SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
September 28, 1999
SYNCOR INTERNATIONAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-8640 85-0229124
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation File Number) Identification No.)
6464 Canoga Avenue, Woodland Hills, California 91367-2407
(Address of Principal Executive Offices) (Zip Code)
(818) 737-4000
Registrant's Telephone Number,
Including Area Code
N/A
Former Name or Former Address, if Changed Since Last Report
Exhibit Index is on Page 9
Item 5. Other Events.
On September 28, 1999, the Board of Directors of Syncor
International Corporation (the "Company") declared a dividend
distribution of one Right for each outstanding share of common
stock, par value $.05 per share, of the Company ("Common Stock").
The dividend is payable to holders of record of Common Stock at
the close of business on October 8, 1999 (the "Record Date").
Except as described below, each Right, when it becomes
exercisable, entitles the registered holder to purchase from the
Company one share of Common Stock at a price of $180 (the
"Purchase Price"). The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between
the Company and American Stock Transfer & Trust Company, 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. Subject to
certain exceptions specified in the Rights Agreement, 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 Person") has acquired, or obtained the
right to acquire, beneficial ownership of 15% or more of the
outstanding shares of Common Stock other than as a result of
repurchases of stock by the Company or certain purchases by
institutional or certain other similar stockholders, so long as
they do not own 20% or more, or following the date a Person
during the Special Period (as defined below) has entered into an
agreement or arrangement with the Company or any Subsidiary of
the Company providing for an Acquisition Transaction (the "Stock
Acquisition Date") or (ii) 10 business days (or such later date
as the Board shall determine, provided, however, that no deferral
of a Distribution Date by the Board pursuant to the terms of the
Rights Agreement described in this clause (ii) may be made at any
time during the Special Period) following the commencement of a
tender offer or exchange offer that would result in a person or
group becoming an Acquiring Person. An Acquisition Transaction
is defined in the Rights Agreement as (x) a merger, consolidation
or similar transaction involving the Company or any of its
Subsidiaries as a result of which stockholders of the Company
will own less than 50% of the outstanding shares of Common Stock
of the Company or a publicly traded entity which controls the
Company or, if appropriate, the entity into which the Company may
be merged, consolidated or otherwise combined (based solely on
the shares of Common Stock received or retained by such
stockholders, in their capacity as stockholders of the Company,
pursuant to such transaction), or (y) a purchase or other
acquisition of all or substantially all of the assets of the
Company and its Subsidiaries. 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 the
Record Date or new issuances will contain a notation
incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on September 28,
2009, unless earlier redeemed or extended 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. Shares of Common Stock issued after the
Distribution Date will be issued with Rights if such shares are
issued pursuant to the exercise of stock options or under an
employee benefit plan, or upon the conversion of securities
issued after adoption of the Rights Agreement. Except as
otherwise determined by the Board of Directors, no other shares
of Common Stock issued after the Distribution Date will be issued
with Rights.
In the event that a Person becomes an Acquiring Person,
except pursuant to an offer for all outstanding shares of Common
Stock of the Company at a price determined by a majority of the
independent Directors of the Company, after receiving advice from
one or more investment banking firms, to be adequate and
otherwise in the best interests of the Company and its
stockholders, each holder of a Right 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. The Exercise Price is the Purchase Price times the
number of shares of Common Stock associated with each Right
(initially, one share). Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this
paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void. However, Rights are
not exercisable following the occurrence of the event set forth
above until such time as the Rights are no longer redeemable by
the Company as set forth below.
For example, at an exercise price of $180 per Right,
each Right not owned by an Acquiring Person (or by certain
related parties) following the event set forth in the preceding
paragraph would entitle its holder to purchase $360 worth of
Common Stock (or other consideration, as noted above). Assuming
that the Common Stock had a per share value of $40 at such time,
the holder of each valid Right would be entitled to purchase nine
shares of Common Stock for $180.
In the event that following the Stock Acquisition Date,
(i) the Company engages in a merger or other business combination
transaction in which the Company is not the surviving corporation
(other than with an entity which acquired the shares pursuant to
a Qualified Offer), (ii) the Company engages in a merger or other
business combination transaction in which the Company is the
surviving corporation and the Common Stock of the Company is
changed or exchanged, or (iii) 50% or more of the Company's
assets, cash flow or earning power is sold or transferred, each
holder of a Right (except Rights which have previously been
voided as set forth above) shall thereafter have the right to
receive, upon exercise of the Right, common stock of the
acquiring company having a value equal to two times the Exercise
Price of the Right. The events set forth in this paragraph and
in the second preceding paragraph are referred to as the
"Triggering Events."
At any time after a person 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 may
exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to
adjustment).
The Purchase Price payable, and the number of shares of
Common Stock or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the Common
Stock, (ii) if holders of the Common Stock are granted certain
rights or warrants to subscribe for Common Stock or convertible
securities at less than the current market price of the Common
Stock, or (iii) upon the distribution to holders of the Common
Stock of evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants
(other than those referred to above). With certain exceptions,
no adjustments 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 will be issued and,
in lieu thereof, an adjustment in cash will be made based on the
market price of the Common Stock on the last trading date prior
to the date of exercise.
At any time until 10 business days following the Stock
Acquisition Date, the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (payable in cash,
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 redemption price.
Notwithstanding the foregoing paragraph, for 180 days
(the "Special Period") following a change in control of the Board
of Directors of the Company, that has not been approved by the
Board of Directors, occurring within nine months of announcement
of an unsolicited third party acquisition or business combination
proposal or of a third party's intent or proposal otherwise to
become an Acquiring Person, the new directors are entitled to
redeem the rights (assuming the rights would have otherwise been
redeemable), including to facilitate an acquisition or business
combination transaction involving the Company, but only (1) if
they have followed certain prescribed procedures or (2) if such
procedures are not followed, and if their decision regarding
redemption and any acquisition or business combination is
challenged as a breach of fiduciary duty of care or loyalty, the
directors (solely for purposes of the effectiveness of the
redemption decision) are able to establish the entire fairness of
the redemption or transaction.
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 or in the event of the redemption of the Rights
as set forth above.
