FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: June 20, 1997
(Date of Earliest Event Reported)
UNIMED PHARMACEUTICALS, INC
(Exact name of registrant as specified in its charter)
Delaware 22-1685346
(State of Incorporation or Organization) (I.R.S. Employer
Identification No.)
2150 East Lake Cook Road Buffalo Grove, Illinois 60089
(Address of principal executive offices) (Zip Code)
(847) 541-2525
(Registrant's telephone no., including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS
Pursuant to a Rights Agreement dated as of June 16, 1997 (the
"Rights Agreement") between UNIMED Pharmaceuticals, Inc. (the
"Company") and Harris Trust and Savings Bank., as Rights Agent (the
"Rights Agent") the Company's Board of Directors has declared a
dividend of one right ("Right") to purchase one share of Common
Stock, $.25 par value ("Common Stock") of the Company for each
outstanding share of Common Stock. The dividend is payable on June
24, 1997 to stockholders of record as of the close of business on
June 20, 1997 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company one share of Common
Stock at an exercise price of $50.00 (the "Purchase Price"), subject
to adjustment.
The following summary of the principal terms of the Rights
Agreement is a general description only and is subject to the
detailed terms and conditions of the Rights Agreement. A copy of the
Rights Agreement is attached as Exhibit 4.1 to this Current Report
and is incorporated herein by reference.
RIGHTS EVIDENCED BY COMMON STOCK CERTIFICATES
The Rights will not be exercisable until the Distribution Date
(defined below). Certificates for the Rights ("Rights Certificates")
will not be sent to stockholders and the Rights will attach to and
trade only together with the Common Stock. Accordingly, Common Stock
certificates outstanding on the Record Date will evidence the Rights
related thereto, and Common Stock certificates issued after the
Record Date will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender or transfer
of any certificates for Common Stock, outstanding as of the Record
Date, even without notation or a copy of the Summary of Rights being
attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
DISTRIBUTION DATE
The Rights will separate from the Common Stock, Rights
Certificates will be issued, and the Rights will become exercisable
upon the earlier of: (i) 10 business days following the first date
of public announcement (the "Stock Acquisition Date") that a person
or group of affiliated or associated persons has acquired, or
obtained the right to acquire, after the Record Date beneficial
ownership of 15% or more of the outstanding Common Stock in a
transaction not approved by the Board of Directors (an "Acquiring
Persons@), or (ii) 10 business days following the commencement of,
or announcement of an intention to make, a tender offer or exchange
offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of the outstanding
Common Stock in a transaction not approved by the Board of
Directors. The earlier of such dates is referred to as the
"Distribution Date".
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ISSUANCE OF RIGHTS CERTIFICATES; EXPIRATION OF RIGHTS
As soon as practicable following the Distribution Date,
separate Rights Certificates will be mailed to holders of record of
the Common Stock as of the close of business on the Distribution
Date and such separate Rights Certificates alone will evidence the
Rights from and after the Distribution Date. All Common Stock issued
prior to the Distribution Date will be issued with Rights. Common
Stock issued after the Distribution Date may be issued with Rights
if such shares are issued (i) upon the conversion of any convertible
securities issued after adoption of the Rights Agreement, or (ii)
pursuant to the exercise of stock options or under employee benefit
plans or arrangements unless such issuance would result in (or
create a risk that) such options, plans or arrangements would not
qualify for otherwise available special tax treatment. Except as
otherwise determined by the Board of Directors, no other Common
Stock issued after the Distribution Date will be issued with Rights.
The Rights will expire on the earliest of (i) June 16, 2007 (the
"Final Expiration Date_), (ii) redemption or exchange of the Rights
as described below, or (iii) consummation of an acquisition of the
Company satisfying certain conditions by a person who acquired stock
pursuant to a transaction approved by the Board of Directors as
described below.
INITIAL EXERCISE OF THE RIGHTS
Following the Distribution Date, and until one of the further
events described below, holders of the Rights will be entitled to
receive, upon exercise and the payment of $50.00 per Right, one
share of Common Stock. In the event that the Company does not have
sufficient Common Stock available for all Rights to be exercised, or
the Board decides that such action is necessary and not contrary to
the interest of Rights holders, the Company may instead substitute
cash, assets, or other securities for the Common Stock for which the
Rights would have been exercisable under this provision or as
described below.
RIGHT TO BUY COMPANY COMMON STOCK
Unless the Rights are earlier redeemed, in the event that an
Acquiring Person becomes the beneficial owner of 15% or more of the
Common Stock then outstanding (other than pursuant to a transaction
approved by the Board of Directors), then proper provision will be
made so that each holder of a Right which has not theretofore been
exercised (other than Rights beneficially owned by the Acquiring
Person, which will thereafter be void) will thereafter have the
right to receive, upon exercise, Common Stock (or, in certain
circumstances as determined by the Board of Directors, cash, other
property or other securities) having a value equal to two times the
Purchase Price. Rights are not exercisable following the occurrence
of an event described above until such time as the Rights are no
longer redeemable by the Company as set forth below.
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RIGHT TO BUY ACQUIRING COMPANY STOCK
Similarly, unless the Rights are earlier redeemed, in the event
that, after the Stock Acquisition Date, (i) the Company is acquired
in a merger or other business combination transaction, or (ii) 50%
or more of the Company's assets or earning power are sold (other
than in transactions in the ordinary course of business), proper
provision must be made so that each holder of a Right which has not
theretofore been exercised (other than Rights beneficially owned by
the Acquiring Person, which will thereafter be void) will thereafter
have the right to receive, upon exercise, shares of common stock of
the acquiring company having a value equal to two times the Purchase
Price.
BOARD APPROVAL
The Rights will not become exercisable if the tender offer or
acquisition of 15% or more of the Common Stock has been approved by
a majority of the Board of Directors of the Company.
EXCHANGE PROVISION
At any time after any Person becomes an Acquiring Person, the
Board of Directors of the Company may exchange the Rights (other
than Rights owned by the Acquiring Person), in whole or in part, at
an exchange ratio of one share of Common Stock per Right.
REDEMPTION
At anytime on or prior to the close of business on the earlier
of (i) the 10th business day following the Stock Acquisition Date,
or (ii) the Final Expiration Date, the Company may redeem the Rights
in whole, but not in part, at a price of $0.01 per Right.
Notwithstanding the foregoing, the Company may not redeem the Rights
within 90 days after the date of election of any new directors to
the Company's Board when new directors shall comprise the majority
of members thereof.
ADJUSTMENTS TO PREVENT DILUTION
The Purchase Price payable, the number of Rights, and the
number of shares of Common Stock or other securities issuable upon
exercise of the Rights are subject to adjustment from time to time
in connection with dilutive issuances by the Company as set forth in
the Rights Agreement.
CASH PAID INSTEAD OF ISSUING FRACTIONAL SHARES
No fractional shares of Common Stock will be issued upon
exercise of a Right and in lieu thereof, an adjustment in cash will
be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise.
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NO STOCKHOLDERS' RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company (other than any
rights resulting from such holder's ownership of Common Stock),
including, without limitation, the right to vote or to receive
dividends.
