SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 13, 1999
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MACROCHEM CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 0-13634 04-2744744
(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.)
INCORPORATION)
110 Hartwell Avenue, Lexington, Massachusetts 02421-3134
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER: (781) 862-4003
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N/A
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS
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On August 13, 1999 the Board of Directors of MacroChem Corporation (the
"Company") declared a dividend of one right (the "Rights") to purchase one
one-hundredth (1/100th) of a share of Series B Preferred Stock, par value $.01
per share, of the Company for each outstanding share of Common Stock, par value
$.01 per share, of the Company. The dividend is payable September 10, 1999 to
stockholders of record at the close of business on such date. The terms of the
Rights are set forth in the Rights Agreement dated as of August 13, 1999 between
the Company and American Stock Transfer & Trust Company, as Rights Agent, a copy
of which is filed herewith as an exhibit and incorporated herein by reference.
On August 13, 1999 the Board of Directors of the Company adopted certain
amendments to the Company's by-laws. A copy of the Company's Amended and
Restated By-laws is attached herewith as an exhibit and is incorporated herein
by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(C) EXHIBITS:
1. Rights Agreement dated as of August 13, 1999 ("Rights
Agreement") between the Company and American Stock Transfer &
Trust Company, as Rights Agent.
2. Form of Certificate of Designation with respect to the Series
B Preferred Stock, par value $.01 per share, of the Company
(attached as Exhibit A to the Rights Agreement).
3. Form of Rights Certificate (attached as Exhibit B to the
Rights Agreement). Pursuant to the Rights Agreement, printed
Rights Certificates will not be mailed until the Distribution
Date (as defined in the Rights Agreement).
4. Summary of Rights (attached as Exhibit C to the Rights Agreement).
5. Amended and Restated By-laws of the Company.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MacroChem Corporation
Date: August 26, 1999 By: /S/ ALVIN J. KARLOFF
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Name: Alvin J. Karloff
Title: President and Chief Executive Officer
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EXHIBIT INDEX
The following designated exhibits are filed herewith:
1. Rights Agreement dated as of August 13, 1999 ("Rights
Agreement") between the Company and American Stock Transfer &
Trust Company, as Rights Agent.
2. Form of Certificate of Designation with respect to the Series B
Preferred Stock, par value $.01 per share, of the Company
(attached as Exhibit A to the Rights Agreement).
3. Form of Rights Certificate (attached as Exhibit B to the
Rights Agreement). Pursuant to the Rights Agreement, printed
Rights Certificates will not be mailed until the Distribution
Date (as defined in the Rights Agreement).
4. Summary of Rights (attached as Exhibit C to the Rights Agreement).
5. Amended and Restated By-laws of the Company.
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MACROCHEM CORPORATION
and
American Stock Transfer & Trust Company
as Rights Agent
Rights Agreement
Dated as of August 13, 1999
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TABLE OF CONTENTS
Section Page
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................6
Section 3. Issue of Rights Certificates......................................6
Section 4. Form of Rights Certificates.......................................8
Section 5. Countersignature and Registration.................................9
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates........9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....10
Section 8. Cancellation and Destruction of Rights Certificates..............12
Section 9. Reservation and Availability of Shares of Preferred Stock;
Other Covenants................................................12
Section 10. Preferred Stock Record Date; Etc................................14
Section 11. Antidilution Adjustments........................................14
Section 12. Certificate of Adjustments......................................24
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.................................................24
Section 14. Fractional Rights and Fractional Shares.........................26
Section 15. Rights of Action................................................27
Section 16. Agreement of Rights Holders.....................................27
Section 17. Rights Certificate Holder Not Deemed a Stockholder..............28
Section 18. Concerning the Rights Agent.....................................28
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Section 19. Merger or Consolidation or Change of Name of Rights Agent.......29
Section 20. Duties of Rights Agent..........................................29
Section 21. Change of Rights Agent..........................................32
Section 22. Issuance of New Rights Certificates.............................33
Section 23. Redemption and Termination......................................33
Section 24. Exchange........................................................34
Section 25. Notice of Proposed Actions......................................35
Section 26. Notices.........................................................36
Section 27. Supplements and Amendments......................................37
Section 28. Successors......................................................37
Section 29. Determinations and Actions by the Board; etc....................37
Section 30. Benefits of this Agreement......................................38
Section 31. Severability....................................................38
Section 32. Governing Law...................................................38
Section 33. Counterparts....................................................39
Section 34. Descriptive Headings............................................39
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RIGHTS AGREEMENT
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This Agreement dated as of August 13, 1999 is between MacroChem
Corporation, a Delaware corporation (the "Company"), and American Stock Transfer
& Trust Company, as rights agent (the "Rights Agent").
W I T N E S S E T H:
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WHEREAS, on August 13, 1999 the Board of Directors of the Company (the
"Board") authorized the issuance of rights (collectively, the "Rights," and
individually a "Right"), each Right being a right to purchase, on the terms and
subject to the provisions of this Agreement, one one-hundredth of a share of the
Company's Preferred Stock; and
WHEREAS, on August 13, 1999 (the "Declaration Date") the Board (a)
authorized and declared a dividend distribution of one Right for every share of
Common Stock, $.01 par value per share, of the Company outstanding at the Close
of Business (as hereinafter defined) on September 10, 1999 (the "Dividend Record
Date"), and (b) authorized the issuance of, and agreed to issue, one Right (as
such number may be adjusted in accordance with Section 11(i) or 11(p) hereof)
for every share of Common Stock of the Company issued between the Dividend
Record Date and the Distribution Date (as hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
Section 1. CERTAIN DEFINITIONS.
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For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates of such Person, shall be the Beneficial Owner of 20% or more of
the shares of Common Stock then outstanding, but shall not include (i) the
Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of
the Company or of any Subsidiary of the Company, (iv) any Person organized,
appointed, or established by the Company or a Subsidiary of the Company pursuant
to the terms of any plan described in clause (iii) above, or (v) any such Person
who has reported or is required to report such ownership on Schedule 13G under
the Exchange Act (or any comparable or successor report) or on Schedule 13D
under the Exchange Act (or any comparable or successor report) which Schedule
13D does not state any intention to or reserve the right to control or influence
the management or policies of the Company or engage in any of the actions
specified in Item 4 of such Schedule (other than the disposition of the Common
Stock) and, within 10 Business Days of being requested by the Company to advise
it regarding the same, certifies to the Company that such Person acquired shares
of Common Stock in excess of 19.9% inadvertently or without knowledge of the
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terms of the Rights and who, together with all of such Person's Affiliates,
thereafter does not acquire additional shares of Common Stock while the
Beneficial Owner of 20% or more of the shares of Common Stock then outstanding,
PROVIDED, HOWEVER, that if the Person requested to so certify fails to do so
within 10 Business Days, then such Person shall become an Acquiring Person
immediately after such 10 Business Day Period.
(b) "Act" shall mean the Securities Act of 1933 (or any successor act), as
amended and as may from time to time be in effect.
(c) "Affiliate," with respect to any Person, shall mean any other Person
who is, or who would be deemed to be, an "affiliate" or an "associate" of such
Person within the respective meanings ascribed to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as such Rule is in
effect on the Declaration Date.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be deemed
to "beneficially own" or have "Beneficial Ownership" of, any securities:
(i) which such Person or any of such Person's Affiliates has
"beneficial ownership" of within the meaning of Rule 13d-3 of the
General Rules and Regulations under the Exchange Act, as such Rule is
in effect on the Declaration Date;
(ii) which such Person or any of such Person's Affiliates has,
directly or indirectly, the right to acquire (whether such right is
exercisable immediately or after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or
upon the exercise of conversion, exchange or other rights, warrants or
options, or otherwise;
(iii) which such Person or any of such Person's Affiliates
has, directly or indirectly, the right to vote or dispose of, including
pursuant to any agreement, arrangement or understanding (whether or not
in writing); PROVIDED, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security for
purposes of this Section 1(d)(iii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable proxy solicitation
rules and regulations promulgated under the Exchange Act or (B) is made
in connection with, or is to otherwise participate in, a proxy or
consent solicitation made, or to be made, pursuant to, and in
accordance with, the applicable proxy solicitation rules and
regulations promulgated under the Exchange Act, in either case
described in clause (A) or (B) above, whether or not such agreement,
arrangement or understanding is also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
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(iv) which are beneficially owned, directly or indirectly, by
any other Person or any Affiliate thereof with which such Person or any
of such Person's Affiliates has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy or in
connection with a proxy or consent solicitation described in clause (A)
or (B) of the proviso to Section 1(d)(iii) hereof) or disposing of any
securities of the Company;
PROVIDED, HOWEVER, that for purposes of this Section 1(d) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (A) securities
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates until such tendered securities are accepted for
purchase or exchange, (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Common Stock Event, or (C) securities issuable
upon exercise of Rights which were held by a Person or its Affiliates prior to
the Distribution Date as long as such Person is not responsible for the
occurrence of the Common Stock Event giving rise to the Distribution Date; and
PROVIDED, FURTHER, HOWEVER, that nothing in this Section 1(d) shall cause a
Person engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.
(e) "Board" shall have the meaning set forth in the preamble to this
Agreement.
(f) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in The Commonwealth of Massachusetts or the
city in which the principal office of the Rights Agent is located are authorized
or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 p.m., Boston,
Massachusetts time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 p.m., Boston, Massachusetts time, on the next
succeeding Business Day.
(h) "Closing Price" shall have the meaning set forth in Section 11(d)
hereof.
(i) "Common Stock" shall mean the Common Stock, $.01 par value per
share, of the Company, except that "Common Stock" when used with respect to any
Person other than the Company shall mean either (i) the common stock (or other
capital stock or shares of beneficial interest) of such Person with the greatest
voting power, or (ii) the equity securities or other equity interests having
power to control or direct the management and affairs of such Person, or if such
Person is a Subsidiary of another Person, the Person (A) who ultimately controls
such Person that is the Subsidiary and (B) which has outstanding such common
stock (or such other capital stock, equity securities or interests).
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(j) "Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
(k) "Common Stock Event" shall mean the occurrence of any event described
in (i) Section 11(a)(ii) hereof or (ii) clause (a), (b) or (c) of the first
sentence of Section 13 hereof.
(l) "Company" shall have the meaning set forth in the preamble to this
Agreement.
(m) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(n) "Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(o) "Declaration Date" shall have the meaning set forth in the preamble to
this Agreement.
(p) "Directors" shall mean the members of the Board.
(q) "Disqualified Transferee" shall mean any Person who is a direct or
indirect transferee of any Right from an Acquiring Person or an Affiliate of an
Acquiring Person and became such a transferee (x) after the occurrence of a
Common Stock Event or (y) prior to or concurrently with the Acquiring Person
becoming such and received such Right pursuant to a transfer (whether or not for
value) (A) from the Acquiring Person to holders of its Common Stock or other
equity securities or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement, or understanding (whether or not in writing)
regarding the transferred Right, or (B) which a majority of the Board reasonably
determines is part of a plan, arrangement, or understanding (whether or not in
writing) which has as a primary purpose or effect, the avoidance of Section 7(e)
hereof.
(r) "Distribution Date" shall mean the date which is the later of (A) the
earlier of (x) the 10th Business Day following the Stock Acquisition Date or (y)
the 10th Business Day following the Offer Commencement Date or (B) such
specified or unspecified date thereafter which is on or after the Dividend
Record Date, as may be determined by a majority of the Board.
(s) "Dividend Record Date" shall have the meaning set forth in the preamble
to this Agreement.
(t) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
(u) "Excess Amount" shall have the meaning set forth in Section 11(a)(iii)
hereof.
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(v) "Exchange Act" shall mean the Securities Exchange Act of 1934 (or any
successor act), as in effect on the Declaration Date.
(w) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(x) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(y) "Offer Commencement Date" shall mean the date of the commencement by
any Person, other than (i) the Company, (ii) a Subsidiary of the Company, (iii)
any employee benefit plan of the Company or of any Subsidiary of the Company or
(iv) any Person organized, appointed, or established by the Company or such
Subsidiary pursuant to the terms of any such plan, of a tender or exchange offer
(including when such offer is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act) if upon consummation thereof such Person and Affiliates thereof would be
the Beneficial Owner of 20% or more of the then outstanding shares of Common
Stock (including any such date which is after the date of this Agreement and
prior to the issuance of the Rights on the Dividend Record Date or thereafter).
(z) "Officers' Certificate" has the meaning set forth in Section 20(b)
hereof.
(aa) "Other Consideration" has the meaning set forth in Section 6(a)
hereof.
(bb) "Person" shall mean a company, corporation, association, partnership,
joint venture, limited liability company, trust, estate, organization, business,
entity or individual.
(cc) "Preferred Stock" shall mean the Series B Preferred Stock, $.01 par
value per share, of the Company, having the rights and preferences set forth in
the form of Certificate of Designation attached hereto as Exhibit A.
(dd) "Purchase Price" shall have the meaning set forth in Section 7(b)
hereof.
(ee) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(ff) "Rights" shall have the meaning set forth in the preamble to this
Agreement.
