FORM 8-A/A
AMENDMENT NO. 3
To Registration Statement on Form 8-A
dated March 9, 1987, as amended on December 7, 1992 and March 2, 1993,
relating to
Preferred Stock Purchase Rights
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
Pursuant to Section 12(b) or (g) of
THE SECURITIES EXCHANGE ACT OF 1934
HUMANA INC.
(Exact name of registrant as specified in charter)
Delaware 61-0647538
(State of incorporation or organization) (I.R.S. Employer Identification No.)
500 West Main Street 40202
Louisville, Kentucky (Zip Code)
(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each Class to be Name of each exchange on which each
so registered is to be registered
Rights to Purchase Series A New York Stock Exchange
Participating Preferred Stock
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A.(c)(1), please check
the following box. / /
If this Form relates to the registration of a class of debt securities and is
to become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A.(c)(2), please check the following box. / /
Securities to be registered pursuant to Section 12(g) of the Act:
None
The undersigned registrant hereby amends the following items and exhibits
or other portions of its Registration Statement on Form 8-A as follows:
1. Item 1. Description of Registrant's Securities to be Registered.
Item 1 is hereby amended by adding the following paragraph:
On February 14, 1996, the Company amended and restated (the
"Restatement") the Rights Agreement dated as of March 5, 1987 between
the Company and MidAmerica Bank of Louisville & Trust Company, as Rights
Agent, as heretofore amended by Amendment No. 1 dated as of December 7, 1992
and Amendment No. 2 dated March 2, 1993 (as so amended and restated, the
"Rights Agreement"). The Restatement, among other things, extended the
expiration of the Rights Agreement from March 4, 1997 until February 14, 2006,
increased the exercise price of the Rights from $25.00 to $145.00 and reduced
the threshold at which the Rights are triggered from 20-30% to 15% of the
outstanding shares of Company Common Stock. For a complete description of
the Rights Agreement, please see the Rights Agreement and the Revised Summary
of Rights to Purchase Preferred Shares, each of which is attached hereto and
made a part hereof.
2. Item 2. Exhibits.
Item 2 is hereby amended by adding new Exhibits 1.3 and 1.4 as follows:
Exhibit 1.3 The Amended and Restated Rights Agreement dated as of
February 14, 1996, between Humana Inc. and MidAmerica
Bank of Louisville & Trust Company, as Rights Agent.
Exhibit 1.4 The Revised Summary of Rights to Purchase Preferred Shares
dated as of February 14, 1996.
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this amendment to its registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: February 14, 1996 HUMANA INC.
By:_____________________________
Arthur P. Hipwell
Senior Vice President
and General Counsel
- ------------------------------------------------------------
HUMANA INC.
and
MID-AMERICA BANK OF LOUISVILLE & TRUST COMPANY, as
Rights Agent
-------------------------
Amended and Restated Rights Agreement
-------------------------
Dated as of February 14, 1996
- ------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1. Certain Definitions..................... 2
SECTION 2. Appointment of Rights Agent............. 7
SECTION 3. Issue of Right Certificates............. 7
SECTION 4. Form of Right Certificate............... 10
SECTION 5. Countersignature and Registration....... 11
SECTION 6. Transfer, Split-Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificate....................... 12
SECTION 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights............... 13
SECTION 8. Cancellation and Destruction of Right
Certificates............................ 17
SECTION 9. Reservation and Availability of Capital
Stock................................... 18
SECTION 10. Preferred Shares Record Date............ 20
SECTION 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights...... 20
SECTION 12. Certificate of Adjusted Purchase Price or
Number of Shares........................ 32
SECTION 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.............. 33
SECTION 14. Fractional Rights and Fractional Shares. 37
SECTION 15. Rights of Action........................ 39
SECTION 16. Agreement of Right Holders.............. 40
SECTION 17. Right Certificate Holder Not Deemed a
Stockholder............................. 41
SECTION 18. Concerning the Rights Agent............. 41
-i-
<PAGE>
SECTION 19. Merger or Consolidation or Change of Name
of Rights Agent......................... 42
SECTION 20. Duties of Rights Agent.................. 43
SECTION 21. Change of Rights Agent.................. 46
SECTION 22. Issuance of New Right Certificates...... 48
SECTION 23. Redemption and Termination.............. 48
SECTION 24. Exchange................................ 51
SECTION 25. Notice of Certain Events................ 53
SECTION 26. Notices................................. 54
SECTION 27. Supplements and Amendments.............. 55
SECTION 28. Determination and Actions by the Board,
etc..................................... 56
SECTION 29. Successors.............................. 57
SECTION 30. Benefits of this Agreement.............. 57
SECTION 31. Severability............................ 58
SECTION 32. Governing Law........................... 58
SECTION 33. Counterparts............................ 58
SECTION 34. Descriptive Headings.................... 59
EXHIBIT A - Certificate of Designation, Preferences and
Rights of Series A Participating Preferred Stock of
Humana Inc.
EXHIBIT B - Form of Right Certificate
EXHIBIT C - Revised Summary of Rights to Purchase
Preferred Shares
-ii-
<PAGE>
DEFINED TERM CROSS REFERENCE SHEET
Acquiring Person............................. Section 1(a)
Act.......................................... Section 1(b)
Adjusted Number of Shares.................... Section 11(a)
Adjusted Purchase Price...................... Section 11(a)
Adjustment Shares............................ Section 11(a)
Affiliate.................................... Section 1(c)
Agreement.................................... Preface
Amended and Restated Rights Agreement........ Section 3(c)
Associate.................................... Section 1(c)
beneficially own............................. Section 1(d)
Beneficial Owner............................. Section 1(d)
Board........................................ Preface
Business Day................................. Section 1(e)
capital stock equivalent..................... Section 11(a)
Close of Business............................ Section 1(f)
Common Shares................................ Section 1(g)
Company...................................... Preface
current per share market price............... Section 11(d)
Disinterested Directors...................... Section 1(h)
Distribution Date............................ Section 3(a)
equivalent preferred shares.................. Section 11(b)
-iii-
<PAGE>
Exchange Act................................. Section 1(c)
Exchange Ratio............................... Section 24(a)
Final Expiration Date........................ Section 7(a)
Interested Stockholder....................... Section 1(i)
NASDAQ....................................... Section 11(d)
Permitted Offer.............................. Section 1(j)
Person....................................... Section 1(k)
Preferred Shares............................. Section 1(l)
Principal Party.............................. Section 13(b)
Proration Factor............................. Section 11(a)
Purchase Price............................... Section 4(a)
Record Date.................................. Preface
Redemption Date.............................. Section 7(a)
Redemption Price............................. Section 23(a)
Revised Summary of Rights.................... Section 3(b)
Right........................................ Preface
Right Certificate............................ Section 3(a)
Rights Agent................................. Preface
Section 11(a)(ii) Event...................... Section 1(m)
Section 13 Event............................. Section 1(n)
Security..................................... Section 11(d)
Shares Acquisition Date...................... Section 1(o)
Subsidiary................................... Section 1(p)
-iv-
<PAGE>
Summary of Rights............................ Section 3(b)
then outstanding............................. Section 1(d)
Trading Day.................................. Section 11(d)
Transaction.................................. Section 1(q)
Transaction Person........................... Section 1(r)
Triggering Event............................. Section 1(s)
voting securities............................ Section 13(a)
-v-
AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of
February 14, 1996 (the "Agreement"), between HUMANA INC.,
a Delaware corporation (the "Company"), and MID-AMERICA BANK
OF LOUISVILLE & TRUST COMPANY, a banking and trust
corporation organized under the laws of the Commonwealth of
Kentucky (the "Rights Agent").
The Board of Directors of the Company (the
"Board") authorized and declared a dividend of one preferred
share purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Company outstanding at the Close
of Business (as hereinafter defined) on March 16, 1987 (the
"Record Date"), each Right representing the right to
purchase one one-hundredth (subject to adjustment as
provided herein) of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions
herein set forth, and has further authorized the issuance of
one Right with respect to each Common Share that shall
become outstanding between the Record Date and the
Distribution Date (as such term is hereinafter defined);
provided, however, that Rights may be issued with respect to
Common Shares that shall become outstanding after the
Distribution Date and prior to the earlier of the Redemption
Date and the Final Expiration Date in accordance with the
provisions of Section 22 hereof.
On December 7, 1992, and March 2, 1993, the Board
previously amended and modified the terms of the Rights
Agreement, dated as of March 5, 1987, between the Company
and the Rights Agent, and on February 14, 1996, the Board
authorized the execution and delivery of this Agreement
which amends and restates such Rights Agreement in its
entirety.
Accordingly, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby
agree as follows:
<PAGE>
SECTION 1. Certain Definitions.
For purposes of this Agreement, the following
terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who
or which, together with all Affiliates and Associates of
such Person, shall be the Beneficial Owner of 15% or more of
the then outstanding Common Shares (other than as a result
of a Permitted Offer) or was such a Beneficial Owner at any
time after the date hereof, whether or not such person
continues to be the Beneficial Owner of 15% or more of the
then outstanding Common Shares. Notwithstanding the
foregoing, (i) the term "Acquiring Person" shall not include
(A) the Company, (B) any Subsidiary of the Company, (C) any
employee benefit plan of the Company or of any Subsidiary of
the Company, or (D) any Person or entity organized,
appointed or established by the Company for or pursuant to
the terms of any such plan acting in such capacity; and (ii)
no Person shall become an "Acquiring Person" (x) as a result
of the acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding, increases
the proportional number of shares beneficially owned by such
Person together with all Affiliates and Associates of such
Person, provided, that if (1) a Person would become an
Acquiring Person (but for the operation of this clause (x))
as a result of the acquisition of Common Shares by the
Company, and (2) after such share acquisition by the
Company, such Person, or an Affiliate or Associate of such
Person, becomes the Beneficial Owner of any additional
Common Shares, then such Person shall be deemed an Acquiring
Person, or (y) if (1) within five (5) Business Days after
such Person would otherwise have become or, if such Person
did so inadvertently, after such Person discovers that such
Person would otherwise have become, an Acquiring Person (but
for the operation of this clause (y)), such Person notifies
the Board that such Person did so inadvertently, and (2)
within two (2) Business Days after such notification or such
greater period of time as may be determined by action of the
-2-
<PAGE>
Board, but in no event greater than five Business Days, such
person divests itself of a sufficient number of Common Shares
so that such Person is the Beneficial Owner of such number of
Common Shares that such Person no longer would be an Acquiring
Person.