Any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the provisions
of the Rights Agreement may be amended by the Board in order to
cure any ambiguity, to correct or supplement any provision which
may be defective or inconsistent with any other provision
therein, to shorten or lengthen any time period thereunder, or to
make changes which do not adversely affect the interests of
holders of Rights (other than an Acquiring Person). The
foregoing notwithstanding, no amendment may be made to the Rights
Agreement during the Special Period or at a time when the Rights
are not redeemable, except to cure any ambiguity or correct or
supplement any provision contained in the Rights Agreement which
may be defective or inconsistent with any other provision
therein.
The Rights Agreement, dated as of September 28, 1999,
between the Company and American Stock Transfer & Trust Company,
as Rights Agent, specifying the terms of the Rights and the press
release announcing the declaration of the Rights are attached
hereto as exhibits and are incorporated herein by reference. The
foregoing description of the Rights is qualified in its entirety
by reference to such exhibits.
Item 7. Financial Statements and Exhibits.
4 Rights Agreement, dated as of September 28, 1999,
between Syncor International Corporation and American
Stock Transfer & Trust Company, as Rights Agent,
including the form of Rights Certificate as Exhibit A
and the Summary of Rights to Purchase Common Stock as
Exhibit B. Pursuant to the Rights Agreement, printed
Rights Certificates will not be mailed until after the
Distribution Date (as such term is defined in the
Rights Agreement).
20(a) Press Release of the Company dated September 29, 1999.
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 thereto duly authorized.
SYNCOR INTERNATIONAL CORPORATION
Date: October 12, 1999 By: /s/Johns S. Bauamnn
John S. Baumann
Senior Vice President &
General Counsel
EXHIBIT INDEX
Exhibit Description Page
4 Rights Agreement, dated as of September N/A
28, 1999, between Syncor International
Corporation and American Stock Transfer
& Trust Company, as Rights Agent, including
the form of Rights Certificate as Exhibit
A and the Summary of Rights to Purchase
Common Stock as Exhibit B. Pursuant to the
Rights Agreement, printed Rights Certificates
will not be mailed until after the
Distribution Date (as such term is defined
in the Rights Agreement).
20(a) Press Release of the Company dated N/A
September 29, 1999.
<PAGE>
Exhibit 4
SYNCOR INTERNATIONAL CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
Rights Agreement
Dated as of September 28, 1999
Table of Contents
Section Page
Section 1. Certain Definitions 2
Section 2. Appointment of Rights Agent 6
Section 3. Issue of Rights Certificates 7
Section 4. Form of Rights Certificates 9
Section 5. Countersignature and Registration 11
Section 6. Transfer, Split Up, Combination
and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen
Rights Certificates 11
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 13
Section 8. Cancellation and Destruction of
Rights Certificates 15
Section 9. Reservation and Availability of
Common Stock 16
Section 10. Common Stock Record Date 18
Section 11. Adjustment of Purchase Price,
Number and Kind of Shares or
Number of Rights 19
Section 12. Certificate of Adjusted Purchase
Price or Number of Shares 30
Section 13. Consolidation, Merger or Sale or
Transfer of Assets, Cash Flow or
Earning Power 30
Section 14. Fractional Rights and Fractional
Shares 34
Section 15. Rights of Action 35
Section 16. Agreement of Rights Holders 36
Section 17. Rights Certificate Holder Not
Deemed a Stockholder 37
Section 18. Concerning the Rights Agent 37
Section 19. Merger or Consolidation or
Change of Name of Rights Agent 38
Section 20. Duties of Rights Agent 39
Section 21. Change of Rights Agent 42
Section 22. Issuance of New Rights Certificates 43
Section 23. Redemption and Termination 44
Section 24. Exchange 47
Section 25. Notice of Certain Events 49
Section 26. Notices 50
Section 27. Supplements and Amendments 51
Section 28. Successors 52
Section 29. Determinations and Actions by the
Board of Directors, etc. 52
Section 30. Benefits of This Agreement 52
Section 31. Severability 53
Section 32. Governing Law 53
Section 33. Counterparts 53
Section 34. Descriptive Headings 53
Exhibit A -- Form of Rights Certificate
Exhibit B -- Summary of Rights to Purchase
Common Stock
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 28, 1999 the "Agreement"),
between SYNCOR INTERNATIONAL CORPORATION, a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Co., as Rights Agent (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, on September 8, 1989, the Board of Directors of the Company
authorized the Rights Agreement dated September 8,1989 between the Company
and American Stock & Transfer Company (the "1989 Agreement") and granted to
each holder of a share of Common Stock outstanding at the close of business
on November 15, 1989 (the "1989 Record Date") the right to purchase, upon
the terms and subject to the conditions set forth in the 1989 Agreement, one
one-fourth of a share of Common Stock for each share of Common Stock so held
on the 1989 Record Date at an initial purchase price of $5.00 per share,
subject to adjustment as provided in the 1989 Agreement (such rights are
hereinafter referred to as the "1989 Rights"), and also authorized and
granted one 1989 Right for each share of Common Stock issued or delivered
(whether originally issued or delivered from the Company's treasury) between
the 1989 Record Date and the Distribution Date (as such term is defined in
Section 3 of the 1989 Agreement);
WHEREAS, on September 28, 1999, the Board of Directors of the Company
determined it desirable and in the best interests of the Company and its
shareholders for the Company to extend the benefits afforded by the 1989
Agreement and to implement such extension by executing this Agreement;
WHEREAS, on September 28, 1999, the Board of Directors of the Company
authorized and granted to each holder of a share of Common Stock outstanding
at the close of business on October 8, 1999 (the "Record Date") the right to
purchase, upon the terms and subject to the conditions hereinafter set forth,
one share of Common Stock for each share of Common Stock so held on the Record
Date at an initial purchase price of $180 per share, subject to adjustment as
provided hereinafter (such rights are hereinafter referred to as the
"Rights") and also authorized and granted one Right for each share of Common
Stock issued or delivered (whether originally issued or delivered from
treasury) between the Record Date and the Distribution Date (as such term is
defined in Section 3 hereof);
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 (x) any Person who or
which, together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of fifteen percent (15%) or more of the shares of Common
Stock then outstanding, but shall not include (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 the Beneficial Owner of fifteen percent (15%) or
more of the shares of Common Stock then outstanding 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 other than during the
Special Period (as defined in Section 23(c) hereof) or at a time when the
rights are not redeemable, unless and until such Person, after becoming
aware that such Person has become the Beneficial Owner of fifteen percent
(15%) or more of the then outstanding shares of Common Stock, acquires
beneficial ownership of additional shares of Common Stock representing one
percent (1%) or more of the shares of Common Stock then outstanding; or (v)
any such Person who has reported or is required to report such ownership (but
less than 20%) on Schedule 13G under the Exchange Act (or any comparable or
successor report) or on Schedule 13D under the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement (the "Exchange
Act") (or any comparable or successor report) which Schedule 13D does not state
any intention to or reserve the right to control or influence the management or
policies of the Company or engage in any of the actions specified in Item 4
of such schedule (other than the acquisition (but less than 20%) or
disposition of the Common Stock), but only so long as such Person qualifies
for the term of this exception; or (y) any Person who or which during the
Special Period (as defined in Section 23(c) hereof) has entered into any
agreement or arrangement with the Company or any Subsidiary of the Company
providing for an Acquisition Transaction (as defined in Section 1(b) hereof).
