, as amended
as of March 8, 1998, by and between PathoGenesis Corporation, a Delaware
corporation (the "Company"), and Harris Trust and Savings Bank, an Illinois
banking corporation (the "Rights Agent").
RECITALS
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The Company and the Rights Agent have heretofore executed and entered
into the aforementioned Rights Agreement. Pursuant to Section 27 of the Rights
Agreement, the Company may direct the Rights Agent to from time to time
supplement or amend the Rights Agreement in accordance with the provisions of
Section 27 thereof. The Board of Directors of the Company, by resolutions
adopted at a meeting held on April 13, 1999, has approved and authorized the
Company to execute and deliver this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the Company hereby directs, and the parties hereto
agree, that the Rights Agreement is Amended as follows:
1. Clause (ii) of the first sentence of subsection 1(a) is deleted
and is replaced with the following:
(ii) any Person, together with all Affiliates and Associates of such
Person, who or which would be an Acquiring Person solely by reason of (A)
being the Beneficial Owner of shares of Voting Stock of the Company, the
Beneficial Ownership of which was acquired by such Person pursuant to any
action or transaction or series of related actions or transactions
specifically approved by the Board of Directors before such Person
otherwise became an Acquiring Person, or (B) a reduction in the number of
issued and outstanding shares of Voting Stock of the Company pursuant to a
transaction or a series of related transactions approved by the Board of
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Directors of the Company; provided, further, that in the event such Person
described in this clause (ii) does not become an Acquiring Person by reason
of subclause (A) or (B) of this clause (ii), such Person nonetheless shall
become an Acquiring Person in the event such Person thereafter acquires
Beneficial Ownership of any additional Voting Stock of the Company, unless
the acquisition of such additional Voting Stock would not result in such
Person becoming an Acquiring Person by reason of subclause (A) or (B) of
this clause (ii).
2. In the third sentence of subsection 1(g), the phrase "represent
the right to participate in profits of such Person and which shall" is deleted.
3. In subsection 1(r) a parenthetical reading "(prior to acceptance
or purchase of shares of Common Stock pursuant thereto)" is inserted between the
words "approved" and "by".
4. The sentence at the end of Section 1, which follows subsection
1(aa), and which begins "Any determination required to be made by the Board of
Directors of the Company" is deleted.
5. In subsection 3(b) the words "tender or exchange offer that the
Board of Directors has determined to be a" are inserted in the fourth
parenthetical of clause (ii), following the word "a" and preceding the phrase
"Qualifying Tender Offer".
6. In clause (d) of the first sentence of Section 3, the words "and
at the Company's expense" are inserted immediately after the words "and if
requested".
7. In the first sentence of subsection 9(b), the words "or other
securities" are inserted between the phrases "Preferred Stock" and "issued or
reserved".
8. In subsection 9(d):
(a) the words "use its best efforts to" immediately preceding
clause (i) and immediately following the word "shall" are deleted;
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(b) the words "use its best efforts to" are inserted at the
beginning of clauses (ii) and (iii), in each case immediately prior to the word
"cause"; and
(c) the final sentence is deleted.
9. Section 11 is amended and restated to read in its entirety as
follows:
Section 11. Adjustment of Exercise Price or Number of Shares. The
Exercise Price and the number of shares of Preferred Stock 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 Rights Agreement (A) declare or pay any dividend on Preferred Stock
payable in shares of Preferred Stock, (B) subdivide or split the
outstanding shares of Preferred Stock into a greater number of shares, or
(C) combine or consolidate the outstanding shares of Preferred Stock into a
smaller number of shares or effect a reverse split of the outstanding
shares of Preferred Stock, or 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) then and in each such
event the Exercise Price and the number of shares of capital stock issuable
upon the exercise of a Right after the record date for such event (if one
shall have been established or, if not, after the date of such event) shall
be proportionately adjusted so that the holder of any Right exercised after
such time shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books of
the Company were open, such holder would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs which would require
an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii) hereof.
(ii) In event that any Person (other than an Exempt Person),
alone or together with its Affiliates and Associates, shall become an
Acquiring Person, except pursuant to a Qualifying Tender Offer, then,
except as otherwise provided in this Section 11 and Section 24 hereof, each
holder of a Right,
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except as provided in Section 7(e) hereof, shall thereafter have the right
to receive upon exercise of such Right at a price equal to the current
Exercise Price in accordance with the terms of this Rights Agreement and in
lieu of Preferred Stock, such number of shares of Common Stock as shall
equal the result obtained by (A) multiplying the then current Exercise
Price by the number of one one-thousandths of a share of Preferred Stock
for which a Right is then exercisable and dividing that product by (B) 50%
of the Fair Market Value of the Common Stock of the Company (determined
pursuant to Section 11(b) hereof) on the date of the occurrence of such
event. In the event that any Person should become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded by
the Rights.