(b) "Act" shall mean the Securities Act of 1933,
as amended and as in effect on the date of this Agreement.
(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 Securities
Exchange Act of 1934, as amended and as in effect on the
date of this Agreement (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 beneficially owns,
directly or indirectly;
(ii) which such Person or any of such
Person's Affiliates or Associates has (A) the right to
acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any
agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially
own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or
exchange, or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided,
however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding
to
-3-
<PAGE>
vote such security (1) arises solely from a revocable
proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report);
or
(iii) which are beneficially owned,
directly or indirectly, by any other Person (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 (other than
customary agreements with and between underwriters and
selling group members with respect to a bona fide
public offering of securities) relating to the
acquisition, holding, voting (except to the extent
contemplated by the proviso to Section l(d)(ii)(B)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of a
Beneficial Owner to the contrary, the phrase "then
outstanding", when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and
outstanding together with the number of such securities not
then actually issued and outstanding which such Person would
be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than
a Saturday, Sunday, U.S. federal holiday or any day on which
banking institutions in the Commonwealth of Kentucky 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., Louisville, Kentucky time, on such date;
provided, however, that if such date is not a
-4-
<PAGE>
Business Day it shall mean 5:00 P.M., Louisville, Kentucky
time, on the next succeeding Business Day.
(g) "Common Shares" when used with reference to
the Company shall mean the shares of Common Stock, par value
$.16-2/3 per share, of the Company or, in the event of a
subdivision, combination or consolidation with respect to
such shares of Common Stock, the shares of Common Stock
resulting from such subdivision, combination or
consolidation. "Common Shares" when used with reference to
any Person other than the Company shall mean the capital
stock (or equity interest) with the greatest combined
economic and voting power of such other Person or, if such
other Person is a Subsidiary of another Person, the Person
or Persons which ultimately control such first-mentioned
Person.
(h) "Disinterested Directors" shall mean the
members of the Board who are not (i) employees of the
Company, (ii) Acquiring Persons or their Affiliates or
Associates or representatives of any of them, or (iii) any
Person who was directly or indirectly proposed or nominated
as a director of the Company by a Transaction Person.
(i) "Interested Stockholder" shall mean any
Acquiring Person or any Affiliate or Associate of an
Acquiring Person or any other Person in which any such
Acquiring Person, Affiliate or Associate has an interest
which represents in excess of 5% of the total combined
economic or voting power of such Person, or any other Person
acting directly or indirectly on behalf of, or in concert
with, any such Acquiring Person, Affiliate or Associate.
(j) "Permitted Offer" shall mean a tender or
exchange offer for all outstanding Common Shares which is at
a price and on terms determined, prior to the purchase of
such shares under such tender or exchange offer, by at least
a majority of the Disinterested Directors, to be adequate
and otherwise in the best interests of the Company
-5-
<PAGE>
and its stockholders (other than the Person, or any
Affiliate or Associate thereof, on whose behalf the offer is
being made) taking into account all factors that such
Disinterested Directors may deem relevant.
(k) "Person" shall mean any individual, firm,
partnership, corporation, trust, association, joint venture
or other entity, and shall include any successor (by merger
or otherwise) of such entity.
(l) "Preferred Shares" shall mean shares of
Series A Participating Preferred Stock, with a par value of
$1.00 per share, of the Company having the relative rights,
preferences and limitations set forth in the Form of
Certificate of Designation, Preferences and Rights attached
to this Agreement as Exhibit A.
(m) "Section 11(a)(ii) Event" shall mean any
event described in Section 11(a)(ii) hereof.
(n) "Section 13 Event" shall mean any event
described in clause (i), (ii) or (iii) of Section 13(a)
hereof.
(o) "Shares Acquisition Date" shall mean the
first date of public announcement (which, for purposes of
this definition, shall include, without limitation, a report
filed pursuant to the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(p) "Subsidiary" of any Person shall mean any
corporation or other Person of which a majority of the
voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
-6-
<PAGE>
(q) "Transaction" shall mean any merger,
consolidation or sale of assets described in Section 13(a)
hereof or any acquisition of Common Shares of the Company
which would result in a Person becoming a Transaction
Person.
(r) "Transaction Person" with respect to a
Transaction shall mean (i) any Person who (A) is or will
become an Acquiring Person if the Transaction were to be
consummated and (B) directly or indirectly proposed or
nominated a director of the Company which director is in
office at the time of consideration of the Transaction, or
(ii) an Affiliate or Associate of such a Person.
(s) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
SECTION 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to
act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to
the Distribution Date also be the holders of Common Shares)
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 Right Certificates.
(a) The Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for
Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates, and
the right to receive Right Certificates will be transferable
only in connection with the transfer of the underlying
Common Shares (including a transfer to the Company) until
the earlier to occur of (i) the Shares Acquisition Date or
(ii) the Close of Business on the tenth Business Day (or
such later date as may be determined by action of the Board)
after the date of the commencement by any Person (other than
the Company, any Subsidiary of the
-7-
<PAGE>
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) of, or of the first public
announcement of the intention of 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)
to commence (which intention to commence remains in effect
for five (5) Business Days after such announcement), a
tender or exchange offer the consummation of which would
result in any Person becoming an Acquiring Person
(including, in the case of both clauses (i) and (ii) of this
Section 3(a), any such date which is after the date of this
Agreement and prior to the issuance of the Rights), the
earlier of such dates being herein referred to as the
"Distribution Date"; provided, however, that if the tender
offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as
a result of such tender offer. As soon as practicable after
the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign and send, or cause to be
sent, by first-class, insured, postage prepaid mail, to each
record holder of Common Shares as of the Close of Business
on the Distribution Date, at the address of such holder
shown on the records of the Company, a Right Certificate,
substantially in the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so
held. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) Following the Record Date, the Company sent a
copy of a Summary of Rights to Purchase Preferred Shares
(the "Summary of Rights"), by first-class, postage prepaid
mail, to each record holder of Common Shares as of the Close
of Business on the Record Date, at the address of such
holder shown on the records of the Company. Upon the
execution and delivery of this Agreement, or as soon as
practicable
-8-
<PAGE>
thereafter, the Company shall file with the Securities and
Exchange Commission the full text of this Agreement and a
revised summary thereof, which revised summary shall be in
substantially the form of Exhibit C hereto (the "Revised
Summary of Rights"). With respect to certificates for
Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached
thereto (which Summary of Rights shall be deemed amended and
restated from and after the date hereof by the Revised
Summary of Rights). Until the Distribution Date (or the
earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, with or
without a copy of the Summary of Rights attached thereto
(which Summary of Rights shall be deemed amended and
restated from and after the date hereof by the Revised
Summary of Rights), shall also constitute the transfer of
the Rights associated with such Common Shares.
(c) Certificates for Common Shares which become
outstanding (including, without limitation, reacquired
Common Shares referred to in the last sentence of this
Section 3(c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or
the Final Expiration Date shall be deemed also to be
certificates for Rights and from and after the date hereof
shall bear the following legend:
This certificate also evidences and
entitles the holder hereof to certain
rights as set forth in an Amended and
Restated Rights Agreement between Humana
Inc. and Mid-America Bank of Louisville
& Trust Company, dated as of February
14, 1996 (the "Amended and Restated
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
Humana Inc. Under certain
circumstances, as set forth in the
Amended and Restated Rights Agreement,
such Rights will be evidenced by
separate
-9-
<PAGE>
certificates and will no longer be
evidenced by this certificate. Humana
Inc. will mail to the holder of this
certificate a copy of the Amended and
Restated Rights Agreement without charge
after receipt of a written request
therefor from such holder. Under
certain circumstances set forth in the
Amended and Restated Rights Agreement,
Rights issued to, or held by, any Person
who is, was or becomes an Acquiring
Person or an Affiliate or Associate
thereof (as defined in the Amended and
Restated Rights Agreement) and certain
related persons, whether currently held
by or on behalf of such Person or by any
subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated
with the Common Shares represented by such certificates
shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the
Common Shares represented thereby. In the event that the
Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled
and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which
are no longer outstanding.
SECTION 4. Form of Right Certificate.
(a) The Right Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse
thereof) shall be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification
or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or
with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Sections 11 and 22
hereof, the Right Certificates shall
-10-
<PAGE>
entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth
therein at the price per one one-hundredth of a Preferred
Share set forth therein (the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise
of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to
Section 3(a) or 22 hereof that represents Rights which are
null and void pursuant to Section 7(e) hereof and any Right
Certificate issued pursuant to Section 6 or 11 hereof upon
transfer, exchange, replacement or adjustment of any other
Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
The Rights represented by this Right
Certificate are or were beneficially
owned by a Person who was or became an
Acquiring Person or an Affiliate or
Associate thereof (as such terms are
defined in the Amended and Restated
Rights Agreement). Accordingly, this
Right Certificate and the Rights
represented hereby are null and void.
Provisions of Section 7(e) hereof shall be operative whether
or not the foregoing legend is contained on any such Right
Certificate.
SECTION 5. Countersignature and Registration.
The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive
Officer, its President, any of its Vice Presidents, or its
Treasurer, either manually or by facsimile signature, shall
have affixed thereto the Company's seal or a facsimile
thereof, and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be
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
-11-
<PAGE>
Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right
Certificates may nevertheless be countersigned by the Rights
Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate,
although at the date of the execution of this Agreement any
such person was not such an officer.
Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its office designated as
the appropriate place for surrender of such Right
Certificate for transfer, books for registration and
transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights
evidenced on its face by each of the Right Certificates and
the certificate number and the date of each of the Right
Certificates.
SECTION 6. Transfer, Split-Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificate.
Subject to the provisions of Sections 4(b), 7(e) and 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 earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates
may be transferred, split-up, combined or exchanged for
another Right Certificate or Right Certificates, entitling
the registered holder to purchase a like number of one
one-hundredths of a Preferred Share (or, following a
Triggering Event, other securities, as the case may be) as
the Right Certificate or Right 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 Right
Certificate or Right
-12-
<PAGE>
Certificates shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split-up, combined
or exchanged at the principal office or offices of the
Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder
shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right
Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request. Thereupon the Rights
Agent shall, subject to the provisions of Sections 4(b),
7(e) and 14 hereof, countersign and deliver to the Person
entitled thereto a Right Certificate or Right Certificates,
as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with
any transfer, split-up, combination or exchange of Right
Certificates.
Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the
registered holder in lieu of the Right 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 Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in
-13-
<PAGE>
whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of
election to purchase and the certificate on the reverse side
thereof duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase
Price for the total number of one one-hundredths of a
Preferred Share (or other securities, as the case may be) as
to which such surrendered Rights are exercised, at or prior
to the earliest of (i) the Close of Business on February
14, 2006 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date"), (iii) the time at which the
Rights are exchanged as provided in Section 24 hereof, or
(iv) the consummation of a transaction contemplated by
Section 13(d) hereof.
(b) From and after the date hereof, the Purchase
Price for each one-hundredth of a Preferred Share pursuant
to the exercise of a Right shall be $145.00, shall be
subject to adjustment from time to time as provided in the
next sentence and in Sections 11 and 13(a) hereof and shall
be payable in accordance with Section 7(c) below. Anything
in this Agreement to the contrary notwithstanding, in the
event that at any time after the date hereof and prior to
the Distribution Date, the Company shall (i) declare or pay
any dividend on the Common Shares payable in Common Shares
or (ii) effect a subdivision, combination or consolidation
of the Common Shares (by reclassification or otherwise than
by payment of dividends in Common Shares) into a greater or
lesser number of Common Shares, then in any such case, each
Common Share outstanding following such subdivision,
combination or consolidation shall continue to have one
Right (subject to adjustment as provided herein) associated
therewith and the Purchase Price following any such event
shall be proportionately adjusted to equal the result
obtained by multiplying the Purchase Price immediately prior
to such event by a fraction the numerator of which shall be
the total number of Common Shares outstanding
-14-
<PAGE>
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of Common
Shares outstanding immediately following the occurrence of
such event. The adjustment provided for in the preceding
sentence shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or
consolidation is effected.
(c) Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election
to purchase and the certificate duly executed, accompanied
by payment of the Purchase Price for the Preferred Shares
(or other securities, as the case may be) to be purchased
and an amount equal to any applicable transfer tax required
to be paid by the holder of such Right Certificate in
accordance with Section 6 hereof by certified check,
cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares
certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests, or (B)
requisition from the depositary agent (if the Company, in
its sole discretion, shall have elected to deposit the
Preferred Shares issuable upon exercise of the Rights
hereunder into a depositary) depositary receipts
representing such number of one one-hundredths of a
Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the depositary
agent to comply with such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid
in lieu of issuance of fractional shares 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 Right
Certificate, registered in such name or names as may be
designated by such holder, and (iv) when appropriate, after
receipt thereof, deliver such cash to or upon the order of
the registered holder of
-15-
<PAGE>
such Right Certificate. In the event that the Company is
obligated to issue other securities (including Common
Shares) of the Company pursuant to Section 11(a) hereof, the
Company will make all arrangements necessary so that such
other securities are available for distribution by the
Rights Agent, if and when appropriate.
In addition, in the case of an exercise of the
Rights by a holder pursuant to Section 11(a)(ii) hereof, the
Rights Agent shall return such Right Certificate to the
registered holder thereof after imprinting, stamping or
otherwise indicating thereon that the rights represented by
such Right Certificate no longer include the rights provided
by Section 11(a)(ii) hereof and if less than all the Rights
represented by such Right Certificate were so exercised, the
Rights Agent shall indicate on the Right Certificate the
number of Rights represented thereby which continue to
include the rights provided by Section 11(a)(ii) hereof.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such
Right Certificate or to his duly authorized assigns, subject
to the provisions of Section 14 hereof, or the Rights Agent
shall place an appropriate notation on the Right Certificate
with respect to those Rights exercised.
(e) Notwithstanding anything in this Agreement to
the contrary, from and after the first occurrence of a
Section 11(a)(ii) Event, any Rights beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate
thereof, (ii) a transferee of an Acquiring Person (or of any
Affiliate or Associate thereof) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any Affiliate or
Associate thereof) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either
-16-
<PAGE>
(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 a 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 Right Certificates or other
Person as a result of its failure to make any determinations
with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall
be obligated to undertake any action with respect to a
registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase
set forth on the reverse side of the Right Certificate
surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
SECTION 8. Cancellation and Destruction of Right
Certificates.
All Right Certificates surrendered for the purpose of
exercise (other than a partial exercise), transfer, split
up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it,
and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of
this
-17-
<PAGE>
Agreement. The Company shall deliver to the Rights Agent
for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased
or acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Right
Certificates, and in such case shall deliver a certificate
of destruction thereof to the Company.
SECTION 9. Reservation and Availability of
Capital Stock.
The Company covenants and agrees that at all
time prior to the occurrence of a Section 11(a)(ii) Event it
will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares, or any authorized
and issued Preferred Shares held in its treasury, the number
of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights and, after the
occurrence of a Section 11(a)(ii) Event, shall, to the
extent reasonably practicable, so reserve and keep available
a sufficient number of Common Shares (and/or other
securities) which may be required to permit the exercise in
full of the Rights pursuant to this Agreement.
So long as the Preferred Shares (and, after the
occurrence of a Section 11(a)(ii) Event, Common Shares, or
any other securities, as the case may be) issuable upon the
exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts
to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance
upon such exercise.
The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all
Preferred Shares (or Common Shares and/or other securities,
as the case may be) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares
or other securities (subject to payment of the
-18-
<PAGE>
Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable shares or securities.
The Company further covenants and agrees that it
will pay when due and payable any and all U.S. federal and
state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares
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 Right Certificates to
a person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Shares
(or Common Shares and/or other securities, as the case may
be) in a name other than that of, the registered holder of
the Right Certificate evidencing Rights surrendered for
exercise, or to issue or to deliver any certificates or
depositary receipts for Preferred Shares (or Common Shares
and/or other securities, as the case may be) upon the
exercise of any Rights, until any such tax shall have been
paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no
such tax is due.
The Company shall use its best efforts to (i)
file, as soon as practicable following the Shares
Acquisition Date (or, if required by law, at such earlier
time following the Distribution Date as so required), a
registration statement under the Act with respect to the
securities purchasable upon exercise of 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 Act and the rules and regulations
thereunder) until the date of the expiration of the rights
provided by Section 11(a)(ii) hereof. The Company will also
take such action as may be appropriate under the blue sky
laws of the various states.
-19-
<PAGE>
SECTION 10. Preferred Shares Record Date.
Each Person in whose name any certificate for
Preferred Shares (or Common Shares and/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 Preferred Shares (or Common Shares and/or
other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however,
that, if the date of such surrender and payment is a date
upon which the Preferred Shares (or Common Shares 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 Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the
Company are open.
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 Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares,
(C) combine the outstanding Preferred Shares into a
smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of
the Preferred Shares (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
-20-
<PAGE>
date of such subdivision, combination or
reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of
capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were
open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of
one Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) In the event any Person, alone or
together with its Affiliates and Associates, shall
become an Acquiring Person, then proper provision shall
be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall, for a
period of sixty (60) days after the later of (i) the
occurrence of any such event or (ii) the effective date
of an appropriate registration statement under the Act
pursuant to Section 9 hereof, have a right to receive,
upon exercise thereof at a price equal to the then
current Purchase Price, in accordance with the terms of
this Agreement, such number of Common Shares (or, in
the discretion of the Board, one one-hundredths of a
Preferred Share) as shall equal the result obtained by
(A) multiplying the then current Purchase Price by the
then number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event and
-21-
<PAGE>
(B) dividing that product by 50% of the then current
per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the
date of such first occurrence (such number of shares
being referred to as the "Adjustment Shares");
provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then
only the provisions of Section 13 hereof shall apply
and no adjustment shall be made pursuant to this
Section 11(a)(ii).
(iii) In the event that there shall not be
sufficient treasury shares or authorized but unissued
(and unreserved) Common Shares to permit the exercise
in full of the Rights in accordance with the foregoing
Section 11(a)(ii) and the Rights become so exercisable
(and the Board has determined to make the Rights
exercisable into fractions of a Preferred Share),
notwithstanding any other provision of this Agreement,
to the extent necessary and permitted by applicable
law, each Right shall thereafter represent the right to
receive, upon exercise thereof at the then current
Purchase Price in accordance with the terms of this
Agreement, (A) a number of (or fractions of) Common
Shares (up to the maximum number of Common Shares which
may permissibly be issued) and (B) a number of one
one-hundredths of a Preferred Share or a number of (or
fractions of) other equity securities of the Company
(or, in the discretion of the Board, debt) which the
Board has determined to have the same aggregate current
market value (determined pursuant to Sections 11(d)(i)
and 11(d)(ii) hereof, to the extent applicable) as one
Common Share (such number of (or fractions of)
Preferred Shares (or other equity securities or debt of
the Company) being referred to as a "capital stock
equivalent"), equal in the aggregate to the number of
Adjustment Shares; provided, however, if sufficient
Common Shares and/or capital stock equivalents are
unavailable, then the Company shall, to the extent
permitted by
-22-
<PAGE>
applicable law, take all such action as may be
necessary to authorize additional Common Shares or
capital stock equivalents for issuance upon exercise of
the Rights, including the calling of a meeting of
stockholders; and provided, further, that if the
Company is unable to cause sufficient Common Shares
and/or capital stock equivalents to be available for
issuance upon exercise in full of the Rights, then each
Right shall thereafter represent the right to receive
the Adjusted Number of Shares upon exercise at the
Adjusted Purchase Price (as such terms are hereinafter
defined). As used herein, the term "Adjusted Number of
Shares" shall be equal to that number of (or fractions
of) Common Shares (and/or capital stock equivalents)
equal to the product of (A) the number of Adjustment
Shares and (B) a fraction, the numerator of which is
the number of Common Shares (and/or capital stock
equivalents) available for issuance upon exercise of
the Rights and the denominator of which is the
aggregate number of Adjustment Shares otherwise
issuable upon exercise in full of all Rights (assuming
there were a sufficient number of Common Shares
available) (such fraction being referred to as the
"Proration Factor"). The "Adjusted Purchase Price"
shall mean the product of the Purchase Price and the
Proration Factor. The Board may, but shall not be
required to, establish procedures to allocate the right
to receive Common Shares and capital stock equivalents
upon exercise of the Rights among holders of Rights.