(b) "Acquisition Transaction" shall mean (x) a merger,
consolidation or similar transaction involving the Company or any of its
Subsidiaries as a result of which stockholders of the Company will own less
than 50% of the outstanding shares of Common Stock of the Company or a
publicly traded entity which controls the Company or, if appropriate, the
entity into which the Company may be merged, consolidated or otherwise combined
(based solely on the shares of Common Stock received or retained by such
stockholders, in their capacity as stockholders of the Company, pursuant to
such transaction), or (y) a purchase or other acquisition of all or
substantially all of the assets of the Company and its Subsidiaries.
(c) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(d) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such
Person's Affiliates or Associates, directly or
indirectly, has the right to acquire (whether
such right is exercisable immediately or only
after the passage of time) pursuant to any
agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of
conversion rights, exchange rights, other rights,
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) hereof or Section 22
hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly,
has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or
not in writing; provided, however, that a Person
shall not 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
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Affiliate
or Associate thereof) with which such Person (or any
of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or
not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities
of the Company;
provided, however, that nothing in this paragraph (c) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of 40 days after the date of such acquisition; and provided
further, however, that any stockholder of the Company, with affiliate(s),
associate(s) or other person(s) who may be deemed representatives of it
serving as director(s) of the Company, shall not be deemed to beneficially
own securities held by other Persons as a result of (i) such person or
persons affiliated or otherwise associated with such stockholder serving as
directors or taking any action in connection therewith, (ii) discussing the
status of its shares with the Company or other stockholders of the Company
similarly situated or (iii) voting or acting in a manner similar to other
stockholders similarly situated, absent a specific finding by the Board of
Directors of an express agreement among such stockholders to act in concert
with one another as stockholders so as to cause, in the good faith judgment of
the Board of Directors, each such stockholder to be the Beneficial Owner of the
shares held by the other stockholder(s).
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M.,
California time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., California time, on the next succeeding
Business Day.
(g) "Common Stock" shall mean the common stock, par value $.05 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.
(h) "Current Market Price" shall have the meaning ascribed to such
term in Section 11(d) hereof.
(i) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(j) "Section 11 Event" shall mean any event described in Section
11(a)(ii) hereof.
(k) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(l) "Stock Acquisition Date" shall mean the earlier of (i) 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 pursuant to clause (x) of the definition of
Acquiring Person, and (ii) the date that an Acquiring Person has become
such pursuant to clause (y) of the definition of Acquiring Person.
(m) "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.
(n) "Triggering Event" shall mean any Section 11 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 and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Stock) in accordance with
the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the tenth
Business Day after the Stock Acquisition Date (or, if the tenth Business Day
after the Stock Acquisition Date occurs before the Record Date, the close of
business on the Record Date), or (ii) the close of business on the tenth
Business Day (or such specified or unspecified later date as the Board shall
determine, provided, however, that no deferral of a Distribution Date by the
Board pursuant to this clause (ii) may be made at any time during the Special
Period) 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) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would become the
Beneficial Owner of 15% or more of the shares of Common Stock then
outstanding (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraphs (b) and (c) of this Section 3) 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 (y) 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 Company will prepare and
execute, the Rights Agent will countersign and the Company will send or in
writing instruct the Rights Agent to send by first-class, 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, in substantially the form of
Exhibit A hereto (the "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(i) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) and will provide written notice thereof to the Rights Agent, 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) At the request of any holder of Common Stock,the Company will
send to such holder a copy of a Summary of Rights attached hereto as
Exhibit B by first-class, postage prepaid mail to the address of such holder
shown on the records of the Company. With respect to certificates for the
Common Stock outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates for the Common Stock and
the registered holders of the Common Stock shall also be the registered
holders of the associated Rights. Until the earlier of the Distribution
Date or the Expiration Date (as such term is defined in Section 7 hereof),
the transfer of any certificates representing shares of Common Stock in respect
of which Rights have been issued shall also constitute the transfer of the
Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued (whether originally issued or delivered from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date or, in certain circumstances provided
in Section 22 hereof, after the Distribution Date. Certificates representing
such shares of Common Stock shall also be deemed to be certificates for
Rights, and shall bear the following legend or such similar legend as the
Company may deem appropriate and as is not inconsistent with the provisions
of this Agreement (or the legend required under the 1989 Agreement), or as
may be required to comply with any applicable law, with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange or
the Nasdaq Stock Market on which the Rights may from time to time be listed
or included:
This certificate also evidences and
entitles the holder hereof to certain
Rights as set forth in the Rights Agreement
between Syncor International Corporation
and the Rights Agent thereunder (the "Rights
Agreement"), the terms of which are hereby
incorporated herein by reference and a copy
of which is on file at the principal executive
offices of Syncor International Corporation.
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.
Syncor International Corporation will mail
to the holder of this certificate a copy
of the Rights Agreement without charge
promptly upon 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 then 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 (or the
legend required under the 1989 Agreement), until the earlier of (i) the
Distribution Date or (ii) the Expiration Date, the Rights associated with
the Common Stock represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificates.