AMENDMENT OF RIGHTS AGREEMENT
The provisions of the Rights Agreement may be supplemented or
amended by the Board of Directors in any manner prior to the close
of business on the Distribution Date without the approval of Rights
holders. After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any
ambiguity, defect or inconsistency, to make changes which do not
adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any
time period under the Rights Agreement; provided, however, that no
amendment to adjust the time period governing redemptions shall be
made at such time as the Rights are not redeemable.
CERTAIN ANTI-TAKEOVER EFFECTS
The Rights approved by the Board of Directors are designed to
protect and maximize the value of the outstanding equity interests
in the Company in the event of a coercive attempt by an acquirer to
take over the Company, in a manner or on terms not approved by the
Board of Directors. Takeover attempts frequently include coercive
tactics to deprive the Company's Board of Directors and its
stockholders of any real opportunity to determine the destiny of the
Company. The Rights have been declared by the Board of Directors to
deter such tactics, including a gradual accumulation of shares in
the open market of a 15% or greater position to be followed by a
merger or a partial or two-tier tender offer that does not treat all
stockholders equally. These tactics unfairly pressure stockholders,
squeeze them out of their investment without giving them any real
choice and deprive them of the full value of their stock.
The Rights are not intended to prevent a takeover of the
Company and will not do so. The Rights may be redeemed by the
Company at $0.01 per Right within 10 business days (or such later
date as may be determined by a majority of the Board of Directors)
after the accumulation of 15% or more of the Company's stock by a
single acquirer or group. Accordingly, the Rights should not
interfere with any merger or business combination approved by the
Board of Directors.
<PAGE>
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The
issuance of the Rights themselves has no dilutive effect, will not
affect reported earnings per share, should not be taxable to the
Company or to its stockholders, and will not change the way in which
the Company's stock is presently traded. The Board of Directors
believes that the Rights represent a sound and reasonable means of
addressing the complex issues of corporate policy created by
corporate takeovers.
However, the Rights may have the effect of rendering more
difficult or discouraging an acquisition of the Company deemed
coercive and undesirable by the Board of Directors. The Rights may
cause substantial dilution to a person or group that attempts to
acquire the Company on terms or in a manner not approved by the
Board of Directors, except pursuant to an offer conditioned upon the
negation, purchase or redemption of the Rights.
A copy of the Rights Agreement, including the form of Rights
Certificate and the Summary of Rights, attached thereto as Exhibits
A and B, respectively, is filed as an Exhibit to this Report and is
incorporated herein by reference. A copy of the Rights Agreement is
available to stockholders free of charge from the Company.
Item 7. EXHIBITS
4.1 Rights Agreement dated as of June 16, 1997, between UNIMED
Pharmaceuticals, Inc. and Harris Trust and Savings Bank,
including the form of Rights Certificate and Summary of Rights,
attached thereto as Exhibits A and B, respectively.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned, hereunto duly authorized.
UNIMED PHARMACEUTICALS, INC.
Date: June 20, 1997 By: DAVID E. RIGGS /s/
David E. Riggs
Senior Vice President &
Chief Financial Officer
<PAGE>
Item 7.
EXHIBIT INDEX
Exhibit No. Exhibit
4.1 Rights Agreement dated as of June 16, 1997, between
UNIMED Pharmaceuticals, Inc. and Harris Trust and
Savings Bank, including the form of Rights
Certificate and Summary of Rights, attached thereto
as Exhibits A and B, respectively.
EXHIBIT 4.1
UNIMED PHARMACEUTICALS, INC.
AND
HARRIS TRUST AND SAVINGS BANK
(RIGHTS AGENT)
DATED AS OF June 16, 1997
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of June 16, 1997 (the
"Agreement"), between UNIMED Pharmaceuticals, Inc., a Delaware
corporation (the "Company"), and HARRIS TRUST AND SAVINGS BANK, a
Illinois Banking Corporation (the "Rights Agent").
W I T N E S S E T H:
WHEREAS, on June 13, 1997, (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and
declared a dividend distribution of one Right for each share of
Common Stock (as hereinafter defined) of the Company outstanding
at the close of business on June 19, 1997 (the "Record Dates),
and authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of Section ll(p)
hereof) for each share of Common Stock of the Company issued
between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date (as
hereinafter defined), each Right initially representing the right
to purchase one share of Common Stock upon the terms and subject
to the conditions hereinafter set forth (the "Rights_);
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who,
together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding, but shall not include:
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(i) The Company,
(ii) Any Subsidiary of the Company,
(iii) Any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan,
(iv) Any Person who becomes an Acquiring Person
solely as a result of a reduction in the number of
shares of Common Stock outstanding due to the
repurchase of shares of Common Stock by the Company,
unless and until such Person shall thereafter purchase
or otherwise become the Beneficial Owner of additional
shares of Common Stock constituting 1% or more of the
shares of Common Stock outstanding at the time that
such Person becomes the Beneficial Owner of 15% or more
of the then outstanding shares of Common Stock,
(v) Any Person described in Rule 13d-l(b)(l)
under the Exchange Act who is eligible to report
beneficial ownership of Common Stock on Schedule 13G,
unless such Person (1) becomes required to file a
Statement on Schedule 13D with respect to its
Beneficial Ownership of Common Stock or (2) acquires
Beneficial Ownership (whether or not required to be
reported on Schedule 13D or Schedule 13G) of 25% or
more of the then outstanding shares of Common Stock, or
(vi) Any Person who, on the Rights Dividend
Declaration Date, is the Beneficial Owner of 15% or
more but less than 30% of the then outstanding shares
of Common Stock.
Notwithstanding the foregoing, "Acquiring Person" shall
not include any Person whose ownership of 15% or more of the
shares of Common Stock then outstanding results from any
action, transaction or series of transactions approved in
advance by the Company's Board of Directors (provided that
such Person shall become an Acquiring Person if such Person
shall thereafter purchase or otherwise become the Beneficial
Owner of additional shares of Common Stock constituting 1%
or more of the outstanding shares of Common Stock unless
otherwise approved in advance by the Board; provided
however, (A) any transfer of shares by such Person to a
third party (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any
trustee in respect thereof acting in such capacity) who
after such transfer owns 15% or more of the shares then
outstanding will cause the Rights to become exercisable at
the time and in the manner provided for herein, and (B) any
institution of a tender or exchange offer by any holder of
shares will trigger the exercisability of the Rights,
notwithstanding the above.
<PAGE>
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2
under the Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner"
of, and shall be deemed to "beneficially own," any
securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion
rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to
a tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to
Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has
the right to vote or dispose of or has "beneficial
ownership" of (as determined pursuant to Rule 13d-3
under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not
in writing; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to
"beneficially own," any security under this
subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if
such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not also then reportable
by such Person on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
<PAGE>
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of
such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not
in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as
described in the provision to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of
the Company; provided, however, that nothing in this
paragraph (c) shall cause a Person engaged in the
business as an underwriter of securities to be deemed
the "Beneficial Owner" of, or to "beneficially own,"
any securities acquired through such Person's
participation in good faith in a firm commitment
underwriting until the expiration of forty (40) days
after the date of such acquisition.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in
the State of Illinois are authorized or obligated by law or
executive order to close.
