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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
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PURSUANT TO SECTION 12(b) or 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
COHR Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 95-4559155
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(State of Incorporation (IRS Employer
or Organization) Identification No.)
21540 Plummer Street,
Chatsworth, California 91311
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of securities registration of a class of securities
pursuant to Section 12(b) of the pursuant to Section 12(g) of the
Exchange Act and is effective Exchange Act and is effective
pursuant to General Instruction pursuant to General Instruction
A.(c), please check the following A.(d), please check the following
box. [ ] box. [X]
Securities Act registration statement file number to which this
form relates: N/A
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Securities to be registered pursuant to Section 12(b) of the Act: None
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Series A Junior Participating Cumulative Preferred Stock
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(Title of Class)
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ITEM 1. Description of Registrant's Securities to be Registered
On November 23, 1998, the Board of Directors of COHR Inc. (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of Common Stock, par value $0.01 per share (the
"Common Shares"), of the Company. The Rights will be issued to the holders of
record of Common Shares outstanding on December 21, 1998, and with respect to
Common Shares issued thereafter until the Distribution Date (as defined below)
and, in certain circumstances, with respect to Common Shares issued after the
Distribution Date. Each Right, when it becomes exercisable as described below,
will entitle the registered holder to purchase from the Company one
one-thousandth (1/1000th) of a share of Series A Junior Participating Cumulative
Preferred Stock, no par value per share (the "Preferred Shares"), of the Company
at a price of twenty dollars ($20.00) (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 ChaseMellon
Shareholder Services, as Rights Agent (the "Rights Agent").
Until the earlier of (i) such time as the Company learns that a
person or group (including any affiliate or associate of such person or group)
has acquired, or has obtained the right to acquire, beneficial ownership of more
than 15% of the outstanding Common Shares (such person or group being an
"Acquiring Person"), and (ii) such date, if any, as may be designated by the
Board of Directors of the Company following the commencement of, or first public
disclosure of an intent to commence, a tender or exchange offer for outstanding
Common Shares which could result in such person or group becoming the beneficial
owner of more than 15% of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates for Common Shares shall also be deemed to be Right
Certificates, as defined below) and not by separate Right Certificates.
Therefore, until the Distribution Date, the Rights will be transferred with and
only with the Common Shares.
Excluded from the definition of "Acquiring Person" are (i) the
Company, its subsidiaries and any employee benefit plan of the Company or its
subsidiaries, (ii) any person (A) who acquires beneficial ownership of greater
than 15% of the outstanding Common Shares because of a change in the number of
Common Shares outstanding or based on a good faith belief in reliance on
inaccurate or out of date publicly filed reports of the Company that such
acquisition would not cause such beneficial ownership to exceed 15% or cause a
Distribution Date (as defined below), or (B) otherwise inadvertently acquires
beneficial ownership of greater than 15% of the outstanding Common Shares, and
(iii) any "Grandfathered Stockholder." A Grandfathered Stockholder is defined as
any person or group (including any associate and affiliate of such person or
group) who or which holds at the date of the Rights Agreement greater than 15%
of the outstanding Common Shares, unless such person or group (alone or together
with any associate or affiliate of such person or group) without the prior
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written approval of the Board of Directors, acquires or proposes to acquire
beneficial ownership of additional Common Shares which exceed 1% of the Common
Shares then outstanding. Notwithstanding the foregoing, if any person that is
excluded as an "Acquiring Person" due to clause (ii) above does not reduce its
beneficial ownership to 15% or less by the fifth business day after notice from
the Company that such person's beneficial ownership of Common Shares exceeds
15%, such person shall, at the end of such 5-day period, become an "Acquiring
Person."
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 Shares as of the close of business on the
Distribution Date (and to each initial record holder of certain Common Shares
originally issued after the Distribution Date), and such separate Rights
Certificates alone will therefore evidence the Rights.
The Rights are not exercisable until the Distribution Date and will
expire on November 23, 2008 (the "Expiration Date") unless earlier redeemed by
the Company as described below.
The number of Preferred Shares or other securities issuable upon
exercise of a Right, the Purchase Price, the Redemption Price (as defined below)
and the number of Rights associated with each outstanding Common Share are all
subject to adjustment by the Board of Directors of the Company in the event of
any change in the Common Shares or the Preferred Shares, whether by reason of
stock dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred Shares, as the case
may be (other than the distribution of Rights or regular quarterly cash
dividends), or otherwise.
The Preferred Shares are authorized to be issued in fractions which
are an integral multiple of one one-thousandth (1/1000th) of a Preferred Share.
The Company may, but is not required to, issue fractions of shares upon the
exercise of Rights, and, in lieu of fractional shares, the Company may issue
certificates or utilize a depositary arrangement as provided by the terms of the
Preferred Shares and, in the case of fractions other than one one-thousandth
(1/1000th) of a Preferred Share or integral multiples thereof, may make a cash
payment based on the market price of such shares.
At such time as there is an Acquiring Person, the Rights will
entitle each holder of a Right (other than such Acquiring Person or an affiliate
or associate of such Acquiring Person) to purchase, for the Purchase Price, that
number of one one-thousandths (1/1000ths) of a Preferred Share equivalent to the
number of Common Shares which at the time of such event would have a market
value of twice the Purchase Price.
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If the Company is acquired in a merger or other business combination
by an Acquiring Person or an associate or affiliate of an Acquiring Person that
is a publicly traded corporation, or if 50% or more of the Company's assets or
assets representing 50% or more of the Company's revenues or cash flow are sold,
leased, exchanged or otherwise transferred (in one or more transactions) to an
Acquiring Person or an associate or affiliate of an Acquiring Person that is a
publicly traded corporation, each Right will entitle its holder (subject to the
next paragraph) to purchase, for the Purchase Price, that number of common
shares of such corporation which at the time of the transaction would have a
market value of twice the Purchase Price. If the Company is acquired in a merger
or other business combination by an Acquiring Person or an associate or
affiliate of an Acquiring Person that is not a publicly traded entity, or if 50%
or more of the Company's assets or assets representing 50% or more of the
Company's revenues or cash flow are sold, leased, exchanged or otherwise
transferred (in one or more transactions) to an Acquiring Person or an associate
or affiliate of an Acquiring Person that is not a publicly traded entity, each
Right will entitle its holder (subject to the next paragraph) to purchase for
the Purchase Price at such holder's option, (i) that number of shares of the
surviving corporation in the transaction with such entity (which surviving
corporation could be the Company) which at the time of the transaction would
have a book value of twice the Purchase Price, (ii) that number of shares of
such entity which at the time of the transaction would have a book value of
twice the Purchase Price, or (iii) if such entity has an affiliate which has
publicly traded common shares, that number of common shares of such affiliate
which at the time of the transaction would have a market value of twice the
purchase price.
Any Rights that are, at any time, beneficially owned by an Acquiring
Person (or any affiliate or associate of an Acquiring Person) will be null and
void and nontransferable and any holder of any such Right (including any
purported transferee or subsequent holder) will be unable to exercise or
transfer any such Right.
At any time prior to the earlier of (i) such time as a Person
becomes an Acquiring Person and (ii) the Expiration Date, the Board of Directors
may redeem the Rights in whole, but not in part, at a price (in cash or Common
Shares or other securities of the Company deemed by the Board of Directors to be
at least equivalent in value) of $.001 per Right, subject to adjustment as
provided in the Rights Agreement (the "Redemption Price"); provided, however,
that, for the 120-day period after any date of a change (resulting from a proxy
or consent solicitation) in a majority of the Board of Directors of the Company
in office at the commencement of such solicitation, the Rights may only be
redeemed if (A) there are directors then in office who were in office at the
commencement of such solicitation and (B) the Board of Directors of the Company,
with the concurrence of a majority of such directors then in office, determines
that such redemption is, in its judgment, in the best interests of the Company
and its shareholders.
Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights, and without any further action and without any
notice, the right to
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exercise the Rights will terminate and the only right of the holders of the
Rights will be to receive the Redemption Price.
After there is an Acquiring Person, the Board of Directors may elect
to exchange each Right (other than Rights that shall have become null and void
and nontransferable as described above) for consideration per Right consisting
of one-half of the securities that would be issuable at such time upon the
exercise of one Right pursuant to the terms of the Rights Agreement.
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.
At any time prior to the Distribution Date, the Company may, without
the approval of any holder of the Rights, supplement or amend any provision of
the Rights Agreement (including the date on which the Distribution Date shall
occur, the time during which the Rights may be redeemed or the terms of the
Preferred Shares), except that no supplement or amendment shall be made which
reduces the Redemption Price (other than pursuant to certain adjustments
therein) or provides for an earlier Expiration Date. Among other permitted
amendments, the Board may reduce the threshold for becoming an Acquiring Person
or otherwise causing the Distribution Date to occur from 15% to any percentage
not less than the greater of (a) the highest percentage known by the Company to
be beneficially owned by any person or group (other than the Company, its
subsidiaries, any employee benefit plan of the Company and any Grandfathered
Stockholder) or (b) 10%. However, during the 120-day period after any date of a
change (resulting from a proxy or consent solicitation) in a majority of the
Board of Directors of the Company in office at the commencement of such
solicitation, this Rights Agreement may be supplemented or amended only if (A)
there are directors then in office who were in office at the commencement of
such solicitation and (B) the Board of Directors of the Company, with the
concurrence of a majority of such directors then in office, determines that such
supplement or amendment is, in their judgment, in the best interests of the
Company and its shareholders.
The Rights have effects that will render difficult an acquisition of
the Company without the approval of the Company's Board of Directors. The Rights
will cause substantial dilution to a person or group that attempts to acquire
the Company without conditioning the offer on substantially all the Rights being
acquired. The Rights will not interfere with any merger or other business
combination approved by the Board of Directors of the Company since the Board of
Directors of the Company may, at its option, at any time prior to a person
becoming an Acquiring Person, redeem all, but not less than all, of the then
outstanding Rights at the Redemption Price.
A copy of the Rights Agreement is available free of charge from the
Company upon written request. This description of the Rights is qualified in its
entirety by reference to the Rights Agreement, which is incorporated herein by
reference.
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ITEM 2. Exhibits
1. Rights Agreement, dated as of November 23, 1998, by and between COHR
Inc. and ChaseMellon Shareholder Services LLC, as Rights Agent.
2. Certificate of the Designations, Preferences, and Rights of Series A
Junior Participating Cumulative Preferred Stock of COHR Inc., dated
November 25, 1998.
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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 hereunto duly authorized.
COHR Inc.