(gg) "Rights Agent" shall have the meaning set forth in the preamble of
this Agreement subject to the appointment of a successor Rights Agent pursuant
to Section 21 hereof.
(hh) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
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(ii) "Stock Acquisition Date" shall mean the later of (i) the date of the
first public announcement by an Acquiring Person or the Company that an
Acquiring Person has become such (including the first date on which any filing
with any governmental authority disclosing that an Acquiring Person has become
such becomes available to the public), or (ii) the date on which an executive
officer of the Company has actual knowledge that an Acquiring Person has become
such.
(jj) "Subsidiary" shall mean, as of any date, any Person of which the
Company (or other specified Person) owns directly, or indirectly through a
Subsidiary or Subsidiaries, at least a majority of the outstanding capital stock
(or other shares of beneficial interest) entitled to vote generally, or holds
directly, or indirectly through a Subsidiary or Subsidiaries, at least a
majority of partnership or similar interests, or is a general partner, or of
which the Company (or other specified Person) owns voting securities sufficient
to elect at least a majority of the directors of such Person.
(kk) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
(mm) "Trading Day" shall mean a day on which the principal national
securities exchange on which such security is listed or admitted to trading is
open for the transaction of business or, if such security is not listed or
admitted to trading on any national securities exchange, a day which is a
Business Day.
Section 2. APPOINTMENT OF RIGHTS AGENT.
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The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time, upon prior written
notice to the Rights Agent, appoint such Co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and in no event be
liable for, the acts or omissions of any such Co-Rights Agent.
Section 3. ISSUE OF RIGHTS CERTIFICATES.
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(a) Until the Distribution Date, (i) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates representing
shares of Common Stock registered in the names of the holders of the Common
Stock (which certificates shall be deemed also to be certificates for the
associated Rights) and not by separate rights certificates, and (ii) the Rights
will be transferable only in connection with the transfer of the associated
shares of Common Stock. As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail, to each
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record holder of the Common Stock as of the Close of Business on the
Distribution Date, at the address of such holder shown on the stock transfer
records of the Company, one or more rights certificates, in substantially the
form of Exhibit B hereto (the "Rights Certificates"), evidencing in the
aggregate that number of Rights to which such holder is entitled in accordance
with the provisions of this Agreement. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates. The Rights are
exercisable only in accordance with the provisions of Section 7 hereof and are
redeemable only in accordance with Section 23 hereof.
(b) As soon as practicable after the Dividend Record Date, the Company will
cause a copy of a Summary of Rights, in substantially the form attached hereto
as Exhibit C (the "Summary of Rights"), to be sent by first-class, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Dividend Record Date, at the address of such holder shown on the
stock transfer records of the Company. With respect to certificates for the
Common Stock outstanding as of the Dividend Record Date, until the Distribution
Date, the Rights associated with the shares of Common Stock represented by such
certificates will be evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the Distribution Date (or the earlier redemption,
expiration or termination of the Rights), the surrender for transfer of any of
the certificates representing shares of the Common Stock outstanding on the
Dividend Record Date, with or without a copy of the Summary of Rights, shall
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock issued
(whether originally issued or delivered from the Company's treasury) after the
Dividend Record Date but prior to the earliest of (i) the Distribution Date,
(ii) the Expiration Date, or (iii) the redemption of the Rights. Certificates
representing such shares of Common Stock and certificates issued on transfer of
such shares of Common Stock, with or without a copy of the Summary of Rights,
prior to the Distribution Date (or earlier expiration or redemption of the
Rights) shall be deemed also to be certificates for the associated Rights, and
commencing as soon as reasonably practicable following the Dividend Record Date
shall bear the following legend (or a legend substantially in the form thereof):
This certificate also evidences and entitles the holder to Rights set forth
in a Rights Agreement between the issuer and American Stock Transfer &
Trust Company, as Rights Agent (the "Rights Agent"), dated as of August
13, 1999 (the "Rights Agreement"), the terms of which are incorporated
herein by reference and a copy of which is on file at the principal offices
of both the issuer and the Rights Agent. The Rights Agent will mail to the
registered holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge upon written request. Under
certain circumstances set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced by
this certificate. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by any Person who is, was or becomes,
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or acquires shares from, an Acquiring Person or any Affiliate of an
Acquiring Person (as each such term is defined in the Rights Agreement and
generally relating to the ownership or purchase of large shareholdings),
whether currently held by or on behalf of such Person or Affiliate or by
certain subsequent holders, may become null and void.
Until the Distribution Date or the earlier redemption, expiration or termination
of the Rights, the Rights associated with the Common Stock shall be evidenced by
the Common Stock certificates alone and the registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the surrender
for transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such certificate.
Section 4. FORM OF RIGHTS CERTIFICATES.
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(a) The Rights Certificates (and the form of assignment and the form of
exercise notice and certificate to be printed on the reverse thereof) shall each
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 traded, or to conform to usage. Subject to
the provisions of Sections 11 and 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Dividend Record Date (or, if the shares
pursuant to which the Rights are attached are issued thereafter, such date of
issuance), shall include the date of countersignature and on their face shall
entitle the holders thereof to purchase such number of one one-hundredths of a
share of Preferred Stock as shall be set forth therein at the Purchase Price (as
hereinafter defined), but the amount and type of securities issuable upon the
exercise of each Right and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or 22 hereof
that represents Rights beneficially owned by (i) any Acquiring Person or any
Affiliate of an Acquiring Person, or (ii) any Disqualified Transferee, and any
other Rights Certificate issued pursuant to Section 6 or 11 hereof upon the
transfer, exchange, replacement, or adjustment of any such Rights Certificate,
shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate (which includes both affiliates and associates) of an
Acquiring Person (as each such term is defined in the Rights Agreement
between the issuer and American Stock Transfer & Trust Company, as
Rights Agent, dated as of August 13, 1999 (the "Rights Agreement")).
Accordingly, this Rights Certificate and the Rights represented hereby
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may become null and void in the circumstances specified in Section 7(e)
of the Rights Agreement. The Rights Agent will mail to the registered
holder of this certificate a copy of the Rights Agreement, as in effect
on the date of such mailing, without charge upon written request.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
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The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President, or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or
facsimile thereof which shall be attested by the Treasurer or an Assistant
Treasurer of the Company, either manually or by facsimile signature. The Rights
Certificates shall be countersigned, either manually or by facsimile signature,
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, issued, and delivered with the same force and effect as though the person
who signed such Rights Certificates had not ceased to be such officer of the
Company. Any Rights Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Rights Certificate,
shall be a proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Agreement any such person was not
such an officer.
Following the Distribution Date, the Rights Agent shall keep or cause to be
kept, at the office of the Rights Agent designated for such purpose, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates, and the date of countersignature thereof by the Rights Agent.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
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MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
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(a) 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 earlier of the Close of Business on the Expiration Date or the redemption of
the Rights, any Rights Certificate may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a share of
Preferred Stock (or, following a Common Stock Event, Common Stock and/or such
other securities, cash, or other assets as shall be issuable in respect of the
Rights in accordance with the terms of this Agreement (such other securities,
cash or other assets being referred to herein as "Other Consideration") as the
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Rights Certificate surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate to be transferred, split up, combined, or exchanged at the office of
the Rights Agent designated for such purpose, accompanied by a signature
guarantee and such other documentation as the Rights Agent may reasonably
request. Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner from whom the Rights evidenced by such Rights
Certificate are to be transferred (or the Beneficial Owner to whom such Rights
are to be transferred) or Affiliates thereof as the Company shall reasonably
request. Thereupon, subject to Sections 4(b), 7(e) and 14 hereof, the Company
shall execute and the Rights Agent shall countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment by the holders of Rights of
a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates which the Company is not required to pay in accordance with Section
9(d) hereof.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, the receipt of
indemnity or security satisfactory to them, and upon reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Rights Certificate,
if mutilated, accompanied by a signature guarantee and such other documentation
as the Rights Agent may reasonably request, the Company will execute and deliver
a new Rights Certificate of like tenor to the Rights Agent for countersignature
and delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed, or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
-------------------------------------------------------------
(a) Except as otherwise provided herein, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby in whole or in part
at any time from and after the Distribution Date and at or prior to the Close of
Business on August 13, 2009 (the "Expiration Date") or the earlier redemption
of the Rights. Immediately after the Close of Business on the Expiration Date
(or the earlier redemption of the Rights), all Rights shall be extinguished and
all Rights Certificates shall become null and void. To exercise Rights, the
registered holder of the Rights Certificate evidencing such Rights shall
surrender such Rights Certificate, with the form of election to purchase on the
reverse side thereof and the certificate contained therein duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
accompanied by a signature guarantee and such other documentation as the Rights
Agent may reasonably request, together with payment in cash, only if by
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electronic or wire transfer, or by certified check or bank check, of the
Purchase Price with respect to the total number of one one-hundredths of a share
of Preferred Stock (or, after a Common Stock Event, shares and/or similar units
of Common Stock or Other Consideration) as to which the Rights are exercised
(which payment shall include any additional amount payable by such Person in
accordance with Section 9(d) hereof). The Rights Agent shall promptly deliver to
the Company all payments of the Purchase Price received in respect of Rights
Certificates accepted for exercise.
(b) The purchase price for each one one-hundredth of a share of Preferred
Stock issuable pursuant to the exercise of a Right (the "Purchase Price") shall
initially be $50.00, shall be subject to adjustment as provided in Section 11
hereof, and shall be payable in lawful money of the United States of America.
(c) Upon receipt of a Rights Certificate representing the Rights, with the
form of election to purchase set forth on the reverse side thereof and the
certificate contained therein duly executed, accompanied by payment of the
Purchase Price, with respect to each Right so exercised, the Rights Agent,
subject to Sections 7(e), 11(a)(iii) and 20(k) hereof, shall thereupon promptly
(i) requisition from any transfer agent of the Preferred Stock (or Common Stock,
as the case may be) (or from the Company if there shall be no such transfer
agent, or make available if the Rights Agent is such transfer agent)
certificates for the total number of one one-hundredths of a share of Preferred
Stock (or Common Stock, as the case may be) to be purchased and the Company
hereby irrevocably authorizes such transfer agent to comply with any such
request, (ii) after receipt of such certificates, cause the same to be delivered
to or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated in writing by such holder,
and (iii) when appropriate, requisition from the Company the amount of cash to
be paid in lieu of issuance of a fractional share in accordance with Section 14
hereof and after receipt promptly deliver such cash to or upon the order of the
registered holder of such Rights Certificate. After the occurrence of a Common
Stock Event, the Company shall make all necessary arrangements so that any Other
Consideration then deliverable in respect of the Rights is available for
distribution by the Rights Agent. For purposes of this Section 7, the Rights
Agent shall be entitled to rely, and shall be protected in relying, on an
Officers' Certificate from the Company to the effect that the Distribution Date
has occurred.
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(d) Subject to Sections 4(b), 7(e) and 14 hereof, in case the registered
holder of any Rights Certificate shall exercise less than all the Rights
evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be executed and delivered by the Company to
the Rights Agent and countersigned and delivered by the Rights Agent to the
registered holder of such Rights Certificate or to such holder's duly authorized
assigns.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Common Stock Event, any Rights beneficially
owned by (i) an Acquiring Person or an Affiliate of an Acquiring Person, or (ii)
a Disqualified Transferee 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 ensure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but the Company shall
have no liability to any holder of Rights Certificates or other Person and none
of the terms of this Agreement or the Rights shall be deemed to be waived with
respect to such holder or other Person as a result of any failure by the Company
to make any determinations with respect to an Acquiring Person or any Affiliate
of an Acquiring Person or Disqualified Transferees hereunder or any failure to
have a legend placed on any Rights Certificate in accordance with Section 4(b)
hereof or on any Common Stock certificate in accordance with Section 3(c)
hereof.
(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 holder of any Rights Certificate upon the occurrence of any
purported exercise thereof unless such holder shall have (i) completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial Owner
from whom the Rights evidenced by such Rights Certificate are to be transferred
(or the Beneficial Owner to whom such Rights are to be transferred) or
Affiliates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
---------------------------------------------------
All Rights Certificates surrendered for the purpose of and accepted for
exercise, or surrendered for the purpose of redemption, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents (other than the Rights Agent), be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent, shall
be canceled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights Certificates
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purchased or retired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all canceled Rights Certificates to the Company,
or may, at the written request of the Company, but shall not be required to,
destroy such canceled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES OF PREFERRED STOCK;
----------------------------------------------------------
OTHER COVENANTS.
---------------
(a) The Company covenants and agrees that on and after the Distribution
Date, it shall use reasonable efforts to cause to be reserved and kept available
out of its authorized and unissued shares of Preferred Stock (or, following the
occurrence of a Common Stock Event, out of its authorized and unissued shares of
Common Stock and/or Other Consideration, or out of its authorized and issued
shares held in its treasury), the number of shares of Preferred Stock (or,
following a Common Stock Event, shares of Common Stock and/or Other
Consideration) that, except as provided in Section 11(a)(iii) hereof, would then
be sufficient to permit the exercise in full of all outstanding Rights;
PROVIDED, HOWEVER, that the reservation of such shares shall be subject and
subordinate to any other reservation of such shares made by the Company at any
time for any lawful purpose; PROVIDED, FURTHER, however, that in no event shall
such failure to so reserve shares affect the rights of any holder of Rights
hereunder.