(e) "Close of Business" on any given date shall mean
5:00 p.m., Illinois time, on such date; provided, however,
that if such date is not a Business Day it shall mean
5:00 p.m., Illinois time, on the next succeeding Business
Day.
(f) "Common Stock" shall mean the common stock, par
value $0.25 per share, of the Company, except that "Common
Stock" when used with reference to any Person other than the
Company shall mean the capital stock of such Person with the
greatest voting power, or the equity securities or other
equity interest having power to control or direct the
management, of such Person.
(g) "Distribution Date" shall mean the earlier of
(i) the Close of Business on the tenth business day after
the Stock Acquisition Date and (ii) the Close of Business on
the tenth business day (or such later date as the Board of
Directors shall determine) after the date that 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 Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company
for or pursuant to the terms of any such plan) is first
published or sent or given within the meaning of Rule 14d-2
(a) under the Exchange Act, if upon consummation thereof,
such Person would be the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding.
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(h) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(i) "Exchange Ratio" shall have the meaning set forth
in Section 23 hereof.
(j) "Expiration Date" shall mean the earlier of
(i) the Final Expiration Date, or (ii) the time at which the
Rights are redeemed as provided in Section 24 hereof.
(k) "Final Expiration Date" shall mean the Close of
Business on June 16, 2007.
(l) "Original Rights" shall have the meaning set forth
in Section 1(c) hereof.
(m) "Principal Party" shall have the meaning set forth
in Section 13 hereof.
(n) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(o) "Purchase Price" shall have the meaning set forth
in Section 4 or Section 11 hereof, as the case may be.
(p) "Record Date" shall have the meaning set forth in
the recitals at the beginning of this Agreement.
(q) "Rights" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(r) "Rights Certificates" shall mean one or more
rights certificates, in substantially the form of Exhibit A
hereto.
(s) "Rights Dividend Declaration Date" shall have the
meaning set forth in the recitals at the beginning of this
Agreement.
(t) "Section 11(a)(ii) Event" shall mean any event
described in Section 11(a)(ii)(A) or (B) hereof.
(u) "Section 13 Event" shall mean any event described
in clauses (x), (y) or (z) of Section 13(a) hereof.
(v) "Securities Act" shall mean the Securities Act of
1933, as amended.
<PAGE>
(w) "Stock Acquisition Date" shall mean the first date
of public announcement (which, for purposes of this
definition, shall include, without limitation, a report
filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person
has become such; provided, however, if such person has first
been determined not to have become an Acquiring Person
pursuant to Section 1(a) hereof, then no Stock Acquisition
Date shall be deemed to have occurred.
(x) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting
securities sufficient to elect at least a majority of the
directors of such corporation is Beneficially Owned,
directly or indirectly, by such Person, or otherwise
controlled by such Person.
(y) "Summary of Rights" shall mean the summary of
rights to purchase Common Stock, in substantially the form
of Exhibit B hereto.
(z) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
(aa) "Triggering Event" shall mean any
Section 11(a)(ii) Event or any Section 13 Event.
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 such concurrent Rights Agents as it may deem
necessary or desirable. Contemporaneously with any such
appointment the Company shall notify the Rights Agent thereof.
<PAGE>
Section 3. Issue of Rights Certificates.
(a) Until the Distribution Date, (i) the Rights will
be evidenced (subject to the provisions of 3(b) hereof) by
the certificates for the Common Stock registered in the
names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (ii) the
Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including
a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record
holder of the Common Stock as of the close of business on
the Distribution Date, at the address of such holder shown
on the records of the Company, one or more Rights
Certificates, evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per
share of Common Stock has been made pursuant to
Section 11(p) hereof, at the time of distribution of the
Right Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates
representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights. As of
and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights, by first-class, postage prepaid mail, to each record
holder of shares of Common Stock as of the close of business
on the Record Date, at the address of such holder shown on
the records of the Company.
(c) Certificates issued for shares of Common Stock
(including, without limitation, certificates issued upon
transfer, exchange or replacement of shares of Common Stock)
after the Record Date but before the earliest of the
Distribution Date, the Redemption Date and the Final
Expiration Date shall bear the following legend:
<PAGE>
This certificate also evidences and entitles
the holder hereof to certain Rights as set
forth in the Rights Agreement between UNIMED
Pharmaceuticals, Inc. and Harris Trust and
Savings Bank, as Rights Agent, dated as of
June 16, 1997 (the "Rights Agreements), the
terms of which are hereby incorporated herein
by reference and a copy of which is on file
at the principal offices of UNIMED
Pharmaceuticals, Inc. 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. UNIMED
Pharmaceuticals, Inc. will mail to the holder
of this certificate a copy of the Rights
Agreement, as in effect on the date of
mailing, without charge promptly after
receipt of a written request therefor. Under
certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof
(as such terms are defined in the Rights
Agreement), whether currently held by or on
behalf of such Person or by any subsequent
holder, may become null and void.
With respect to such certificates containing the
foregoing legend, until the earlier of (i) the Distribution
Date and (ii) the Expiration Date, the Rights associated
with the Common Stock represented by such certificates shall
be evidenced by such certificates alone and registered
holders of Common Stock shall also be the registered holders
of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such
certificates.
(d) If the Company purchases or acquires any Common
Stock after the Record Date but before the Distribution
Date, any Rights associated with that Common Stock shall
deemed canceled so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which
are no longer outstanding.
<PAGE>
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election
to purchase and of assignment to be printed on the reverse
thereof) may have such marks of identification or
designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase
such number of shares of Common Stock as shall be set forth
therein at the price set forth therein (such exercise price
per share of Common Stock, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise
of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Rights Certificates issued pursuant to
Section 3(a) or Section 22 hereof that represents Rights
beneficially owned by: (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Persons with whom such
Acquiring Person has any continuing agreement, arrangement
or understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to
the extent feasible) the following legend:
The Rights represented by this Rights
Certificates are or were beneficially owned
by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined
in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented
hereby may become null and void in the
circumstances specified in Section 7(e) of
such Agreement.
<PAGE>
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its
President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The
Rights Certificates shall be countersigned by the Rights
Agent, either manually or by facsimile signature, and shall
not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of
the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights
Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date
of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its principal
office or offices designated as the appropriate place for
surrender of Rights Certificates upon exercise or transfer,
books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by
each of the Rights Certificates and the date of each of the
Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
<PAGE>
(a) Subject to the provisions of Section 4(b),
Section 7(e) and Section 14 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior
to the close of business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a
like number of shares of Common Stock (or, following a
Triggering Event, other securities, cash or other assets, as
the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder
desiring to transfer split up, combine or exchange any
Rights Certificate or Certificates shall make such request
in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent designated
for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed
and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate
and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the
loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and
deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
<PAGE>
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided
herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c),
Section 11(a)(iii) and Section 24(a) hereof) in whole or in
part at any time after the Distribution Date upon surrender
of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with
respect to the total number of shares of Common Stock (or
other securities, cash or other assets, as the case may be)
as to which such surrendered Rights are then exercisable, at
or prior to the earlier of (i) the Final Expiration Date, or
(ii) the Expiration Date.