(Registrant)
By: /s/ RAYMOND E. LIST
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Raymond E. List
President and Chief Executive Officer
Date: November 25, 1998
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EXHIBIT 1
RIGHTS AGREEMENT
Dated as of November 23, 1998
between
COHR INC.
and
CHASEMELLON SHAREHOLDER SERVICES LLC,
as Rights Agent
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TABLE OF CONTENTS
<TABLE>
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PAGE
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SECTION 1. Certain Definitions................................................... 2
SECTION 2. Appointment of Rights Agent........................................... 13
SECTION 3. Issue of Rights and Right Certificates................................ 14
SECTION 4. Form of Right Certificates............................................ 17
SECTION 5. Execution, Countersignature and Registration.......................... 17
SECTION 6. Transfer, Split-Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates;
Uncertificated Rights................................................. 19
SECTION 7. Exercise of Rights; Expiration Date of Rights......................... 20
SECTION 8. Cancellation and Destruction of Right Certificates.................... 24
SECTION 9. Reservation and Availability of Preferred Shares...................... 24
SECTION 10. Preferred Shares Record Date.......................................... 27
SECTION 11. Adjustments in Rights After There Is an Acquiring Person; Exchange
of Rights; Business Combinations...................................... 28
SECTION 12. Certain Adjustments................................................... 36
SECTION 13. Certificate of Adjustment............................................. 38
SECTION 14. Additional Covenants.................................................. 38
SECTION 15. Fractional Rights and Fractional Shares............................... 39
SECTION 16. Rights of Action...................................................... 41
SECTION 17. Transfer and Ownership of Rights and Right Certificates............... 42
SECTION 18. Right Certificate Holder Not Deemed a Stockholder..................... 42
SECTION 19. Concerning the Rights Agent........................................... 43
</TABLE>
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TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
SECTION 20. Merger or Consolidation or Change of Rights Agent..................... 44
SECTION 21. Duties of Rights Agent................................................ 45
SECTION 22. Change of Rights Agent................................................ 49
SECTION 23. Issuance of Additional Rights and Right Certificates.................. 51
SECTION 24. Redemption and Termination............................................ 52
SECTION 25. Notices............................................................... 54
SECTION 26. Supplements and Amendments............................................ 55
SECTION 27. Successors............................................................ 57
SECTION 28. Benefits of Rights Agreement; Determinations and Actions by the
Board of Directors, etc............................................... 57
SECTION 29. Severability.......................................................... 58
SECTION 30. Governing Law......................................................... 58
SECTION 31. Counterparts; Effectiveness........................................... 59
SECTION 32. Descriptive Headings.................................................. 59
Signatures.......................................................................... 61
</TABLE>
EXHIBIT A Certificate of the Designations, Preferences and Rights of Series
A Junior Participating Cumulative Preferred Stock of COHR Inc.
EXHIBIT B Form of Right Certificate
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THIS RIGHTS AGREEMENT dated as of November 23, 1998 (the "Rights
Agreement"), is executed by and between COHR Inc., a Delaware corporation (the
"Company"), and ChaseMellon Shareholder Services LLC, a New Jersey limited
liability company, as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one Right (as hereinafter defined) for each share of Common Stock,
no par value per share, of the Company (the "Common Stock") outstanding at the
Close of Business (as hereinafter defined) on December 21, 1998 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of this Rights Agreement) with
respect to each share of Common Stock that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date or
the Expiration Date (as such terms are hereinafter defined); provided however,
that Rights may be issued with respect to shares of Common Stock that shall
become outstanding after the Distribution Date and prior to the earlier of the
Redemption Date or the Expiration Date in accordance with the provisions of
Section 23. Each Right shall initially represent the right to purchase one
one-thousandth (1/1000th) of one share of Series A Junior Participating
Cumulative Preferred Stock, no par value per share, of the Company (the
"Preferred Shares"), having the rights, preferences, privileges, and
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restrictions set forth in the Certificate of Designations attached as Exhibit A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 15% of the Common Shares then outstanding, but
shall not include (a) the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any of its Subsidiaries, or any Person holding
Common Shares for or pursuant to the terms of any such employee benefit plan;
(b) any such Person who has become such a Beneficial Owner solely because (i) of
a change in the aggregate number of Common Shares outstanding since the last
date on which such Person acquired Beneficial Ownership of any Common Shares or
(ii) (A) it acquired such Beneficial Ownership in the good faith belief that
such acquisition would not (x) cause such Beneficial Ownership to exceed 15% of
the Common Shares then outstanding and such Person relied in good faith in
computing the percentage of its Beneficial Ownership on publicly filed reports
or documents of the Company which are inaccurate or out-of-date or (y) otherwise
cause a Distribution Date or the adjustment provided for in Section 11(a) to
occur, or (B) it otherwise inadvertently acquired such Beneficial Ownership; or
(c) any Grandfathered Stockholder. Notwithstanding clause (b) of the prior
sentence, if any Person
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that is not an Acquiring Person due to such clause (b) does not reduce its
percentage of Beneficial Ownership of Common Shares to 15% or less by the Close
of Business on the fifth Business Day after notice from the Company (the date of
notice being the first day) that such Person's Beneficial Ownership of Common
Shares so exceeds 15%, such Person shall, at the end of such five Business Day
period, become an Acquiring Person (and such clause (b) shall no longer apply to
such Person). For purposes of this definition, the determination whether any
Person acted in "good faith" or "inadvertently" shall be conclusively determined
by the Board of Directors of the Company, acting by a vote of those directors of
the Company whose approval would be required to redeem the Rights under Section
24.
"Affiliate" and "Associate" when used with reference to any Person,
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
of this Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", and shall be deemed to have "Beneficial Ownership"
of, any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Rights Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the
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passage of time) pursuant to any agreement, arrangement or understanding
(written or oral) 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 or to have Beneficial Ownership of, securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange thereunder, or
(B) the right to vote pursuant to any agreement, arrangement or
understanding (written or oral), provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to beneficially own or to have
Beneficial Ownership of, any security if (1) the agreement, arrangement or
understanding (written or oral) to vote such security arises solely from a
revocable proxy or consent given to such Person in response to a public
proxy or consent solicitation made pursuant to and in accordance with, the
applicable rules and regulations under the Exchange Act and (2) the
beneficial ownership of such security is not also then reportable 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 with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (written or
oral), for the purpose of acquiring, holding, voting (except pursuant to a
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revocable proxy as described in clause (ii)(B)(1) of this definition) or
disposing of any securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition shall cause
a Person ordinarily engaged in business as an underwriter of securities to be
the "Beneficial Owner" of, or to "beneficially own", or to have "Beneficial
Ownership" of, any securities acquired in a bona fide firm commitment
underwriting pursuant to an underwriting agreement with the Company.
"Book Value", when used with reference to Common Shares issued by
any Person, shall mean the amount of equity of such Person applicable to each
Common Share, determined (i) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value is to be
determined, (ii) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (iii) after giving
effect to (A) the exercise of all rights, actions and warrants to purchase such
Common Shares (other than the Rights), and the conversion of all securities
convertible into such Common Shares, at an exercise or conversion price, per
Common Share, which is less than such Book Value before giving effect to such
exercise or conversion (whether or not exercisability or convertibility is
conditioned upon occurrence of a future event), (B) all dividends and other
distributions on the capital stock of such Person declared prior to the date as
of which such Book Value is to be determined and to be paid or made after such
date, and (C) any other agreement, arrangement or
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understanding (written or oral), or transaction or other action prior to the
date as of which such Book Value is to be determined which would have the effect
of thereafter reducing such Book Value.
"Business Combination" shall have the meaning set forth in Section
11(c)(I).
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in the State of
California are authorized or obligated by law or executive order to close.
"Certificate of Designations" shall mean the Certificate of
Designations of Series A Junior Participating Cumulative Preferred Stock setting
forth the rights, preferences, privileges, and restrictions of such series of
Preferred Stock of the Company, a copy of which is attached as Exhibit A.
"Close of Business" on any given date shall mean 5:00 p.m., Pacific
time (Standard or Daylight Savings, as generally in effect at the time), on such
date; provided, however, that, if such date is not a Business Day, "Close of
Business" shall mean 5:00 p.m., Pacific time (Standard or Daylight Savings, as
generally in effect at the time), on the next succeeding Business Day.
"Common Shares", when used with reference to the Company prior to a
Business Combination, shall mean the shares of Common Stock of the Company or
any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares", when used with reference to
any Person (other than the Company prior to a Business Combination) shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests
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in such Person (if such Person is not a corporation) of any class or series, the
terms of which do not limit (as a maximum amount and not merely in proportional
terms) the amount of dividends or income payable or distributable on such class
or series or the amount of assets distributable on such class or series upon any
voluntary or involuntary liquidation, dissolution or winding up of such Person
and do not provide that such class or series is subject to redemption at the
option of such Person, or any shares of capital stock or units of equity
interests into which the foregoing shall be reclassified or changed; provided,
however, that, if at any time there shall be more than one such class or series
of capital stock or equity interests of such Person, "Common Shares" of such
Person shall include all such classes and series substantially in the proportion
of the total number of shares or other units of each such class or series
outstanding at such time.
"Common Stock" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Company" shall have the meaning set forth in the heading of this
Rights Agreement; provided, however, that, if there is a Business Combination,
"Company" shall have the meaning set forth in Section 11(c)(III).
"Control", when used with respect to any Person, shall mean the
power to direct the management and policies of such Person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or understanding (written or
oral) with one or more other Persons by or through stock ownership, agency or
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otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"Distribution Date" shall have the meaning set forth in Section
3(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
"Exchange Consideration" shall have the meaning set forth in Section
11(b)(I).
"Expiration Date" shall have the meaning set forth in Section 7(a).
"Grandfathered Stockholder" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such Person, at the date
of this Rights Agreement was the Beneficial Owner of more than 15% of the Common
Shares outstanding unless such Person, alone or together with any Affiliates or
Associates of such Person, without the prior written approval of the Company's
Board of Directors, acquires or proposes to acquire beneficial ownership of
additional Common Shares which exceed 1% of the Common Shares then outstanding.
"Major Part", when used with reference to the assets of the Company
and its Subsidiaries as of any date, shall mean assets (i) having a fair market
value aggregating 50% or more of the total fair market value of all the assets
of the Company and its Subsidiaries (taken as a whole) as of the date in
question (ii) accounting for 50% or more of the total value (net of depreciation
and amortization) of all the assets of the Company and its Subsidiaries (taken
as a whole) as would be shown on a consolidated
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or combined balance sheet of the Company and its Subsidiaries as of the date in
question, prepared in accordance with generally accepted accounting principles
then in effect, or (iii) accounting for 50% or more of the total amount of
earnings before interest, taxes, depreciation and amortization, or of revenues,
of the Company and its Subsidiaries (taken as a whole) as would be shown on, or
derived from, a consolidated or combined statement of income of the Company and
its Subsidiaries for the period of 12 months ending on the last day of the
Company's monthly accounting period next preceding the date in question,
prepared in accordance with generally accepted accounting principles then in
effect.