(b) In case the Company shall fix a record date
for the issuance of rights (other than the Rights), options
or warrants to all holders of Preferred Shares entitling
them (for a period expiring within forty-five (45) calendar
days after such record date) to subscribe for or purchase
Preferred Shares (or shares having the same rights and
privileges as the Preferred Shares ("equivalent preferred
shares") or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred
-23-
<PAGE>
Share or equivalent preferred share (or having a conversion
price per share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than the then
current per share market price of the Preferred Shares (as
determined pursuant to Section 11(d) hereof) 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
Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering
price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
per share market price, and the denominator of which shall
be the number of Preferred Shares outstanding on such record
date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription
or purchase (or into which the convertible securities so to
be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon
the exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration
shall be 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.
Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of
any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in
the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record
date had not been fixed.
-24-
<PAGE>
(c) In case the Company shall fix a record date
for the making of a distribution to all holders of the
Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in Preferred
Shares) 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 then current per share market price (as
determined pursuant to Section 11(d) hereof) of the
Preferred Shares 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)
of the portion of the assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of
which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of
one Right. Such adjustments shall be made successively
whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average
of the daily closing prices per share of such Security
for the thirty (30) consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such
date; provided,
-25-
<PAGE>
however, that in the event that the current per share
market price of the Security is determined during a
period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such
Security payable in shares of such Security or
securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such
Security, and prior to the expiration of thirty (30)
Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and
in each such case, the current per share market price
shall be appropriately adjusted to reflect the current
per share market price equivalent of such Security.
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
Security is 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 Security is listed or
admitted to trading or, if the Security is not listed
or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated
Quotations System ("NASDAQ") or such other system then
in use, or, if on any such date the Security is not
quoted by any such organization, the average of the
closing bid and asked prices as furnished by a
professional market maker, selected by the Board,
making a market in the Security. If on any such date
no such market maker is making a market in the
Security, the fair value of the Security on such date
as determined in good faith by the Board shall be used.
The term "Trading Day"
-26-
<PAGE>
shall mean a day on which the principal national
securities exchange on which the Security is listed or
admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted
to trading on any national securities exchange, a
Business Day. Subject to Section 11(d)(ii) hereof, if
any Security is not publicly held or so listed or
traded, "current per share market price" of such
Security shall mean the fair market 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 binding on the
Rights Agent.
(ii) For the purpose of any computation
hereunder, the "current per share market price" of the
Preferred Shares shall be determined in accordance with
the method set forth in the foregoing Section 11(d)(i).
If the Preferred Shares are not publicly traded, the
current per share market price of the Preferred Shares
shall be conclusively deemed to be the current per
share market price of the Common Shares as determined
pursuant to the foregoing Section 11(d)(i)
(appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after
the date hereof), multiplied by one hundred (100). If
neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, "current per
share market price" 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 binding on the
Rights Agent.
(e) Notwithstanding anything herein to the
contrary, no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 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
-27-
<PAGE>
Section 11 shall be made to the nearest cent or to the
nearest one one-hundredth of a Preferred Share or one
ten-thousandth of any other share or security, 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 Final Expiration Date.
(f) If, as a result of an adjustment made
pursuant to Section 11(a)(ii) or 13(a) hereof, the holder of
any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other
than Preferred Shares, thereafter the number of other shares
so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with
respect to the Preferred Shares contained in Sections 11(a)
through 11(c) hereof, inclusive, and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the
Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one-hundredths of a
Preferred Share 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) hereof, upon each
adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and 11(c) hereof, each
Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one
one-hundredths of a Preferred Share (calculated to the
nearest one ten-thousandth of a Preferred Share) obtained by
(i) multiplying (A) the number of Preferred Shares covered
by a Right immediately prior
-28-
<PAGE>
to this adjustment of the Purchase Price by (B) the Purchase
Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of one
one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share
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 Right
Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on
such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment,
or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be
entitled after such
-29-
<PAGE>
adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided
for herein and shall be registered in the names of the
holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in
the initial Right 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 number of one one-hundredths of a
Preferred Share, Common Shares or other securities issuable
upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and
legally issue such number of fully paid and nonassessable
one one-hundredths of a Preferred Share, Common Shares or
other securities at such adjusted Purchase Price.
(1) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised
after such record date the number of one one-hundredths of a
Preferred Share, Common Shares or other securities of the
Company, if any, issuable upon such exercise over and above
the number of one one-hundredths of a Preferred Share,
Common Shares or other securities of the Company, if any,
issuable upon 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
-30-
<PAGE>
evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Section 11
to the contrary, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly
for cash of Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or
exchangeable for Preferred Shares, (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 Preferred Shares 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 (other than a Subsidiary
of the Company in a transaction which does not violate
Section 11(o) hereof), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a
transaction which does not violate Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which does
not violate Section 11(o) hereof), if (A) at the time of or
immediately after such consolidation, merger, sale or
transfer there are any charter or by-law provisions or any
rights, warrants or other instruments or securities
outstanding or agreements in effect or other actions taken,
which would materially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (B) prior
to, simultaneously with or immediately after such
-31-
<PAGE>
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. The Company
shall not consummate any such consolidation, merger, sale or
transfer unless prior thereto the Company and such other
Person shall have executed and delivered to the Rights Agent
a supplemental agreement evidencing compliance with this
Section 11(n).
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 23 or 27 hereof, take (or permit any Subsidiary to
take) any action the purpose of which is to, or if at the
time such action is taken it is reasonably foreseeable that
the effect of such action is to, materially diminish or
otherwise eliminate the benefits intended to be afforded by
the Rights.
(p) The exercise of Rights under Section
11(a)(ii) hereof shall only result in the reduction of
rights under Section 11(a)(ii) hereof to the extent so
exercised and shall not otherwise affect the rights
represented by the Rights under this Agreement, including
the rights represented by Section 13 hereof.
SECTION 12. Certificate of Adjusted Purchase Price
or Number of Shares.
Whenever an adjustment is made as provided in Section 11
or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment, (b)
file with the Rights Agent and with each transfer agent for
the Common Shares and the Preferred Shares a copy of such
certificate and (c) mail a brief summary thereof to each
holder of a Right Certificate in accordance with Section 26
hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment
therein contained and shall not be deemed
-32-
<PAGE>
to have knowledge of such adjustment unless and until it
shall have received such certificate.
SECTION 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, on or following the Shares
Acquisition Date, directly or indirectly, (i) the Company
shall consolidate with, or merge with and into, any
Interested Stockholder or, if in such merger or
consolidation all holders of Common Shares are not treated
alike, any other Person, (ii) the Company shall consolidate
with, or merge with, any Interested Stockholder or, if in
such merger or consolidation all holders of Common Shares
are not treated alike, any other Person, and the Company
shall be the continuing or surviving corporation of such
consolidation or merger (other than, in a case of any
transaction described in clause (i) or (ii) above of this
Section 13(a), a merger or consolidation which would result
in all of the securities generally entitled to vote in the
election of directors ("voting securities") of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into securities of the surviving entity) all of
the voting securities of the Company or such surviving
entity outstanding immediately after such merger or
consolidation and the holders (and relative percentage
holdings of each such holder) of such securities not having
changed as a result of such merger or consolidation), or
(iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Interested
Stockholder or Stockholders or, if in such transaction all
holders of Common Shares are not treated alike, any other
Person, (other than the Company or any Subsidiary of the
Company in one or more transactions each of which does not
violate Section 11(o) hereof), then, and in each such case
(except as provided in Section 13(d) hereof), proper
provision shall be made so that (A) each
-33-
<PAGE>
holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current
Purchase Price, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of
freely tradable Common Shares of the Principal Party (as
hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse
claims, as shall equal the result obtained by (1)
multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is
then exercisable (without taking into account any adjustment
previously made pursuant to Section 11(a)(ii) hereof) and
dividing that product by (2) 50% of the then current per
share market price of the Common Shares of such Principal
Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such Section 13 Event; (B) 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; (C) 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; and (D) such Principal
Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of its Common Shares)
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 the Common Shares thereafter deliverable
upon the exercise of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction
described in clause (i) or (ii) of the first sentence
of Section 13(a) hereof, the Person that is the issuer
of any securities into which Common Shares of the
Company are converted in such merger or consolidation,
and if no securities are so issued, the Person that is
the
-34-
<PAGE>
other party to such merger or consolidation (including,
if applicable, the Company if it is the surviving
corporation); and
(ii) in the case of any transaction described
in clause (iii) of the first sentence of Section 13(a)
hereof, the Person that is the party receiving the
greatest portion of the assets or earning power
transferred pursuant to such transaction or
transactions;
provided, however, that in any of the foregoing cases, (1)
if the Common Shares of such Person are not at such time,
and have 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 Shares of which are
and have been so registered, "Principal Party" shall refer
to such other Person; (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person,
the Common Shares 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 Shares having the
greatest aggregate market value; and (3) in case such Person
is owned, directly or indirectly, by a joint venture formed
by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in
clauses (1) and (2) above of this Section 13(b) shall apply
to each of the chains of ownership having an interest in
such joint venture as if such party were a "Subsidiary" of
both or all of such joint venturers, and the Principal
Parties in each such chain shall bear the obligations set
forth in this Section 13 in the same ratio as their direct
or indirect interests in such Person bear to the total of
such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of its authorized
Common Shares 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
-35-
<PAGE>
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 Sections 13(a) and
13(b) hereof and further providing that, as soon as
practicable after the date of any consolidation, merger,
sale or transfer mentioned in Section 13(a) hereof, the
Principal Party at its own expense shall:
(i) prepare and file a registration
statement under the Act with respect to the Rights and
the securities purchasable upon exercise of the Rights
on an appropriate form, and use its best efforts to
cause such registration statement to (A) become
effective as soon as practicable after such filing, and
(B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or
register the Rights and the securities purchasable upon
exercise of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate; and
(iii) deliver to holders of the Rights
historical financial statements for the Principal Party
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. The rights under this Section 13 shall be
in addition to the rights to exercise Rights and adjustments
under Section 11(a)(ii) hereof and shall survive any
exercise thereof.