(b) The Purchase Price for each share of Common
Stock pursuant to the exercise of a Right shall initially be
$50.00, and shall be subject to adjustment from time to time
as provided in Sections 11 and 13(a) hereof and shall be
payable in accordance with paragraph (c) below.
<PAGE>
(c) Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election
to purchase and the certificate duly executed, accompanied
by payment, with respect to each Right so exercised, of the
Purchase Price per share of Common Stock (or other
securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof, thereupon promptly (i)(A) requisition
from any transfer agent of the Common Stock (or make
available, if the Rights Agent is the transfer agent for
such shares) certificates for the total number of shares of
Common Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all
such requests, or (B) if the Company shall have elected to
deposit the total number of shares of Common Stock issuable
upon exercise of the Rights hereunder with a depository
agent, requisition from the depository agent depository
receipts representing such number of shares of Common Stock
as are to be purchased (in which case certificates for the
shares of Common Stock represented by such receipts shall be
deposited by the transfer agent with the depository agent)
and the Company will direct the depository agent to comply
with such request, (ii) requisition from the Company the
amount of cash, if any, to be paid in lieu of fractional
shares in accordance with Section 14 hereof, (iii) after
receipt of such certificates or depository receipts, cause
the same to be delivered to or upon the order of the
registered holder of such Rights Certificate registered in
such name or names as may be designated by such holder, and
(iv) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights
Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof)
may be made (x) in cash or by certified bank check or bank
draft payable to the order of the Company, or (y) by
delivery of a certificate or certificates (with appropriate
stock powers executed in blank attached thereto) evidencing
a number of shares of Common Stock equal to the then
Purchase Price divided by the closing price (as determined
pursuant to Section 11(d) hereof) per share of Common Stock
on the Trading Day immediately preceding the date of such
exercise. In the event that the Company is obligated to
issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof,
the Company will make all arrangements necessary so that
such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require
prior to the occurrence of a Triggering Event that upon any
exercise of Rights, a number of Rights be exercised so that
only whole shares of Common Stock would be issued.
<PAGE>
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights
evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall
be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificates,
registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a
Section 11(a)(ii) Event, any Rights beneficially owned by
(i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding
the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become
null and void without any further action and no holder of
such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Agreement
or otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or other
Person as a result of its failure to make any determinations
with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall
be obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase
set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) and Affiliates or Associates
thereof as the Company shall reasonably request.
<PAGE>
Section 8. Cancellation and Destruction of Rights
Certificates. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the
Company, or shall, at the written request of the Company, destroy
such canceled Rights Certificates, and in such case shall deliver
a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) Except as permitted pursuant to Section
11(a)(iii) hereof, the Company covenants and agrees that it
will cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock or shares of
Common Stock held in the Treasury, the number of shares of
Common Stock that, as provided in this Agreement including
Section 11(a)(iii) hereof, will be sufficient to permit the
exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock
issuable and deliverable upon the exercise of the Rights may
be listed on any national securities exchange or quoted on
an automated quotation system, the Company shall use its
best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange or quoted on such
automated quotation system upon official notice of issuance
upon such exercise.
<PAGE>
(c) The Company shall use its best efforts to
(i) file, as soon as practicable following the earliest date
after the first occurrence of a Section 11(a)(ii) Event on
which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance
with Section 11(a)(ii) hereof, or as soon as is required by
law following the Distribution Date, as the case may be, a
registration statement under the Securities Act, with
respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of such Act) until the earlier of (A) the date
as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file
such registration statement and permit it to become
effective. Upon any such suspension, the Company shall
issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction if the requisite
qualification in such jurisdiction shall not have been
obtained, the exercise thereof shall not be permitted under
applicable law or a registration statement shall not have
been declared effective.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all
shares of Common Stock delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and
nonassessable.
<PAGE>
(e) The Company further covenants and agrees that
it will pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Rights
Certificates and of any certificates for shares of Common
Stock upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or
delivery of shares of Common Stock in respect of a name
other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or
to issue or deliver any certificates for shares of Common
Stock (or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise
of any Rights until such tax shall have been paid (any such
tax being payable by the holder of such Rights Certificates
at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
Section 10. Common Stock Record Date. Each person in whose
name any certificate for shares of Common Stock is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such shares of Common Stock
represented thereby on, and such certificate shall be dated, the
date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Common Stock transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Common
Stock transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder
of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and Kind
of Shares or Number of Rights. The Purchase Price, the number
and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as
provided in this Section 11.
<PAGE>
(a) (i) In the event the Company shall at any time
after the date of this
Agreement (A) declare a dividend on the
Common Stock payable in shares of Common
Stock, (B) subdivide the outstanding Common
Stock, (C) combine the outstanding Common
Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in
a reclassification of the Common Stock
(including any such reclassification in
connection with a consolidation or merger in
which the Company is the continuing or
surviving corporation), except as otherwise
provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for
such dividend or of the effective date of
such subdivision, combination or
reclassification, and the number and kind of
shares of Common Stock or capital stock, as
the case may be, issuable on such date, shall
be proportionately adjusted so that the
holder of any Right exercised after such time
shall be entitled to receive, upon payment of
the Purchase Price then in effect, the
aggregate number and kind of shares of Common
Stock or capital stock, as the case may be,
which, if such Right had been exercised
immediately prior to such date and at a time
when the Common Stock transfer books of the
Company were open, he would have owned upon
such exercise and been entitled to receive by
virtue of such dividend, subdivision,
combination or reclassification. If an event
occurs which would require an adjustment
under both this Section 11(a) and 13(a), the
adjustment provided for in this Section 11(a)
shall be in addition to and shall be made
prior to, any adjustment required pursuant to
Section 13(a) hereof.