"Market Value" when used with reference to Common Shares on any
date, shall be deemed to be the average of the daily closing prices, per share,
of such Common Shares for the period which is the shorter of (1) 30 consecutive
Trading Days immediately prior to the date in question or (2) the number of
consecutive Trading Days beginning on the Trading Day immediately after the date
of the first public announcement of the event requiring a determination of the
Market Value and ending on the Trading Day immediately prior to the record date
of such event; provided, however, that, in the event that the Market Value of
such Common Shares is to be determined in whole or in part during a period
following the announcement by the issuer of such Common Shares of any action of
the type described in Section 12(a) that would require an adjustment thereunder,
then and in each such case the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on the market price
of such Common Shares. The closing price for each Trading Day shall be the
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average of the closing bid and asked quotations with respect to a share of such
securities listed on the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ"), or, if such securities are not quoted on
such system or if such securities are not listed on such system, on the
principal United States securities exchange registered under the Exchange Act
(or any recognized foreign stock exchange) on which such securities are listed,
or, if such securities are not listed on any such exchange, the average of the
closing bid and asked quotations with respect to a share of such securities on
such other system then in use, or if no such quotations are available, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in such securities selected by the Board of
Directors of the Company. If on any such Trading Day no market maker is making a
market in such securities, the closing price of such securities on such Trading
Day shall be deemed to be the fair value of such securities 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, the holders of Rights and all other Persons); provided,
however, that for the purpose of determining the closing price of the Preferred
Shares for any Trading day on which there is no such market maker for the
Preferred Shares the closing price on such Trading Day shall be deemed to be the
Formula Number (as defined in the Certificate of Determination) times the
closing price of the Common Shares of the Company on such Trading Day.
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<PAGE> 14
"Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.
"Principal Party" shall mean the Surviving Person in a Business
Combination; provided, however, that, if such Surviving Person is a direct or
indirect Subsidiary of any other Person, "Principal Party" shall mean the Person
which is the ultimate parent of such Surviving Person and which is not itself a
Subsidiary of another Person. In the event ultimate control of such Surviving
Person is shared by two or more Persons, "Principal Party" shall mean that
Person that is immediately controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall mean twenty
dollars ($20.00), as such amount may from time to time be adjusted as provided
herein, and shall be payable in lawful money of the United States of America.
All references herein to the Purchase Price shall mean the Purchase Price as in
effect at the time in question.
"Record Date" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement
"Redemption Date" shall have the meaning set forth in Section 24(a).
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<PAGE> 15
"Redemption Price" with respect to each right shall mean $.001, as
such amount may from time to time be adjusted in accordance with Section 12. All
references herein to the Redemption Price shall mean the Redemption Price as in
effect at the time in question.
"Registered Common Shares" shall mean Common Shares which are, as of
the date of consummation of a Business Combination, and have continuously been
for the 12 months immediately preceding such date, registered under Section 12
of the Exchange Act.
"Right Certificate" shall mean a certificate evidencing a right in
substantially the form attached as Exhibit B.
"Rights" shall mean the rights to purchase Preferred Shares (or
other securities) as provided in this Rights Agreement.
"Securities Act" shall mean the Securities Act of 1933, as in effect
on the date in question, unless otherwise specifically provided.
"Subsidiary" shall mean a Person, at least a majority of the total
outstanding voting power (being the power under ordinary circumstances, and not
merely upon the happening of a contingency, to vote in the election of directors
of such Person, if such Person is a corporation, or to participate in the
management and control of such Person, if such Person is not a corporation) of
which is owned, directly or indirectly, by another Person or by one or more
other Subsidiaries of such other Person or by such other Person and one or more
other Subsidiaries of such other Person.
"Surviving Person" shall mean (1) the Person which is the continuing
or surviving Person in a consolidation or merger specified in Section
11(c)(I)(i) or 11(c)(I)(ii) or (2) the Person
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<PAGE> 16
to which the Major Part of the assets of the Company and its Subsidiaries is
sold, leased, exchanged or otherwise transferred or disposed of in a transaction
specified in Section 11(c)(I)(iii); provided, however, that, if the Major Part
of the assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in one or more related transactions
specified in Section 11(c)(I)(iii) to more than one Person, the "Surviving
Person" in such case shall mean the Person that acquired assets of the Company
and/or its Subsidiaries with the greatest fair market value in such transaction
or transactions.
"Trading Day" shall mean a day on which the principal national
securities exchange or national market system (or principal recognized foreign
stock exchange, as the case may be) on which any securities or Rights, as the
case may be, are listed or admitted to trading is open for the transaction of
business or, if the securities or Rights in question are not listed or admitted
to trading on any national securities exchange or national market system (or
recognized foreign stock exchange, as the case may be), a Business Day.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights Agents). In
the event the Company appoints one or more
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<PAGE> 17
co-Rights Agent, the respective duties of the Rights Agent and any co-Rights
Agents shall be as the Company shall determine.
SECTION 3. Issue of Rights and Right Certificates.
(a) One Right shall be associated with each Common Share outstanding
on the Record Date, each additional Common Share that shall become outstanding
between the Record Date and the earliest of the Distribution Date, the
Redemption Date or the Expiration Date and each additional Common Share with
which Rights are issued after the Distribution Date but prior to the earlier of
the Redemption Date or the Expiration Date as provided in Section 23; provided,
however, that if the number of outstanding Rights are combined into a smaller
number of outstanding Rights pursuant to Section 12(a), the appropriate
fractional Right determined pursuant to such Section shall thereafter be
associated with each such Common Share.
(b) Until the earlier of (i) such time as the Company learns that a
Person has become an Acquiring Person or (ii) the Close of Business on such
date, if any, as may be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any of
its Subsidiaries, or any Person holding Common Shares for or pursuant to the
terms of any such employee benefit plan) for outstanding Common Shares, if upon
consummation of such tender or exchange offer such Person could be the
Beneficial Owner of more than 15% of the outstanding Common Shares (the Close of
Business on the earlier of such dates being the "Distribution Date"), (x) the
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<PAGE> 18
Rights will be evidenced by the certificates for Common Shares registered in the
names of the holders thereof and not by separate Right Certificates and (y) the
Rights, including the right to receive Right Certificates, will be transferable
only in connection with the transfer of Common Shares. As soon as practicable
after the Distribution Date the Rights Agent will send, by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate evidencing (subject to Section 7(e)) one whole
Right for each Common Share (or for the number of Common Shares with which one
whole Right is then associated if the number of Rights per Common Share held by
such record holder has been adjusted in accordance with the proviso in Section
3(a)). If the number of Rights associated with each Common Share has been
adjusted in accordance with the proviso in Section 3(a), at the time of
distribution of the Right Certificates the Company may make any necessary and
appropriate rounding adjustments so that Right Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Right in accordance with Section 15(a). As of and after the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(c) With respect to any certificate for Common Shares, until the
earliest of the Distribution Date, the Redemption Date or the Expiration Date,
the Rights associated with the Common Shares represented by any such certificate
shall be evidenced by such certificate alone, the registered holders of the
Common Shares shall also be the registered holders of the associated Rights and
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<PAGE> 19
the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
(d) Certificates issued for Common Shares after the Record Date
(including without limitation, upon transfer or exchange of outstanding Common
Shares), but prior to the earliest of the Distribution Date, the Redemption Date
or the Expiration Date, may have printed on, written on or otherwise affixed to
them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement dated as of November 23,
1998, as it may be amended from time to time (the "Rights Agreement"),
between COHR Inc. (the "Company") and ChaseMellon Shareholder Services
LLC, as Rights Agent (the "Rights Agent"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances,
as set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this certificate.
The Rights Agent will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request
therefor. Rights beneficially owned by Acquiring Persons or their
Affiliates or Associates (as such terms are defined in the Rights
Agreement) and by any subsequent holder of such Rights are null and void
and nontransferable.
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<PAGE> 20
Notwithstanding this paragraph (d), the omission of a legend shall not affect
the enforceability of any part of this Rights Agreement or the rights of any
holder of Rights.
SECTION 4. Form of Right Certificates. The Right Certificates (and
the form of election to purchase and form of assignment to be printed on the
reverse side thereof) shall be in substantially the form set forth as Exhibit B
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 Rights 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 Sections 7, 11 and 23, the Right Certificates,
whenever issued, shall be dated as of the Distribution Date, and on their face
shall entitle the holders thereof to purchase such number of Preferred Shares as
shall be set forth therein for the Purchase Price set forth therein, subject to
adjustment from time to time as herein provided.
SECTION 5. Execution, Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Treasurer, the Chief Financial
Officer or a Vice President (whether or not preceded by any additional title) of
the Company either manually or by facsimile signature, and have affixed thereto
the Company's seal or a facsimile thereof which shall be attested by the
Secretary, an
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<PAGE> 21
Assistant Secretary or a Vice President (whether or not preceded by any
additional title, provided that such Vice President shall not have also executed
the Right Certificates) of the Company, either manually or by facsimile
signature. The Right Certificates shall be manually countersigned by the Rights
Agent and shall not be valid or obligatory for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such an officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates may nevertheless 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 Right Certificates had not ceased to be such an
officer of the Company; and any Right Certificate may be signed on behalf of the
Company by any person who, at the actual date of execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of execution of this Rights Agreement any such
person was not such an officer of the Company.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced by each of the Right Certificates, the certificate number of
each of the Right Certificates and the date of each of the Right Certificates.
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<PAGE> 22
SECTION 6. Transfer, Split-Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates;
Uncertificated Rights.
(a) Subject to the provisions of Sections 7(e) and 15, at any time
after the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Expiration Date, any Right Certificate or
Right Certificates may be transferred, split-up, combined or exchanged for
another Right Certificate or Right Certificates representing, in the aggregate,
the same number of Rights as the Right Certificate or Right Certificates
surrendered then represented. Any registered holder desiring to transfer,
split-up, combine or exchange any Right Certificate shall make such request in
writing delivered to the Rights Agent and shall surrender the Right Certificate
or Right Certificates to be transferred, split-up, combined or exchanged at the
principal office of the Rights Agent; provided, however, that neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any Rights Certificate surrendered for transfer until
the registered holder shall have completed and signed the certification
contained in the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Sections 7(e) and 15, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to
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<PAGE> 23
cover any tax or governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a valid Right Certificate, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make a new
Right Certificate of like tenor and deliver such new Right Certificate to the
Rights Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
SECTION 7. Exercise of Rights; Expiration Date of Rights.