(b) The Company covenants and agrees that on and after the Distribution
Date so long as the Preferred Stock (or, following a Common Stock Event, shares
and/or similar units of Common Stock and/or Other Consideration) issuable upon
the exercise of Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause all shares (or similar units)
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company covenants and agrees that it shall take all such action as
may be necessary to ensure that each one one-hundredth of a share of Preferred
Stock (or, following a Common Stock Event, each share and/or similar unit of
Common Stock or Other Consideration) delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such shares (or units), subject to
payment in full of the Purchase Price, be duly and validly authorized and issued
and fully paid and nonassessable.
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(d) The Company covenants and agrees that it shall pay when due and payable
any and all federal and state transfer taxes and similar charges which may be
payable in respect of the issuance or delivery of the Rights Certificates or of
any shares of Preferred Stock (or, following the occurrence of a Common Stock
Event, each share and/or similar unit of Common Stock or Other Consideration)
upon the exercise of Rights; PROVIDED, HOWEVER, that the Company shall not be
required to pay any transfer tax which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or in the issuance
or delivery of certificates for any shares of Preferred Stock (or, following the
occurrence of a Common Stock Event, each share and/or similar unit of Common
Stock or Other Consideration) in a name other than that of the registered holder
of the Rights Certificate evidencing Rights surrendered for exercise or to issue
or deliver any certificates for any shares of Preferred Stock (and, following
the occurrence of a Common Stock Event, any shares and/or similar units of
Common Stock or Other Consideration) upon the exercise of any Rights until any
such tax shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender thereof) or until it has been
established to the Company's satisfaction that no such tax is due.
(e) The Company shall use its best efforts (i) to file, as soon as
practicable following the earliest date after the first occurrence of a Common
Stock Event on which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, or
as soon as is required by law following the Distribution Date, as the case may
be, a registration statement under the Act, with respect to the securities
issuable upon exercise of the Rights on an appropriate form, (ii) to cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, or (B) the Expiration Date or earlier redemption of the Rights. The
Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states of the
United States in connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(e), the exercisability of the Rights in order to prepare and file such
registration statement or to permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended. The Company shall
thereafter issue a public announcement at such time as the suspension is no
longer in effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained.
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Section 10. PREFERRED STOCK RECORD DATE; ETC.
--------------------------------
Each Person in whose name any certificate for any shares of Preferred Stock
(or, following the occurrence of a Common Stock Event, shares and/or similar
units of Common Stock or Other Consideration) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
such shares of Preferred Stock (or such shares and similar units of Common Stock
and/or Other Consideration, as the case may be) represented thereby, and such
certificate shall be dated the date which is the later of (i) the date upon
which the Rights Certificate evidencing such Rights was duly surrendered, or
(ii) the date upon which payment of the Purchase Price (and any applicable
transfer taxes) in respect thereof was made; PROVIDED, HOWEVER, that if such
date is a date upon which the relevant transfer books of the Company are closed,
such Person shall be deemed to have become the record holder of such shares (or
Other Consideration) on, and such certificate shall be dated, the next
succeeding Business Day on which such transfer books of the Company are open;
PROVIDED, FURTHER, that the Company covenants and agrees that it shall not close
such transfer books for a period exceeding ten consecutive days. Prior to the
exercise of the Rights evidenced thereby (which shall be deemed to have occurred
on the date such certificate for shares and/or similar units of Preferred Stock,
Common Stock or Other Consideration shall be dated in accordance with this
Section 10), the holder of a Rights Certificate, as such, shall not be entitled
to any rights of a security holder of the Company with respect to the shares of
Preferred Stock or Common Stock (and/or such shares or similar units of Common
Stock or Other Consideration) for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions, or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as expressly
provided herein.
Section 11. ANTIDILUTION ADJUSTMENTS.
------------------------
The Purchase Price and the number and kind of securities 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 that the Company shall at any time after the
Declaration Date (A) declare and pay a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares, or (D) issue, change, or alter any of its shares of
capital stock in a reclassification or recapitalization (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving Person), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, then, and in each
such case, the Purchase Price in effect at the time of the record date for
such dividend or the effective time of such subdivision, combination,
reclassification or recapitalization, and the number and kind of shares of
capital stock issuable upon exercise of the Rights at such time, 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 Preferred Stock or other capital stock which, if such Right had
been exercised immediately prior to such time at the Purchase Price then in
effect and at a time when the transfer books for the Preferred Stock (or
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other capital stock) 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, reclassification or recapitalization. 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 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
(A) any Person shall at any time after the Declaration Date
become an Acquiring Person; or
(B) any Acquiring Person or any Affiliate of any
Acquiring Person, at any time after the Declaration Date,
directly or indirectly, shall (1) merge into the Company or
otherwise combine with the Company, and the Company shall be
the continuing or surviving corporation of such merger or
combination and the Common Stock of the Company shall remain
outstanding and no shares thereof shall be changed or
otherwise transformed into stock or other securities of any
other Person or the Company or cash or any other property, (2)
in one or more transactions, transfer any assets to the
Company in exchange (in whole or in part) for shares of any
class of its equity securities or for securities exercisable
for or convertible into shares of any such class or otherwise
obtain from the Company, with or without consideration, any
additional shares of any such class or securities exercisable
for or convertible into shares of any such class (other than
as part of a pro rata distribution to all holders of such
class), (3) sell, purchase, lease, exchange, mortgage, pledge,
transfer or otherwise dispose (in one transaction or a series
of transactions) to, from or with the Company or any of the
Company's Subsidiaries, assets with an aggregate fair market
value in excess of 25% of the assets of the Company and its
Subsidiaries determined on a consolidated basis on terms and
conditions less favorable to the Company than the Company
would be able to obtain through arm's-length negotiation with
an unaffiliated third party, (4) receive any compensation from
the Company or any of the Company's Subsidiaries other than
compensation as a director of the Company or for full-time
employment as a regular employee at rates in accordance with
the Company's (or such Subsidiary's) past practices, (5)
receive the benefit (except proportionately as a stockholder),
of any loans, advances, guarantees, pledges or other financial
assistance provided by the Company or any of its Subsidiaries
on terms and conditions less favorable to the Company (or such
Subsidiary) than the Company would be able to obtain through
arm's-length negotiation with an unaffiliated third party or
(6) commence a tender or exchange offer for securities of the
Company; or
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(C) during such time as there is an Acquiring Person
at any time after the Declaration Date, there shall be any
reclassification of securities (including any combination
thereof), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries
(whether or not with or into or otherwise involving an
Acquiring Person or any Affiliate of an Acquiring Person), or
any repurchase by the Company or any of its Subsidiaries of
shares of the Common Stock of the Company, or any other class
or series of securities issued by the Company, which
reclassification, recapitalization, merger, consolidation or
repurchase is effected at a time when a majority of the Board
consists of persons who are the Acquiring Person or its
Affiliates, or nominees or designees of any thereof, which has
the effect, directly or indirectly, of increasing by more than
1% the proportionate share of the outstanding shares of any
class of equity securities or securities exercisable for or
convertible into any class of equity securities of the Company
or any of its Subsidiaries which is directly or indirectly
owned by an Acquiring Person or any Affiliate of an Acquiring
Person.
then, in each such case, upon the Close of Business 10 Business Days after
the occurrence of such event, proper provision shall be made so that each
holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon exercise thereof at the Purchase
Price in effect at the time of exercise in accordance with the terms of
this Agreement, in lieu of a number of one one-hundredths of a share of
Preferred Stock, such number of shares of Common Stock of the Company as
shall equal the result obtained by (x) multiplying an amount equal to the
then current Purchase Price by an amount equal to the number of one
one-hundredths of a share of Preferred Stock for which a Right was or would
have been exercisable immediately prior to the first occurrence of any such
event whether or not such Right was then exercisable, and (y) dividing that
product by 50% of the Current Market Price per share of the Common Stock of
the Company (as defined in Section 11(d) hereof) determined as of the date
of such first occurrence.
(iii) In lieu of issuing whole or fractional shares of Common Stock in
accordance with Section 7(c) hereof, the Company shall (i) in the event
that the number of shares of Common Stock which are authorized by the
Company's charter but not outstanding or reserved for issuance for purposes
other than upon exercise of the Rights are not sufficient to permit the
exercise in full of the Rights in accordance with Section 7(c) hereof, or
(ii) if a majority of the Board determines that it would be appropriate and
not contrary to the interests of the holders of Rights (other than any
Acquiring Person or Disqualified Transferee or any Affiliate of the
Acquiring Person or Disqualified Transferee), (A) determine an amount, if
any, (the "Excess Amount") equal to the excess of (1) the value (the
"Current Value") of the whole or fractional shares of Preferred Stock (or
Common Stock) issuable upon the exercise of a Right in accordance with
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Section 7(c) hereof, over (2) the Purchase Price, and (B) with respect to
each Right, (subject to Section 7(e) hereof) make adequate provision to
substitute for such whole or fractional shares of Preferred Stock (or
Common Stock), upon payment of the applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares or units
of Preferred Stock or preferred stock which the Board has deemed in good
faith to have the same value as a share of Common Stock (such shares of
preferred stock being referred to herein as "Common Stock Equivalents")),
(4) debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing (which would include the additional
consideration provided to any holder by reducing the Purchase Price) having
an aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board; PROVIDED, HOWEVER, subject to the
provisions of Section 9(e) hereof, that if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within 30
days following the Close of Business 10 Business Days after the first
occurrence of a Common Stock Event described in Section 11(a)(ii) hereof,
then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price,
whole or fractional shares of Preferred Stock (or Common Stock) (to the
extent available) and then, if necessary, cash, securities, and/or assets
which in the aggregate are equal to the Excess Amount. If the Board shall
determine in good faith that it is likely that sufficient additional shares
of Common Stock or Common Stock Equivalents could be authorized for
issuance upon exercise in full of the Rights, the 30-day period set forth
above may be extended to the extent necessary, but not more than 90 days
following the Close of Business 10 Business Days after the first occurrence
of such a Common Stock Event (such 30 day period) as it may be extended to
90 days, is referred to herein as the "Substitution Period"). To the extent
that the Company determines that some action is to be taken pursuant to the
preceding provisions of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that (except as to the form of
consideration which shall be determined as appropriate by a majority of the
Board) such action shall apply uniformly to all outstanding Rights which
shall not have become null and void, and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to
seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to such provisions and
to determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended. The Company shall thereafter
issue a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common
Stock issuable upon exercise of a Right in accordance with Section 7(c)
hereof shall be the Current Market Price per share of the Common Stock (as
determined pursuant to Section 11(d) hereof) on the Close of Business 10
Business Days after the date of the first occurrence of such a Common Stock
Event and the value of any Common Stock Equivalent shall be deemed to be
equal to the Current Market Price per share of the Common Stock on such
date.
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(b) In the event the Company shall, after the Dividend Record Date, fix a
record date for the issuance of any options, warrants, or other rights to all
holders of Preferred Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase (i) Preferred
Stock or (ii) shares having the same rights, privileges and preferences as the
shares of any number of one one-hundredths of a share of Preferred Stock
("Equivalent Preferred Stock") or (iii) securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
Equivalent Preferred Stock (or having a conversion price per share of Preferred
Stock or Equivalent Preferred Stock, if a security is convertible into Preferred
Stock or Equivalent Preferred Stock) less than the Current Market Price per
share of Preferred Stock (determined in accordance with Section 11(d) hereof)
determined as of such record date, the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record date
plus the number of shares of Preferred Stock and/or Equivalent Preferred Stock
which the aggregate minimum offering price of the total number of shares of one
one-hundredths of a share of Preferred Stock and/or Equivalent Preferred Stock
so to be offered (and/or the aggregate minimum conversion price of such
convertible securities so to be offered) would purchase at such Current Market
Price, and the denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date plus the maximum number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be offered for
subscription or purchase (or the maximum number of shares into which such
convertible securities so to be offered are convertible). In case such
subscription price may be paid by delivery of consideration part or all of which
shall be in a form other than cash, for purposes of this Section 11(b) the value
of such consideration shall be the fair market value thereof as determined in
good faith by the Board (which determination shall be described in an Officers'
Certificate filed with the Rights Agent). Shares of Preferred Stock owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such options,
warrants or other rights 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 (subject, however, to such other adjustments as are provided
herein).
(c) In the event that the Company shall, after the Dividend Record Date,
fix a record date for the making of a distribution to all holders of Preferred
Stock (including any such distribution made in connection with a consolidation
or merger in which the Company is the surviving or continuing Person) of
evidences of indebtedness, cash (other than cash dividends paid out of the
earnings or retained earnings of the Company and its Subsidiaries determined on
a consolidated basis in accordance with generally accepted accounting principles
consistently applied), other property (other than a dividend payable in a number
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of one one-hundredths of a share of Preferred Stock, but including any dividend
payable in capital stock other than Preferred Stock), or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, of which the numerator shall be (i) the Current Market Price per share
of Preferred Stock (as defined in Section 11(d) hereof) determined as of such
record date, LESS (ii) the sum of (A) that portion of cash plus (B) the fair
market value, as determined in good faith by the Board (which determination
shall be described in an Officers' Certificate filed with the Rights Agent) of
that portion of such evidences of indebtedness, such other property, and/or such
subscription rights or warrants applicable to one share of Preferred Stock and
of which the denominator shall be such Current Market Price per share of the
Preferred Stock. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event 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 (subject, however, to such
other adjustments as are provided herein).