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) shall each be
substantially in the form set forth in Exhibit A hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange or the
Nasdaq Stock Market on which the Rights may from time to time be listed or
quoted, 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 (the "Purchase Price"), but the number
of shares or other property purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(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 Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of Section 7(e) hereof, and any
Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights
Certificate are or were beneficially owned
by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined
in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights
represented hereby may become null and void
in the circumstances specified in Section
7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chief Executive Officer, 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 manually countersigned
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by the
Rights Agent and issued and delivered by the Company with the same force
and effect as though the person who signed such Rights Certificates had not
ceased to be such officer of the Company; and any Rights Certificate may be
signed on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the Company
to sign such Rights Certificate, although at the date of the execution of
this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights evidenced
on its face by each of the Rights Certificates and the date of each of the
Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(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 (other than Rights Certificates
representing Rights that have become void pursuant to Section 7(e) hereof)
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, Common
Stock, 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 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 or Certificates until the
registered holder shall have completed and signed the certificate contained
in the form of assignment set forth on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon the
Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate
or Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination
or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
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
23(a) hereof) in whole or in part at any time after the Distribution Date
upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly executed, to
the Rights Agent at the principal office of the Rights Agent 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 close of
business on September 28, 2009 (the "Final Expiration Date") or (ii) the
time at which the Rights are redeemed or exchanged as provided in Section 23
and Section 24 hereof (the earlier of (i) and (ii) being herein referred to
as the "Expiration Date").
(b) The Purchase Price for each share of Common Stock pursuant to
the exercise of a Right shall initially be $180 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.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) requisition from any transfer agent of the
shares of Common Stock (or make available, if the Rights Agent is the
transfer agent for the Common Stock) 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, (ii)
requisition from the Company the amount of cash, if any, to be paid in lieu
of fractional shares of Common Stock in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, and (iv) after receipt thereof, 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) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. 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.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11 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 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 any of its respective 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) or
Affiliates or Associates thereof as the Company or the Rights Agent shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and
no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any 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 cancelled Rights Certificates to
the Company, or shall, at the written request of the Company, destroy such
cancelled Rights Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
Section 9. Reservation and Availability of Common Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities)
or out of any authorized and issued shares held in its treasury, the number
of shares of Common Stock (and, following the occurrence of a Triggering
Event, shares of Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Common Stock (and, following the
occurrence of a Triggering Event, shares of Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange or quoted on the Nasdaq Stock
Market, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable (but only to the extent that it is
reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange or the Nasdaq Stock Market upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a Section
11 Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined pursuant to this agreement
(including in accordance with Section 11(a)(iii) 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 of 1933, as amended (the
"Securities Act"), with respect to the Common Stock or other securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such shares of Common Stock or other securities, and
(B) the Expiration Date. The Company will also take such action as may be
appropriate under, or to ensure compliance with, the securities or "blue sky"
laws of the various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become
effective. 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. In addition, if the Company shall determine
that a registration statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective.
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 or the exercise thereof
shall not be permitted under applicable law or a registration statement shall
not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock (and,
following the occurrence of a Triggering Event, shares of Common Stock and/or
other securities) 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.
(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 (or Common
Stock and/or other securities, as the case may be) 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 (or Common Stock and/or other securities, as the case may be) 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 Common Stock and/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 (or other securities, as the case may
be) is issued upon the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the shares of Common Stock (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and 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 (or Common
Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a 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.
(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; provided, however,
that if the record date for any such dividend,
subdivision, combination or reclassification shall
occur prior to the Distribution Date, the Company
shall make an appropriate adjustment to the Purchase
Price (taking into account any additional Rights
which may be issued as a result of such dividend,
subdivision, combination or reclassification), in
lieu of adjusting (as described above) the number
of shares of Common Stock (or other capital stock,
as the case may be) issuable upon exercise of the
Rights. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and
shall be made prior to any adjustment required pursuant
to Section 11(a)(ii) hereof.
(ii) In the event any Person, at any time
after the Rights Dividend Declaration Date, shall
become an Acquiring Person, unless the event causing
such Person to become an Acquiring Person is a transaction
set forth in Section 13(a) hereof, or is an acquisition
of shares of Common Stock pursuant to a tender offer or
exchange offer for all outstanding shares of Common
Stock at a price and on terms determined by at least a
majority of the members of the Board who are not officers
of the Company and who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person, after
receiving advice from one or more investment banking
firms, to be (A) at a price which is adequate and (B)
otherwise in the best interests of the Company and its
stockholders (other than the Person or an Affiliate or
Associate thereof on whose behalf the offer is made) (a
"Qualified Offer") then, promptly following the
occurrence of any such event, proper provision shall be
made 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, such number of shares of Common
Stock of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price
by the then number of shares of Common Stock for which
a Right was exercisable immediately prior to the first
occurrence of a Section 11 Event, and (y) dividing
that product (such product, following such first
occurrence, shall be referred to as the "Purchase
Price" with respect to each Right for all purposes
of this Agreement) by 50% of the Current Market
Price per share of Common Stock on the date of
such first occurrence (such number of shares is
herein called the "Adjustment Shares"); provided
that the Purchase Price and the number of Adjustment
Shares shall be further adjusted as provided in this
Agreement to reflect any event occurring after the
date of such first occurrence.
(iii) In the event that the number of
shares of Common Stock which is authorized by the
Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes
other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the
Rights in accordance with Section 11(a)(ii), 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 is herein called
the "Spread"), and (B) with respect to each Right,
make adequate provision to substitute for the
Adjustment Shares, upon exercise of the Rights, (1)
cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the
Company (including, without limitation, shares, or
units of shares, of preferred stock which the Board
has deemed to have the same value as shares of Common
Stock (such shares or units of shares of preferred
stock are referred to herein as "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 based upon the advice of
a nationally recognized investment banking firm
selected by the Board; provided, however, if the
Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first
occurrence of a Section 11 Event and (y) the date on
which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver,
upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Board
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
11(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 should
be taken pursuant to the first and/or second sentences
of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in
order to seek any authorization of additional securities
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 11(a)(iii), the value of
the Common Stock shall be the Current Market Price per
share of the Common Stock on the Section 11(a)(ii)
Trigger Date and the value of any "common stock
equivalent" shall be deemed to have the same value as
the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance
of rights (other than the Rights), options or warrants to 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 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 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, 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.
(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 per share of Common Stock on such record date, less the fair
market value (as determined in good faith by the Board, 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) 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 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.