(a) Subject to Section 7(e) and except as otherwise provided herein
(including Section 11), each Right shall entitle the registered holder thereof,
upon exercise thereof as provided herein, to purchase for the Purchase Price, at
any time after the Distribution Date and at or prior to the earlier of (i) the
Close of Business on the 10th anniversary of the date of this Rights Agreement
(the Close of Business on such date being the "Expiration
20
<PAGE> 24
Date"), or (ii) the Redemption Date, one one-thousandth (1/1000th) of a
Preferred Share, subject to adjustment from time to time as provided in Sections
11 and 12.
(b) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided in Section 7(e) or
elsewhere herein) in whole or in part at any time after the Distribution Date,
upon surrender of the Right Certificate with the form of election to purchase on
the reverse side thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the Purchase Price for each
one one-thousandth (1/1000th) of a Preferred Share as to which the Rights are
exercised at or prior to the earlier of (i) the Expiration Date or (ii) the
Redemption Date.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares to be purchased together
with an amount equal to any applicable transfer tax, in lawful money of the
United States of America, in cash or by certified check or money order payable
to the order of the Company, the Rights Agent shall thereupon (i) either (A)
promptly requisition from any transfer agent of the Preferred Shares (or make
available if the Rights Agent is the transfer agent) certificates for the number
of Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests or (B) if the
Company shall have elected to deposit the Preferred Shares with a depositary
agent under a depositary arrangement, promptly requisition from the depositary
agent depositary receipts
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<PAGE> 25
representing the number of one one-thousandths (1/1000ths) of a Preferred Share
to be purchased (in which case certificates for the Preferred Shares to be
represented by such depositary receipts shall be deposited by the transfer agent
with the depositary agent) and the Company will direct the depositary agent to
comply with all such requests, (ii) when appropriate, promptly requisition from
the Company, the amount of cash 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 Right Certificate registered in such
name or names as may be designated any such holder and (iv) when appropriate,
after receipt promptly deliver such cash to or upon the order of the registered
holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions of
Section 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by an Acquiring
Person or any Affiliate or Associate of an Acquiring Person shall be null and
void and nontransferable, and any holder of any such Right (including any
purported transferee or subsequent holder) shall not have any right to exercise
or transfer any such Right.
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<PAGE> 26
(f) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Right
Certificates upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(g) The Company may temporarily suspend, for a period of time not to
exceed 90 calendar days after the Distribution Date the exercisability of the
Rights in order to prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration statement
to become effective; provided, however, that no such suspension shall remain
effective after, and the Rights shall without any further action by the Company
or any other Person become exercisable immediately upon, the effectiveness of
such registration statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue a further public announcement at such time
as the suspension is no longer in effect. Notwithstanding any provision herein
to the contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification under the blue sky or securities laws of such
23
<PAGE> 27
jurisdiction shall not have been obtained or the exercise of the Rights shall
not be permitted in such jurisdiction under applicable law.
SECTION 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right Certificate
representing rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered or presented to
the Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by 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 Right Certificate purchased
or acquired by the Company. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
or any authorized and issued Preferred Shares held in its treasury, free from
preemptive rights or any
24
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right of first refusal, a number of Preferred Shares sufficient to permit the
exercise in full of all outstanding Rights.
(b) In the event that there shall not be sufficient Preferred Shares
issued but not outstanding or authorized but unissued to permit the exercise or
exchange of Rights in accordance with Section 11, the Company covenants and
agrees that it will take all such action as may be necessary to authorize
additional Preferred Shares for issuance upon the exercise or exchange of Rights
pursuant to Section 11; provided, however, that if the Company is unable to
cause the authorization of additional Preferred Shares, then the Company shall,
or in lieu of seeking any such authorization, the Company may, to the extent
necessary and permitted by applicable law and any agreements or instruments in
effect prior to the Distribution Date to which it is a party, (A) upon surrender
of a Right, pay cash equal to the Purchase Price in lieu of issuing Preferred
Shares and requiring payment therefor, (B) upon due exercise of a Right and
payment of the Purchase Price for each Preferred Share as to which such Right is
exercised, issue equity and/or debt securities having a value equal to the value
of the Preferred Shares which otherwise would have been issuable pursuant to
Section 11, which value shall be determined by a nationally recognized
investment banking firm selected by the Board or (C) upon due exercise of a
Right and payment of the Purchase Price for each Preferred Share as to which
such Right is exercised distribute a combination of Preferred Shares, cash
and/or other equity and/or debt securities having an aggregate value equal to
the value of the Preferred Shares which otherwise would have been issuable
pursuant to Section 11, which value shall be determined by
25
<PAGE> 29
a nationally recognized investment banking firm selected by the Board. To the
extent that any legal or contractual restrictions (pursuant to agreements or
instruments in effect prior to the Distribution Date to which it is party)
prevent the Company from paying the full amount payable in accordance with the
foregoing sentence, the Company shall pay to holders of the Rights as to which
such payments are being made all amounts which are not then restricted on a pro
rata basis as such payments become permissible under such legal or contractual
restrictions until such payments have been paid in full.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares delivered upon
exercise or exchange of Rights shall at the time of delivery of the certificates
for such Preferred Shares (subject to payment of the Purchase Price) be duly and
validly authorized and issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to be listed on any national securities exchange or
national market system, the Company covenants and agrees to use its best efforts
to cause, from and after such time as the Rights become exercisable or
exchangeable, all Preferred Shares reserved for such issuance to be listed on
such securities exchange or national market system upon official notice of
issuance upon such exercise or exchange.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all Federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of Right Certificates or
of any Preferred
26
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Shares or Common Shares or other securities upon the exercise or exchange of the
Rights. The Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or in respect of the issuance or delivery
of certificates for the Preferred Shares or Common Shares or other securities,
as the case may be, in a name other than, that of the registered holder of the
Right Certificate evidencing Rights surrendered for exercise or exchange or to
issue or deliver any certificates for Preferred Shares or Common Shares or other
securities, as the case may be, upon the exercise or exchange of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
SECTION 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares or Common Shares or other securities is
issued upon the exercise or exchange of Rights shall for all purposes be deemed
to have become the holder of record of the Preferred Shares or Common Shares or
other securities, as the case may be, represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such rights was duly surrendered and payment of any Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the transfer books of the Company for
the Preferred Shares or Common Shares or other securities, as the case may be,
are closed, such Person shall be deemed to have become the
27
<PAGE> 31
record holder of such Preferred Shares or Common Shares or other securities, as
the case may be, on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Shares
or Common Shares or other securities, as the case may be, are open.
SECTION 11. Adjustments in Rights After There Is an Acquiring
Person; Exchange of Rights; Business Combinations.
(a) Upon a Person becoming an Acquiring Person, proper provision
shall be made so that each holder of a Right, except as provided in Section
7(e), shall thereafter have a right to receive, upon exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement, such
number of one one-thousandths (1/1000ths) of a Preferred Share as shall equal
the result obtained by multiplying the Purchase Price by a fraction, the
numerator of which is the number of one one-thousandths (1/1000ths) of a
Preferred Share for which a Right is then exercisable and the denominator of
which is 50% of the Market Value of the Common Shares on the date on which a
Person becomes an Acquiring Person. As soon as practicable after a Person
becomes an Acquiring Person (provided the Company shall not have elected to make
the exchange permitted by Section 11(b)(I) for all outstanding Rights), the
Company covenants and agrees to use its best efforts to:
(I) prepare and file a registration statement under the Securities
Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights;
(II) cause such registration statement to become effective as soon
as practicable after such filing;
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(III) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date; and
(IV) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
(b)(I) The Board of Directors of the Company may, at its option, at
any time after a Person becomes an Acquiring Person, cause the Company to
mandatorily exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that shall have become null and void and
nontransferable pursuant to the provisions of Section 7(e)) for consideration
per Right consisting of one-half of the securities that would be issuable at
such time upon the exercise of one Right in accordance with Section 11(a) or, if
applicable, Section 9(b) (the consideration issuable per Right pursuant to this
Section 11(b)(I) being the "Exchange Consideration"). The Board of Directors of
the Company may, at its option, cause the Company to issue, in substitution for
Preferred Shares, Common Shares in an amount per Preferred Share equal to the
Formula Number (as defined in the Certificate of Determination) if there are
sufficient Common Shares issued but not outstanding or authorized but unissued.
If the Board of Directors of the Company elects to cause the Company to exchange
all the Rights for Exchange Consideration pursuant to this Section 11(b)(I)
prior to the physical distribution of the Rights Certificates, the Company may
distribute the Exchange Consideration in lieu of distributing Right
Certificates, in which case for purposes of this Rights Agreement
29
<PAGE> 33
holders of Rights shall be deemed to have simultaneously received and
surrendered for exchange Right Certificates on the date of such distribution.
(II) Any action of the Board of Directors of the Company ordering
the exchange of any Rights pursuant to Section 11(b)(I) shall be irrevocable
and, immediately upon the taking of such action and without any further action
and without any notice, the right to exercise any such Right pursuant to Section
11(a) shall terminate and the only right thereafter of a holder of such Right
shall be to receive the Exchange Consideration in exchange for each such Right
held by such holder or, if the Exchange Consideration shall not have been paid
or issued, to exercise any such Right pursuant to Section 11(c)(I). 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 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 the Rights for the Exchange Consideration 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 shall have become null and void and nontransferable pursuant
to the provisions of Section 7(e)) held by each holder of Rights.