(d) For purposes of any computation pursuant to Section 11(a)(iii) hereof,
the "Current Market Price" per share (or unit) of any security on any date shall
be deemed to be the average of the daily Closing Price of such security for the
10 consecutive Trading Days immediately after such date, and for the purpose of
any other computation hereunder, the "Current Market Price" per share (or unit)
of any security on any date shall be deemed to be the average of the daily
Closing Price of such security for the 20 consecutive Trading Days immediately
prior to such date; PROVIDED, HOWEVER, that in the event that the Current Market
Price per share of such security is determined during a period following the
announcement by the issuer of such security of (i) a dividend or distribution on
such security payable in shares (or units) of such security or securities
convertible into shares (or units) of such security, or (ii) any subdivision,
combination or reclassification of such security, and prior to the expiration of
such 10 Trading Days or 20 Trading Days after (A) the ex-dividend date for such
dividend or distribution, or (B) the record date for such subdivision,
combination or reclassification, as the case may be, then, and in each such
case, the "Current Market Price" shall be the Closing Price of such security on
the last day of such respective 10 Trading Day or 20 Trading Day period. For
purposes of this Agreement, the "Closing Price" of any security on any day shall
be the last sale price, regular way, with respect to shares (or units) of such
security, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, with respect to such security, 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 such 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 such security is listed or admitted to trading; or,
if such security is not so listed or admitted to trading, the last quoted sale
price with respect to shares (or units) of such security, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market
with respect to shares (or units) of such security, as reported by the National
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Association of Securities Dealers, Inc. Automated Quotation System or such other
similar system then in use; or, if on any such date such security is not quoted
by any such organization, the average of the closing bid and asked prices with
respect to shares (or units) of such security, as furnished by a professional
market maker making a market in such security selected by the Board; or, if no
such market maker is available, the fair market value of shares (or units) of
such security as of such day as determined in good faith by the Board (which
determination shall be described in an Officers' Certificate filed with the
Rights Agent); PROVIDED, HOWEVER, that the "Closing Price" of one one-hundredth
of a share of Preferred Stock as of any Trading Day shall be equal to the
Closing Price of a whole share of Preferred Stock on such Trading Day divided by
100; PROVIDED, FURTHER, that if the Closing Price of such a share of Preferred
Stock as of any Trading Day cannot be reasonably determined by the foregoing
provisions, the "Closing Price" of one one-hundredth of a share of Preferred
Stock on such Trading Date shall be the Closing Price of a share of Common Stock
on such Trading Day.
(e) No adjustment in the Purchase Price shall be required unless adjustment
would require an increase or decrease of at least 1% in such price; PROVIDED,
HOWEVER, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest (x) ten-thousandth of a share (or similar
unit) of Common Stock or securities other than Preferred Stock or Equivalent
Preferred Stock or (y) one-millionth of a share of Preferred Stock or Equivalent
Preferred Stock. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which mandates the
adjustment or (ii) the Expiration Date. Anything in this Section 11 to the
contrary notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those required by this Section 11, as it
in its discretion shall determine to be advisable in order that any dividends,
subdivision of shares, distribution of rights to purchase shares of beneficial
interest or other stock or securities, or distribution of securities convertible
into or exchangeable for stock hereafter made by the Company to its stockholders
shall not be taxable.
(f) In the event that at any time, as a result of an adjustment made in
respect of a Common Stock Event, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock of the Company
other than shares of Preferred Stock, thereafter the number of such other shares
so receivable upon exercise of any Right and the Purchase Price thereof shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to such other shares
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (m) and (p)
hereof, and the provisions of Sections 7, 9, 10, 11(d), 13 and 14 hereof with
respect to the shares of Preferred Stock shall apply on like terms to any such
other shares.
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(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 one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights represented thereby, 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 pursuant to 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 share of Preferred Stock (calculated to the nearest
one-millionth of a share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share of Preferred Stock covered by a Right immediately
prior to this adjustment, by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.
(i) Assuming that no other adjustment pursuant to this Section 11 has been
made, the Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights in substitution for any adjustment
in the number of one one-hundredths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Rights Certificates have been issued, shall be at least 10 days later
than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i) the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed, and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
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(j) Irrespective of any adjustment or change in the Purchase Price or the
number of whole or fractional shares of Preferred Stock issuable upon exercise
of such Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of one
one-hundredths of a share of Preferred Stock which were expressed in the initial
Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the number of one
one-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue such number of fully paid and nonassessable one one-hundredths of a share
of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
number of one one-hundredths of a share of Preferred Stock or other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock or other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it, by means of a resolution of the Board acting in good faith,
shall determine to be advisable in order that any consolidation or subdivision
of the Common Stock, issuance wholly for cash of any Common Stock at less than
the Current Market Price thereof, issuance wholly for cash of Common Stock (or
other securities which by their terms are convertible into or exchangeable for
Common Stock), dividends payable in shares of Common Stock or other capital
stock or shares of beneficial interest, or issuance of rights, options, or
warrants referred to hereinabove in this Section 11, hereafter made or declared
by the Company to the holders of its Common Stock, shall not be taxable to such
holders.
(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 that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
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the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, more than 25% of (A) the assets
(taken at net asset value as stated on the books of the Company and determined
on a consolidated basis in accordance with generally accepted accounting
principles consistently applied) or (B) the earning power of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any other Person or
Persons (other than the Company or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale, there are any
rights, warrants or other instruments or securities outstanding or agreements
(whether or not in writing) in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of such other Person shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates.
(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 if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Dividend Declaration Date and
prior to the Distribution Date (i) declare or pay a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, or (ii) effect a
subdivision, combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of dividends in shares of Common
Stock) into a greater or smaller number of shares, then in any such case, (i)
the number of one one-hundredths of a share of Preferred Stock purchasable after
such event upon proper exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a share of Preferred Stock so purchasable
immediately prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock outstanding immediately following the occurrence of
such event; and (ii) each share of Common Stock outstanding immediately after
such event shall have issued with respect to it that number of Rights which each
share of Common Stock outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
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Section 12. CERTIFICATE OF ADJUSTMENTS.
--------------------------
Whenever an adjustment is made as provided in Section 11 or 13 hereof, the
Company shall (a) promptly prepare an Officers' Certificate setting forth such
adjustment, including any adjustment in Purchase Price, the number of shares or
Other Consideration payable, and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock and Common Stock a copy of such Officers'
Certificate, and (c) mail a brief summary thereof to each registered holder of a
Rights Certificate in accordance with Section 26 hereof. The Rights Agent shall
be fully protected in relying on any such Officers' Certificate and on any
adjustment therein contained, and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such an Officers'
Certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
--------------------------------------------------------------
POWER.
-----
In the event that, following the Stock Acquisition Date, directly or
indirectly, (a) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) and the Company shall not be the continuing
or surviving Person of such consolidation or merger, (b) any Person (other than
a Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) shall consolidate with, or merge with and into, the Company, the Company
shall be the continuing or surviving Person of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the Common Stock
of the Company shall be changed or otherwise transformed into other stock or
other securities of any other Person or the Company or cash or any other
property, or (c) 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, more than 25% of (A) the assets (taken at net
asset value as stated on the books of the Company and determined on a
consolidated basis in accordance with generally accepted accounting principles
consistently applied) or (B) the earning power of the Company and its
Subsidiaries (determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) to any Person (other than
the Company or any Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof) then, from and after such event,
proper provision shall be made so that (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to receive,
upon the exercise thereof at the Purchase Price in effect at the time of such
exercise in accordance with the terms of this Agreement, such number of whole or
fractional shares of validly authorized and issued, fully paid, non-assessable,
and freely tradeable Common Stock of such other Person (OR in the case of a
transaction or series of transactions described in clause (c) above, the Person
receiving the greatest amount of the assets or earning power of the Company, OR
if the Common Stock of such other Person is not and has not been continuously
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registered under Section 12 of the Exchange Act for the preceding 12-month
period and such Person is a direct or indirect Subsidiary of another Person,
that other Person, OR if such other Person is a direct or indirect Subsidiary of
more than one other Person, the Common Stock of two or more of which are and
have been so registered, such other Person whose outstanding Common Stock has
the greatest aggregate value), free and clear of any liens, encumbrances, rights
of first refusal, or other adverse claims, as shall be equal to the result
obtained by (x) multiplying the Purchase Price in effect immediately prior to
the first occurrence of any Common Stock Event described in this Section 13 by
the number of one one-hundredths of a share of Preferred Stock for which a Right
is exercisable immediately prior to such first occurrence (and without taking
into account any prior adjustment made pursuant to 11(a)(ii)) and (y) dividing
that product by 50% of the Current Market Price per share (as defined in Section
11(d) hereof) of the Common Stock of such other Person determined as of the date
of consummation of such consolidation, merger, sale, or transfer; (ii) the
issuer of such Common Stock shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale, or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed, for all purposes of this Agreement, to refer to such
issuer, it being specifically intended that the provisions of Section 11 hereof
(other than Section 11(a)(ii) hereof) shall apply only to such issuer following
the first occurrence of a Common Stock Event described in this Section 13; (iv)
such issuer shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the whole or fractional shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Common Stock Event
described in clauses (a), (b) or (c) of this Section 13. The Company shall not
consummate any such consolidation, merger, sale or transfer unless (i) such
issuer shall have a sufficient number of authorized shares of its Common Stock
which have not been issued or reserved for issuance as will permit the exercise
in full of the Rights in accordance with this Section 13, and (ii) prior thereto
the Company and such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement so providing and further providing that as soon
as practicable after the date of any Common Stock Event described above in this
Section 13 such issuer shall (A) prepare and file a registration statement under
the Act, with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (I) become effective as soon as practicable after
such filing and (II) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Expiration Date, and (B) will deliver to
holders of the Rights historical financial statements of such issuer and each of
its Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act. Furthermore, in case the Person
which is to be party to a transaction referred to in this Section 13 has any
provision in any of its authorized securities or in its charter or by-laws or
other agreement or instrument governing its affairs, which provision would have
the effect of causing such Person to issue, in connection with, or as a
consequence of, the consummation of a Common Stock Event described in clauses
(a), (b), or (c) of this Section 13, whole or fractional shares of Common Stock
of such Person at less than the then Current Market Price per share thereof (as
defined in Section 11(d) hereof), or to issue securities exercisable for, or
convertible into, Common Stock of such Person at less than such then Current
Market Price, then, in such event, the Company hereby agrees with each holder of
the Rights that it shall not consummate any such transaction unless prior
thereto the Company and such Person shall have executed and delivered to the
Rights Agent a supplemental agreement providing that such provision in question
shall have been canceled, waived, or amended so that it will have no effect in
connection with, or as a consequence of, the consummation of the proposed
transaction. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Common Stock Event described in this Section 13 shall occur at any time
after the occurrence of a Common Stock Event described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall thereafter
become exercisable, except as provided in Section 7(e) hereof, in the manner
described in this Section 13.
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Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
---------------------------------------
(a) The Company shall not be required to issue fractions of Rights or to
distribute fractions of Rights, except prior to the Distribution Date as
provided in Section 11(i) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of issuing such fractional Rights, at the
election of the Company, there shall be paid to the registered holders of the
Rights 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.
(b) The Company shall not be required to issue fractions of shares of its
capital stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares (other than, in each case with respect to Preferred
Stock or Equivalent Preferred Stock, fractions which are integral multiples of
one one-hundredth of a share of Preferred Stock or Equivalent Preferred Stock,
as the case may be). Fractions of shares of Preferred Stock or Equivalent
Preferred Stock, as the case may be, in integral multiples of one one-hundredth
of a share of Preferred Stock or Equivalent Preferred Stock may, at the election
of the Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depository selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock or the Equivalent Preferred Stock
represented by such depositary receipts. In lieu of fractional shares, at the
election of the Company, there shall be paid to the registered holders of Rights
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 of such capital
stock. For purposes of this Section 14(b), the current market value of a share
of such capital stock shall be the Closing Price of such capital stock for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right, by the acceptance of the Right, expressly waives
such holder's right to receive any fractional Rights or (except as provided in
Section 14(b) hereof) any fractional share upon exercise of a Right.
Section 15. RIGHTS OF ACTION.