<PAGE>
(ii) In the event
(A) (1) any
Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at
any time after the date of this
Agreement, directly or indirectly, shall
merge into the Company or otherwise
combine with the Company and the Company
shall be the continuing or surviving
corporation of such merger or
combination and the Common Stock of the
Company shall remain outstanding and
unchanged, or (2) subject to the right
of redemption granted in Section 24
hereof, any Person (other than the
Company, any Subsidiary of the Company,
any employee benefit plan of the Company
or of any Subsidiary of the Company, or
any Person or entity organized,
appointed or established by the Company
for or pursuant to the terms of any such
plan), alone or together with its
Affiliates and Associates, shall, at any
time after the Rights Dividend
Declaration Date, become an Acquiring
Person, other than pursuant to any
transaction set forth in Section 13(a)
hereof, or pursuant to an offer for all
outstanding shares of Common Stock at a
price and upon such terms and conditions
as a majority of the Board of Directors
determines to be in the best interests
of the Company and its stockholders,
other than such Acquiring Person, its
Affiliates and its Associates, or
<PAGE>
(B) during such time as there is an
Acquiring Person, there shall be any
reclassification of securities
(including any reverse stock split), or
recapitalization of the Company, or any
merger or consolidation of the Company
with any of its Subsidiaries or any
other transaction or series of
transactions involving the Company or
any of its Subsidiaries, other than a
transaction or transactions to which the
provisions of Section 13(a) apply
(whether or not with or into or
otherwise involving an Acquiring Person)
which has the effect, directly or
indirectly, of increasing by more than
1% the proportionate share of the
outstanding shares of any class of
equity securities of the Company or any
of its Subsidiaries which is directly or
indirectly beneficially owned by any
Acquiring Person or any Associate or
Affiliate of any Acquiring Person, then,
promptly following the occurrence of a
Section ll(a)(ii) Event, the Company
and, to the extent necessary or
appropriate, the Acquiring Person and
its Affiliates and Associates, shall
make proper provision so that each
holder of a Right (except as provided
below and in Section 7(e) hereof) shall
thereafter have the right to receive,
upon exercise thereof at the then
current Purchase Price in accordance
with the terms of this Agreement, in
lieu of that number of shares of Common
Stock, such number of shares of Common
Stock as shall equal the result obtained
by (x) multiplying the then current
Purchase Price by the then number of
shares of Common Stock for which a Right
was exercisable immediately prior to the
first occurrence of a Section ll(a)(ii)
Event, and (y) dividing that product
(which, following such first occurrence,
shall thereafter be referred to as the
"Purchase Price" for each Right and for
all purposes of this Agreement) by 50%
of the current market price (determined
pursuant to Section ll(d) hereof) per
share of Common Stock on the date of
such first occurrence (such number of
shares, the "Adjustment Shares").
<PAGE>
(iii) In the event that the
number of shares of Common Stock which
are authorized by the Certificate of
Incorporation but not outstanding or
reserved for issuance for purposes other
than upon exercise of the Rights are not
sufficient to permit the exercise in
full of the Rights in accordance with
the foregoing subparagraph (ii) of this
Section ll(a), the Company shall: (A)
determine the excess of (1) the value of
the Adjustment Shares issuable upon the
exercise of a Right (the "Current
Value") over (2) the Purchase Price
(such excess, the "Spreads), and (B)
with respect to each Right (subject to
Section 7(e) hereof), make adequate
provision to substitute for the
Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3)
Common Stock or other equity securities
of the Company ("common stock
equivalents"), (4) debt securities of
the Company, (5) other assets, or (6)
any combination of the foregoing, having
an aggregate value equal to the Current
Value, where such aggregate value has
been determined by the Board of
Directors of the Company based upon the
advice of a nationally recognized
investment banking firm selected by the
Board of Directors of the Company;
provided, however, if the Company shall
not have made adequate provision to
deliver the value pursuant to clause (B)
above within thirty (30) days following
the later of (x) the first occurrence of
a Section ll(a)(ii) Event and (y) the
date on which the Company's right of
redemption pursuant to Section 24(a)
expires (the later of (x) and (y) being
referred to herein as the "Section
ll(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver,
upon the surrender for exercise of a
Right and without requiring payment of
the Purchase Price, shares of Common
Stock (to the extent available) and
then, if necessary, cash, which shares
and/or cash have an aggregate value
equal to the Spread. If the Board of
<PAGE> Directors of the Company shall determine
in good faith that it is likely that
sufficient additional shares of Common
Stock could be authorized for issuance
upon exercise in full of the Rights, the
thirty (30) day period set forth above
may be extended to the extent necessary,
but not more than ninety (90) days after
the Section ll(a)(ii) Trigger Date, in
order that the Company may seek
stockholder approval for the
authorization of such additional shares
(such period, as it may be extended, the
"Substitution Period"). To the extent
that the Company determines that some
action need be taken pursuant to the
first and/or second sentences of this
Section ll(a)(iii), the Company (x)
shall provide, subject to Section 7(e)
hereof, that such action shall apply
uniformly to all outstanding Rights, and
(y) may suspend the exercisability of
the Rights until the expiration of the
Substitution Period in order to seek any
authorization of additional shares
and/or to decide the appropriate form of
distribution to be made pursuant to such
first sentence and to determine the
value thereof. In the event of any such
suspension, the Company shall issue a
public announcement stating that the
exercisability of the Rights has been
temporarily suspended, as well as a
public announcement at such time as the
suspension is no longer in effect. For
purposes of this Section ll(a)(iii), the
value of the Common Stock shall be the
current market price (as determined
pursuant to Section ll(d) hereof) per
share of the Common Stock on the Section
ll(a)(ii) Trigger Date and the value of
any Acommon stock equivalents@ shall be
deemed to have the same value as the
Common Stock on such date.
<PAGE>
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all
holders of Common Stock entitling them to subscribe for or
purchase (for a period expiring within forty-five (45)
calendar days after such record date) Common Stock (or
shares having the same rights, privileges and preferences as
the shares of Common Stock ("Equivalent Common Stock")) or
securities convertible into Common Stock or Equivalent
Common Stock at a price per share of Common Stock or per
share of Equivalent Common Stock (or having a conversion
price per share, if a security convertible into Common Stock
or Equivalent Common Stock) less than the current market
price (as determined pursuant to Section 11(d) hereof) per
share of Common Stock on such record date, the Purchase
Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Common
Stock outstanding on such record date, plus the number of
shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock and/or Equivalent
Common Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be
offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of
Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock and/or
Equivalent Common Stock to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible). In case such
subscription price may be paid by delivery of consideration
part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good
faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights. Shares of Common Stock owned
by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
<PAGE>
(c) In case the Company shall fix a record date
for a distribution to all holders of Common Stock (including
any such distribution made in connection with a
consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash
(other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other
than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or
subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be
the current market price (as determined pursuant to
Section 11(d) hereof) per share of Common Stock on such
record date, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of
Common Stock and the denominator of which shall be such
current market price (as determined pursuant to
Section 11(d) hereof) per share of Common Stock. Such
adjustments shall be made successively whenever such a
record date is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in
effect if such record date had not been fixed.
<PAGE>
(d) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "current market price" per share of Common Stock
on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the thirty
(30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any day
shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date;
provided, however, that in the event that the current market
price per share of the Common Stock is determined during a
period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock of
securities convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or
reclassification, then, and in each such case, the "current
market price" shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading by the NASDAQ National Market System or, if the
shares of Common Stock are not listed or admitted to trading
on the NASDAQ National Market System, as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation
System (NASDAQ) or such other system then in use, or, if on
any such date the shares of Common Stock are not quoted by
any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board of
Directors of the Company. If on any such date no market
maker is making a market in the Common Stock, the fair value
of such shares on such date as determined in good faith by
the Board of Directors of the Company shall be used. The
<PAGE> term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common
Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is
not publicly held or not so listed or traded, "current
market price" per share shall mean the fair value per share
as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase
or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Common Stock.
Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three (3) years from the date
of the transaction which mandates such adjustment, or
(ii) or the Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a) or Section 13(a) hereof, the holder of any
Right thereafter exercised shall become entitled to receive
any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in
Sections ll(a), (b), (c), (e), (g), (h), (i), (j), (k) and
(m), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Common Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the shares of Common Stock
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided
herein.