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(c)(I) In the event that, following a Distribution Date, directly or
indirectly, any transactions specified in the following clause (i), (ii) or
(iii) of this Section 11(c)(I) (each such transaction being a "Business
Combination") shall be consummated:
(i) the Company shall consolidate with, or merge with and into, any
Acquiring Person or any Affiliate or Associate of an Acquiring Person;
(ii) any Acquiring Person or any Affiliate or Associate of an
Acquiring Person shall merge with and into the Company and, in connection
with such merger, all or part of the Common Shares shall be changed into
or exchanged for capital stock or other securities of the Company or of
any Acquiring Person or Affiliate or Associate of an Acquiring Person or
cash or any other property; or
(iii) the Company shall sell, lease, exchange or otherwise transfer
or dispose of (or one or more of its Subsidiaries shall sell, lease,
exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any Acquiring Person or any Affiliate
or Associate of an Acquiring Person,
then, in each such case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, the securities specified below (or, at such
holder's option, the securities specified in Section 11(a)):
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(A) If the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the Purchase
Price in accordance with the terms of this Rights Agreement, such number
of Registered Common Shares of such Principal Party, free and clear of all
liens, encumbrances or other adverse claims, as shall have an aggregate
Market Value equal to the result obtained by multiplying the Purchase
Price by two;
(B) If the Principal Party involved in such Business Combination
does not have Registered Common Shares outstanding, each Right shall
thereafter represent the right to receive, upon the exercise thereof for
the Purchase Price in accordance with the terms of this Rights Agreement,
at the election of the holder of such Right at the time of the exercise
thereof, any of:
(1) such number of Common Shares of the Surviving Person in
such Business Combination as shall have an aggregate Book Value
immediately after giving effect to such Business Combination equal
to the result obtained by multiplying the Purchase Price by two;
(2) such number of Common Shares of the Principal Party in
such Business Combination (if the Principal Party is not also the
Surviving Person in such Business Combination) as shall have an
aggregate Book Value immediately after giving effect to such
Business Combination equal to the result obtained by multiplying the
Purchase Price by two; or
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(3) if the Principal Party in such Business Combination is an
Affiliate of one or more Persons which has Registered Common Shares
outstanding, such number of Registered Common Shares of whichever of
such Affiliates of the Principal Party has Registered Common Shares
with the greatest aggregate Market Value on the date of consummation
of such Business Combination as shall have an aggregate Market Value
on the date of such Business Combination equal to the result
obtained by multiplying the Purchase Price by two.
(II) The Company shall not consummate any Business Combination
unless each issuer of Common Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Common Shares that
have not been issued or reserved for issuance (and which shall, when issued upon
exercise thereof in accordance with this Rights Agreement, be validly issued,
fully paid and nonassessable and free of preemptive rights, rights of first
refusal or any other restrictions or limitations on the transfer of ownership
thereof) to permit the exercise in full of the Rights in accordance with this
Section 11(c) and unless prior thereto:
(i) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights, shall be effective under
the Securities Act; and
(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights Agent a supplemental
agreement providing for the
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assumption by such issuer of the obligations set forth in this
Section 11(c) (including the obligation of such issuer to issue
Common Shares upon the exercise of Rights in accordance with the
terms set forth in Sections 11(c)(I) and 11(c)(III)) and further
providing that such issuer, at its own expense, will use its best
efforts to:
(1) cause a registration statement under the Securities
Act on an appropriate form, with respect to the Rights and the
Common Shares of such issuer purchasable upon exercise of the
Rights, to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the
Expiration Date;
(2) qualify or register the Rights and the Common Shares
of such issuer purchasable upon exercise of the Rights under
the blue sky or securities laws of such jurisdictions as may
be necessary or appropriate; and
(3) list the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights on each national
securities exchange on which the Common Shares were listed
prior to the consummation of the Business Combination or, if
the Common Shares were not listed on a national securities
exchange prior to the consummation of the Business
Combination, on a national securities exchange;
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(B) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement is a
valid, binding and enforceable agreement of such issuer; and
(C) filed with the Rights Agent a certificate of a nationally
recognized firm of independent accountants setting forth the number
of Common Shares of such issuer which may be purchased upon the
exercise of each Right after the consummation of such Business
Combination.
(III) After consummation of any Business Combination and subject to
the provisions of Section 11(c)(II), (i) each issuer of Common Shares for which
Rights may be exercised as set forth in this Section 11(c) shall be liable for,
and shall assume, by virtue of such Business Combination, all the obligations
and duties of the Company pursuant to this Rights Agreement, (ii) the term
"Company" shall thereafter be deemed to refer to such issuer, (iii) each such
issuer shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof (including the provisions of
Sections 11(a) and 11(c)) shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights, and (iv) the number of Common Shares of each such
issuer thereafter 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 of Sections 11 and 12 and the provisions of
Section 7, 9 and 10 with respect to the
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Preferred Shares shall apply, as nearly as reasonably may be, on like terms to
any such Common Shares.
SECTION 12. Certain Adjustments.
(a) To preserve the actual or potential economic value of the
Rights, if at any time after the date of this Rights Agreement there shall be
any change in the Common Shares or the Preferred Shares, whether by reason of
stock dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred Shares, as the case
may be (other than distribution of the Rights or regular quarterly cash
dividends) or otherwise, then, in each such event the Board of Directors of the
Company shall make such appropriate adjustments in the number of Preferred
Shares (or the number and kind of other securities) issuable upon exercise of
each Right, the Purchase Price and Redemption Price in effect at such time and
the number of Rights outstanding at such time (including the number of Rights or
fractional Rights associated with each Common Share) such that following such
adjustment such event shall not have had the effect of reducing or limiting the
benefits the holders of the Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section 12(a),
the holder of any Right thereafter exercised shall become entitled to receive
any securities other than Preferred Shares, thereafter the number of such
securities so receivable upon
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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 of
Sections 11 and 12 and the provisions of Sections 7, 9 and 10 with respect to
the Preferred Shares shall apply, as nearly as reasonably may be, on like terms
to any such other securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities relating
to a Right shall evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(d) Irrespective of any adjustment or change in the Purchase Price
or the number of Preferred Shares or number or kind of other securities issuable
upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms which were expressed in the
initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment 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 Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect 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
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receive such additional securities upon the occurrence of the event requiring
such adjustment.
SECTION 13. Certificate of Adjustment. Whenever an adjustment is
made as provided in Section 11 or 12, 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 Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate (or, prior to
the Distribution Date, of the Common Shares) in accordance with Section 25. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained.
SECTION 14. Additional Covenants.
(a) Notwithstanding any other provision of this Rights Agreement, no
adjustment to the number of Preferred Shares (or fractions of a share) or other
securities for which a Right is exercisable or the number of Rights outstanding
or associated with each Common Share or any similar or other adjustment shall be
made or be effective if such adjustment would have the effect of reducing or
limiting the benefits the holders of the Rights would have had absent such
adjustment, including, without limitation, the benefits under Section 11 and 12,
unless the terms of this Rights Agreement are amended so as to preserve such
benefits.
(b) The Company covenants and agrees that, after the Distribution
Date, except as permitted by Section 26, it will not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably
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<PAGE> 42
foreseeable that such action will reduce or otherwise limit the benefits the
holders of the Rights would have had absent such action, including, without
limitation, the benefits under Sections 11 and 12. Any action taken by the
Company during any period after any Person becomes an Acquiring Person but prior
to the Distribution Date shall be null and void unless such action could be
taken under this Section 14(b) from and after the Distribution Date. The Company
shall not consummate any Business Combination if any issuer of Common Shares for
which Rights may be exercised after such Business Combination in accordance with
Section 11(c) shall have taken any action that reduces or otherwise limits the
benefits the holders of the Rights would have had absent such action, including,
without limitation, the benefits under Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares.
(a) The Company may, but shall not be required to, issue fractions
of Rights or distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, the Company may pay to the registered holders of
the Right 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 purposes of this Section 15(a), the
current market value of a whole Right shall be the closing price of the Rights
(as determined pursuant to the second and third sentences of the definition of
Market Value contained in Section 1) for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise issuable.
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<PAGE> 43
(b) The Company may, but shall not be required to, issue fractions
of Preferred Shares upon exercise of the Rights or distribute certificates which
evidence fractional Preferred Shares. In lieu of fractional Preferred Shares,
the Company may elect to (i) utilize a depositary arrangement as provided by the
terms of the Preferred Shares or (ii) in the case of a fraction of a Preferred
Share (other than one one-thousandth (1/1000th) of a Preferred Share or any
integral multiple thereof), pay to the registered holders of Right 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 Preferred Share, if any
are outstanding and publicly traded (or the Formula Number times the current
market value of one Common Share if the Preferred Shares are not outstanding and
publicly traded). For purposes of this Section 15(b), the current market value
of a Preferred Share (or Common Share) shall be the closing price of a Preferred
Share (or Common Share) (as determined pursuant to the second and third
sentences of the definition of Market Value contained in Section 1) for the
Trading Day immediately prior to the date of such exercise. If, as a result of
an adjustment made pursuant to Section 12(a), the holder of any Right thereafter
exercised shall become entitled to receive any securities other than Preferred
Shares, the provisions of this Section 15(b) shall apply, as nearly as
reasonably may be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue fractions
of Common Shares upon exchange of Rights pursuant to Section 11(b), or to
distribute certificates which evidence fractional Common Shares. In lieu of such
fractional Common
40
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Shares, the Company may pay to the registered holders of the Right Certificates
with regard to which such fractional Common Shares would otherwise be issuable
an amount in cash equal to the same fraction of the current Market Value of one
Common Share as of the date on which a Person became an Acquiring Person.
(d) The holder of Rights by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right except as provided in this Section 15.
SECTION 16. Rights of Action.
(a) All rights of action in respect of this Rights Agreement are
vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares) 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 Right Certificate in the manner provided
in such Right Certificate and in this Rights 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 Rights Agreement and shall be entitled to specific
performance of the obligations of any Person under, and injunctive relief
against
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<PAGE> 45
actual or threatened violations of the obligations of any Person subject to,
this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the reasonable
costs and expenses, including attorneys' fees, incurred in such action.
SECTION 17. Transfer and Ownership of Rights and Right Certificates.
(a) Prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares.
(b) After the Distribution Date, the Right Certificates will be
transferable, subject to Section 7(e), 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.
(c) The Company and the Rights Agent may deem and treat the Person
in whose name a Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
SECTION 18. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote or receive
dividends or be deemed, for any
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<PAGE> 46
purpose, the holder of the Preferred Shares or of any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company, including, without
limitation, any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting stockholders, or to receive dividends or other distributions or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
SECTION 19. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Rights Agreement in reliance upon any Right
Certificate or certificate for the Common Shares or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent,
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<PAGE> 47
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged by the
proper Person or Persons.
SECTION 20. Merger or Consolidation or Change of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any corporation succeeding to
the stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Rights 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 would
be eligible for appointment as a successor Rights Agent under the provisions of
Section 22. In case, at the time such successor Rights Agent shall succeed to
the agency created by this Rights Agreement, any of the Right 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
Right Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
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(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and, in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Right
Certificates (or, prior to the Distribution Date, of the Common Shares), by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person) be
proved or established by the Company prior to taking, refraining from taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to
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be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer, a Vice President (whether or not
preceded by any additional title), the Treasurer or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or wilful 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 Rights Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights 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 Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require
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<PAGE> 50
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares 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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Chief Financial Officer, a Vice President
(whether or not preceded by any additional title), the Secretary or the
Treasurer of the Company, in connection with its duties and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may
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be interested or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not the Rights Agent under this Rights
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct provided reasonable care was exercised in the selection
and continued employment thereof.