(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
the Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 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 the Common Stock
of (i) any dividend or distribution on such Common Stock, payable in shares
of such Common Stock or securities convertible into shares of such Common Stock
(other than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and the ex-dividend date for such
dividend or distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred prior to the
expiration of the requisite thirty (30) Trading Day period or ten (10)
Trading Day period, as set forth above, then, and in each such case, the
"Current Market Price" shall be properly adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported on the Nasdaq Stock
Market or, if on any such date the shares of Common Stock are not quoted on
the Nasdaq Stock Market, 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. 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 shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, 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, 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, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock 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 shares of Common Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Common
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number (or fraction) of shares of
Common Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of shares of Common Stock (calculated to the nearest ten-thousandth) obtained
by (i) multiplying (x) the number of shares covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number (or fraction) 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 (or
fraction) 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 ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number (or fraction) of shares of Common Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of
shares which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the 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 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 shares of Common Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the 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 of Common Stock and other
capital stock 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 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.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person, (ii)
merge with or into any other Person, 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
ny other Person or Persons, if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately
after such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26 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.
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 and methodology 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) if
deemed appropriate by the Company, mail a brief summary thereof to each
holder of a Rights Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock) in
accordance with Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets, Cash
Flow 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, cash flow or earning power
aggregating 50% or more of the assets, cash flow or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or Persons,
then, and in each such case (except as may be contemplated by Section 13(d)
hereof), proper provision shall be made 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, non-assessable and freely tradeable shares
of Common Stock of the Principal Party (as such term is hereinafter defined),
not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of shares of Common Stock for
which a Right was exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11 Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the Purchase Price in effect
immediately prior to the first occurrence of a Section 11 Event by the
number of shares of Common Stock for which a Right was exercisable
immediately prior to such first occurrence of a Section 11 Event) and (2)
dividing that product (such product following the first occurrence of a
Section 13 Event shall be referred to as the "Purchase Price" for each Right
and for all purposes of this Agreement) by 50% of the Current Market Price
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 transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; and (v) the provisions of Section 11(a)(ii) 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 for or 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,
cash flow 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 Stock of two or
more of which are and have been so registered, "Principal Party" shall refer
to whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any Section 13 Event unless
the Principal Party shall have a sufficient number of authorized shares of
its Common Stock which have not been issued or reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any such Section 13
Event, the Principal Party will
(i) prepare and file a registration
statement under the Securities 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 Securities Act)
until the Expiration Date;
(ii) use its best efforts to qualify
or register the Rights and the securities purchasable
upon exercise of the Rights under blue sky laws of
such jurisdiction, as may be necessary or appropriate;
and
(iii) 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 first occurrence of a Section 11
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to a tender offer or exchange offer for all outstanding shares of
Common Stock which complies with the provisions of Section 11(a)(ii) hereof
(or a wholly-owned Subsidiary of any such Person or Persons), (ii) the price
per share of Common Stock offered in such transaction is not less than the
price per share of Common Stock paid to all holders of shares of Common
Stock whose shares were purchased pursuant to such tender offer or exchange
offer, and (iii) the form of consideration being offered to the remaining
holders of shares of Common Stock pursuant to such transaction is the same
as the form of consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
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 New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
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 on the Nasdaq Stock Market or,
if on any such date the Rights are not quoted on the Nasdaq Stock Market, 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. 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
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
one share of Common Stock. For purposes of this Section 14(b), the current
market value of one share of Common Stock shall be the closing price per share
of Common Stock (determined pursuant to Section 11(d) hereof) on the Trading
Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
(d) Whenever a payment for fractional rights or fractional shares
is to be made by the Rights Agent, the Company shall (i) promptly prepare
and deliver to the Rights Agent a certificate setting forth the facts related
to such payment and the prices and/or formulas utilized in calculating such
payments, and (ii) provide sufficient monies to the Rights Agent in the form
of fully collected funds to make such payments. The Rights Agent shall be
fully protected in relying upon such a certificate and shall have no duty with
respect to this Section 14 unless and until it shall have received such a
certificate and sufficient monies.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant
to 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 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 and only if
surrendered at the principal office of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer,
with the form of assignment set forth on the reverse side thereof and the
certificate contained therein duly completed and executed in a form
reasonably acceptable to the Rights Agent;
(c) the Company and the Rights Agent may deem and treat the
person in whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any 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 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 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 in
the absence of 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.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
Rights Certificate or certificate for Common Stock or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons or otherwise upon the advice of counsel as set forth
in Section 20 hereof.
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 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.
(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 reasonably necessary or desirable that any
fact, circumstance, calculation, or matter (including, without limitation, the
identity of any Acquiring Person and the determination of "Current Market
Price") be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board,
the Chief Executive Officer, 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
gross 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.
(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 or
change in the exercisability of the Rights (including the Rights becoming
void) required under any of the provisions of this Agreement, including
Section 11, Section 13 or Section 24 hereof or responsible for the manner,
method or amount of any such change or adjustment or the ascertaining of the
existence of facts that would require any such change or adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates after
actual notice of any such change or 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 or other
securities to be issued pursuant to this Agreement or any Rights Certificate
or as to whether any shares of Common Stock or other securities will, when so
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary, any Assistant Secretary, the Treasurer or
any Assistant Treasurer of the Company or any designee of any of the
foregoing, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions
of any such officer.
(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.
(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) The Rights Agent shall have no responsibility to the Company,
any holders of Rights or any holders of Common Stock or other securities for
interest or earnings on any monies held by the Rights Agent pursuant to this
Agreement.
(l) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or the 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 or transfer without first consulting with
the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock, by registered or certified mail, and to
the holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within
a period of thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by any registered holder of a
Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of a
Rights Certificate or the Rights Agent may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States
or of the State of New York or California (or of any other state of the
United States so long as such corporation is authorized to do business in
the State of New York or California), in good standing, having a principal
office in the State of New York or California which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority. 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 Rights, Rights Agreement or the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by its Board to reflect any adjustment or
change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Rights Certificates made
in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights,
the Company (a) shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, granted or awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board, issue Rights Certificates representing the appropriate number
of Rights in connection with such issuance or sale; provided, however, that
(i) no such Rights Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its 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, if the Stock Acquisition Date shall have occurred prior
to the Record Date, the close of business on the tenth Business Day following
the Record Date), or (ii) the Final Expiration Date, direct the Company to,
and if directed, the Company shall redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). Notwithstanding
anything contained in this Agreement to the contrary, the Rights shall not be
exercisable after the first occurrence of a Section 11 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) hereof, of
the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board directing the Company
to make 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 directing the Company
to make 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 each such holder at such 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.