(iii) In the event that the Company does not have available
sufficient authorized but unissued 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 and
reserve for issuance such number of additional shares of Common Stock as
may from time to time be required to be issued upon the exercise in full of
all Rights from time to time outstanding and, if necessary, shall use its
best efforts to obtain stockholder approval thereof. If the Company shall,
after good faith effort, be unable to take any such action as may be
necessary to authorize additional Common Stock, the Company shall
substitute for each share of Common Stock that would otherwise be issuable
upon exercise of a Right, a number of shares of Preferred Stock or fraction
thereof such that the Fair Market Value of one share of Preferred Stock
multiplied by such number or fraction is equal to the Fair Market Value of
one share of Common Stock as of the date of issuance of such share of
Preferred Stock or fraction thereof.
(b) For the purpose of this Rights Agreement, the "Fair Market
Value" of any share of Preferred Stock, Common Stock or any other stock or
any Right or other security or any other property on any date shall be
determined as provided in this Section 11(b). In the case of a publicly-
traded stock or other security, the Fair Market Value on any date shall be
deemed to be the average of the daily closing prices per share of such
stock or per unit of such other security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the Fair Market Value per share
of any share of Common Stock is determined during a period which includes
any date that is within 30 Trading Days after (i) the ex-dividend date for
a dividend or distribution on such stock payable in shares of Common Stock
or securities convertible into shares of Common Stock, or (ii) the
effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of such stock, then, and in each
such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Company to take into account ex-dividend or post-
effective date trading. The closing price for any
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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 applicable transaction
reporting system with respect to securities listed or admitted to trading
on the Nasdaq National Market), or, if the securities are not listed or
admitted to trading on the Nasdaq National Market, as reported in the
applicable transaction reporting system with respect to securities listed
on the principal national securities exchange on which such security is
listed or admitted to trading; or, if 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 Stock Market or such other system
then in use; or, if no bids for such security are quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in such security selected by
the Board of Directors of the Company. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which such
security is listed or admitted to trading is open for the transaction of
business or, if such security is not listed or admitted to trading on any
national securities exchange, a Business Day. If a security is not publicly
held or not so listed or traded, "Fair Market Value" shall mean the fair
value per share of stock or per other unit of such other security, as
determined by an independent investment banking firm experienced in the
valuation of securities selected in good faith by the Board of Directors of
the Company, or, if no such investment banking firm is, in the good faith
judgment of the Board of Directors, available to make such determination,
in good faith by the Board of Directors of the Company; provided, however,
that for purposes of making the adjustment provided for by Section
11(a)(ii) hereof, the Fair Market Value of a share of Preferred Stock shall
not be less than 100% of the product of the Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock (as such terms are defined in
the Certificate of Designations relating to the Preferred Stock) and shall
not exceed 105% of the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend Multiple or Vote
Multiple applicable to the Preferred Stock. In the case of property other
than securities, the "Fair Market Value" thereof shall be determined in
good faith by the Board of Directors of the Company based upon such
appraisals or valuation reports of such independent experts as the Board of
Directors of the Company shall in good faith determine to be appropriate in
accordance with good business practices and the interests of the holders of
Rights. Any such determination of Fair Market Value shall be described in a
statement filed with the Rights Agent and shall be binding upon the Rights
Agent. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one one-thousandth of a share, as the case may be.
(c) In case 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 45 calendar days after such record date)
to subscribe for or
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purchase Preferred Stock (or shares having the same 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 equivalent preferred stock (or
having a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the then current
Fair Market Value of the Preferred Stock (as defined in Section 11(b)) on
such record date, the Exercise Price to be in effect after such record date
shall be determined by multiplying the Exercise 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 shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at
such current Fair Market Value and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record date plus
the number of shares of additional 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);
provided, however, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration part or all
of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent and holders of the Rights. 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, options or
warrants are not so issued, the Exercise Price shall be adjusted to be the
Exercise Price which would then be in effect if such record date had not
been fixed.