(d) Notwithstanding anything in this Agreement to
the contrary, the provisions of this Section 13 shall not be
applicable to a transaction described in clause (i) or (ii)
of Section 13(a) hereof if (A) such transaction is
consummated with a Person or
-36-
<PAGE>
Persons who acquired Common Shares pursuant to a Permitted
Offer (or a wholly owned Subsidiary of any such Person or
Persons), (B) the price per Common Share offered in such
transaction is not less than the price per Common Share paid
to all holders of Common Shares whose shares were purchased
pursuant to such Permitted Offer, and (C) the form of
consideration offered in such transaction is the same as the
form of consideration paid pursuant to such Permitted Offer.
Upon consummation of any such transaction contemplated by
this 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 Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right.
For the 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 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 by NASDAQ or such other system then in
use or, if on any such date the Rights are not
-37-
<PAGE>
quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market
maker, selected by the Board, making a market in the Rights.
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 Preferred Shares (other than fractions which
are one one-hundredths or integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the
Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are
one one-hundredths or integral multiples of one
one-hundredth of a Preferred Share). Fractions of Preferred
Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by
it, provided that such agreement shall provide that the
holders of such depositary receipts shall have the rights,
privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by
such depositary receipts. In lieu of fractional Preferred
Shares that are not one one-hundredths or integral multiples
of one one-hundredth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the
time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market
value of one Preferred Share. For the purposes of this
Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as
determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the
transactions or events specified in Section 11 hereof giving
rise to the right to receive Common Shares, capital stock
equivalents (other than Preferred Shares) or other
securities upon the exercise of a
-38-
<PAGE>
Right, the Company shall not be required to issue fractions
of shares or units of such Common Shares, capital stock
equivalents or other securities upon exercise of the Rights
or to distribute certificates which evidence fractions of
such Common Shares, capital stock equivalents or other
securities. In lieu of fractional shares or units of such
Common Shares, capital stock equivalents or other
securities, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction
of the current market value of a share or unit of such
Common Shares, capital stock equivalents or other
securities. For purposes of this Section 14(c), the current
market value shall be determined in the manner set forth in
Section 11(d) hereof for the Trading Day immediately prior
to the date of such exercise and, if such capital stock
equivalent is not traded, each such capital stock equivalent
shall have the value of one one-hundredth of a Preferred
Share.
(d) The holder of a Right by the acceptance of
the Right expressly waives his right to receive any
fractional Rights or any fractional share upon exercise of a
Right (except as provided above).
SECTION 15. Rights of Action.
All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to
the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of
any other Right Certificate (or, prior to the Distribution
Date, of the Common Shares), may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, his right to exercise the
Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement.
Without limiting the foregoing or any
-39-
<PAGE>
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 will be entitled to specific performance of
the obligations under, and injunctive relief against actual
or threatened violations of the obligations of any Person
subject to, this Agreement.
SECTION 16. Agreement of Right 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
the Common Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the principal office or
offices of the Rights Agent designated for such purpose,
duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate form fully executed;
(c) subject to Sections 6 and 7(f) hereof, the
Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate)
is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the
associated Common Shares certificate made by anyone other
than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, 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 a
-40-
<PAGE>
beneficial interest in 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. Right Certificate Holder Not Deemed a
Stockholder.
No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of the Preferred Shares 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 Right
Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a
stockholder of the Company 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
other distributions, or to exercise any preemptive or
subscription rights, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
SECTION 18. Concerning the Rights Agent.
The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and,
from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this
Agreement and the exercise and performance of its duties
hereunder. The Company also
-41-
<PAGE>
agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the
premises.
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 Right
Certificate or certificate for Common Shares or for other
securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or
acknowledged by the proper Person or Persons.
SECTION 19. Merger or Consolidation or Change of
Name of Rights Agent.
Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger
or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding
to the stock transfer or all or substantially all of 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, 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 Right 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 Right Certificates
so
-42-
<PAGE>
countersigned, and in case at that time any of the Right
Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor or in the
name of the successor Rights Agent. In all such cases such
Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right
Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so
countersigned, and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its
prior name or in its changed name. In all such cases such
Right Certificates shall have the full force provided in the
Right 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 Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal
counsel (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties
under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter (including,
without limitation, the identity of any Acquiring Person and
the determination of the current per share market price of
any Security) be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or
matter (unless other
-43-
<PAGE>
evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of 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 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 Right Certificates or
be required to verify the same (except its countersignature
thereof). 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 Right Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any adjustment required
under the provisions of Section 11 or 13 hereof or
responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts
that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates
after receipt of the certificate described in Section 12
hereof); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or
reservation of any Preferred Shares or Common Shares or
other securities
-44-
<PAGE>
to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares or Common
Shares or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable; nor
shall it be under any duty to make any independent
investigation or determination of the identity of any
Acquiring Person or any Affiliate or Associate thereof, but
shall be entitled to rely, in the absence of instructions
identifying any such Person, on representations made by
holders of Right Certificates.
(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 Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the
Company, and to apply to such officers for advice or
instructions in connection with its duties, and shall not be
liable for any action taken or suffered 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
-45-
<PAGE>
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 hereunder if there shall be reasonable grounds for
believing that repayment of such funds or adequate
indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Right Certificates
surrendered to the Rights Agent for exercise or transfer,
the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has not been
completed, the Rights Agent shall not take any further
action with respect to such requested exercise of 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 Preferred Shares or Common
Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent
upon sixty (60) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be,
and to each
-46-
<PAGE>
transfer agent of the Preferred Shares or Common Shares by
registered or certified mail, and to holders of the Right
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 sixty (60) days after giving notice of
such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a corporation
organized and doing business under the laws of the United
States or any state of the United States, in good standing,
which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has
at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000 (or such lower
number as approved by the Board). 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 Preferred Shares or Common Shares and mail a notice
thereof in writing to the registered holders of the Right
Certificates. Failure to give any notice provided for in
this Section 21, however, or any
-47-
<PAGE>
defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may
be.
SECTION 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this
Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing
Rights in such form as may be approved by the 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 Right Certificates made in
accordance with the provisions of this Agreement.
In addition, in connection with the issuance or
sale of Common Shares following the Distribution Date and
prior to the earliest of the Redemption Date, the Final
Expiration Date and the consummation of a transaction
contemplated by Section 13(d) hereof, the Company (a) shall,
with respect to Common Shares so issued or sold pursuant to
the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of
securities, notes or debentures issued by the Company, and
(b) may, in any other case, if deemed necessary or
appropriate by the Board, issue Right Certificates
representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that no Right
Certificates 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) (i) The Board may, at its option, 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"), at any time prior to the earlier
of (A) the occurrence of a Section 11(a)(ii) Event or (B)
the Final
-48-
<PAGE>
Expiration Date, and the Company may, at its option, pay the
Redemption Price either in Common Shares (based on the
"current per share market price", as defined in Section
11(d) hereof, of the Common Shares at the time of
redemption) or cash; provided, however, that if the Company
elects to pay the Redemption Price in Common Shares, the
Company shall not be required to issue any fractional Common
Shares, and the number of Common Shares issuable to each
holder of Rights shall be rounded down to the next whole
share.
(ii) In addition, the Board may, at its option, at
any time following a Shares Acquisition Date but prior to
any Section 13 Event redeem all, but not less than all, of
the then outstanding Rights at the Redemption Price in
connection with any Section 13 Event (A) in which all
holders of Common Shares are treated alike and (B) not
involving (other than as a holder of Common Shares being
treated like all other such holders) a Transaction Person.
(iii) Notwithstanding anything to the contrary
in this Agreement, including, without limitation, the
provisions of Sections 23(a)(i) and (a)(ii) hereof, in the
event that a majority of the Board is comprised of (A)
persons elected at a meeting or by written consent of
stockholders who were not nominated by the Board in office
immediately prior to such meeting or action by written
consent, and/or (B) successors of such persons elected to
the Board for the purpose of either facilitating a
Transaction with a Transaction Person or circumventing
directly or indirectly the provisions of this Section
23(a)(iii), then (1) the Rights may not be redeemed for a
period of 365 days following the effectiveness of such
election if such redemption is reasonably likely to have the
purpose or effect of facilitating a Transaction with a
Transaction Person, and (2) the Rights may not be redeemed
following such 365-day period if (x) such redemption is
reasonably likely to have the purpose of facilitating a
Transaction with a Transaction Person and (y) during such
365-day period, the Company enters into any agreement,
-49-
<PAGE>
arrangement or understanding with any Transaction Person
which is reasonably likely to have the purpose or effect of
facilitating a Transaction with any Transaction Person.
(b) In the case of a redemption permitted under
Section 23(a)(i) hereof, immediately upon the date for
redemption set forth in (or determined in the manner
specified in) a resolution of the Board ordering the
redemption of the Rights, evidence of which shall have been
filed with the Rights Agent, and without any further action
and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each
Right so held. In the case of a redemption permitted only
under Section 23(a)(ii) hereof, evidence of which shall have
been filed with the Rights Agent, the right to exercise the
Rights will terminate and represent only the right to
receive the Redemption Price upon the later of ten (10)
Business Days following the giving of notice or the
expiration of any period during which the rights under
Section 11(a)(ii) hereof may be exercised. The Company
shall promptly give public notice of any such redemption;
provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such
redemption. Within ten (10) days after such date for
redemption set forth in a resolution of the Board ordering
the redemption of the Rights, the Company shall mail a
notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer
agent for the Common Shares. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any
of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner
other than that specifically set forth in this
-50-
<PAGE>
Section 23 and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
(c) In the case of a redemption permitted under
Section 23(a)(i) hereof, the Company may, at its option,
discharge all of its obligations with respect to the Rights
by (i) issuing a press release announcing the manner of
redemption of the Rights in accordance with this Agreement
and (ii) mailing payment of the Redemption Price to the
registered holders of the Rights at their last addresses as
they appear on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Shares, and upon such action,
all outstanding Rights and Right Certificates shall be null
and void without any further action by the Company.
SECTION 24. Exchange.
(a) The Board may, at its option, at any time
after the time that any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void
pursuant to the provisions of Sections 7(e) and 11(a)(ii)
hereof) for Common Shares of the Company at an exchange
ratio of one Common Share per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar
transaction involving either the Common Shares or the
Preferred Shares occurring after the date hereof (such
exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board
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, any entity holding Common Shares for or
pursuant to the terms of any such plan or any trustee,
administrator or fiduciary of such a plan), together with
all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then
outstanding.