(c) Notwithstanding the provisions of Section 23(a) hereof, if,
within 270 days of a public announcement by a third party of an intent or
proposal to engage (without the current and continuing concurrence of the
Board) in a transaction involving an acquisition of or business combination
with the Company or otherwise to become an Acquiring Person, there is an
election of Directors (whether at one or more stockholder meetings and/or
pursuant to written stockholder consent) resulting in a majority of the Board
being comprised of persons who were not nominated by the Board in office
immediately prior to such election, then following the effectiveness of such
election for a period of 180 days (the "Special Period") the Rights, if
otherwise then redeemable absent the provisions of this paragraph (c), shall
be redeemable upon either of the following conditions being satisfied, but not
otherwise:
(A) by a vote of a majority of the Directors then in office,
provided that
(I) before such vote, the Board shall have implemented the Value
Enhancement Procedures (as defined below) and
(II) promptly after such vote, the Company publicly announces
such vote and
(a) the manner in which the Value Enhancement Procedures
were implemented,
(b) any material financial, business, personal or other
benefit or relationship (an "Interest") which each
Director and each Affiliate of such Director (identifying
each Director and Affiliate separately in relation to
each such Interest) has in connection with any suggested,
proposed or pending transaction with or involving the
Company (a "Transaction"), or with any other party or
Affiliate of any other party to a Transaction, where such
Transaction would or might, or is intended to, be
permitted or facilitated by redemption of the Rights (an
"Affected Transaction"), other than treatment as a
stockholder on a pro rata basis with other stockholders
or pursuant to compensation arrangements as a director or
employee of the Company or a subsidiary which have been
previously disclosed by the Company,
(c) the individual vote of each Director on the motion to
redeem the Rights, and
(d) the statement of any Director who voted for or
against the motion to redeem the Rights and desires to
have a statement included in such announcement, or
(B) if clause (A) is not applicable, by a vote of a majority
of the Directors then in office, provided that (I) if there is
a challenge to the Directors' action approving redemption
and/or any related Affected Transaction as a breach of the
fiduciary duty of care or loyalty, the Directors, solely for
purposes of determining the effectiveness of such redemption
pursuant to this clause (B), are able to establish the entire
fairness of such redemption and, if applicable, such related
Affected Transaction, and (II) the Company shall have publicly
announced the vote of the Board approving such redemption and,
if applicable, such related Affected Transaction, which
announcement shall set forth the information prescribed by
clauses (A) (II) (b), (c) and (d) above.
"Value Enhancement Procedures" shall mean:
(1) the selection by the Board of an independent financial advisor (the
"Independent Advisor") from among financial advisors which have national
standing, have established expertise in advising on mergers,
acquisitions and related matters and have no Interest relating to an
Affected Transaction (other than receipt of a customary fee from the
Company), and have not during the preceding year provided services to,
been engaged by or been a financing source for any other party to an
Affected Transaction;
(2) if there is a then-pending Affected Transaction,
(A) the establishment and implementation by the Board, with the
advice of its Independent Advisor, of a process and procedures
which the Board, in good faith, concludes would be most likely to
result in the best value reasonably available to stockholders,
(B) the Board (I) receiving the opinion of its Independent Advisor,
in customary form and content for transactions of the type
involved, that the Affected Transaction is fair to the Company's
stockholders from a financial point of view and (II) determining
that it has no reason to believe that a superior transaction is
reasonably available for the benefit of the Company's stockholders,
and
(C) the execution of a definitive transaction agreement and other
definitive documentation necessary to effect the Affected Transaction.
(d) Neither the Company nor any of its Affiliates or Associates
may redeem, acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this Section 23 and other
than in connection with the purchase or repurchase by any of them of Common
Stock prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after the first occurrence of a Section 11 Event, 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 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 of the Company shall not be empowered to
effect such exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or
any such Subsidiary, or any entity holding Common Stock for or pursuant to the
terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of fifty percent (50%) or more of the
Common Stock then outstanding.
Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common
Stock equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books of
the Company. 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 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.
(b) In the event that there shall not be sufficient Common Stock
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
(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, there shall be paid 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 subsection (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 Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Common Stock or to make any other distribution to the holders
of Common Stock (other than a regular quarterly cash dividend out of earnings
or retained earnings 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(p)
hereof), or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one transaction or
a series of related transactions, of more than 50% of the assets, cash flow
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(p) 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 Section 11 Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate, to the extent feasible and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Common Stock shall be deemed thereafter to refer to Common Stock
and/or other securities, if appropriate.
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
delivered personally, sent by confirmed telecopy, sent by overnight courier
or sent by registered or certified mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Syncor International Corporation
6464 Canoga Avenue
Woodland Hills, California 91367
Attention: The President
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 delivered personally, sent by confirmed telecopy, sent by overnight
courier or sent by registered or certified mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10015
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 delivered
personally, sent by confirmed telecopy, sent by overnight courier or 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.
Section 27. Supplements and Amendments.
(a) Prior to the Distribution Date, and subject to the provisions
of Section 27(b) hereof, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement
(including, without limitation, any extension of the period in which the
Rights may be redeemed, any increase in the Purchase Price and any extension
of the Final Expiration Date) without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date, and subject to the provisions of Section 27(b) hereof, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder, or (iv) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable
and which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of
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 the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Stock.
(b) Notwithstanding anything herein to the contrary, no supplement
or amendment shall be made to this Agreement during the Special Period or at
a time when the Rights are not redeemable, except as contemplated by clause
(i) or (ii) of the second sentence of Section 27(a) hereof.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock or any other class of capital 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-3d(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board 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 purpose 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 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 23 hereof shall be reinstated and shall not expire until the close of
business on the tenth day following the date of such determination by the
Board.
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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
Attest: SYNCOR INTERNATIONAL
CORPORATION
By /s/Edwin A. Burgos By /s/Robert G. Funari
Edwin A. Burgos Robert G. Funari
Senior Corporate Counsel President & CEO
Attest: AMERICAN STOCK TRANSFER &
TRUST COMPANY
By /s/Isaac J. Kagan By /s/Herbert J. Lemmer
Isaac J. Kagan Herbert J. Lemmer
Vice President Vice President
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R- ________________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 28, 2009 UNLESS EXTENDED PRIOR
THERETO BY THE BOARD OF DIRECTORS OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS
OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.] 1
Rights Certificate
SYNCOR INTERNATIONAL CORPORATION
This certifies that , or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Rights Agreement, dated as of September 28, 1999 (the "Rights
Agreement"), between SYNCOR INTERNATIONAL CORPORATION, a Delaware corporation
(the "Company"), and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent"), to purchase from the Company at any time prior to
5:00 P.M. (California time) on September 28, 2009, at the principal office of
the Rights Agent designated for such purposes, one fully paid and
nonassessable share of common stock, par value $.05 per share (the "Common
___________________________
1 The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Stock"), of the Company, at a purchase price of $180 (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with the Form of
Election to Purchase set forth on the reverse hereof and the Certificate
contained therein duly executed. The Purchase Price shall be paid in cash.