<PAGE>
(h) Unless the Company shall have exercised its
election as provided in Section 13(i), upon each adjustment
of the Purchase Price as a result of the calculations made
in Sections ll(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by
(i) multiplying (x) the number of Common Shares covered by a
Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the
product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of shares of
Common Stock purchasable upon the exercise of a Right. Each
of the Rights outstanding after the adjustment in the number
of Rights shall be exercisable for the number of shares of
Common Stock for which a Right was exercisable immediately
prior to such adjustment. Each Right held of record prior
to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest
one-one-hundredth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a
public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least
ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result
of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates
held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders
of record of Rights Certificates on the record date
specified in the public announcement.
<PAGE>
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of shares of Common Stock
issuable upon the exercise of the Rights, the Rights
Certificates issued may continue to express the Purchase
Price and the number of shares which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then stated
value, if any, of the number of shares of Common Stock
issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable such number
of shares of Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised
after such record date the number of one one-hundredths of a
share of Common Stock and other capital stock or securities
of the Company, if any, issuable upon such exercise over and
above the number of shares of Common Stock and other capital
stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or
securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in
order that any (i) consolidation or subdivision of the
Common Stock, (ii) issuance wholly for cash of any shares of
Common Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or
exchangeable for shares of Common Stock, (iv) stock
dividends, or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the
Company to holders of its Common Stock shall not be taxable
to such stockholders.
<PAGE>
(n) The Company covenants and agrees that it
shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of
or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights, or (y) prior to,
simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person who
constitutes, or would constitute, the principal Party for
purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or
any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 24 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any
time after the Rights Dividend Declaration Date and prior to
the Distribution Date (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of
Common Stock, or (iii) combine the outstanding shares of
Common Stock into a smaller number of shares, the number of
Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so
that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior
to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the
occurrence of such event.
<PAGE>
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11
and Section 13 hereof, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent, and with each transfer agent for the
Common Stock, a copy of such certificate, and (c) mail or cause
the Rights Agent to mail a brief summary thereof to each holder
of a Rights Certificate (or, if prior to the Distribution Date,
to each holder of a certificate representing shares of Common
Stock) in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person, and the Company
shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person shall consolidate with,
or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons, then, and in each such case, the Company
and the Principal Party (as such term is herein defined) and its
Affiliates and Associates shall make proper provision so that:
(i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely
traceable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the number of shares of Common Stock
for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii)
Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of such shares for which a Right
was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and (2) dividing
<PAGE> that product (which, following the first occurrence of a
Section 13 Event, shall be referred to as the "Purchase Price"
for each Right and for all purposes of this Agreement) by 50% of
the current market price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on
the date of consummation of such Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume,
by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such
transactions as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction
described in clause (x) or (y) of the first sentence of
Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the
Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is
the other party to such merger or consolidation; and
(ii) in the case of any transaction
described in clause (z) of the first sentence of
Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power
transferred pursuant to such transaction or
transactions; provided, however, that in any such case,
(1) if the Common Stock of such Person is not at such
time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of
the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock
of which is and has been so registered, "Principal
Party" shall refer to such other Person; and (2) in
case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stocks
of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever
of such Persons is the issuer of the Common Stock
having the greatest aggregate market value.
<PAGE>
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of
its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b)
of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or
sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
(i) prepare and file a registration
statement under the Act, with respect to the Rights and
the securities purchasable upon exercise of the Rights
on an appropriate form, and will use its best efforts
to cause such registration statement to (A) become
effective as soon as practicable after such filing and
(B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the
Rights historical financial statements for the
Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration
on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not been exercised shall thereafter become exercisable
in the manner described in Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
<PAGE>
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the NASDAQ National Market System or, if
the Rights are not listed or admitted to trading on the NASDAQ
National Market System, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights
are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use
or, if on any such date the rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
rights selected by the board of directors of the company. If on
any such date no such market maker is making a market in the
rights the fair value of the rights on such date as determined in
good faith by the board of directors of the company shall be
used.
(b) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market
value of shares of Common Stock. For purposes of this
Section 14(b), the current market value of shares of Common Stock
shall be the closing price of a share of Common Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading
Day immediately prior to the date of such exercise.
<PAGE>
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, except the rights of action given to
the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his
own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by
such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations
hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person (including,
without limitation, the Company) subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a
Right by accepting the same consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
Common Stock;
(b) After the Distribution Date, the Rights
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purposes,
duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates
fully executed;
(c) Subject to Section 6(a) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat
the person in whose name a Rights Certificate (or, prior to
the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates
or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall
be required to be affected by any notice to the contrary;
and
<PAGE>
(d) Notwithstanding anything in this Agreement to
the contrary, neither the Company nor the Rights Agent shall
have any liability to any holder of a Right or other person
as a result of its inability to perform any of its
obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree
or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Rights Certificate shall
be entitled to vote, receive dividends or be deemed for any
purpose the holder of the number of shares of Common Stock or any
other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be
construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder in accordance with a fee schedule to be mutually
agreed upon and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the
administration and execution of this Agreement and the
exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything
done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of
liability in the premises.
<PAGE>
(b) In no case will the Rights Agent be liable
for special, indirect, incidental or consequential loss or
damage of any kind whatsoever, even if the Rights Agent has
been advised of the likelihood of such loss or damage.
(c) The Rights Agent shall be protected and
shall incur no liability for or in respect of any
action taken, suffered or omitted by it in
connection with its administration of this
Agreement in reliance upon any Rights Certificate
or certificate for Common Stock or for other
securities of the Company, instrument of
assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or
document believed by it to be genuine and to be
signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger
or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding
to the corporate trust or stock transfer business of the
Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on
the part of any of the parties hereto; provided, however,
that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign
such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have
the full force provided in the Rights Certificates and in
this Agreement.
<PAGE>
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights
Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its
prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the
determination of "current market prices) be proved or
established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence
in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only
for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals
contained in this Agreement or in the Rights Certificates or
be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been
made by the Company only.
<PAGE>
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or
responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any
shares of Common Stock will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of
its duties hereunder from any one of the Chairman of the
Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties under
this Agreement, and it shall not
be liable for any action taken or suffered to be taken by it
in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal
entity.
<PAGE>
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct;
provided, however, reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer,
the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise
of transfer without first consulting with the Company.
(l) At any time and from time to time after the
Distribution Date, upon the request of the Company, the
Rights Agent shall promptly deliver to the Company a list,
as of the most recent practicable date (or as of such
earlier date as may be specified by the Company), of the
holders of record of Rights.
<PAGE>
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company, and to each transfer agent of the
Common Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty
(30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock, by registered or certified mail, and
to the holders of the Rights Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the resigning, removed, or
incapacitated Rights Agent shall remit to the Company, or to any
successor Rights Agent designated by the Company, all books,
records, funds, certificates and other documents and instruments
of any kind then in its possession which were acquired or created
by such resigning, removed or incapacitated Rights Agent in
connection with its services as Rights Agent hereunder, and shall
thereafter be discharged from all further duties and obligations
hereunder. Following notice of such removal, resignation or
incapacity, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within
a period of thirty (30) days after giving notice of such removal
or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice,
submit his Rights Certificate for inspection by the Company),
then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by
the Company or by such a court, shall be either (a) a corporation
organized and doing business under the laws of the United States
or of any state of the United States, in good standing, which is
authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by
federal or state authority and which either has or is an
affiliate of a corporation which has at the time of its
appointment as Rights Agent a combined capital and surplus of at
least $100,000,000, or (b) an affiliate of such corporation.