-51-
<PAGE>
(b) Immediately upon the action of the Board
ordering the exchange of any Rights pursuant to Section
24(a) hereof 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 Common Shares equal to
the number of such rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public
notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method
by which the exchange of the Common Shares 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 Sections 7(e) and 11(a)(ii) hereof) held
by each holder of Rights.
(c) In any exchange pursuant to this Section 24,
the Company, at its option, may substitute Preferred Shares
(or equivalent preferred shares, as such term is defined in
Section 11(b) hereof) for some or all of the Common Shares
exchangeable for Rights, at the initial rate of
one-hundredth of a Preferred Share (or equivalent preferred
share) for each Common Share, as appropriately adjusted to
reflect adjustments in the voting rights of the Preferred
Shares pursuant to the terms thereof, so that the fraction
of a Preferred Share delivered in lieu of each Common Share
shall have the same voting rights as one Common Share.
(d) The Board shall not authorize any exchange
transaction referred to in Section 24(a) hereof unless at
the time such exchange is authorized there shall be
-52-
<PAGE>
sufficient Common Shares or Preferred Shares issued but not
outstanding, or authorized but unissued, to permit the
exchange of Rights as contemplated in accordance with this
Section 24.
SECTION 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any
dividend payable in stock of any class to the holders of its
Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regularly
quarterly cash dividend), (ii) to offer to the holders of
its Preferred Shares rights or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of
stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving
only the subdivision of outstanding Preferred Shares), (iv)
to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a
transaction which does not violate Section 11(o) hereof), or
to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of 50% or more of
the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which does
not violate Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action to the extent feasible and
file a certificate with the Rights Agent to that effect,
which shall specify the record date for the purposes of such
stock dividend or 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 Preferred Shares, if any such date is to be
fixed. Such notice shall be so given in the case of any
action covered by clause (i) or (ii) above of this
-53-
<PAGE>
Section 25(a) at least twenty (20) days prior to
the record date for determining holders of the Preferred
Shares 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 Preferred
Shares, whichever shall be the earlier.
(b) In case of a Section 11(a)(ii) Event, then
(i) the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event,
which notice shall describe such event and the consequences
of such event to holders of Rights under Section 11(a)(ii)
hereof and (ii) all references in the foregoing Section
25(a) to Preferred Shares shall be deemed thereafter to
refer also, if appropriate, to Common Shares and/or, if
appropriate, other securities of the Company.
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 Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail,
postage prepaid, and addressed (until another address is
filed in writing with the Rights Agent) as follows:
Humana Inc.
500 West Main Street
Louisville, Kentucky 40202
Attention: Corporate Secretary and
General Counsel
Subject to the provisions of Section 21 hereof, any notice
or demand authorized by this Agreement to be given or made
by the Company or by the holder of any Right Certificate to
or on the Rights Agent shall be sufficiently given or made
if sent
-54-
<PAGE>
by first-class mail, postage prepaid, and addressed (until
another address is filed in writing with the Company) as
follows:
Mid-America Bank of Louisville & Trust
Company
500 West Broadway
Louisville, Kentucky 40202
Attention: Mr. Orson Oliver, President
Notices or demands authorized by this Agreement to
be given or made by the Company or the Rights Agent to the
holder of any Right Certificate or, if prior to the
Distribution Date, to the holder of certificates
representing Common Shares, shall be sufficiently given or
made if sent by first-class mail, postage prepaid, and
addressed to such holder at the address of such holder as
shown on the registry books of the Company.
SECTION 27. Supplements and Amendments.
Prior to the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend
any provision of this Agreement without the approval of any
holders of certificates representing Common Shares. From
and after the Distribution Date, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend
this Agreement without the approval of any holders of Right
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 Right Certificates (other than
an Acquiring Person or an Affiliate or Associate thereof);
provided, however, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause
(iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are
not then redeemable, or (B) any other time period unless
such lengthening is for the
-55-
<PAGE>
purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights. 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, provided that such supplement or amendment does
not adversely affect the rights or obligations of the Rights
Agent under Section 18 or 20 of this Agreement. Prior to
the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the
holders of Common Shares. Notwithstanding anything
contained in this Agreement to the contrary, in the event
that a majority of the Board is comprised of (i) persons
elected at a meeting or by written consent of stockholders
who were not nominated by the Board in office immediately
prior to such meeting or written consent, and/or (ii)
successors of such persons elected to the Board for the
purpose of either facilitating a Transaction with a
Transaction Person or circumventing directly or indirectly
the provisions of this Section 27, then (A) for a period of
365 days following the effectiveness of such action, this
Agreement shall not be amended or supplemented in any manner
reasonably likely to have the purpose or effect of
facilitating a Transaction with a Transaction Person and (B)
no amendments or supplements may be made following such
365-day period if (1) such amendment or supplement is
reasonably likely to have the purpose of facilitating a
Transaction with a Transaction Person and (2) during such
365-day period, the Company enters into any agreement,
arrangement or understanding with any Transaction Person
which is reasonably likely to have the purpose or effect of
facilitating a Transaction with any Transaction Person.
SECTION 28. Determination and Actions by the
Board, etc.
The Board shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and
powers specifically granted to the Board, or the Company, or
as may be necessary or advisable in the administration of
this Agreement, including, without
-56-
<PAGE>
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, without
limitation, a determination to redeem or not redeem the
Rights or to amend the Agreement and whether any proposed
amendment adversely affects the interests of the holders of
Right Certificates). For all purposes of this Agreement,
any calculation of the number of Common Shares or other
securities outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding Common Shares or any other securities of which
any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act as
in effect on the date of this Agreement. All such actions,
calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board in
good faith, shall (x) be final, conclusive and binding on
the Company, the Rights Agent, the holders of the Right
Certificates and all other parties, and (y) not subject the
Board to any liability to the holders of the Right
Certificates.
SECTION 29. Successors.
All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 30. Benefits of this Agreement.
This Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares), and 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 Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement.
-57-
<PAGE>
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.
SECTION 32. Governing Law.
This Agreement, each Right and each Right
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.
-58-
<PAGE>
SECTION 34. Descriptive Headings.
Descriptive headings of the several Sections of
this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of
the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed and attested, all as of
the date and year first above written.
HUMANA INC.
By:/s/Arthur P. Hipwell
Name: Arthur P. Hipwell
Title: Senior Vice President
MID-AMERICA BANK OF LOUISVILLE
& TRUST COMPANY
By:/s/Robert H. Sachs
Name: Robert H. Sachs
Title: Executive Vice President
-59-
EXHIBIT A
HUMANA INC.
CERTIFICATE OF DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES A PARTICIPATING
PREFERRED STOCK
(Pursuant to Section 151
of the General Corporation Law of the State of Delaware)
We, David A. Jones, Chairman of the Board, and
Alice F. Newton, Secretary of Humana, Inc., a corporation
organized and existing under the General Corporation Law of
the State of Delaware (the "Corporation"), in accordance
with the provisions of Section 103 thereof, do hereby
certify:
That pursuant to the authority conferred upon the
Board of Directors by the Corporation's Restated Certificate
of Incorporation, the Board of Directors on March 5, 1987,
adopted the following resolution creating a series of
2,500,000 shares of Preferred Stock designated as Series A
Participating Preferred Stock:
WHEREAS, the Corporation's Restated Certificate of
Incorporation provides that the Corporation is authorized to
issue 10,000,000 shares of preferred stock none of which are
outstanding; and
RESOLVED, that pursuant to the authority vested in
the Board of Directors of the Corporation by Article FOURTH
of the Corporation's Restated Certificate of Incorporation,
a series of Preferred Stock of the Corporation be, and it
hereby is, created out of the authorized but unissued shares
of the capital stock of the Corporation, such series to be
designated Series A Participating Preferred Stock (the
"Participating Preferred Stock"), to consist of two million
five hundred thousand (2,500,000) shares, par value $1 per
share, of which the preferences and relative and other
rights, and the qualifications, limitations or restrictions
thereof, shall be as follows:
1. Future Increase or Decrease. Subject of
paragraph 4(e) of this resolution, the number of shares of
said series may at any time or from time to time be
increased or decreased by the Board of Directors
notwithstanding that shares of such series may be
outstanding at such time of increase or decrease.
<PAGE>
2. Dividend Rate.
(a) The holders of shares of Participating
Preferred Stock shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in
cash on the first day of each November, February, May and
August in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Participating
Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $20 or (b) subject
to the provision for adjustment hereinafter set forth, 100
times the aggregate per share amount of all cash dividends
and 100 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common
Stock, par value $.16 2/3 per share, of the Corporation (the
"Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Participating Preferred
Stock. In the event the Corporation shall at any time after
March 5, 1987 (the "Rights Declaration Date") (i) declare
any dividend on Common Stock, payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which
holders of shares of Participating Preferred Stock were
entitled immediately prior to such event under clause (b) of
the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.
(b) On or after the first issuance of any
share or fractional share of Participating Preferred Stock,
no dividend on Common Stock shall be declared unless
concurrently therewith a dividend or distribution is
declared on the Participating Preferred Stock as provided in
paragraph (a) above; and the declaration of any such
dividend on the Common Stock shall be expressly conditioned
upon payment or declaration of and provision for a dividend
on the Participating Preferred Stock as above provided. In
the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $20 per share
on the Participating Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be
cumulative on outstanding shares of Participating Preferred
Stock from the Quarterly Dividend Payment
A-2
<PAGE>
Date next preceding the date of issue of such shares of
Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for
the determination of holders of shares of Participating
Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. The
Board of Directors may fix a record date for the
determination of holders of shares of Participating
Preferred Stock entitled to receive payment of a dividend
distribution declared thereon, which record date shall be no
more than 30 days prior to the date fixed for the payment
thereof.
3. Dissolution, Liquidation and Winding Up.
(a) In the event of any voluntary or
involuntary dissolution, liquidation or winding up of the
affairs of the Corporation (hereinafter referred to as a
"Liquidation"), the holders of Participating Preferred Stock
shall receive at least $1,000 per share, plus an amount
equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such
payment, provided that the holders of shares of
Participating Preferred Stock shall be entitled to receive
at least an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to
holders of Common Stock (the "Participating Preferred
Liquidation Preference").