----------------
Excepting the rights of action given the Rights Agent under Section 18
hereof and except as set forth in Section 20(l) hereof, all rights of action in
respect of this Agreement are vested in the registered holder of each Right; and
any registered holder of any Right, without the consent of the Rights Agent or
of the holder of any other Right, may, in its own behalf and for its own
benefit, enforce, and may institute and maintain any suit, action, or proceeding
against the Company to enforce, or otherwise act in respect of, such registered
holder's right to exercise the rights evidenced by such Right in the manner
provided in such Rights Certificate and in this Agreement, and the Company
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hereby agrees to reimburse such registered holder for all expenses (including
reasonable attorneys' fees) incurred by such registered holder in connection
therewith. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of the obligations
hereunder, and shall be entitled to injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS.
---------------------------
Every holder of a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of Common Stock;
(b) from and after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer with a form of assignment and certificate set
forth on the reverse side thereof duly executed, accompanied by a signature
guarantee and such other documentation as the Rights Agent may reasonably
request;
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name a Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights Certificate
or, prior to the Distribution Date, the associated Common Stock certificate,
made by anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a Right
or other Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining performance of such
obligation; PROVIDED, HOWEVER, the Company agrees to use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
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Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
--------------------------------------------------
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends, or otherwise be deemed for any purpose the holder of any
securities of the Company which may be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote in
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any action by the Company, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or preemptive rights, or
otherwise, until the time specified in Section 10 hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
---------------------------
The Company agrees to pay to the Rights Agent such reasonable compensation
as shall be agreed to in writing between the Company and the Rights Agent for
all services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any and all loss, liability, damages, claims or expense, incurred without gross
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
(including reasonable attorneys' fees and expenses) of defending against any
claim of liability for any of the foregoing.
The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered, or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for any number of one one-hundredth of a share of Preferred Stock,
or for shares of Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, instruction, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed and executed by the
proper Person or Persons, and verified or acknowledged as required by this
Agreement.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
---------------------------------------------------------
Any corporation into which the 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 shall be a party, or any corporation
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succeeding to the shareholder services business of the Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
PROVIDED, HOWEVER, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement and any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver such Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT.
----------------------
The Rights Agent undertakes only the duties and obligations expressly
imposed upon it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent. The Rights Agent shall
perform its duties and obligations hereunder upon the following terms and
conditions:
(a) The Rights Agent may consult with legal counsel of its selection (who
may be legal counsel to 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) be proved
or established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate (an "Officers' Certificate") signed by a person believed by the
Rights Agent to be the Chairman of the Board, the President or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary or
any Assistant Secretary of the Company and delivered to the Rights Agent; and
such Officers' 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 Officers' Certificate.
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(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature on such Rights Certificate) or be
required to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Sections 11
or 13 hereof or be responsible for the manner, method or amount of any such
adjustment or procedures or the ascertaining of the existence of facts that
would require any such adjustment or procedure (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt of a
certificate delivered pursuant to Section 12 hereof, describing any such
adjustment or procedures); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Preferred Stock, Common Stock or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common Stock,
or any shares or similar units of other securities, will, when issued, be
validly authorized and issued, fully paid, and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver, or cause to be performed, executed, acknowledged and delivered, all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer. Any application by the
Rights Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent with respect to its duties or obligations under this Agreement
and the date on and/or after which such action shall be taken or omitted and the
Rights Agent shall not be liable for any action taken or omitted in accordance
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with a proposal included in any such application on or after the date specified
therein (which date shall not be less than three Business Days after the date
any such officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking or
omitting any such action, the Rights Agent has received written instructions
from the Company in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any stockholder, director, officer, or employee of
the Rights Agent may buy, sell, or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other 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, that reasonable care was exercised in
the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certification appearing on the reverse side
thereof following the form of election to purchase has either not been completed
or indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent shall not take any further action with respect to such requested exercise
of transfer without first consulting with the Company.
(l) The provisions of this Section 20 are solely for the benefit of the
Rights Agent or the Company and any failure or omission under this Section 20
shall not affect the rights of the Company under this Agreement and neither the
Rights Agent nor the Company shall have any liability to any holder of Rights or
other Person on account of such failure or omission.
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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 30 days' notice in writing mailed to
the Company and to each transfer agent of the Common Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of the
Rights Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent, to each transfer agent of the Common Stock by registered or
certified mail, and, subsequent to the Distribution Date, to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the registered holder of any Rights Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation organized and doing business under the laws
of the United States, the State of New York or The Commonwealth of Massachusetts
(or of any other State of the United States so long as such corporation is
authorized to do business as a banking institution in the State of New York or
The Commonwealth of Massachusetts), in good standing, having an office
designated for such purpose in the State of New York or The Commonwealth of
Massachusetts, which is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. 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; and, except as the context herein otherwise requires, such
successor Rights Agent shall be deemed to be the "Rights Agent" for all purposes
of this Agreement. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
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Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
-----------------------------------
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale by the Company of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, HOWEVER, that (i) no such Rights evidenced by a
Rights Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights would be issued, and (ii) no such Rights Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
--------------------------
The Board, by majority vote, may, at its option, at any time prior to the
Expiration Date, redeem all (but not less than all) of the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend, combination of shares, or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). Immediately upon the taking
of such action ordering the redemption of all 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 so redeemed will terminate
and the only right thereafter of the holders of such Rights so redeemed shall be
to receive the Redemption Price (without the payment of any interest thereon).
Within 10 days after such action ordering the redemption of all of the Rights,
the Company shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption shall state the method by which the payment of the Redemption Price
shall be made.
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Section 24. EXCHANGE.
--------
(a) The Board, by majority vote, may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the then outstanding
and exercisable Rights for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio, as the same may be so adjusted from time to time, 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 (i) the Company, (ii) any Subsidiary of the Company, (iii)
any employee benefit plan of the Company or of any such Subsidiary, or (iv) any
entity holding Common Stock for or pursuant to the terms of any such plan),
together with all Affiliates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Stock then outstanding.
(b) Immediately upon the action of the Board ordering the exchange of any
Rights pursuant to subsection (a) of this Section 24 and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; PROVIDED, HOWEVER, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the 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 shall state the method by which the exchange of the
Common Stock for Rights shall be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preferred Stock (or shares of Equivalent
Preferred Stock) for shares of Common Stock exchangeable for Rights, at the
initial rate of one one-hundredth of a share of Preferred Stock (or share of
Equivalent Preferred Stock) for each share of Common Stock, as appropriately
adjusted to reflect adjustments in the voting rights of shares of Preferred
Stock pursuant to the terms thereof, so that the fraction of a share of
Preferred Stock delivered in lieu of each share of Common Stock shall have the
same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of Common Stock
or Preferred Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to authorize
additional Common Stock or Preferred Stock for issuance upon exchange of the
Rights.
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(e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to each registered holder of a Rights Certificate with regard to which
a fractional share of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (e), the current market value
of a whole share of Common Stock shall be the Closing Price of a share of Common
Stock (as determined pursuant to Section 11(d) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF PROPOSED ACTIONS.
--------------------------
In case the Company shall after the Distribution Date propose (a) to pay
any dividend payable in stock of any class to the holders of its Preferred Stock
or to make any other distribution to the holders of its Preferred Stock (other
than a cash dividend out of earnings or the retained earnings of the Company),
or (b) to offer to the holders of its Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock, Common
Stock or shares of stock of any other class or any other securities, rights, or
options, or (c) to effect any reclassification of the Preferred Stock (other
than a reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (d) to effect any consolidation or merger into or with, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one transaction or a
series of related transactions, of more than 25% of (i) the assets of the
Company and its Subsidiaries (taken at net asset value as stated on the books of
the Company and determined on a consolidated basis in accordance with generally
accepted accounting principles consistently applied) or (ii) the earning power
of the Company and its Subsidiaries (determined on a consolidated basis in
accordance with generally accepted accounting principles consistently applied)
to any other Person or Persons, or (e) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
the Rights Agent and each holder of a Right, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of Preferred Stock, if any such date is to
be fixed, and such notice shall be so given in the case of any action covered by
clause (a) or (b) above at least 20 days prior to the record date for
determining holders of the Preferred Stock for purposes of such action, and in
the case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of Common Stock whichever shall be the earlier. The failure to give
notice required by this Section 25 or any defect therein shall not affect the
legality or validity of the action taken by the Company or the vote upon any
such action.
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In case any Common Stock Event described in Section 11(a)(ii) hereof shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to the Rights Agent and each holder of a Rights Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of such Common
Stock Event, which shall specify such event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof.
Notwithstanding anything in this Agreement to the contrary, prior to the
Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Rights, for purposes of this Agreement and no other
notice need be given.
Section 26. NOTICES.
-------
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Rights Certificate to the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
MacroChem Corporation
110 Hartwell Avenue
Lexington, MA 02421-3134
Attention: William P. Johnson
Copy to: Dwight W. Quayle, Esq.
Ropes & Gray
One International Place
Boston, MA 02110-2624
Subject to the provisions of Sections 19 and 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, NY 10005
Attention: Shareholder Services
(MacroChem Corporation Rights Agreement)
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Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS.
--------------------------
Prior to the Distribution Date, the Board, upon the vote of a majority of
the Board, may from time to time supplement or amend this Agreement without the
approval of any holders of the Rights. From and after the Distribution Date, the
Board may, upon the vote of a majority of the Board, from time to time amend
this Agreement without the approval of any holders of the Rights 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 change any time period governing redemption of the Rights or any other time
period or (iv) to make any other provisions in regard to matters or questions
arising hereunder which the Board, upon the vote of a majority of the Board, may
deem necessary or desirable and which shall not adversely affect the interests
of the holders of the Rights (other than any Acquiring Person or Disqualified
Transferee or any Affiliate of an Acquiring Person or Disqualified Transferee).
Any amendment made pursuant to this Section 27 after a Stock Acquisition Date
shall require the approval of a majority of the Board. The Rights Agent shall
join with the Company in the execution and delivery of any such supplement or
amendment, unless such supplement or amendment affects any of the rights,
duties, or obligations of the Rights Agent hereunder, in which case the Rights
Agent may, but shall not be required to, join in such execution and delivery.
Section 28. SUCCESSORS.
----------
All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD; 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 to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. 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 of Directors in good faith and
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with the concurrence of a majority of the Board then in office shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Rights and all other parties and (y) not subject any Director to any
liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT.
-------------------------
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent, and the registered holders of the Rights
(and, prior to the Distribution Date, the associated shares of Common Stock) any
legal or equitable right, remedy, or claim under this Agreement or the Rights;
but this Agreement shall be for the sole and exclusive benefit of the Company,
the Rights Agent, and the registered holders of the Rights (and, prior to the
Distribution Date, the associated Common Stock).
Section 31. SEVERABILITY.
------------
The invalidity or unenforceability of any term or provision hereof shall
not affect the validity or enforceability of any other term or provision hereof.
If any term, provision, covenant or restriction of this Agreement is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; PROVIDED, HOWEVER, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
Close of Business on the tenth day following the date of such determination by
the Board.
Section 32. GOVERNING LAW.
-------------
This Agreement and each Rights Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of Delaware and for all
purposes shall be governed by and construed in accordance with the laws of said
State applicable to contracts to be made and performed entirely within said
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.
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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 set their respective hands and seals, all as of the day and
year first above written.
MACROCHEM CORPORATION
By: /s/Kenneth L. Rice, Jr.
Title: Vice President & Chief Financial
Officer
Attest:
By: /s/William P. Johnson
Title: Treasurer
AMERICAN STOCK TRANSFER & TRUST COMPANY
AS RIGHTS AGENT
By: /s/Herbert J. Lemmer
Title: Vice President
Attest:
By: /s/Susan Silber
Title: Assistant Secretary
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<PAGE>
EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF PREFERRED STOCK
of
MACROCHEM CORPORATION
Pursuant to Section 151 of the
Delaware General Corporation Law
MacroChem Corporation, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation") DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors (the "Board of Directors") by the Certificate of
Incorporation, as amended, of the Corporation, and in
accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware, the Board of
Directors on August 13, 1999 adopted a resolution providing
for the authorization of a series of Preferred Stock, $.01 par
value per share (the "Preferred Stock") as follows:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of its
Certificate of Incorporation, as amended, a series of Preferred Stock
of the Corporation be and it hereby is created, and that the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the
shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series B Preferred Stock" (the "Series B Stock") and the number
of shares constituting such series shall be 600,000. The number of shares of
Series B Stock may be increased or decreased by a resolution duly adopted by the
Board of Directors, but may not be decreased below the number of shares of
Series B Stock then outstanding plus the number of shares reserved for issuance
upon the exercise of outstanding options, rights or warrants or upon conversion
of any outstanding securities convertible into Series B Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior
to the shares of Series B Stock with respect to dividends, the holders
of shares of Series B Stock shall be entitled to receive, when, as and
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if declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the last day of
March, June, September and December 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 Series B Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00
or (b) subject to the provision for adjustment set forth in Section 8
hereof, 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, $.01 par value per share, of the Corporation
(the "Common Stock") or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on 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 Series B
Stock.
(b) The Corporation shall declare a dividend or distribution on
the Series B Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of or a subdivision with
respect to Common Stock); PROVIDED, HOWEVER, that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series B 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 Series B Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series B
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 Series B 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. Dividends paid on the shares of Series B Stock
in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Series B Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be
no more than 60 days prior to the date fixed for the payment thereof.