After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time
held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor
Rights Agent and each transfer agent of the Common Stock, and
mail a notice thereof in writing to the registered holders of the
Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect
the legality or validity of the registration or removal of the
Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
<PAGE>
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and/or the number or kind or class
of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Company (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or
warrants or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued
by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors, of the
Company, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be
issued if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to
whom such Rights Certificate would be issued, and (ii) no such
Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Exchange.
(a) The Company's Board of Directors may, at their
option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e)
hereof) for shares of Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at
any time after any person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the
Company or any such subsidiary or any entity holding shares
of Common Stock for or pursuant to any such plan), together
with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of Shares of Common Stock aggregating
50% or more of the shares of Common Stock then outstanding.
<PAGE>
(b) Immediately upon the action of the Company's Board
of Directors ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 23 and without any further
action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice 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 shall mail promptly a notice of
any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the
shares of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) The Company shall not be required to issue
fractions of shares of Common Stock or to distribute
certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock,
the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional shares of
Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this
paragraph (d), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 23.
Section 24. Redemption and Termination.
<PAGE>
(a) The Board of Directors of the Company may, at
their option, at any time prior to the earlier of (i) the
close of business on the tenth business day following the
Stock Acquisition Date or (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights
at a redemption price of $0.01 per Right, as such amount may
be appropriately adjusted to reflect any stock split,
reverse stock split, reclassification, stock dividend or
similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the
"Redemption Prices); provided, however, that if, following
the occurrence of a Stock Acquisition Date and following the
expiration of the right of redemption hereunder but prior to
any Triggering Event, (i) a Person who is an Acquiring
Person shall have transferred or otherwise disposed of a
number of shares of Common Stock in one transaction or
series of transactions, not directly or indirectly involving
the Company or any of its Subsidiaries, which did not result
in the occurrence of a Triggering Event such that such
Person is thereafter a Beneficial Owner of 10% or less of
the outstanding shares of Common Stock, and (ii) there are
no other Persons, immediately following the occurrence of
the event described in clause (i), who are Acquiring
Persons, then the right of redemption shall be reinstated
and thereafter be subject to the provisions of this
Section 24. Notwithstanding anything contained in this
Agreement to the contrary, subject to Section 27 hereof, the
Rights shall not be exercisable after the first occurrence
of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock (based on the "current market
price," as defined in Section 11(d)(i) hereof, of the Common
Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
<PAGE>
(b) Immediately upon the action of the Company's Board
of Directors ordering the redemption of the Rights, evidence
of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right
to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the
action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books
of the Rights Agent or, prior to the Distribution Date, on
the registry books of the Transfer Agent for the Common
Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that
specifically set forth in this Section 24, and other than in
connection with the purchase of Common Stock before the
Distribution Date.
(c) Notwithstanding the provisions of Section 24(a)
hereof, in the event that a majority of the Board is elected
by stockholder action by written consent, or is comprised of
persons elected at a meeting of stockholders who were not
nominated by the Board in office immediately prior to such
meeting, then for a period of ninety (90) days following the
effectiveness of such election the Rights shall not be
redeemed if such redemption is reasonably likely to have the
purpose or effect of allowing any Person to become an
Acquiring Person or otherwise facilitating the occurrence of
a Triggering Event or a transaction with an Acquiring
Person.
<PAGE>
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time
after the Distribution Date, (i) to pay any dividend payable
in stock of any class to the holders of Common Stock or to
make any other distribution to the holders of Common Stock
(other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), or (ii) to
offer to the holders of Common Stock rights or warrants to
subscribe for or to purchase any additional shares of Common
Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a
reclassification involving only the subdivision of
outstanding shares of Common Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other
than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale
or other transfer (or to permit one or more of its
Subsidiaries to effect any sale of other transfer), in one
transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of
a Rights Certificate, to the extent feasible and in
accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes
of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding
up is to take place and the date of participation therein by
the holders of the shares of Common Stock, if any such date
is to be fixed, and such notice shall be so given in the
case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for
determining holders of the shares of Common Stock for
purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation
therein by the holders of the shares of Common Stock
whichever shall be the earlier.
(b) In case any of the events set forth in Section
ll(a)(ii) hereof shall occur, then, in any such case, (i)
the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, to the extent feasible
and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under
Section ll(a)(ii) hereof.
<PAGE>
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the
holder of any Rights Certificate to or on 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:
UNIMED Pharmaceuticals, Inc.
2150 East Lake Cook Road
Buffalo Grove, Illinois 60089
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
HARRIS TRUST AND SAVINGS BANK
P. O. Box 755
Chicago, Illinois 60690
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) 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 Company.
<PAGE>
Section 27. Supplements and Amendments. Before the
Distribution Date, the Company and the Rights Agent shall, if a
majority of the Board of Directors so directs, supplement or
amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Common Stock.
From and after the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if a majority of the Board of Directors so
directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period
hereunder for any or all purposes (for example, the Company may
shorten or lengthen the period during which the Rights may be
redeemed without changing the Distribution Date), (iv) to change
or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable, or (v) lower the
threshold set forth in Section 1(a) to not less than 10%.
Notwithstanding the previous sentence, in no event shall any
such supplement or amendment adopted after the Distribution Date
adversely affect the interests of the holders of Rights (other
than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). In addition, this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of
the second sentence of this Section 27, (A) a time period
relating to when the Rights may be redeemed at such time as the
Rights are not then redeemable, or (B) any other time period
unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to,
the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Upon the
delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with this Section 27, the Rights Agent shall sign
such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price, the Final
Expiration Date, the Purchase Price or the number of shares of
Common Stock for which a Right is exercisable; provided, however,
that at any time before the Distribution Date, the Board of
Directors may amend this Agreement to increase the Purchase Price
or to extend the Final Expiration Date. Before the Distribution
Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
<PAGE>
Section 29. Determination and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any
calculation of the number of shares of Common Stock outstanding
at any particular time, including for purposes of determining the
particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board
of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights
and powers specifically granted to the Board or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to
redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board to any liability to
the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 24 hereof shall be reinstated and shall not expire until
the close of business on the tenth day following the date of such
determination by the Board of Directors.
<PAGE>
Section 32. Governing Law. This Agreement, each Right and
each Rights Certificate issued hereunder shall be deemed to be a
contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with
the laws of such State applicable to contracts made and to be
performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for
convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
UNIMED PHARMACEUTICALS, INC.
By: John N. Kapoor
Name: John N. Kapoor
Title: Chairman
HARRIS TRUST AND SAVINGS BANK
By:
Name:
Title:
<PAGE>
Exhibit A
FORM OF ELECTION TO PURCHASE
(a) (To be executed if holder desire to exercise Rights
represented by the Rights Certificate.)
To: UNIMED PHARMACEUTICALS, INC.