(b) In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding Common
Stock (by reclassification or otherwise than by payment of a
dividend in Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount
which holders of Participating Preferred Stock were entitled
immediately prior to such event pursuant to the proviso set
forth in paragraph (a) above, shall be adjusted by
multiplying such amount by a fraction the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
4. Voting Rights. The holders of shares of
Participating Preferred Stock shall have the following
voting rights:
A-3
<PAGE>
(a) Each share of Participating Preferred
Stock shall entitle the holder thereof to one (1) vote on
all matters submitted to a vote of the stockholders of the
Company.
(b) Except as otherwise provided herein, or
by law, the Certificate of Incorporation or the By-laws, the holders of
shares of Participating Preferred Stock and the holders of
shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the
Company.
(c) If and whenever dividends on the
Participating Preferred Stock shall be in arrears in an
amount equal to six quarterly dividend payments, then and in
such event the holders of the Participating Preferred Stock,
voting separately as a class (subject to the provisions of
subparagraph (d) below), shall be entitled at the next
annual meeting of the stockholders or at any special meeting
to elect two (2) directors. Each share of Participating
Preferred Stock shall be entitled to one vote, and holders
of fractional shares shall have the right to a fractional
vote. Upon election, such directors shall become additional
directors of the Corporation and the authorized number of
directors of the Corporation shall thereupon be
automatically increased by such number of directors. Such
right of the holders of Participating Preferred Stock to
elect directors may be exercised until all dividends in
default on the Participating Preferred Stock shall have been
paid in full, and dividends for the current dividend period
declared and funds therefor set apart, and when so paid and
set apart, the right of the holders of Participating
Preferred Stock to elect such number of directors shall
cease, the term of such directors shall thereupon terminate,
and the authorized number of directors of the Corporation
shall thereupon return to the number of authorized directors
otherwise in effect, but subject always to the same
provisions for the vesting of such special voting rights in
the case of any such future dividend default or defaults.
The fact that dividends have been paid and set apart as
required by the preceding sentence shall be evidenced by a
certificate executed by the President and the chief
financial officer of the Corporation and delivered to the
Board of Directors. The directors so elected by holders of
Participating Preferred Stock shall serve until the
certificate described in the preceding sentence shall have
been delivered to the Board of Directors or until their
respective successors shall be elected or appointed and
qualify.
At any time when such special voting rights have
been so vested in the holders of the Participating Preferred
Stock, the Secretary of the Corporation may, and upon the
written request of the holders of record of 10% or more of
the number of shares of the Participating Preferred Stock
then outstanding addressed to such Secretary at the
principal office of the Corporation in the Commonwealth of
Kentucky, shall, call a special meeting of the holders of
the Participating Preferred Stock for the election of the
directors to be elected by them as hereinabove provided, to
be held in the case of such written request within forty
(40) days after delivery of such request, and in either case
to
A-4
<PAGE>
be held at the place and upon the notice provided by law and
in the Corporation's Bylaws for the holding of meetings of
stockholders; provided, however, that the Secretary shall
not be required to call such a special meeting (i) if any
such request in received less than ninety (90) days before
the date fixed for the next ensuing annual or special
meeting of stockholders or (ii) if at the time any such
request is received, the holders of Participating Preferred
Stock are not entitled to elect such directors by reason of
the occurrence of an event specified in the third sentence
of subparagraph (d) below.
(d) if, at any time when the holders of
Participating Preferred Stock are entitled to elect
directors pursuant to the foregoing provisions of this
paragraph 4, the holders of any one or more additional
series of Preferred Stock are entitled to elect directors by
reason of any default or event specified in the
Corporation's Restated Certificate of Incorporation, as
amended, as in effect at the time of the certificate of
designation for such series, and if the terms for such other
additional series so permit, the voting rights of the two or
more series then entitled to vote shall be combined (with
each series having a number of votes proportional to the
aggregate liquidation preference of its outstanding shares).
In such case, the holders of Participating Preferred Stock
and of all such other series then entitled so to vote,
voting as a class, shall elect such directors. If the
holders of any such other series have elected such directors
prior to the happening of the default or event permitting
the holders of Participating Preferred Stock to elect
directors, or prior to a written request for the holding of
a special meeting being received by the Secretary of the
Corporation from the holders of not less than 10% of the
then outstanding shares of Participating Preferred Stock,
then such directors so previously elected will be deemed to
have been elected by and on behalf of the holders of
Participating Preferred Stock as well as such other series,
without prejudice to the right of the holders of
Participating Preferred Stock to vote for directors if such
previously elected directors shall resign, cease to serve or
fail to stand for reelection while the holders of
Participating Preferred Stock are entitled to vote. If the
holders of any such other series are entitled to elect in
excess of two (2) directors, the Participating Preferred
Stock shall not participate in the election of more than two
(2) such directors, and those directors whose terms first
expire shall be deemed to be the directors elected by the
holders of Participating Preferred Stock; provided that, if
at the expiration of such terms the holders of Participating
Preferred Stock are entitled to vote in the election of
directors pursuant to the provisions of this paragraph 4,
then the Secretary of the Corporation shall call a meeting
(which meeting may be the annual meeting or special meeting
of stockholders referred to in subparagraph (c)) of holders
of Participating Preferred Stock for the purpose of electing
replacement directors (in accordance with the provisions of
this paragraph 4) to be held on or prior to the time of
expiration of the expiring terms referred to above.
(e) Except as otherwise set forth herein or
required by law, the Corporation's Restated Certificate of
Incorporation or By-laws, holders of Participating Preferred
Stock shall have no special voting rights and their consent
shall not be required
A-5
<PAGE>
(except to the extent they are entitled to vote with holders
of Common Stock as set forth herein) for the taking of any
corporate action. No consent of the holders of outstanding
shares of Participating Preferred Stock at any time
outstanding shall be required in order to permit the Board
of Directors to: (i) increase the number of authorized
shares of Participating Preferred Stock or to decrease such
number to a number not below the sum of the number of shares
of Participating Preferred Stock then outstanding and the
number of shares with respect to which there are outstanding
rights to purchase; or (ii) to issue Preferred Stock which
is senior to the Participating Preferred Stock, junior to
the Participating Preferred Stock or on a parity with the
Participating Preferred Stock.
5. Redemption. The shares of Participating
Preferred Stock shall not be redeemable.
6. Conversion Rights. The Participating
Preferred Stock is not convertible into Common Stock or any
other security of the Corporation.
IN WITNESS WHEREOF, the undersigned Chairman of
the Board and Secretary of the Corporation each declares
under penalty or perjury the truth, to the best of his or
her knowledge, of this Certificate.
Executed this 5th day of March, 1987 in Louisville,
Kentucky.
By:/s/ David A. Jones
David A. Jones
Chairman of the Board and
Chief Executive Officer
Attest:
/s/Alice F. Newton
Alice F. Newton, Secretary
A-6
EXHIBIT B
Form of Right Certificate
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER FEBRUARY 14,
2006, OR EARLIER IF REDEEMED BY THE
CORPORATION. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT.
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 AN
AFFILIATE OR ASSOCIATE THEREOF (AS
DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN RELATED PERSONS, WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH
PERSON OR BY ANY SUBSEQUENT HOLDER,
SHALL BECOME NULL AND VOID.
Right Certificate
HUMANA INC.
This certifies that ___________, or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the
Amended and Restated Rights Agreement, dated as of February
14, 1996 (the "Rights Agreement"), between Humana Inc., a
Delaware corporation (the "Company"), and Mid-America Bank
of Louisville & Trust Company, a banking and trust
corporation organized under the laws of the Commonwealth of
Kentucky (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M.,
Louisville, Kentucky time, on February 14, 2006, unless
the Rights evidenced hereby shall have been previously
redeemed by the Company, at the principal office or offices
of the Rights Agent designated for such purpose, or at the
office of its successor as Rights Agent, one one-hundredth
of a fully paid non-assessable share of Series A
Participating Preferred Stock, with a par value of $1.00 per
share (the
<PAGE>
"Preferred Shares"), of the Company, at a purchase price of
$145.00 per one one-hundredth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this
Right Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a
Preferred Share which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of ____________, ____ based
on the Preferred Shares as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event
(as such term is defined in the Rights Agreement), if the
Rights evidenced by this Right Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate who becomes a transferee after the
Acquiring Person becomes such, or (iii) under certain
circumstances specified in the Rights Agreement, a
transferee of any such Acquiring Person, Associate or
Affiliate who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such, such Rights shall
become null and void and no holder hereof shall have any
right with respect to such Rights from and after the
occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase
Price and the number of one one-hundredths of a Preferred
Share or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the
happening of certain events, including Triggering Events (as
such term is defined in the Rights Agreement).
This Right 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 Right
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 principal executive offices of the Company and the
principal office or offices of the Rights Agent.
This Right Certificate, with or without other
Right Certificates, upon surrender at the principal office
of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares or other securities as
the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in
part, the
B-2
<PAGE>
holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Certificate may be redeemed by
the Company at a redemption price of $.01 per Right (subject
to adjustment as provided in the Rights Agreement) payable
in Common Shares or cash.
The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered
holders of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in
cash equal to the same fraction of the current market value
of a whole Right as defined in the Rights Agreement.
The Company will not be required to issue
fractions of Preferred Shares (other than fractions which
are one one-hundredths or integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the
Rights or to distribute certificates which evidence
fractional Preferred Shares (other than fractions which are
one one-hundredths or integral multiples of one
one-hundredth of a Preferred Share). In lieu of fractional
Preferred Shares other than fractions that are multiples of
one one-hundredth of a Preferred Share, the Company will pay
to the registered holders of Right Certificates at the time
such Rights are exercised an amount in cash equal to the
same fraction of the current market value of one Preferred
Share as defined in the Rights Agreement.
No holder of this Right Certificate shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or of any other
securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder
of the Company 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 other
distributions or to exercise any preemptive or subscription
rights, or otherwise, until the Right or Rights evidenced by
this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been
countersigned by the Rights Agent.
B-3
<PAGE>
WITNESS the signature of the proper officers of
the Company and its corporate seal. Dated as of _________,
______.
[SEAL]
ATTEST: HUMANA INC.
Attest:
By ____________________ By _________________
Name: Name:
Title: Title:
Countersigned:
MID-AMERICA BANK OF LOUISVILLE &
TRUST COMPANY
By
Authorized Signatory
Name:
Title:
B-4
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ________________________________________
hereby sells, assigns and transfers unto ___________________
____________________________________________________________
(Please print name and address of transferee)
____________________________________________________________
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with
full power of substitution.