(j) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage or expense (including reasonable
fees and expenses of legal counsel) which the Rights Agent may incur resulting
from its actions as Rights Agent pursuant to this Rights Agreement; provided,
however, that the Rights Agent shall not be indemnified or held harmless with
respect to any such loss, liability, damage or expense incurred by the Rights
Agent as a result of, or arising out of, its own negligence, bad faith or wilful
misconduct. In no case shall the Company be liable with respect to any action,
proceeding, suit or claim against the Rights Agent unless the Rights Agent shall
have notified the Company, by letter or by facsimile confirmed by letter, of the
assertion of any action, proceeding, suit or claim against the Rights Agent,
promptly after the Rights Agent shall have notice of any such assertion of an
action, proceeding, suit or
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claim or have been served with the summons or other first legal process giving
information as to the nature and basis of the action, proceeding, suit or claim.
The Company shall be entitled to participate at its own expense in the defense
of any such action, proceeding, suit or claim, and, if the Company so elects,
the Company shall assume the defense of any such action, proceeding, suit or
claim. In the event that the Company assumes such defense, the Company shall not
thereafter be liable for the fees and expenses of any additional counsel
retained by the Rights Agent, so long as the Company shall retain counsel
satisfactory to the Rights Agent, in the exercise of its reasonable judgment, to
defend such action, proceeding, suit or claim. The Rights Agent agrees not to
settle any litigation in connection with any action, proceeding, suit or claim
with respect to which it may seek indemnification from the Company without the
prior written consent of the Company.
SECTION 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and the Preferred Shares by registered
or certified mail, and to the holders of the Right Certificates (or, prior to
the Distribution Date, of the Common Shares) by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Shares and the Preferred Shares
by registered or certified mail, and to the holders of the Right Certificates
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(or, prior to the Distribution Date, of the Common Shares) by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (or, prior to the Distribution Date, of the
Common Shares) (who shall, with such notice, submit his Right Certificate or,
prior to the Distribution Date, the certificate representing his Common Shares,
for inspection by the Company), then the registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares) may apply
to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of the
United States or of the State of New York or California (or of any other state
of the United States so long as such corporation is authorized to conduct a
stock transfer or corporate trust business in the State of New York or
California), in good standing, having a principal office in the State of New
York or California, which is authorized under such laws to exercise stock
transfer or corporate trust 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 a least $100,000,000; provided
that the principal transfer agent for the Common Shares shall in any event be
qualified to be the Rights
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Agent. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
and the Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates (or, prior to the Distribution Date, of the
Common Shares). Failure to give any notice provided for in this Section 22,
however, or any defect therein shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 23. Issuance of Additional Rights and Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change made in accordance with the provisions of this
Rights Agreement. In addition, in connection with the issuance or sale of Common
Shares following the Distribution Date and prior to the earlier of the
Redemption Date and the Expiration Date, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee
51
<PAGE> 55
plan or arrangement, pursuant to a dividend reinvestment plan or stock purchase
plan related thereto, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company, and (b) may, in any other
case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (i) no such
Right Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 24. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) such time as a Person becomes an Acquiring
Person and (ii) the Expiration Date, order the redemption of all, but not fewer
than all, of the then outstanding Rights at the Redemption Price (the date of
such redemption being the "Redemption Date"), and the Company, at its option,
may pay the Redemption Price either in cash or Common Shares or other securities
of the Company deemed by the Board of Directors of the Company, in the exercise
of its sole discretion, to be at least equivalent in value to the Redemption
Price; provided, however, that, in addition to any other limitations contained
herein on the right to redeem outstanding Rights (including the occurrence of
any event or the expiration of any
52
<PAGE> 56
period after which the Rights may no longer be redeemed), for the 120-day period
after any date of a change (resulting from a proxy or consent solicitation) in a
majority of the Board of Directors of the Company in office at the commencement
of such solicitation, the Rights may only be redeemed if (A) there are directors
then in office who were in office at the commencement of such solicitation and
(B) the Board of Directors of the Company, with the concurrence of a majority of
such directors then in office, determines that such redemption is, in their
judgment, in the best interests of the Company and its stockholders.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, 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. Within 10 Business Days after the action of the Board of
Directors of the Company ordering the redemption of the Rights, the Company
shall give notice of such redemption to the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Each such notice of redemption will state the method by which payment of
the Redemption Price will be made. The notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not
the holder of Rights receives such notice. In any case, failure to give such
notice by mail, or any defect in
53
<PAGE> 57
the notice, to any particular holder of Rights shall not affect the sufficiency
of the notice to other holders of Rights.
SECTION 25. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares) to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
COHR Inc.
21540 Plummer Street
Chatsworth, California 91311
Attention: Corporate Secretary
Subject to the provisions of Section 22, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by the
holder of a Right Certificate (or, prior to the Distribution Date, of the Common
Shares) to or on the Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
ChaseMellon Shareholder Services LLC
Overpeck Centre
85 Challenger Road
Ridgefield Park, New Jersey 07660
Attention: Ms. Stacy Tankel
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate (or, prior
to the Distribution Date, of the Common
54
<PAGE> 58
Shares) shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares.
SECTION 26. Supplements and Amendments. At any time prior to the
Distribution Date and subject to the last sentence of this Section 26, the
Company may, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Rights Agreement without the approval of any holder
of the Rights. Without limiting the foregoing, the Company may, at any time
prior to the Distribution Date and subject to the last sentence of this Section
26, without the approval of any holder of the Rights, change the time during
which the Rights may be redeemed pursuant to Section 24, change any provision of
the Certificate of Determination, and/or lower the threshold set forth in the
definition of Acquiring Person in Section 1 and the threshold set forth in
Section 3(b) to not less than the greater of (i) any percentage greater than the
largest percentage of the Common Shares then outstanding known by the Company to
be beneficially owned by an Person (other than any Grandfathered Stockholder,
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any of its Subsidiaries, or any Person holding Common Shares for
or pursuant to the terms of any such employee benefit plan) and (ii) 10%. From
and after the Distribution Date and subject to applicable law, the Company may,
and the Rights Agent shall if the Company so directs, amend this Rights
Agreement without the approval of any holders of Right Certificates (i) to
55
<PAGE> 59
cure any ambiguity or to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision of this Rights
Agreement or (ii) to make any other provisions in regard to matters or questions
arising hereunder which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person). Any supplement or amendment adopted during any period after any Person
has become an Acquiring Person but prior to the Distribution Date shall be null
and void unless such supplement or amendment could have been adopted under the
prior sentence from and after the Distribution Date. Any supplement or amendment
to this Rights Agreement duly approved by the Company that does not amend
Sections 19, 20, 21 or 22 in a manner adverse to the Rights Agent shall become
effective immediately upon execution by the Company, whether or not also
executed by the Rights Agent. Notwithstanding anything contained in this Rights
Agreement to the contrary, during the 120-day period after any date of a change
(resulting from a proxy or consent solicitation) in a majority of the Board of
Directors of the Company in office at the commencement of such solicitation,
this Rights Agreement may be supplemented or amended only if (A) there are
directors then in office who were in office at the commencement of such
solicitation and (B) the Board of Directors of the Company, with the concurrence
of a majority of such directors then in office, determines that such supplement
or amendment is, in their judgment, in the best interests of the Company and its
stockholders and, after the Distribution Date, the holders of the Right
56
<PAGE> 60
Certificates. In addition, notwithstanding anything to the contrary contained in
this Rights Agreement, no supplement or amendment to this Rights Agreement shall
be made which (a) reduces the Redemption Price (except as required by Section
12(a)) or (b) provides for an earlier Expiration Date.
SECTION 27. Successors. All the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. Benefits of Rights Agreement; Determinations and Actions
by the Board of Directors, etc.
(a) Nothing in this Rights Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, of the Common
Shares) any legal or equitable right, remedy or claim under this Rights
Agreement; but this Rights Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, of the Common Shares).
(b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors of the Company shall have the exclusive power
and authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Rights Agreement and
57
<PAGE> 61
(ii) make all determinations deemed necessary or advisable for the
administration of this Rights Agreement (including, without limitation, a
determination to redeem or not redeem the Rights or to amend this Rights
Agreement and a determination of whether there is an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall be deemed to be
in derogation of the obligation of the Board of Directors of the Company to
exercise its fiduciary duty. Without limiting the foregoing, nothing contained
herein shall be construed to suggest or imply that the Board of Directors shall
not be entitled to reject any tender offer, or to recommend that holders of
Common Shares reject any tender offer, or to take any other action (including,
without limitation, the commencement, prosecution, defense or settlement of any
litigation and the submission of additional or alternative offers or other
proposals) with respect to any tender offer that the Board of Directors believes
is necessary or appropriate in the exercise of such fiduciary duty.
SECTION 29. Severability. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 30. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the law
of the State of Delaware and for all
58
<PAGE> 62
purposes shall be governed by and construed in accordance with the law of such
State applicable to contracts to be made and performed entirely within such
State.
SECTION 31. Counterparts; Effectiveness. This Rights 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. This Rights Agreement shall
be effective as of the Close of Business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
COHR INC.
By /s/ RAYMOND E. LIST
--------------------------------------
Raymond E. List
President, Chief Executive Officer
CHASEMELLON SHAREHOLDER SERVICES LLC,
as Rights Agent,
By /s/ JOSEPH CANNATA
--------------------------------------
Joseph Cannata
Assistant Vice President
59
<PAGE> 63
Exhibits to Rights Agreement.
<PAGE> 64
EXHIBIT A
CERTIFICATE OF THE DESIGNATIONS, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
COHR INC.
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, COHR Inc. (the "Corporation"), a Delaware corporation, DOES HEREBY
CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors of the Corporation by the Certificate of Incorporation of the
Corporation (the "Certificate of Incorporation"), the Board of Directors of the
Corporation on November 23, 1998, adopted the following resolution creating a
series of Preferred Stock designated as Series A Junior Participating Cumulative
Preferred Stock, no shares of which series has been issued:
RESOLVED, that, pursuant to the authority granted to and
vested in this Board of Directors of the Corporation in accordance
with the provisions of its Certificate of Incorporation, this Board
of Directors hereby creates a series of Preferred Stock, no par
value per share, of this Corporation and hereby states that the
number of shares, and determines the rights, preferences, privileges
and restrictions thereof (in addition to the provisions set forth in
the Certificate of Incorporation, which are applicable to the
Preferred State of all classes and series) as follows:
SECTION 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series A Junior Participating Cumulative
Preferred Stock" (the "Series A Preferred Stock"), no par value per share. The
number of shares initially constituting the Series A Preferred Stock shall be
20,000; provided, however, that, if more than a total of 20,000 shares of Series
A Preferred Stock shall be issuable upon the exercise of Rights (the "Rights")
issued pursuant to the Rights Agreement dated as of November 23, 1998, between
the Corporation and ChaseMellon Shareholder Services LLC, a New Jersey limited
liability company, as Rights Agent (the "Rights Agreement"), the Board of
Directors of the Corporation, pursuant to Section 151 of the General Corporation
Law of the State of Delaware, shall direct by resolution or resolutions that a
certificate be properly filed providing for the total number of shares of Series
A Preferred Stock authorized to be issued to be increased (to the extent that
the Certificate of Incorporation then permits) to the largest number of whole
shares (rounded up to the nearest whole number) issuable upon exercise of such
Rights.