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<PAGE>
Section 3. VOTING RIGHTS. The holders of shares of Series B Stock shall
have the following voting rights:
(a) Subject to the provision for adjustment set forth in
Section 8 hereof, each share of Series B Stock shall entitle the holder
thereof to one hundred votes on all matters submitted to a vote of the
stockholders of the Corporation.
(b) Except as otherwise provided herein or required by applicable law,
the holders of shares of Series B 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 Corporation.
(c) Except as set forth herein or required by applicable law, holders
of Series B Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. CERTAIN RESTRICTIONS
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series B Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B Stock,
except dividends paid ratably on the Series B Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B Stock,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock (A) in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series B Stock or (B) in accordance with subparagraph (iv) of this
Section 4(a); or
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(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series B Stock, or any shares of stock ranking on a
parity with the Series B Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of the outstanding shares of such stock upon
such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective Series Bnd classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (a) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. REACQUIRED SHARES. Any shares of Series B Stock redeemed,
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders
of shares of Common Stock or any other stock of the Corporation ranking
junior (upon liquidation, dissolution or winding up) to the Series B Stock
unless, prior thereto, the holders of shares of Series B Stock shall have
received $100.00 per share plus an amount equal to all accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date
of such payment (the "Series B Liquidation Preference"). Following the
payment of the full amount of the Series B Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series B
Stock unless, prior thereto, the holders of shares of Common Stock (which
term shall include, for the purposes only of this Section 6, any series of
the Corporation's Preferred Stock ranking on a parity with the Common Stock
upon liquidation, dissolution or winding up) shall have received an amount
per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series B Liquidation Preference by (ii) 100 (as
appropriately adjusted as set forth in Section 8 hereof to reflect such
events as stock splits, stock dividends and recapitalizations with respect
to the Common Stock; such number in this clause (ii), as the same may be
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<PAGE>
adjusted from time to time, is hereinafter referred to as the "Adjustment
Number". In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then any
remaining assets shall be distributed ratably to the holders of Common
Stock. Following the payment of the full amount of the Series B Liquidation
Preference and the Common Adjustment in respect of all outstanding shares
of Series B Stock and Common Stock, respectively, holders of shares of
Series B Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of any remaining assets to be distributed
in the ratio of the Adjustment Number to one (1) with respect to such
Series B Stock and Common Stock, on a per share basis, respectively.
(b) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series B Liquidation Preference
and the liquidation preferences of all other series of Preferred Stock, if
any, which rank on a parity with the Series B Stock, then any remaining
assets shall be distributed ratably to the holders of the Series B Stock
and the holders of such parity stock in proportion to their respective
liquidation preferences.
(c) None of the merger or consolidation of the Corporation into or
with any other entity, the sale of all or substantially all of the property
and assets of the Corporation or the distribution to the stockholders of
the Corporation of all or substantially all of the consideration for such
sale, unless such consideration (apart from the assumption of liabilities)
or the net proceeds thereof consists substantially entirely of cash, shall
be deemed to be a liquidation, dissolution or winding up within the meaning
of this Section 6.
(d) Each share of Series B Stock shall stand on a parity with each
other share of Series B Stock or any other series of the same class of
Preferred Stock upon voluntary or involuntary liquidation, dissolution or
distribution of assets or winding up of the Corporation.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the outstanding shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case the
outstanding shares of Series B Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment set forth in Section 8 hereof) equal to 100 times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged.
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<PAGE>
Section 8. CERTAIN ADJUSTMENTS. In the event the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then, in each such case, the amounts set forth in
Sections 2(a) and (b), 3(a), 6(a) and 7 hereof with respect to the multiple of
(i) cash and non-cash dividends, (ii) votes, (iii) the Series B Liquidation
Preference and (iv) an aggregate amount of stock, securities, cash and/or other
property referred to in Section 7 hereof, 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.
Section 9. RANKING. The Series B Stock shall rank PARI PASSU with (or
if determined by the Board of Directors in any vote establishing any other
series of Preferred Stock, either senior and prior in preference to, or junior
and subordinate to, as the case may be) each other series of Preferred Stock of
the Corporation with respect to dividends and/or preference upon liquidation,
dissolution or winding up.
Section 10. REDEMPTION. The shares of Series B Stock may be purchased
by the Corporation at such times and on such terms as may be agreed to between
the Corporation and the redeeming stockholder, subject to any limitations which
may be imposed by law or the Certificate of Incorporation, as amended.
Section 11. AMENDMENT. The Certificate of Incorporation, as amended, of
the Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series B Stock so as
to affect them adversely without the affirmative vote of the holders of
two-thirds or more of the outstanding shares of Series B Stock, voting together
as a single class.
Section 12. FRACTIONAL SHARES. Series B Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series B Stock.
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<PAGE>
IN WITNESS WHEREOF, this Certificate of Designation was executed on
behalf of the Corporation by its President and attested by its Secretary on
August 25, 1999.
By /s/ Alvin J. Karloff
--------------------
President
Attest:
By /s/ William P. Johnson
----------------------
Secretary
[SEAL]
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<PAGE>
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _______ Rights
NOT EXERCISABLE AFTER AUGUST 13, 2009 OR EARLIER IF ORDER OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES
AND ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE
VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE
REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE
BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN
OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE
ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE (WHICH INCLUDES AFFILIATES AND
ASSOCIATES) OF AN ACQUIRING PERSON (AS EACH SUCH TERM IS DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]*
Rights Certificate
MACROCHEM CORPORATION
This certifies that , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions, and conditions of the Rights
Agreement dated as of August 13, 1999 (the "Rights Agreement")
between MacroChem Corporation (the "Company"), and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as
_______________________
* The portion of the legend in brackets shall be inserted only if applicable.
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<PAGE>
such term is defined in the Rights Agreement) and prior to 5:00 p.m.
(Boston, Massachusetts time) on August 13, 2009 (the "Expiration
Date") at the office of the Rights Agent designated for such purpose,
or its successors as Rights Agent, one one-hundredth of a share of the
Series B Preferred Stock, with a $.01 par value per share ("Preferred
Stock"), of the Company per each Right represented hereby, at a
purchase price of $50.00 per share (the "Purchase Price") upon
presentation and surrender of this Rights Certificate with the Form of
Election to Purchase set forth on the reverse side hereof and the
certificate contained therein duly completed and executed, accompanied
by a signature guarantee and such other documentation as the Rights
Agent may reasonably request. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased
upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of
August 13, 1999, based on the shares of Common Stock of the Company
as constituted at such date.
As more fully set forth in the Rights Agreement, upon the occurrence of
a Common Stock Event (as such term is defined in the Rights Agreement), if the
Rights evidenced by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate of an Acquiring Person (as each such term is
defined in the Rights Agreement) or (ii) a Disqualified Transferee (as defined
in the Rights Agreement), such Rights shall automatically become null and void
and no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Common Stock Event.
The Rights evidenced by this Rights Certificate shall not be exercisable,
and shall be void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been obtained or be
obtainable.
As provided in the Rights Agreement, the Purchase Price and the number of
whole or fractional shares of Preferred Stock which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
In the circumstances described in Section 13 of the Rights Agreement, the
securities issuable upon the exercise of the Rights evidenced hereby shall be
the common stock or similar equity securities or equity interests of an entity
other than the Company.
This Rights Certificate is subject to all of the terms, provisions, and
conditions of the Rights Agreement, which terms, provisions, and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties, and immunities hereunder of the
Rights Agent, the Company, and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
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<PAGE>
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the office of the Rights Agent
designated for such purpose and may be obtained by the holder of any Rights upon
written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose,
accompanied by a signature guarantee and such other documentation as the Rights
Agent may reasonably request, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of whole or fractional shares of
Preferred Stock (or other consideration, as the case may be) as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive, upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Rights Certificate may be redeemed by the Company by a majority vote of the
Board (as defined in the Rights Agreement) then in office at any time prior to
the Expiration Date, at a redemption price of $.01 per Right (which amount is
subject to adjustment as provided in the Rights Agreement).
The Company is not obligated to issue whole or fractional shares of
Preferred Stock (or other securities) upon the exercise of any Right or Rights
evidenced hereby, but in lieu thereof a cash payment may be made at the election
of the Company, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred Stock or
of any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any action by the Company, or to receive notice of meetings
or other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers and the seal of the
Company. Dated as of _________________, ____.
MACROCHEM CORPORATION
By______________________________
Title:
ATTEST:
____________________________
Title:
Countersigned:
____________________________
American Stock Transfer & Trust Company,
as Rights Agent
By___________________________
Authorized Signatory
Date of Countersignature:__________
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<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED _______________________________________________________
hereby sells, assigns and transfers unto ______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________________ whose
social security or tax identification number is ___________________, the Rights
evidenced by this Rights Certificate, together with all right, title and
interest herein, and does hereby irrevocably constitute and appoint
_______________________________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: _________________________, ______.
__________________________
Signature
Signature Guaranteed:*
___________________________
* Signature must be guaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature guarantee program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate of an Acquiring Person (as each such term is
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate after
the occurrence of a Common Stock Event from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate of an Acquiring Person.
Dated:____________________ ______________________________
Signature
Signature Guaranteed:*
________________________
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
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<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights Certificate)
To MacroChem Corporation
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Rights Certificate to purchase the number of one
one-hundredths of a share of Preferred Stock (or other securities) issuable upon
the exercise of such Rights and requests that certificates for such shares be
issued in the name of:
Please insert social security
or other identifying number_________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number _________________________________________________
_____________________________________________________________________________
____________________________________________________________________________
(Please print name and address)
Dated: _______________________, _________
_______________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Rights Certificate)
Signature Guaranteed:**
_________________________
**Signature must be quaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature quarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
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<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate of any such Acquiring Person (as each such term is defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate after
the occurrence of a Common Stock Event (as such term is defined in the Rights
Agreement) from any Person who is, was, or subsequently became an Acquiring
Person or an Affiliate of an Acquiring Person.
Dated: _________________, _______ ______________________________
Signature
Signature Guaranteed:***
_________________________________
**Signature must be quaranteed by an "Eligible Guarantor Institution" (with
membership in an approved signature quarantee medallion program) pursuant to
Rule 17Ad-15 of the Securities Exchange Act of 1934.
B-8
<PAGE>
EXHIBIT C
MACROCHEM CORPORATION
SUMMARY OF PURCHASE RIGHTS
On August 13, 1999, MacroChem Corporation (the "Company") declared a
dividend distribution of one preferred stock purchase right for each share of
Common Stock. Each Right entitles the registered holder to purchase from the
Company after the Distribution Date described below one-hundredth of a share of
its Series B Preferred Stock. The exercise price is $50.00 for each
one-hundredth share of Preferred Stock. The distribution of Rights is payable on
September 10, 1999 to the record holders of Common Stock at the close of
business on that date. One Right will also be issued for each share of Common
Stock issued between September 10, 1999 and the Distribution Date.
EXERCISABILITY OF THE RIGHTS; DISTRIBUTION DATE. The Rights are not
exercisable until the Distribution Date. The Distribution Date would occur, if
ever, ten business days after either of the following events:
o A public announcement that a person or group (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the Company's outstanding Common Stock (the "Stock Acquisition Date") or
o The commencement or announcement of an intention to make a tender offer
or exchange offer that would result in a person or group owning 20% or more of
the Company's outstanding Common Stock.
MERGERS, ASSET SALES AND SELF-DEALING TRANSACTIONS. If after the Stock
Acquisition Date the Company is acquired in a merger or other business
combination, or 25% or more of its assets or earning power is sold, proper
provision is to be made so that each holder of a Right would have the right to
receive, upon exercise of the Right, that number of shares of common stock of
the acquiring company which at the time has a market value of two times the
exercise price of the Right.
In the event that:
(1) any person shall at any time after August 13, 1999 become an Acquiring
Person, or
(2) the Company is the surviving corporation in a merger with an Acquiring
Person and its Common Stock is not changed or exchanged, or
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<PAGE>
(3) an Acquiring Person engages in one of a number of self-dealing
transactions specified in the Rights Agreement described below, or
(4) during such time as there is an Acquiring Person any recapitalization,
reorganization or other transaction involving the Company occurs which result in
such Acquiring Person's ownership interest being increased by more than 1%,
then each holder of a Right would have the right to receive, upon exercise of
the Right, that number of shares of Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a market value of two
times the exercise price of the Right.
Following the occurrence of any of the events described in this section,
any Rights beneficially owned by any Acquiring Person would immediately become
null and void.
EXCHANGE OPTION. The Board may, at its option, at any time after any person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right. The Board, however, may not effect an exchange at any
time after any person (other than (i) the Company, (ii) any subsidiary of the
Company, (iii) any employee benefit plan of the Company or any such subsidiary
or any entity holding Common Stock for or pursuant to the terms of any such
plan), together with all affiliates of such person, becomes the beneficial owner
of 50% or more of the Common Stock then outstanding. Immediately upon the action
of the Board ordering the exchange of any Rights and without any further action
and without any notice, the right to exercise such Rights will terminate and the
only right thereafter of a holder of such Rights will be to receive that number
of shares of Common Stock equal to the number of such Rights held by the holder.