Dated: ____________, _____
--------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of
a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a
commercial bank, savings association, credit union or trust
company having an office or correspondent in the United
States or other eligible guarantor institution which is a
participant in a signature guarantee medallion program.
- ------------------------------------------------------------
The undersigned hereby certifies that (1) the
Rights evidenced by this Right Certificate are not being
sold, assigned or transferred by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement) and (2) after due inquiry and to the best
knowledge of the undersigned, the undersigned did not
acquire the Rights evidenced by this Right Certificate from
any Person who is or was an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the
Rights Agreement).
--------------------
Signature
B-5
<PAGE>
- ------------------------------------------------------------
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise Rights represented by the Right
Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to
exercise Rights represented by this Right Certificate to
purchase the Preferred Shares, Common Shares or such other
securities issuable upon the exercise of such Rights at this
time as follows:
Please Insert
Number of Rights
To Be Exercised
(i) Preferred Shares Exercise _______________
(ii) Section 11(a)(ii) Exercise _______________
(iii) Section 13 Exercise _______________
The undersigned requests that certificates for
such Preferred Shares, Common Shares or other securities be
issued in the name of:
Please insert social security
or other identifying number ________________________________
____________________________________________________________
(Please print name and address of transferee)
____________________________________________________________
If such number of Rights shall not be all the Rights
evidenced by this Right Certificate, a new Right Certificate
for the balance remaining of such Rights shall be registered
in the name of and delivered to:
Please insert social security
or other identifying number ________________________________
____________________________________________________________
(Please print name and address of transferee)
____________________________________________________________
B-6
<PAGE>
Dated: _________, 19__
--------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of
a registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a
commercial bank, savings association, credit union or trust
company having an office or correspondent in the United
States or other eligible guarantor institution which is a
participant in a signature guarantee medallion program.
B-7
<PAGE>
Form of Reverse Side of Right Certificate -- continued.
- ------------------------------------------------------------
The undersigned hereby certifies that (1) the
Rights evidenced by this Right Certificate are not being
exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement) and (2)
after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights
evidenced by this Rights Certificate from any Person who is
or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement).
--------------------
Signature
- ------------------------------------------------------------
NOTICE
The signature on the foregoing Forms of Assignment
and Election and certificates must conform to the name as
written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in
the Form of Assignment or the Form of Election to Purchase,
as the case may be, is not completed, the Company and the
Rights Agent will deem the Beneficial Owner of the Rights
evidenced by this Right Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
B-8
EXHIBIT C
February 14, 1996
REVISED SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
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 AN AFFILIATE
OR ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT)
AND CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON
BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, SHALL
BECOME NULL AND VOID.
On March 5, 1987, the Board of Directors of Humana
Inc., a Delaware corporation (the "Company"), declared a
dividend of one preferred share purchase right (a "Right")
for each outstanding share of Common Stock, par value
$.16-2/3 per share (the "Common Shares"), of the Company.
The dividend was paid to the stockholders of record as of
5:00 P.M., Louisville, Kentucky time, on March 16, 1987 (the
"Record Date"), and either was paid or is payable with
respect to Common Shares issued thereafter until the
Distribution Date (as hereinafter defined) and, in certain
circumstances, is payable with respect to Common Shares
issued after the Distribution Date. Since March 5, 1987,
the terms of the Rights have been amended on December 7,
1992, March 2, 1993 and February 14, 1996.
Except as set forth below, each Right, when it
becomes exercisable, entitles the registered holder to
purchase from the Company one one-hundredth of a share of
Series A Participating Preferred Stock, par value $1.00 per
share (the "Preferred Shares"), at a price of $145.00 per
one one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms
of the Rights are set forth in an Amended and Restated
Rights Agreement, dated as of February 14, 1996 (the
"Rights Agreement"), between the Company and Mid-America
Bank of Louisville & Trust Company (the "Rights Agent").
<PAGE>
The Rights are attached to all certificates
representing outstanding Common Shares, and no separate
Right Certificates (as hereinafter defined) have been
distributed. The Rights will separate from the Common
Shares on the earliest to occur of (i) the first date of
public announcement that a person or "group" has acquired
beneficial ownership of 15% or more of the outstanding
Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) ten (10) business days (or
such later date as the Board of Directors of the Company may
determine) following the commencement of, or announcement of
an intention to commence, a tender offer or exchange offer
the consummation of which would result in a person or group
becoming an Acquiring Person (as hereinafter defined) (the
earliest of such dates being called the "Distribution
Date"). A person or group whose acquisition of Common
Shares causes a Distribution Date pursuant to clause (i)
above is an "Acquiring Person". The first date of public
announcement that a person or group has become an Acquiring
Person is the "Shares Acquisition Date".
The Rights Agreement provides that until the
Distribution Date the Rights will be transferred with and
only with the Common Shares. Until the Distribution Date
(or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon
transfer or new issuance of Common Shares have contained and
will continue to contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such
certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on
the Distribution
C-2
<PAGE>
Date (and to each initial record holder of certain Common
Shares issued after the Distribution Date), and such
separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the
Distribution Date and will expire at 5:00 P.M., Louisville,
Kentucky time, on February 14, 2006, unless earlier
redeemed by the Company as described below.
In the event that any person becomes an Acquiring
Person (except pursuant to a Permitted Offer as hereinafter
defined), each holder of a Right will have (subject to the
terms of the Rights Agreement) the right (the "Flip-In
Right") to receive upon exercise the number of Common
Shares, or, in the discretion of the Board of Directors of
the Company, of one one-hundredths of a Preferred Share (or,
in certain circumstances, other securities of the Company)
having a value (immediately prior to such triggering event)
equal to two times the Purchase Price. Notwithstanding the
foregoing, following the occurrence of the event described
above, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned
by any Acquiring Person or any affiliate or associate
thereof will be null and void. A "Permitted Offer" is a
tender or exchange offer for all outstanding Common Shares
which is at a price and on terms determined, prior to the
purchase of shares under such tender or exchange offer, by a
majority of Disinterested Directors (as hereinafter defined)
to be adequate (taking into account all factors that such
Disinterested Directors deem relevant) and otherwise in the
best interests of the Company and its stockholders (other
than the person or any affiliate or associate thereof on
whose basis the offer is being made) taking into account all
factors that such Disinterested Directors may deem relevant.
"Disinterested Directors" are directors of the Company who
are not officers of the Company and who are not Acquiring
Persons or affiliates or associates thereof, or
representatives of any of them, or any person who was
directly or indirectly proposed or nominated as a director
of the Company by a Transaction Person (as hereinafter
defined).
C-3
<PAGE>
In the event that, at any time following the
Shares Acquisition Date, (i) the Company is acquired in a
merger or other business combination transaction in which
the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are
not the holders of all of the surviving corporation's voting
power, or (ii) more than 50% of the Company's assets or
earning power is sold or transferred, in either case with or
to an Acquiring Person or any affiliate or associate
thereof, or any other person in which such Acquiring Person,
affiliate or associate has an interest, or any person acting
on behalf of or in concert with such Acquiring Person,
affiliate or associate, or, if in such transaction all
holders of Common Shares are not treated alike, any other
person, then each holder of a Right (except Rights which
previously have been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to
receive, upon exercise, common shares of the acquiring
company having a value equal to two times the Purchase
Price.
The Purchase Price payable, and the number of one-
hundredths of a Preferred Share or other securities
issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination
or reclassification of, the Preferred Shares, (ii) upon the
grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at
a price, or securities convertible into Preferred Shares
with a conversion price, less than the then current market
price of the Preferred Shares or (iii) upon the distribution
to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than
those referred to above).
The Purchase Price is also subject to adjustment
in the event of a stock split of the Common Shares, or a
stock dividend on the Common Shares payable in Common
C-4
<PAGE>
Shares, or subdivisions, consolidations or combinations of
the Common Shares occurring, in any such case, prior to the
Distribution Date.
With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional one-hundredths of a Preferred Share will be
issued, and in lieu thereof, an adjustment in cash will be
made based on the market price of the Preferred Shares on
the last trading day prior to the date of exercise.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend
payment of $20.00 per share but, if greater, will be
entitled to an aggregate dividend per share of 100 times the
dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of
$1,000.00 per share but will be entitled to an aggregate
payment per share of 100 times the aggregate payment made
per Common Share. Each Preferred Share will have one vote,
voting together with the Common Shares. These rights are
protected by customary antidilution provisions. In the
event that the amount of accrued and unpaid dividends on the
Preferred Shares is equivalent to at least six full
quarterly dividends, the holders of the Preferred Shares
shall have the right, voting as a class, to elect two
directors in addition to the directors elected by the
holders of the Common Shares until all dividends in default
on the Preferred Shares have been paid in full and dividends
for the current dividend period declared and funds therefor
set apart.
At any time prior to the earlier to occur of (i) a
person becoming an Acquiring Person or (ii) the expiration
of the Rights, the Company may redeem the Rights in whole,
but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective
upon the action of the Board of Directors of the
C-5
<PAGE>
Company. Additionally, the Company may redeem the then
outstanding Rights in whole, but not in part, at the
Redemption Price after the triggering of the Flip-In Right
and before the expiration of any period during which the
Flip-In Right may be exercised in connection with a merger
or other business combination transaction or series of
transactions involving the Company in which all holders of
Common Shares are treated alike but not involving a
Transaction Person (as hereinafter defined). Upon the
effective date of the redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
In the event that a majority of the directors
serving on the Board following a meeting of stockholders or
stockholder action by written consent are not nominated by
the Board of Directors of the Company serving immediately
prior to such meeting or action, then for 365 days following
such meeting or action the Rights may not be redeemed if
such redemption is reasonably likely to facilitate a
combination or sale of assets or earning power (a
"Transaction") with an Acquiring Person or affiliate or
associate thereof who has directly or indirectly proposed or
nominated a member of the Board of Directors of the Company
who is in office at the time the Transaction is being
considered (a "Transaction Person"). The Rights may not be
redeemed thereafter if during such 365 day period the
Company enters into any agreement reasonably likely to
facilitate a Transaction with a Transaction Person and the
redemption is reasonably likely to facilitate a Transaction
with a Transaction Person.
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 of the Company,
stockholders may, depending upon the circumstances,
recognize taxable income should the Rights become
exercisable or upon the occurrence of certain events
thereafter.
C-6