(d) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section 11(c) hereof), the Exercise Price
to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then-current Fair Market
Value of the Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent and holders of
the Rights) of the portion of the as-
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sets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of Preferred Stock
and the denominator of which shall be such then-current Fair Market Value
of the Preferred Stock on such record date; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments shall be
made successively whenever such a record date is fixed; and, in the event
that such distribution is not so made, the Exercise Price shall again be
adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(e) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of capital stock issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price and the number of shares to be
issued upon exercise of the Rights as in the initial Right Certificates
issued hereunder but, nevertheless, shall represent the Rights as so
adjusted.
(f) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of capital stock upon exercise
of the Rights below the then par value, if any, of the shares of capital
stock, 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 such capital stock
at such adjusted purchase price per share.
(g) Anything in this Section 11 to the contrary notwithstanding,
in the event of any reclassification of stock of the Company or any
recapitalization, reorganization or partial liquidation of the Company or
similar transaction, the Company shall be entitled to make such further
adjustments in the Exercise Price, in addition to those adjustments
expressly required by the other paragraphs of this Section 11, as the Board
of Directors of the Company shall determine to be necessary or appropriate
in order for the holders of the Rights in such event to be treated in
accordance with the purpose and intent of this Rights Agreement or in order
that any such event shall not, but for such adjustment, in the opinion of
counsel to the Company, result in the stockholders of the Company being
subject to any United States federal income tax liability by reason
thereof.
(h) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Exercise Price; provided, however, that any adjustments which by reason of
this Section 11(h) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a share of Preferred Stock or one ten-thousandth of any
other share or security as the case may
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be. Notwithstanding the first sentence of this Section 11(h), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the right to exercise
any Rights.
(i) If, as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
Preferred 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 Preferred Stock contained in Section 11(a),
(c) and (d) hereof, inclusive, and the provisions of Sections 7, 9, 10 and
13 hereof with respect to the Preferred Stock shall apply on like terms to
any such other shares.
(j) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall evidence the right to
purchase, at the adjusted Exercise Price, the number of one one-thousandths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(k) Unless the Company shall have exercised its election as
provided in Section 11(l) hereof, upon each adjustment of the Exercise
Price as a result of the calculations made in Sections 11(c) and (d)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Exercise Price, that number of one one-thousandths of a share of Preferred
Stock (calculated to the nearest one one-millionth of a share of Preferred
Stock) obtained by (A) multiplying (x) the number of one one-thousandths of
a share covered by a Right immediately prior to this adjustment by (y) the
Exercise Price in effect immediately prior to such adjustment of the
Exercise Price and (B) dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment of the Exercise Price.
(l) The Company may elect, on or after the date of any adjustment
of the Exercise Price, to adjust the number of Rights in substitution for
any adjustment in the number of one one-thousandths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-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 one-hundred-thousandth) obtained by dividing the Exercise Price
in effect immediately prior to adjustment of the Exercise Price by the
Exercise Price in effect immediately after adjustment of the Exercise
Price. The Company shall make a public announcement of its election to
adjust the number
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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 Exercise Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at least 10 days
later than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(l), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein, and shall be
registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(m) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date of the Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the
Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Exercise Price in
effect prior to such adjustment; provided, however, that the Company shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(n) In the event that, at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare
or pay any dividend on the Common Stock payable in Common Stock, or (ii)
effect a subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock)
into a greater or lesser number of Common Stock, then, in any such case,
(A) the number of one one-thousandths of a share of Preferred Stock
purchasable after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-thousandths of a share of
Preferred Stock so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event and the denominator of which is
the number of shares of Common Stock outstanding immediately after such
event, and (B) each share of Common Stock outstanding immediately after
such event shall have issued with respect to it that number of Rights which
each share of Common Stock outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section
11(n) shall
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<PAGE>
be made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
10. In clause (b) of the first sentence of Section 12, the words
"Common Stock or the" are inserted between the word "the" and the phrase
"Preferred Stock", and the words "and the Securities and Exchange Commission"
are inserted between the phrases "Preferred Stock" and "a copy".