TRANSFERABILITY OF RIGHTS. Until the Distribution Date, the Common Stock
Certificates will evidence the Rights, and the transfer of the Common Stock
certificates will constitute a transfer of the Rights. After the Distribution
Date, separate certificates evidencing the Rights would be mailed to holders of
record of the Company's Common Stock as of the close of business on the
Distribution Date, and such separate Rights Certificates alone would evidence
the Rights.
REDEMPTION. The Board of Directors, by a majority vote, may redeem the
Rights at any time at a redemption price of $.01 per Right. Immediately upon
such redemption, the right to exercise the Rights will terminate, and the Rights
Holders will become entitled only to receive the Redemption Price.
EXPIRATION OF RIGHTS. If not previously exercised or redeemed, the Rights
will expire on August 13, 2009.
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<PAGE>
ANTI-DILUTION ADJUSTMENT. The exercise price, the redemption price, the
exchange ratio and the number of shares of the Preferred Stock or other
securities or property issuable upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution under the following
circumstances:
o in the event of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock, or
o upon the grant to holders of the Preferred Stock of certain rights or
warrants to subscribe for shares of the Preferred Stock or convertible
securities at less than the current market price, or
o upon the distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular quarterly cash dividends out of the
earnings or retained earnings of the Company and dividends payable in shares of
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
With certain exceptions, no adjustment in the exercise price will be
required until cumulative adjustments require an adjustment of at least 1% in
such price. At the Company's option, cash (based on the market price on the last
trading date prior to the date of the exercise) will be paid instead of issuing
fractional shares of any securities (other than fractional shares of Preferred
Stock in integral multiples of one-thousandth of a share).
NO SHAREHOLDER RIGHTS. A Right holder, as such, has no rights as a
shareholder of the Company, including, without limitation, the right to vote or
receive dividends.
AMENDMENTS. Any of the provisions of the Rights Agreement may be amended by
the Board of Directors prior to the Distribution Date without the approval of
any holders of the Rights. After the Distribution Date, the Board of Directors
may amend the Rights Agreement to cure any ambiguity, to make changes which do
not adversely affect the interests of holders of Rights (excluding the interests
of any Acquiring Person) or to shorten or lengthen any time period under the
Rights Agreement. A majority vote of the Board of Directors is required.
TAX CONSEQUENCES. Although the Company believes that neither the
distribution of the Rights nor the subsequent separation of the Rights on the
Distribution Date should be taxable to the stockholders or the Company,
stockholders may, depending upon the circumstances, realize taxable income upon
the occurrence of an event described under "Mergers, Asset Sales and
Self-Dealing Transactions."
RIGHTS AGREEMENT. The terms of the Rights are set forth in a Rights
Agreement between the Company and American Stock Transfer & Trust Company, as
Rights Agent. A copy of the Rights Agreement is an Exhibit to Form 8-A filed
with the Securities and Exchange Commission. A copy of the Rights Agreement is
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<PAGE>
available free of charge from the Rights Agent at the following address:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, NY 10005
Attn: Shareholder Services
(MacroChem Corporation Rights Agreement)
This summary does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated in this summary by
reference.
C-4
AMENDED AND RESTATED BYLAWS
OF
MACROCHEM CORPORATION
ARTICLE I. OFFICES.
SECTION 1. REGISTERED OFFICE. The registered office of the Corporation
shall be at The Corporation Trust Company, 1209 Orange Street, in the City of
Wilmington, County of New Castle, State of Delaware, 19801.
SECTION 2. ADDITIONAL OFFICES. The Corporation may also have offices at
such other places, both within and without the State of Delaware, as the Board
of Directors may from time to time determine or as the business of the
Corporation may require.
ARTICLE II. MEETINGS OF STOCKHOLDERS.
SECTION 1. TIME AND PLACE. A meeting of stockholders for any purpose may be
held at such time and place within or without the State of Delaware as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
SECTION 2. ANNUAL MEETING. The annual meeting of stockholders shall be held
each year on a date and at a time designated by the Board of Directors. At the
meeting, directors shall be elected and any other business properly brought
before the meeting pursuant to these Bylaws may be transacted.
SECTION 3. SPECIAL MEETINGS. Except as otherwise provided in the
Certificate of Incorporation, special meetings of stockholders for any purpose
or purposes may be called by the Chairman of the Board, the President, or a
majority of the Board of Directors, and shall be called by the President or the
Secretary upon the request, in writing, of the stockholders owning a majority of
the shares of capital stock of the Corporation issued and outstanding and
entitled to vote. A stockholder request for a special meeting shall be signed,
dated and delivered to the Secretary, shall state the purpose of the proposed
meeting, and shall provide the information required by Article II, Sections
5.1(c) and 5.2(c) hereof. The Board of Directors or, in the absence of action by
the Board of Directors, the Chairman of the Board, shall have the sole power to
determine the date, time and place for any special meeting of stockholders, and
to set a record date for the determination of stockholders entitled to vote at
such meeting pursuant to Article IX, Section 4 hereof. Following such
determination, it shall be the duty of the Secretary to cause notice to be given
to the stockholders entitled to vote at such meeting, in the manner set forth in
Article II, Section 4 hereof, that a meeting will be held at the place, time and
date and in accordance with the record date determined by the Board of Directors
or the Chairman of the Board. The stockholders requesting the special meeting
shall not have the power to give notice of the meeting.
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SECTION 4. NOTICE OF MEETING OF STOCKHOLDERS. Whenever stockholders are
required or permitted to take action at a meeting, a written notice of the
meeting shall be given that shall state the place, date and hour of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called. Unless otherwise provided by law, the certificate of
incorporation or these by-laws, the written notice of any meeting shall be given
not less than ten (10) nor more than sixty (60) days before the meeting.
SECTION 5. ADVANCE NOTICE REQUIREMENTS FOR STOCKHOLDER NOMINATIONS OF
DIRECTORS OR STOCKHOLDER PROPOSED BUSINESS.
5.1 ADVANCE NOTICE OF STOCKHOLDER NOMINATIONS OF DIRECTORS. Only
persons who are nominated in accordance with the following procedures shall be
eligible for election as directors of the Corporation except as may be otherwise
provided in the Certificate with respect to the right of holders of preferred
shares of the Corporation to nominate and elect a specified number of directors
in certain circumstances.
(a) ANNUAL MEETINGS OF STOCKHOLDERS.
(1) Nominations of persons for election to the Board of
Directors of the Corporation may be made at an annual meeting of
stockholders only (i) pursuant to the Corporation's notice of
meeting delivered pursuant to Article II, Section 4 of these
By-laws (or any supplement thereto), (ii) by or at the direction of
the Board of Directors (or any duly authorized committee thereof)
or the Chairman of the Board or (iii) by any stockholder of the
Corporation who was a stockholder of record of the Corporation at
the time the notice provided for in this Section 5.1 is delivered
to the Secretary of the Corporation, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in
subparagraphs (2) and (3) of this paragraph (a) in this Section
5.1.
(2) For nominations to be properly brought before an
annual meeting by a stockholder pursuant to clause (iii) of
paragraph (a)(1) of this Section 5.1, the stockholder must have
given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice shall be
delivered to the Secretary at the principal executive offices of
the Corporation not less than sixty (60) nor more than ninety (90)
days prior to the anniversary date of the immediately preceding
annual meeting of stockholders; PROVIDED, HOWEVER, that in the
event that the annual meeting is called for a date that is not
within thirty (30) days before or after such anniversary date,
notice by the stockholder in order to be timely must be so received
not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the annual
meeting was mailed or public disclosure of the date of the annual
meeting was made, whichever first occurs. In no event shall the
public announcement of an adjournment or
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postponement of an annual meeting of stockholders commence
a new time period (or extend any time period) for the giving of a
stockholder's notice as described above. The stockholder's notice
shall contain, at a minimum, the information set forth in Section
5.1(c).
(3) Notwithstanding anything in the second sentence of
paragraph (a)(2) of this Section 5.1 to the contrary, in the event
that the number of directors to be elected to the Board of
Directors of the Corporation at an annual meeting is increased and
there is no public announcement by the Corporation naming all of
the nominees for director or specifying the size of the increased
Board of Directors at least one hundred days prior to the first
anniversary of the preceding year's annual meeting, a stockholder's
notice required by this Section 5.1 shall also be considered
timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary
at the principal executive offices of the Corporation not later
than the close of business on the tenth (10th) day following the
day on which such public announcement is first made by the
Corporation.
(b) SPECIAL MEETINGS OF STOCKHOLDERS. Only such business shall
be conducted at a special meeting of stockholders as shall have been
described in the Corporation's notice of meeting given pursuant to
Article II, Section 4 of these By-laws. To the extent such business
includes the election of directors, nominations of persons for election
to the Board of Directors may be made at a special meeting of
stockholders only (i) by or at the direction of the Board of Directors
(or any duly authorized committee thereof) or the Chairman of the Board,
or (ii) by any stockholder of the Corporation who is a stockholder of
record at the time the notice provided for in this Section 5.1(b) is
delivered to the Secretary of the Corporation, who is entitled to vote at
the special meeting and who gives timely notice in writing by the
Secretary of the Corporation. The stockholder's notice shall contain, at
a minimum, the information set forth in Section 5.1(c). To be timely, a
stockholder's notice shall be delivered to the Secretary at the principal
executive offices of the Corporation not later than the close of business
on the tenth (10th) day following the day on which public announcement is
first made of the date of the special meeting and of the nominees
proposed by the Board of Directors to be elected at such meeting. In no
event shall the public announcement of an adjournment or postponement of
a special meeting commence a new time period (or extend any time period)
for the giving of a stockholder's notice as described above.
(c) CONTENTS OF STOCKHOLDER'S NOTICE. Any stockholder's notice
required by this Section 5.1 shall set forth as to each person whom the
stockholder proposes to nominate for election or reelection as a director
(i) the name, age, business address, residence address and nationality of
the person, (ii) the principal occupation and employment of the person,
(iii) the written consent of each proposed nominee to being named as a
nominee and to serve as a director if elected, (iv) the class or series
and number of shares of capital stock of the Corporation which are owned
beneficially or of record by the person and (v) any other
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information relating to the person that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and the rules and regulations promulgated
thereunder. Such stockholder's notice further shall set forth as to the
stockholder giving the notice and the beneficial owner, if any, on whose
behalf the nomination or proposal is made (i) the name and address of
such stockholder and of such beneficial owner, as they appear on the
Corporation's books (ii) the class and number of shares of capital stock
of the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner, as to the stockholder giving the
notice, (iii) a description of all arrangements or understandings between
such stockholder and each proposed nominee and any other person or
persons (including their names) pursuant to which the nomination(s) are
to be made by such stockholder, (iv) a representation that such
stockholder intends to appear in person or by proxy at the meeting to
nominate the person named in its notice, (v) a representation whether the
stockholder or the beneficial owner, if any, intends or is part of a
group which intends to (1) deliver a proxy statement and/or form of proxy
to holders of at least the percentage of the Corporation's outstanding
capital stock required to elect the nominee and/or (2) otherwise solicit
proxies from stockholders in support of such nomination, and (vi) any
other information relating to such stockholder that would be required to
be disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Exchange Act, and the rules and regulations
promulgated thereunder. The Corporation may require any proposed nominee
to furnish such other information as it may reasonably require to
determine the eligibility of such proposed nominee to serve as a director
of the Corporation.
(d) Only such persons who are nominated in accordance with the
procedures set forth in this Section 5.1 shall be eligible to be elected
at an annual or special meeting of stockholders of the Corporation to
serve as directors. Except as otherwise provided by law, the chair of the
meeting shall have the power and duty to (i) determine whether a
nomination to be brought before an annual or special meeting was made in
accordance with the procedures set forth in this Section 5.1 and (ii) if
any proposed nomination is not in compliance with this Section 5.1
(including whether the stockholder or beneficial owner, if any, on whose
behalf the nomination is made solicits (or is part of a group which
solicits), or fails to so solicit (as the case may be), proxies in
support of such stockholder's nominee in compliance with such
stockholder's representation as required by Section (c) of this Section
5.1), to declare that such nomination shall be disregarded.
5.2 ADVANCE NOTICE OF STOCKHOLDER PROPOSED BUSINESS. No business
shall be transacted at a meeting of stockholders except in accordance with the
following procedures.
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(a) ANNUAL MEETINGS OF STOCKHOLDERS.
(1) The proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders
only (i) pursuant to the Corporation's notice of meeting
delivered pursuant to Article II, Section 4 of these By-laws
(or any supplement thereto), (ii) by or at the direction of
the Board of Directors (or any duly authorized committee
thereof) or (iii) by any stockholder of the Corporation who
was a stockholder of record of the Corporation at the time the
notice provided for in this Section 5.2 is delivered to the
Secretary of the Corporation, who is entitled to vote at the
meeting and who complies with the notice procedures set forth
in subparagraphs (2) and (3) of this paragraph (a) in this
Section 5.2.