<PAGE> 65
SECTION 2. Dividends or Distributions. (a) Subject to the prior and
superior rights of the holders of shares of any other series of Preferred Stock
or other class of capital stock of the Corporation ranking prior and superior to
the shares of Series A Preferred Stock with respect to dividends, the holders of
shares of the Series A Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of the assets of the Corporation
legally available therefor, (1) quarterly dividends payable in cash on the last
day of each fiscal quarter in each year, or such other dates as the Board of
Directors of the Corporation shall approve (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 a
fraction of a share of Series A Preferred Stock, in the amount of $.01 per whole
share (rounded to the nearest cent) less the amount of all cash dividends
declared on the Series A Preferred Stock pursuant to the following clause (2)
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock (the total of which
shall not, in any event, be less than zero) and (2) dividends payable in cash on
the payment date for each cash dividend declared on the Common Stock in an
amount per whole share (rounded to the nearest cent) equal to the Formula Number
(as hereinafter defined) then in effect times the cash dividends then to be paid
on each share of Common Stock. In addition, if the Corporation shall pay any
dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or
distributions solely in shares of Common stock), then, in each such case, the
Corporation shall simultaneously pay or make on each outstanding whole share of
Series A Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each share
of the Common Stock. As used herein, the "Formula Number" shall be 1,000;
provided, however, that, if at any time after December 21, 1998, the Corporation
shall (i) declare or pay any dividend on the Common Stock payable in shares of
Common Stock or make any distribution on the Common Stock in shares of Common
Stock, (ii) subdivide (by a stock split or otherwise) the outstanding shares of
Common Stock into a larger number of shares of Common Stock or (iii) combine (by
a reverse stock split or otherwise) the outstanding shares of Common Stock into
a smaller number of shares of Common Stock, then in each such event the Formula
Number shall be adjusted to a number determined by multiplying the Formula
Number in effect immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock that are 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 (and rounding the
result to the nearest whole number); and provided further, that, if at any time
after December 21, 1998, the Corporation shall issue any shares of its capital
stock in a merger, reclassification, or change of the outstanding shares of
Common Stock, then in each such event the Formula Number shall be appropriately
adjusted to reflect such merger, reclassification or
A-2
<PAGE> 66
change so that each share of Preferred Stock continues to be the economic
equivalent of a Formula Number of shares of Common Stock prior to such merger,
reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately prior to or at
the same time it declares a dividend or distribution on the Common Stock (other
than a dividend or distribution solely in shares of Common Stock); provided,
however, that, in the event no dividend or distribution (other than a dividend
or distribution in shares of Common Stock) 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 $.01 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the record date for any corresponding dividend
or distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from and after the Quarterly
Dividend Payment Date next preceding the date of original issue of such shares
of Series A Preferred Stock; provided, however, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and on or prior to the next succeeding Quarterly Dividend Payment Date
shall begin to accrue and be cumulative from and after such Quarterly Dividend
Payment Date. Notwithstanding the foregoing, dividends on shares of Series A
Preferred Stock which are originally issued prior to the record date for the
determination of holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend on the first Quarterly Dividend Payment Date shall
be calculated as if cumulative from and after the last day of the fiscal quarter
next preceding the date of original issuance of such shares. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
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.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be declared on
the Series A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock shall not
be entitled to receive any dividends or other distributions except as provided
herein.
A-3
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SECTION 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share of
Series A Preferred Stock held of record on each matter on which holders of the
Common Stock or stockholders generally are entitled to vote, multiplied by the
maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Corporation and on all other matters submitted to a vote of stockholders of
the Corporation.
(c) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Preferred Stock are in
default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series A Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at said
meeting of stockholders (and at each subsequent annual meeting of stockholders),
unless all dividends in arrears have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series A Preferred Stock being entitled to cast
a number of votes per share of Series A Preferred Stock equal to the Formula
Number. Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote of the holders
of the shares of Series A Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Preferred stock shall
be divested of the foregoing special voting rights, subject to revesting in the
event of each and every subsequent like default in payments of dividends. Upon
the termination of the foregoing special voting rights, the terms of office of
all persons who may have been elected directors pursuant to said special voting
rights shall forthwith terminate, and the number of directors constituting the
Board of Directors shall be reduced by two. The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights granted to the
holders of the Series A Preferred Stock in this Section 3.
A-4
<PAGE> 68
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series A 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 authorizing or taking
any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever quarterly dividends or
other dividends or distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A 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 A 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 A Preferred Stock,
except dividends paid ratably on the Series A 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 A 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 A Preferred
Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with
the Series A 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
A-5
<PAGE> 69
could, under paragraph (a) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $.01 per whole share or
(y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up.
SECTION 6. 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 or any other property, then in any such case the then
outstanding shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.
SECTION 7. No Redemption; No Sinking Fund. (a) The shares of Series
A Preferred Stock shall not be subject to redemption by the Corporation or at
the option of any holder of Series A Preferred Stock provided, however, that the
Corporation may purchase or otherwise acquire outstanding shares of Series A
Preferred Stock in the open market or by offer to any holder or holders of
shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to
or entitled to the operation of a retirement or sinking fund.
SECTION 8. Ranking. The Series A Preferred Stock shall rank junior
to all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the rights,
preferences, privileges, and restrictions of the shares of another series of
Preferred Stock of the Corporation.
A-6
<PAGE> 70
SECTION 9. Fractional Shares. The Series A Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-thousandth (1/1000th)
of a share or any integral multiple of such fraction which shall entitle the
holder, in proportion to such holder's fractional shares, to receive dividends,
exercise voting rights, participate in distributions and to have the benefit of
all other rights of holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a fraction of
a share of Series A Preferred Stock, may elect (1) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one
one-thousandth (1/1000th) of a share or any integral multiple thereof or (2) to
issue depositary receipts evidencing such authorized fraction of a share of
Series A Preferred Stock pursuant to an appropriate agreement between the
Corporation and a depositary selected by the Corporation; 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 holders
of the Series A Preferred Stock.
SECTION 10. Reacquired Shares. Any shares of Series A 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, without designation as to series until such shares
are once more designated as part of a particular series by the Board of
Directors pursuant to the provisions of the Certificate of Incorporation.
SECTION 11. Amendment. None of the rights, preferences, privileges,
and restrictions of the Series A Preferred Stock as provided herein or in the
Certificate of Incorporation shall be amended in any manner which would alter or
change the rights, preferences, privileges, or restrictions of the holders of
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least 66-2/3% of the outstanding shares of Series A
Preferred Stock, voting as a separate class; provided, however, that no such
amendment approved by the holders of at least 66-2/3% of the outstanding shares
of Series A Preferred Stock shall be deemed to apply to the rights, preferences,
privileges, or restrictions of any holder of shares of Series A Preferred Stock
originally issued upon exercise of the Rights after the time of such approval
without the approval of such holder.
A-7
<PAGE> 71
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be duly executed in its corporate name on this 25th day of November, 1998.
COHR INC.
By
--------------------------------------
Raymond E. List
President and Chief Executive Officer
Attest:
- --------------------------------
Name:
Title:
A-8
<PAGE> 72
EXHIBIT B
Form of Right Certificate
Certificate No.
______________ Rights
NOT EXERCISABLE AFTER NOVEMBER 23, 2008, OR EARLIER IF REDEEMED BY THE
COMPANY. 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. RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE
NULL AND VOID AND NONTRANSFERABLE.
Right Certificate
COHR 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 23, 1998 (the "Rights
Agreement"), between COHR Inc., a Delaware corporation (the "Company"), and
ChaseMellon Shareholder Services LLC, a New Jersey limited liability company, as
Rights Agent (the "Rights Agent"), unless the Rights evidenced hereby shall have
been previously redeemed by the Company, to purchase from the Company at any
time after the Distribution Date (as defined in the Rights Agreement) and prior
to 5:00 p.m., Pacific time, on the 10th anniversary of the date of the Rights
Agreement (the "Expiration Date"), at the principal office of the Rights Agent,
or its successors as Rights Agent, in the City of Ridgefield Park, New Jersey,
one one-thousandth (1/1000th) of a fully paid, nonassessable share of Series A
Junior Participating Cumulative Preferred Stock, no par value per share, of the
Company (the "Preferred Shares"), at a purchase price per one one-thousandth
(1/1000th) of a share equal to twenty dollars ($20.00) (the "Purchase Price")
payable in cash, upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed.
The Purchase Price and the number and kind of shares which may be
purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be so purchased as of November 23, 1998. As provided in the Rights
Agreement, the Purchase Price and the number and kind of shares which may be
purchased upon the exercise of each Right evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
<PAGE> 73
If the Rights evidenced by this Right Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate is subject to all 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 reference to
the Rights Agreement is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number and kind of shares as the Rights evidenced by
the Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price (in cash or shares of Common Stock or other securities of
the Company deemed by the Board of Directors to be at least equivalent in value)
of $.001 per Right (which amount shall be subject to adjustment as provided in
the Rights Agreement) at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date; provided,
however, that, for the 120-day period after any date of a change (resulting from
a proxy or consent solicitation) in a majority of the Board of Directors of the
Company in office at the commencement of such solicitation, the Rights may only
be redeemed if (A) there are directors then in office who were in office at the
commencement of such solicitation and (B) the Board of Directors of the Company,
with the concurrence of a majority of such directors then in office, determines
that such redemption is, in its judgment, in the best interests of the Company
and its stockholders.
The Company may, but shall not be required to, issue fractions of
Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash payment
as provided in the
B-2
<PAGE> 74
Rights Agreement for fractions of a share other than one one-thousandth
(1/1000th) of a share or any integral multiple thereof or to issue certificates
or utilize a depositary arrangement as provided in the terms of the Rights
Agreement and the Preferred Shares.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company, including, without limitation,
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or other distributions or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate shall have been exercised as
provided in accordance with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of:
COHR INC.