The number of Rights evidenced by this Rights Certificate, the number of
shares of Common Stock which may be purchased upon exercise thereof and the
Purchase Price set forth above are the number of Rights, number of shares of
Common Stock and Purchase Price as of the date the Rights Agreement was
executed, based on the Common Stock as constituted at such date, and are
subject to adjustment upon the happening of certain events as provided in the
Rights Agreement.
Upon the occurrence of a Section 11 Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person or an Affiliate or
Associate of any such Acquiring Person, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, concurrently
with or after such transfer, became an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person, such Rights shall become null and
void and no holder hereof shall have any rights whatsoever with respect to
such Rights from and after the occurrence of such Section 11 Event.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Common Stock which may be purchased upon the exercise of the
Rights evidenced by this Certificate are subject to modification and
adjustment upon the happening of certain events (including a Section 11 Event).
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension of
the exercisability of such Rights under the specific circumstances set forth
in the Rights Agreement. Copies of the Rights Agreement are on file at the
office of the Company and are also available upon written request to the
Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Common Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Certificates representing the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right payable, at the election of the Company,
in cash, Common Stock, or such other consideration as the Board of Directors
may determine, at any time prior to the earlier of the close of business on
(a) the tenth business day following the Stock Acquisition Date (as such time
period may be extended or shortened pursuant to the Rights Agreement) or (b)
the Final Expiration Date. For 180 days following a change in control of the
Board of Directors of the Company, that has not been approved by the Board of
Directors, occurring within nine months of announcement of an unsolicited
third party acquisition or business combination proposal or of a third party's
intent or proposal otherwise to become an Acquiring Person, the new directors
are entitled to redeem the rights (assuming the rights would have otherwise
been redeemable), including to facilitate an acquisition or business
combination transaction involving the Company, but only (1) if they have
followed certain prescribed procedures or (2) if such procedures are not
followed, and if their decision regarding redemption and any acquisition or
business combination is challenged as a breach of fiduciary duty of care or
loyalty, the directors (solely for purposes of the effectiveness of the
redemption decision) are able to establish the entire fairness of the
redemption or transaction.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.
No holder, as such, of this Rights Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the shares of
Common Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a 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 the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
this Rights Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ____________ ____, ______
ATTEST: SYNCOR INTERNATIONAL
CORPORATION
____________________________ By________________________
Secretary Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By___________________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
Please print social security or other
identifying number of the transferor: _________________________________
FOR VALUE RECEIVED______________________________________________________
hereby sells, assigns and transfers unto _______________________________
________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________
(Please print social security or other
identifying number of the transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _________________
____________________________________
Signature
Signature Guaranteed:__________________________________________________
Signature must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person.
Dated: ____________________ ___________________________________
Signature
Signature Guaranteed:_______________________________________________________
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
The signature must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to
exercise Rights represented by the Rights Certificate.)
To: SYNCOR INTERNATIONAL CORPORATION
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the shares of
Common Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be
issued in the name of and delivered to:
___________________________________________________________________________
(Please print name and address)
___________________________________________________________________________
Please insert social security
or other identifying number:_______________________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
____________________________________________________________________________
(Please print name and address)
____________________________________________________________________________
Please insert social security
or other identifying number:________________________________________________
Dated:____________________
_________________________________________
Signature
Signature Guaranteed:_______________________________________________________
Signature must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
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 in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person.
Dated:____________________ ____________________________________
Signature
Signature Guaranteed:_______________________________________________________
NOTICE
The signatures 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.
The signature must be guaranteed by an Eligible Guarantor Institution as
defined by SEC Rule 17Ad-15 (17 C.F.R. 240.17-Ad-15).
<PAGE>
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On September 28, 1999, the Board of Directors of Syncor International
Corporation (the "Company") declared a dividend distribution of one Right for
each outstanding share of common stock, par value $.05 per share, of the
Company ("Common Stock"). The dividend is payable to holders of record of
Common Stock at the close of business on October 8, 1999 (the "Record Date").
Except as described below, each Right, when it becomes exercisable, entitles
the registered holder to purchase from the Company one share of Common Stock
at a price of $180 (the "Purchase Price"). The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and American Stock Transfer & Trust Co., 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. Subject to certain exceptions specified in the Rights
Agreement, 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 Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
other than as a result of repurchases of stock by the Company or certain
purchases by institutional or certain other similar stockholders, so long as
they do not own 20% or more, or following the date a Person during the
Special Period (as defined below) has entered into an agreement or arrangement
with the Company or any Subsidiary of the Company providing for an
Acquisition Transaction (the "Stock Acquisition Date") or (ii) 10 business
days (or such later date as the Board shall determine, provided, however,
that no deferral of a Distribution Date by the Board pursuant to the terms of
the Rights Agreement described in this clause (ii) may be made at any time
during the Special Period) following the commencement of a tender offer or
exchange offer that would result in a person or group becoming an Acquiring
Person. An Acquisition Transaction is defined in the Rights Agreement as (x)
a merger, consolidation or similar transaction involving the Company or any
of its Subsidiaries as a result of which stockholders of the Company will own
less than 50% of the outstanding shares of Common Stock of the Company or a
publicly traded entity which controls the Company or, if appropriate, the
entity into which the Company may be merged, consolidated or otherwise
combined (based solely on the shares of Common Stock received or retained by
such stockholders, in their capacity as stockholders of the Company, pursuant
to such transaction), or (y) a purchase or other acquisition of all or
substantially all of the assets of the Company and its Subsidiaries. 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 the Record
Date or new issuances will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of any
certificates for Common Stock outstanding will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on September 28, 2009, unless earlier
redeemed or extended 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. Shares of Common Stock issued
after the Distribution Date will be issued with Rights if such shares are
issued pursuant to the exercise of stock options or under an employee benefit
plan, or upon the conversion of securities issued after adoption of the
Rights Agreement. Except as otherwise determined by the Board of Directors,
no other shares of Common Stock issued after the Distribution Date will be
issued with Rights.