The undersigned hereby irrevocably elects to exercise
Rights represented by this Rights
Certificate to purchase the shares of Common Stock issuable upon
the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such
shares be issued in the name of and delivered to:
Please insert social security or other identifying number:
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Please insert social security or other identifying number:
Please print name and address:
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, broker, dealer, credit
union or savings association or other entity that is a member in
good standing of a signature guarantee medallion program approved
by the Securities Transfer Association, Inc.
<PAGE>
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) The Rights evidenced by this Rights Certificate
[ ] are
[ ] are not
being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined pursuant to the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated:
Signature
Signature Guaranteed:
Signatures must be guaranteed by a bank, broker, dealer,
credit union or savings association or other entity that is a
member in good standing of a signature guarantee medallion
program approved by the Securities Transfer Association, Inc.
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
<PAGE>
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On June 13, 1997, the Board of Directors of UNIMED
Pharmaceuticals, Inc. (the
"Company") declared a dividend distribution of one right for each
outstanding share of common stock to stockholders of record at
the close of business on June 20, 1997. Each Right entitles the
registered holder to purchase from the Company one share of
common stock at a Purchase Price of $50.00 per share, subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and Harris Trust and Savings Bank as Rights Agent.
Initially, the Rights will be attached to all common stock
certificates representing shares then outstanding, and no
separate Rights Certificates will be distributed. The Rights
will separate from the common stock and a Distribution Date will
occur upon the earlier of (i) 10 business days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Persons") has acquired, or obtained the
right to acquire, after June 20, 1997 beneficial ownership of 15%
or more of the outstanding shares of common stock (the "Stock
Acquisition Dates"), except under certain limited circumstances,
or (ii) 10 business days (or such later date as the Board of
Directors shall determine) following the commencement of a tender
or exchange offer that would result in a person or group
beneficially owning 15% or more of such outstanding shares of
common stock. Until the Distribution Date, (i) the Rights will
be evidenced by the common stock certificates and will be
transferred with and only with such common stock certificates,
(ii) new common stock certificates issued after June 20, 1997
will contain a notation incorporating the Rights Agreement by
reference, and (iii) the surrender for transfer of any
certificates for common stock outstanding will also constitute
the transfer of the Rights associated with the common stock
represented by such certificates. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon
any exercise of Rights, a number of Rights be exercised so that
only whole shares of common stock will be issued.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on June 16, 2007 unless
earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the common
stock as of the close of business on the Distribution Date, and
thereafter, the separate Rights Certificates alone will represent
the Rights. Except as otherwise determined by the Board of
Directors, only shares of common stock issued prior to the
Distribution Date will be issued with Rights.
<PAGE>
In the event that (i) the Company is the surviving
corporation in a merger or other business combination with an
Acquiring Person (or any associate or affiliate thereof) and its
common stock remains outstanding and unchanged, (ii) any
Acquiring Person shall acquire beneficial ownership of more than
15% of the outstanding shares of common stock (except pursuant to
(A) certain consolidations or mergers involving the Company or
sales or transfers of the combined assets or earning power the
Company and its subsidiaries or (B) an offer for all outstanding
shares of common stock at a price and upon terms and conditions
which a majority of the Board of Directors determines to be in
the best interests of the Company and its stockholders) or (iii)
there occurs a reclassification of securities, a recapitalization
of the Company or any of certain business combinations or other
transactions (other than certain consolidations and mergers
involving the Company and sales or transfers of the combined
assets or earning power of the Company and its subsidiaries)
involving the Company or any of its subsidiaries which has the
effect of increasing by more than 1% the proportionate share of
any class of the outstanding equity securities of the Company or
any of its subsidiaries beneficially owned by an Acquiring Person
(or any associate or affiliate thereof), each holder of a Right
(other than the Acquiring Person and certain related parties)
will thereafter have the right to receive, upon exercise, common
stock (or, in certain circumstances, cash, property or other
securities of the Company) having a value equal to two times the
exercise price of the Right. However, Rights are not exercisable
following the occurrence of any of the events described above
until such time as the Rights are no longer redeemable by the
Company as described below. Notwithstanding any of the foregoing
following the occurrence of any of the events described in this
paragraph, all Rights that are, or under certain circumstances
specified in the Rights Agreement were, beneficially owned by any
Acquiring Person will be null and void.
For example, at an exercise price of $50.00 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties or transferees) following an event set forth in the
preceding paragraph would entitle its holder to purchase $100.00
worth of common stock for $50.00. Assuming that the common stock
had a per share market price of $10.00 at such time, the holder
of each valid Right would be entitled to purchase 10 shares of
common stock for $50.00, which equates to $5.00 per share.
<PAGE>
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is
not the surviving corporation, (ii) the Company is the surviving
corporation in a consolidation or merger pursuant to which all or
part of the outstanding shares of common stock are changed into
or exchanged for stock or other securities of any other person or
cash or any other property or (iii) more than 50% of the combined
assets of earning power of the Company and its subsidiaries is
sold or transferred (in each case other than certain
consolidations with, mergers with and into, or sales of assets or
earning power by or to subsidiaries of the Company as specified
in the Rights Agreement), each holder of a Right (except Rights
which previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock
of the acquiring company having a value equal to two times the
exercise price of the Rights. The events described in this
paragraph and in the second preceding paragraph are referred to
as the "Triggering Events."
The Purchase Price payable, the number and kind of shares
covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time to prevent dilution (i)
in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the common stock, (ii) if
holders of the common stock are granted certain rights or
warrants to subscribe for common stock or securities convertible
into common stock at less than the current market price of the
common stock, or (iii) upon the distribution to holders of the
common stock of evidences of indebtedness, cash (excluding
regular quarterly cash dividends), assets (other than dividends
payable in common stock) or of subscription rights or warrants
(other than those referred to in (ii) immediately above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price. No fractional shares of common
stock are required to be issued and, in lieu thereof, the Company
may make an adjustment in cash based on the market price of the
common stock on the trading data immediately prior to the date of
exercise.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of
50% or more of the outstanding shares of common stock, the Board
of Directors of the Company may exchange the Rights (other than
Rights owned by such person or group, which will become void), in
whole or in part, for shares of common stock at an exchange ratio
of one share of common stock per Right (subject to adjustment).
<PAGE>
At any time until ten business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $0.01 per Right (payable in cash,
shares of common stock or other consideration deemed appropriate
by the Board of Directors). Immediately upon the action of the
Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will
be to receive the $0.01 redemption price. Notwithstanding the
foregoing, the Rights generally may not be redeemed for 90 days
following a change in a majority of the Board as a result of a
proxy contest.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the
Rights become exercisable for common stock (or other
consideration) of the Company or for common stock of the
acquiring company as set forth above or in the event that the
Rights are redeemed.
Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights
Agreement may be amended by the Board of Directors prior to the
Distribution Date. After the Distribution Date, the provisions
of the Rights Agreement may be amended by the Board in order to
cure any ambiguity, to make changes which do not adversely affect
the interests of holders of Rights (excluding the interest of any
Acquiring Person) or to shorten or lengthen any time period under
the Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such
time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated June 20, 1997. A copy
of the Rights Agreement is available free of charge from the
Rights Agent. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated, herein
by reference.