By
-------------------------------------
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
Countersigned:
- -------------------------------,
as Rights Agent
By
-----------------------------
Authorized Officer
B-3
<PAGE> 75
Reverse Side of Right Certificate
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise ____________
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other shares) issuable upon the exercise of such 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)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
Please insert social security or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated: ,
-------------- ----
-----------------------------------------
Signature
Signature Guaranteed:
B-4
<PAGE> 76
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 or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
the undersigned
[ ] did
[ ] did not
acquire the Rights evidenced by this Rights Certificate from any Person who is,
was or became an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person.
Dated: ,
------------------ ---- ----------------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature on the foregoing Form of Election to Purchase must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-5
<PAGE> 1
EXHIBIT 2
CERTIFICATE OF THE DESIGNATIONS, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
COHR INC.
Pursuant to Section 151 of the General Corporation Law of the State
of Delaware, COHR Inc. (the "Corporation"), a Delaware corporation, DOES HEREBY
CERTIFY:
That, pursuant to the authority conferred upon the Board of Directors
of the Corporation by the Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation"), the Board of Directors of the Corporation on
November 23, 1998, adopted the following resolution creating a series of
Preferred Stock designated as Series A Junior Participating Cumulative Preferred
Stock, no shares of which series has been issued:
RESOLVED, that, pursuant to the authority granted to and vested
in this Board of Directors of the Corporation in accordance with the
provisions of its Certificate of Incorporation, this Board of
Directors hereby creates a series of Preferred Stock, no par value
per share, of this Corporation and hereby states that the number of
shares, and determines the rights, preferences, privileges and
restrictions thereof (in addition to the provisions set forth in the
Certificate of Incorporation, which are applicable to the Preferred
State of all classes and series) as follows:
SECTION 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series A Junior Participating Cumulative
Preferred Stock" (the "Series A Preferred Stock"), no par value per share. The
number of shares initially constituting the Series A Preferred Stock shall be
20,000; provided, however, that, if more than a total of 20,000 shares of Series
A Preferred Stock shall be issuable upon the exercise of Rights (the "Rights")
issued pursuant to the Rights Agreement dated as of November 23, 1998, between
the Corporation and ChaseMellon Shareholder Services LLC, a New Jersey limited
liability company, as Rights Agent (the "Rights Agreement"), the Board of
Directors of the Corporation, pursuant to Section 151 of the General Corporation
Law of the State of Delaware, shall direct by resolution or resolutions that a
certificate be properly filed providing for the total number of shares of Series
A Preferred Stock authorized to be issued to be increased (to the extent that
the Certificate of Incorporation then permits) to the largest number of whole
shares (rounded up to the nearest whole number) issuable upon exercise of
<PAGE> 2
such Rights.
SECTION 2. Dividends or Distributions. (a) Subject to the prior and
superior rights of the holders of shares of any other series of Preferred Stock
or other class of capital stock of the Corporation ranking prior and superior to
the shares of Series A Preferred Stock with respect to dividends, the holders of
shares of the Series A Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of the assets of the Corporation
legally available therefor, (1) quarterly dividends payable in cash on the last
day of each fiscal quarter in each year, or such other dates as the Board of
Directors of the Corporation shall approve (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 a
fraction of a share of Series A Preferred Stock, in the amount of $.01 per whole
share (rounded to the nearest cent) less the amount of all cash dividends
declared on the Series A Preferred Stock pursuant to the following clause (2)
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock (the total of which
shall not, in any event, be less than zero) and (2) dividends payable in cash on
the payment date for each cash dividend declared on the Common Stock in an
amount per whole share (rounded to the nearest cent) equal to the Formula Number
(as hereinafter defined) then in effect times the cash dividends then to be paid
on each share of Common Stock. In addition, if the Corporation shall pay any
dividend or make any distribution on the Common Stock payable in assets,
securities or other forms of noncash consideration (other than dividends or
distributions solely in shares of Common stock), then, in each such case, the
Corporation shall simultaneously pay or make on each outstanding whole share of
Series A Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each share
of the Common Stock. As used herein, the "Formula Number" shall be 1,000;
provided, however, that, if at any time after December 21, 1998, the Corporation
shall (i) declare or pay any dividend on the Common Stock payable in shares of
Common Stock or make any distribution on the Common Stock in shares of Common
Stock, (ii) subdivide (by a stock split or otherwise) the outstanding shares of
Common Stock into a larger number of shares of Common Stock or (iii) combine (by
a reverse stock split or otherwise) the outstanding shares of Common Stock into
a smaller number of shares of Common Stock, then in each such event the Formula
Number shall be adjusted to a number determined by multiplying the Formula
Number in effect immediately prior to such event by a fraction, the numerator of
which is the number of shares of Common Stock that are 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 (and rounding the
result to the nearest whole number);
<PAGE> 3
and provided further, that, if at any time after December 21, 1998, the
Corporation shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock, then in
each such event the Formula Number shall be appropriately adjusted to reflect
such merger, reclassification or change so that each share of Preferred Stock
continues to be the economic equivalent of a Formula Number of shares of Common
Stock prior to such merger, reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in Section 2(a) immediately prior to or at
the same time it declares a dividend or distribution on the Common Stock (other
than a dividend or distribution solely in shares of Common Stock); provided,
however, that, in the event no dividend or distribution (other than a dividend
or distribution in shares of Common Stock) 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 $.01 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the record date for any corresponding dividend
or distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from and after the Quarterly Dividend Payment
Date next preceding the date of original issue of such shares of Series A
Preferred Stock; provided, however, that dividends on such shares which are
originally issued after the record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive a quarterly dividend and
on or prior to the next succeeding Quarterly Dividend Payment Date shall begin
to accrue and be cumulative from and after such Quarterly Dividend Payment Date.
Notwithstanding the foregoing, dividends on shares of Series A Preferred Stock
which are originally issued prior to the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend on the first Quarterly Dividend Payment Date shall be calculated as if
cumulative from and after the last day of the fiscal quarter next preceding the
date of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series A 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.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be
<PAGE> 4
declared, paid or distributed, or set aside for payment or distribution, on the
Common Stock unless, in each case, the dividend required by this Section 2 to be
declared on the Series A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock shall not
be entitled to receive any dividends or other distributions except as provided
herein.
SECTION 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share of
Series A Preferred Stock held of record on each matter on which holders of the
Common Stock or stockholders generally are entitled to vote, multiplied by the
maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Corporation and on all other matters submitted to a vote of stockholders of
the Corporation.
(c) If, at the time of any annual meeting of stockholders for the
election of directors, the equivalent of six quarterly dividends (whether or not
consecutive) payable on any share or shares of Series A Preferred Stock are in
default, the number of directors constituting the Board of Directors of the
Corporation shall be increased by two. In addition to voting together with the
holders of Common Stock for the election of other directors of the Corporation,
the holders of record of the Series A Preferred Stock, voting separately as a
class to the exclusion of the holders of Common Stock, shall be entitled at said
meeting of stockholders (and at each subsequent annual meeting of stockholders),
unless all dividends in arrears have been paid or declared and set apart for
payment prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series A Preferred Stock being entitled to cast
a number of votes per share of Series A Preferred Stock equal to the Formula
Number. Until the default in payments of all dividends which permitted the
election of said directors shall cease to exist, any director who shall have
been so elected pursuant to the next preceding sentence may be removed at any
time, either with or without cause, only by the affirmative vote of the holders
of the shares of Series A Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any
<PAGE> 5
vacancy thereby created may be filled by the vote of such holders. If and when
such default shall cease to exist, the holders of the Series A Preferred stock
shall be divested of the foregoing special voting rights, subject to revesting
in the event of each and every subsequent like default in payments of dividends.
Upon the termination of the foregoing special voting rights, the terms of office
of all persons who may have been elected directors pursuant to said special
voting rights shall forthwith terminate, and the number of directors
constituting the Board of Directors shall be reduced by two. The voting rights
granted by this Section 3(c) shall be in addition to any other voting rights
granted to the holders of the Series A Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series A 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 authorizing or taking
any corporate action.
SECTION 4. Certain Restrictions. (a) Whenever quarterly dividends or
other dividends or distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
A 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 A 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 A Preferred Stock,
except dividends paid ratably on the Series A 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 A 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 A Preferred
Stock; or
<PAGE> 6
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Stock, or any shares of stock ranking on a parity with
the Series A 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.
SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $.01 per whole share or
(y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up.
SECTION 6. 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 or any other property, then in any such case the then
outstanding shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.
<PAGE> 7
SECTION 7. No Redemption; No Sinking Fund. (a) The shares of Series A
Preferred Stock shall not be subject to redemption by the Corporation or at the
option of any holder of Series A Preferred Stock, provided, however, that the
Corporation may purchase or otherwise acquire outstanding shares of Series A
Preferred Stock in the open market or by offer to any holder or holders of
shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
SECTION 8. Ranking. The Series A Preferred Stock shall rank junior to
all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the rights,
preferences, privileges, and restrictions of the shares of another series of
Preferred Stock of the Corporation.
SECTION 9. Fractional Shares. The Series A Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-thousandth (1/1000th)
of a share or any integral multiple of such fraction which shall entitle the
holder, in proportion to such holder's fractional shares, to receive dividends,
exercise voting rights, participate in distributions and to have the benefit of
all other rights of holders of Series A Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a fraction of
a share of Series A Preferred Stock, may elect (1) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one
one-thousandth (1/1000th) of a share or any integral multiple thereof or (2) to
issue depositary receipts evidencing such authorized fraction of a share of
Series A Preferred Stock pursuant to an appropriate agreement between the
Corporation and a depositary selected by the Corporation; 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 holders
of the Series A Preferred Stock.
SECTION 10. Reacquired Shares. Any shares of Series A 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, without designation as to series until such shares are once
more designated as part of a particular series by the Board of Directors
pursuant to the provisions of the Certificate of Incorporation.
SECTION 11. Amendment. None of the rights, preferences, privileges,
and restrictions of the Series A Preferred Stock as
<PAGE> 8
provided herein or in the Certificate of Incorporation shall be amended in any
manner which would alter or change the rights, preferences, privileges, or
restrictions of the holders of Series A Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least 66-2/3% of the
outstanding shares of Series A Preferred Stock, voting as a separate class;
provided, however, that no such amendment approved by the holders of at least
66-2/3% of the outstanding shares of Series A Preferred Stock shall be deemed to
apply to the rights, preferences, privileges, or restrictions of any holder of
shares of Series A Preferred Stock originally issued upon exercise of the Rights
after the time of such approval without the approval of such holder.
<PAGE> 9
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
duly executed in its corporate name on this 25th day of November, 1998.
COHR INC.
By /s/ RAYMOND E. LIST
--------------------------------------
Raymond E. List
President and Chief Executive Officer
Attest:
/s/ DANIEL F. CLARK
- -----------------------------------
Name: Daniel F. Clark
Title: Corporate Secretary