In the event that a Person becomes an Acquiring Person, except pursuant
to an offer for all outstanding shares of Common Stock of the Company at a
price determined by a majority of the independent Directors of the Company,
after receiving advice from one or more investment banking firms, to be
adequate and otherwise in the best interests of the Company and its
stockholders, each holder of a Right 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. The Exercise Price is the Purchase
Price times the number of shares of Common Stock associated with each Right
(initially, one share). Notwithstanding any of the foregoing, following the
occurrence of the event set forth in this paragraph, all Rights that are, or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of the event set forth
above until such time as the Rights are no longer redeemable by the Company
as set forth below.
For example, at an exercise price of $180 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following the
event set forth in the preceding paragraph would entitle its holder to
purchase $360 worth of Common Stock (or other consideration, as noted above).
Assuming that the Common Stock had a per share value of $40 at such time, the
holder of each valid Right would be entitled to purchase nine shares of
Common Stock for $180.
In the event that following the Stock Acquisition Date, (i) the Company
engages in a merger or other business combination transaction in which the
Company is not the surviving corporation (other than with an entity which
acquired the shares pursuant to a Qualified Offer), (ii) the Company engages
in a merger or other business combination transaction in which the Company is
the surviving corporation and the Common Stock of the Company is changed or
exchanged, or (iii) 50% or more of the Company's assets, cash flow or
earning power is sold or transferred, each holder of a Right (except Rights
which have previously been voided as set forth above) shall thereafter have
the right to receive, upon exercise of the Right, common stock of the
acquiring company having a value equal to two times the Exercise Price of the
Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
At any time after a person 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 may exchange the Rights (other than Rights owned
by such person or group which have become void), in whole or in part, at an
exchange ratio of one share of Common Stock per Right (subject to adjustment).
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Common Stock, (ii) if holders of the Common Stock are granted certain rights
or warrants to subscribe for Common Stock or convertible securities at less
than the current market price of the Common Stock, or (iii) upon the
distribution to holders of the Common Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above). With certain exceptions, no
adjustments 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 will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise.
At any time until 10 business days following the Stock Acquisition Date,
the Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right (payable in cash, 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
redemption price.
Notwithstanding the foregoing paragraph, for 180 days (the "Special
Period") following a change in control of the Board of Directors of the
Company, that has not been approved by the Board of Directors, occurring
within nine months of announcement of an unsolicited third party acquisition
or business combination proposal or of a third party's intent or proposal
otherwise to become an Acquiring Person, the new directors are entitled to
redeem the rights (assuming the rights would have otherwise been redeemable),
including to facilitate an acquisition or business combination transaction
involving the Company, but only (1) if they have followed certain prescribed
procedures or (2) if such procedures are not followed, and if their decision
regarding redemption and any acquisition or business combination is
challenged as a breach of fiduciary duty of care or loyalty, the directors
(solely for purposes of the effectiveness of the redemption decision) are
able to establish the entire fairness of the redemption or transaction.
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 or in the event of
the redemption of the Rights as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, to correct or supplement any provision
which may be defective or inconsistent with any other provision therein, to
shorten or lengthen any time period thereunder, or to make changes which do
not adversely affect the interests of holders of Rights (other than an
Acquiring Person). The foregoing notwithstanding, no amendment may be made
to the Rights Agreement during the Special Period or at a time when the
Rights are not redeemable, except to cure any ambiguity or correct or
supplement any provision contained in the Rights Agreement which may be
defective or inconsistent with any other provision therein.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of
the Rights Agreement is available free of charge from the 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.
<PAGE>
Exhibit 20(a)
NASDAQ: SCOR
FOR RELEASE - Wednesday, September 29, 1999 1:00 pm EST
Contacts:
Ed Burgos
Sr. Corporate Counsel
(818) 737-4543
SYNCOR ADOPTS NEW STOCKHOLDER RIGHTS PLAN
WOODLAND HILLS, CALIFORNIA, September 29, 1999 Syncor International
Corporation (NASDAQ: SCOR) announced today that its Board of Directors has
approved the adoption of a new Stockholder Rights Plan, which will supersede
the previous rights plan that expires on September 30, 1999. Under the new
Rights Plan, rights will be distributed as a dividend at the rate of one
Right for each share of common stock of Syncor held by stockholders of record
as of the close of business on October 8, 1999.
As with the expired rights plan, the new Rights Plan was not adopted in
response to any effort to acquire Syncor. The Rights Plan, however, is
designed to deter coercive takeover tactics, including the accumulation of
shares in the open market or through private transactions and to prevent an
acquirer from gaining control of Syncor without offering a fair price to all
of its stockholders. Under certain circumstances, the Rights are redeemable
at a price of $0.01 per Right, and will expire on September 28, 2009.
Each Right initially will entitle stockholders to buy one share of
common stock for $180. The Rights generally will be exercisable only if a
person or group acquires beneficial ownership of 15% or more of Syncor's
common stock or commences a tender or exchange offer upon consummation of
which such person or group would beneficially own 15% or more of Syncor's
common stock (other than as a result of repurchases of stock by Syncor or
certain purchases by institutional or similar stockholders, so long as they
do not own 20% or more).
A copy of the Rights Plan will be filed shortly with the Securities and
Exchange Commission.
Syncor International Corporation is a leading provider of
radiopharmaceuticals and comprehensive value-added specialized services and
medical imaging services.
In its core specialized pharmacy services business, Syncor compounds and
dispenses radiopharmaceuticals in patient specific unit dose and multi dose
form for diagnostic and therapeutic use by nuclear medicine departments in
hospitals and out-patient clinics. Syncor distributes these time-critical
pharmaceuticals through an integrated network of strategically located
nuclear pharmacies, 120 domestic and 16 international. This network also
provides information management services and currently serves more than 7,000
customers.
Syncor continues to pursue a growth objective, which will broaden its
role in medical imaging. The Company has become, through a series of
acquisitions, one of the nation's leading providers in medical imaging
services. Syncor owns or operates 38 medical imaging centers in 11 states
and Puerto Rico.
News on Demand: (800) 546-8172 Web Site: www.syncor.com