11. In subsection 13(a):
(a) the beginning phrase of the first sentence "Except for any
transaction approved by the Board of Directors, in the event that, at any time
on or after the Distribution Date," is deleted, and replaced by the following:
"In the event that, at any time after a Person has become an Acquiring
Person"
(b) Clause (i) is amended and restated to read in its entirety
as follows:
(i) each holder of record of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof and payment of the Exercise Price multiplied by the number
of one one-thousandths of a share of Preferred Stock for which a Right is
then exercisable in accordance with the terms of this Rights Agreement,
such number of shares of validly issued, fully paid, non-assessable and
freely tradeable Common Stock of the Principal Party (as defined herein),
not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall, based on the Fair Market Value of the Common
Stock of the Principal Party on the date of the Consummation of such
consolidation, merger, sale or transfer, equal twice the Exercise Price
multiplied by the number of one one-thousandths of a share of Preferred
Stock for which a Right is then exercisable;
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<PAGE>
(c) a sentence which reads "The provisions of this Section 13
shall similarly apply to successive mergers or consolidations or sales or other
transfers." is added at the end of the subsection.
12. The last sentence of Section 21 is deleted.
13. Subsection 23(a) is amended and restated to read in its entirety
as follows:
(a) The Company may, at its option, at any time prior to such
time as any Person becomes an Acquiring Person, but only by the vote of a
majority of the Board of Directors then in office, redeem all but not less
than all of the then outstanding Rights, at a redemption price of $0.01 per
Right, subject to adjustments as provided in subsection (c) below (the
"Redemption Price"); such redemption may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may at such time establish.
14. A new subsection 23(d) is inserted following subsection 23(c)
which reads as follows:
(d) Neither the Company nor any of its Affiliates or Associates
may redeem, acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the purchase of Common
Stock prior to the Distribution Date.
15. The text of subsection 24(c) is deleted and the following is
inserted in its place:
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of
the Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such
additional shares of Common Stock, the Company shall substitute, for each
share of Common Stock that would otherwise be issuable upon exchange of a
Right, a number of shares of Preferred Stock or fraction
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<PAGE>
thereof such that the Fair Market Value of one share of Preferred Stock
multiplied by such number or fraction is equal to the Fair Market Value of
one share of Common Stock as of the date of issuance of such share of
Preferred Stock or fraction thereof.
16. In subsection 25(a), the cross-reference to subsection 11(g) is
deleted and cross-references to subsections 11(n) and 13 are inserted in its
place.
17. Subsection 25(b) is amended and restated to read in its entirety
as follows:
(b) In case the event referred to in Section 11(a)(ii) of this Rights
Agreement shall occur, then the Company shall as soon as practicable
thereafter give to each holder of Rights, in accordance with Section 26
hereof, notice of the occurrence of such event, which notice shall describe
such event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof.
18. The address for notice for the Company specified in Section 26 is
deleted and the following is inserted in its place:
PathoGenesis Corporation
Attention Wilbur H. Gantz, Chairman and CEO
5215 Old Orchard Road, Suite 900
Skokie, Illinois 60077
19. Section 27 is amended and restated to read in its entirety as
follows:
Section 27. Supplements and Amendments. For as long as the Rights
are then redeemable and except as provided in the last sentence of this
Section 27, the Company by a majority of the Directors then in office may
in its sole and absolute discretion, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of the Rights. At any time when the
Rights are not then redeemable and except as provided in the last sentence
of this Section 27, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend this Rights Agreement without the
approval of any holders of Right Certificates (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or (iii) to
change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable, provided that from and after such
time as any Person becomes an Acquiring Person no supplement or amendment
shall ad-
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<PAGE>
versely affect the interest of the holders of Right 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.
Notwithstanding anything contained in this Rights Agreement to
the contrary, no supplement or amendment shall be made which changes the
Redemption Price or Final Expiration Date.
Further, notwithstanding anything in this Agreement to the
contrary, no supplement or amendment that changes the rights of the Rights
Agent under this Agreement shall be effective without the written consent
of the Rights Agent.
20. This Amendment shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
21. This Amendment may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute one and the same instrument.
22. Terms not defined herein shall, unless the context otherwise
requires, have the meanings assigned to such terms in the Rights Agreement.
23. In all respects not inconsistent with the terms and provisions of
this Amendment, the Rights Agreement is hereby ratified, adopted, approved and
confirmed. In executing and delivering this Amendment, the Rights Agent shall
be entitled to all the privileges and immunities afforded to the Rights Agent
under the terms and conditions of the Rights Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and attested, all as of the date and year first above written.
PATHOGENESIS CORPORATION
By: /s/ Alan R. Meyer
------------------------------------------
Name: Alan R. Meyer
Title: Executive Vice President
HARRIS TRUST AND SAVINGS BANK
By: /s/ Susan M. Shadel
------------------------------------------
Name: Susan M. Shadel
Title: Assistant Vice President
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