(2) For business to be properly brought before an annual
meeting by a stockholder pursuant to clause (iii) of paragraph
(a)(1) of this Section 5.2, the stockholder must have given
timely notice thereof in writing to the Secretary of the
Corporation and such business must otherwise be a proper
matter for stockholder action as determined by the Board of
Directors. To be timely, a stockholder's notice shall be
delivered to the Secretary at the principal executive offices
of the Corporation not less than sixty (60) nor more than
ninety (90) days prior to the anniversary date of the
immediately preceding annual meeting of stockholders;
PROVIDED, HOWEVER, that in the event that the annual meeting
is called for a date that is not within thirty (30) days
before or after such anniversary date, notice by the
stockholder in order to be timely must be so received not
later than the close of business on the tenth day following
the day on which such notice of the date of the annual meeting
was mailed or public disclosure of the date of the annual
meeting was made, whichever first occurs. In no event shall
the public announcement of an adjournment or postponement of
an annual meeting of stockholders commence a new time period
(or extend any time period) for the giving of a stockholder's
notice as described above. The stockholder's notice shall
contain, at a minimum, the information set forth in Section
5.2(c).
(b) SPECIAL MEETINGS OF STOCKHOLDERS. Only such business shall
be conducted at a special meeting of stockholders as shall have been
described in the Corporation's notice of meeting given pursuant to
Article II, Section 4 of these By-laws.
(c) CONTENTS OF STOCKHOLDER'S NOTICE: Any stockholder's notice
required by this Section 5.2 shall set forth for each item of business
that the stockholder proposes for consideration (i) a description of the
business desired to be brought before the stockholder meeting, (ii) the
text of the proposal or business (including the text of any resolutions
proposed for consideration and in the event that such business includes a
proposal to amend the By-laws of the Corporation, the language of the
proposed amendment), (iii) the reasons for conducting such business at
the stockholder meeting, (iv) any material interest in such business of
such stockholder and the beneficial owner, if any, on whose behalf the
proposal is made; and (v) any other information relating to the
stockholder, the beneficial owner, or
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proposed business that would be required to be disclosed in a proxy
statement or other filings in connection with solicitations of proxies
relating to the proposed item of business pursuant to Section 14 of the
Exchange Act, and the rules and regulations promulgated thereunder.
Such stockholder's notice further shall set forth as to the stockholder
giving the notice and the beneficial owner, if any, on whose behalf the
proposal is made (i) the name and address of such stockholder, as they
appear on the Corporation's books, and of such beneficial owner, (ii)
the class and number of shares of capital stock of the Corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner, (iii) a description of all arrangements or
understandings between such stockholder and any other person or persons
(including their names) pursuant to which the proposals are to be made
by such stockholder, (iv) a representation that such stockholder
intends to appear in person or by proxy at the annual meeting to
propose the items of business set forth in the notice, (v) a
representation whether the stockholder or the beneficial owner, if any,
intends or is part of a group which intends to (1) deliver a proxy
statement and/or form of proxy to holders of at least the percentage of
the Corporation's outstanding capital stock required to approve or
adopt the proposal and/or (2) otherwise solicit proxies from
stockholders in support of such proposal, and (vi) any other
information relating to such stockholder, beneficial owner, or proposed
business that would be required to be disclosed in a proxy statement or
other filings required to be made in connection with solicitations of
proxies in support of such proposal pursuant to Section 14 of the
Exchange Act, and the rules and regulations promulgated thereunder. The
Corporation may require the stockholder to furnish such other
information as it may reasonably require to determine whether each
proposed item of business is a proper matter for stockholder action.
(d) Except as otherwise provided by law, the chair of the
meeting shall have the power and duty to (i) determine whether any
business proposed to be brought before an annual or special meeting was
proposed in accordance with the procedures set forth in this Section 5.2
and (ii) if any proposed business is not in compliance with this Section
5.2 (including whether the stockholder or beneficial owner, if any, on
whose behalf the proposal is made solicits (or is part of a group which
solicits), or fails to so solicit (as the case may be), proxies in
support of such stockholder's proposal in compliance with such
stockholder's representation as required by Section (c) of this Section
5.2), to declare that such proposed business shall not be transacted.
5.3 GENERAL.
(a) For purposes of this Section 5, "public announcement" shall
mean disclosure in a press release reported by the Dow Jones News
Service, Associated Press or comparable national news service or in a
document publicly filed by the Corporation with the Securities and
Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange
Act.
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(b) Notwithstanding the foregoing provisions of this Section 5,
a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this Section 5. Nothing in this Section 5 shall be
deemed to affect any rights of stockholders to request inclusion of
proposals in the Corporation's proxy statement pursuant to Rule 14a-8
under the Exchange Act.
SECTION 6. LIST OF STOCKHOLDERS. The transfer agent or the officer in
charge of the stock ledger of the Corporation shall prepare and make, at least
ten days before every meeting of stockholders, a complete list of the
stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each stockholder and the number of shares registered
in the name of each stockholder. Such list shall be open to the examination of
any stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, at a
place within the city where the meeting is to be held, which place, if other
than the place of the meeting, shall be specified in the notice of the meeting.
The list shall also be produced and kept at the place of the meeting during the
whole time thereof and may be inspected by any stockholder who is present in
person thereat.
SECTION 7. CONDUCT OF MEETINGS. Meetings of stockholders shall be presided
over by the Chairman of the Board or by another chair designated by the Board of
Directors. The date and time of the opening and the closing of the polls for
each matter upon which the stockholders will vote at a meeting shall be
determined by the chair of the meeting and announced at the meeting. The Board
of Directors may adopt by resolution such rules and regulations for the conduct
of the meeting of stockholders as it shall deem appropriate. Except to the
extent inconsistent with such rules and regulations as adopted by the Board of
Directors, the chair of any meeting of stockholders shall have the exclusive
right and authority to prescribe such rules, regulations and procedures and to
do all such acts as, in the judgment of such chair, are appropriate for the
proper conduct of the meeting. Such rules, regulations or procedures, whether
adopted by the Board of Directors or prescribed by the chair of the meeting, may
include, without limitation, the following: (i) the establishment of an agenda
or order of business for the meeting; (ii) rules and procedures for maintaining
order at the meeting and the safety of those present; (iii) limitations on
attendance at or participation in the meeting to stockholders of record of the
Corporation, their duly authorized and constituted proxies or such other persons
as the chair of the meeting shall determine; (iv) restrictions on entry to the
meeting after the time fixed for the commencement thereof; and (v) limitations
on the time allotted to questions or comments by participants. Unless and to the
extent determined by the Board of Directors or the chair of the meeting,
meetings of stockholders shall not be required to be held in accordance with the
rules of parliamentary procedure.
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SECTION 8. QUORUM. Except as otherwise provided by law, the Certificate of
Incorporation or these by-laws, at each meeting of stockholders the presence in
person or by proxy of the holders of a majority in voting power of the
outstanding shares of stock entitled to vote at the meeting shall be necessary
and sufficient to constitute a quorum. Shares of its own stock belonging to the
Corporation or to another corporation, if a majority of the shares entitled to
vote in the election of directors of such other corporation is held, directly or
indirectly, by the Corporation, shall neither be entitled to vote nor be counted
for quorum purposes; provided, however, that the foregoing shall not limit the
right of the Corporation or any subsidiary of the Corporation to vote stock,
including but not limited to its own stock, held by it in a fiduciary capacity.
The chair of the meeting shall have the power and duty to determine whether a
quorum is present at any stockholder meeting.
SECTION 9. VOTING.
9.1 At any meeting of the stockholders, every stockholder having
the right to vote shall be entitled to vote in person or by proxy. Except as
otherwise provided by law or the Certificate of Incorporation, each stockholder
of record shall be entitled to one vote for each share of capital stock
registered in his name on the books of the Corporation.
9.2 All elections shall be determined by a plurality vote, and,
except as otherwise provided by law or the Certificate of Incorporation, all
other matters shall be determined by a vote of a majority of the shares present
in person or represented by proxy and voting on such other matters.
SECTION 10. PROCEDURES FOR STOCKHOLDER ACTION BY CONSENT.
10.1 REQUEST FOR RECORD DATE.
(a) The record date for determining stockholders entitled to
express consent to corporate action in writing without a meeting shall be
as fixed by the Board of Directors or as otherwise established under this
Section 10.1. Any person seeking to have the stockholders authorize or
take corporate action by written consent without a meeting shall, by
written notice addressed to the Secretary and delivered to the
Corporation and signed by a stockholder of record, request that a record
date be fixed for such purpose. The written notice shall contain at a
minimum the information set forth in Section 10.1(b) below. The Board of
Directors shall have ten (10) days following the date of receipt of the
notice to determine the validity of the request. Following the
determination of the validity of the request, and (subject to Section
10.1(b)) no later than ten (10) days after the date on which such request
is received by the Corporation, the Board of Directors may fix a record
date for such purpose which shall be no more than ten (10) days after the
date upon which the resolution fixing the record date is adopted by the
Board of Directors and shall not precede the date such resolution is
adopted. If the Board of Directors fails within ten (10) days after
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the date the Corporation receives such notice to fix a record date for
such purpose, the record date shall be the day on which the first
written consent is delivered to the Corporation in the manner described
in Section 10.3 below unless prior action by the Board of Directors is
required under the General Corporation Law of Delaware, in which event
the record date shall be at the close of business on the day on which
the Board of Directors adopts the resolution taking such prior action.
(b) Any stockholder's notice required by this Section 10.1
shall describe each action that the stockholder proposes to take by
consent. For each such proposal, the notice shall set forth (i) the text
of the proposal (including the text of any resolutions to be adopted by
consent and the language of any proposed amendment to the By-laws of the
Corporation), (ii) the reasons for soliciting consents for the proposal,
(iii) any material interest in the proposal held by the stockholder and
the beneficial owner, if any, on whose behalf the action is to be taken,
and (iv) any other information relating to the stockholder, the
beneficial owner, or the proposal that would be required to be disclosed
in filings in connection with the solicitation of proxies or consents
pursuant to Section 14 of the Exchange Act and the rules and regulations
promulgated thereunder. To the extent the proposed action by consent
involves the election of directors, the notice shall set forth as to each
person whom the stockholder proposes to elect as a director (i) the name,
age, business address, residence address and nationality of the person,
(ii) the principal occupation and employment of the person, (iii) the
class or series and number of shares of capital stock of the Corporation
which are owned beneficially or of record by the person and (iv) any
other information relating to the person that would be required to be
disclosed in filings required to be made in connection with solicitations
of proxies or consents for the election of directors pursuant to Section
14 of the Exchange Act and the rules and regulations promulgated
thereunder. In addition to the foregoing, the notice shall set forth as
to the stockholder giving the notice and the beneficial owner, if any, on
whose behalf the notice is given (i) the name and address of such
stockholder as they appear on the Corporation's books, and the name and
address of such beneficial owner, (ii) the class and number of shares of
capital stock of the Corporation which are owned beneficially and of
record by such stockholder and such beneficial owner, (iii) a description
of all arrangements or understandings between such stockholder and any
other person or persons relating to the proposed action by consent, (iv)
a representation whether the stockholder or the beneficial owner, if any,
intends or is part of a group which intends to (1) deliver a proxy
statement and/or consent solicitation statement to holders of at least
the percentage of the Corporation's outstanding capital stock required to
effect the action by consent either to solicit consents or to solicit
proxies to execute consents, and/or (2) otherwise solicit proxies or
consents from stockholders in support of the action to be taken by
consent, and (v) any other information relating to such stockholder and
beneficial owner that would be required to be disclosed in filings
required to be made in connection with solicitation of proxies or
consents relating to the proposed action by consent pursuant to Section
14 of the Exchange Act and the rules and regulations promulgated
thereunder. During the ten (10) day period following the date of the
receipt of the notice required under Section 10.1(a), the Corporation may
require the stockholder of record and/or
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beneficial owner requesting a record date for proposed stockholder
action by consent to furnish such other information as it may
reasonably require to determine the validity of the request for a
record date.
10.2 FORM OF CONSENT. Every written consent purporting to take or
authorize the taking of corporate action and/or related revocations (each such
written consent and related revocation is referred to in this Section 10 as a
"Consent") shall bear the date of signature of each stockholder who signs the
Consent, and no Consent shall be effective to take the corporate action referred
to therein unless, within 60 days of the earliest dated Consent delivered in the
manner required by this Section 10, Consents signed by a sufficient number of
stockholders to take such action are so delivered to the Corporation.
10.3 DELIVERY OF CONSENT. A Consent shall be delivered to the
Corporation by delivery to its registered office in the State of Delaware or to
the Secretary of the Corporation at the Corporation's principal place of
business. Delivery to the Corporation's registered office shall be made by hand
or by certified or registered mail, return receipt requested.
In the event of the delivery to the Corporation of a Consent, the
Secretary of the Corporation shall provide for the safe-keeping of such Consent
and shall promptly conduct such ministerial review of the sufficiency of the
Consents and of the validity of the action to be taken by stockholder consent as
the Secretary deems necessary or appropriate, including, without limitation,
whether the holders of a number of shares having the requisite voting power to
authorize or take the action specified in the Consent have given consent;
PROVIDED, HOWEVER, that if the corporate action to which the Consent relates is
the removal or replacement of one or more members of the Board of Directors, the
Secretary of the Corporation shall promptly designate two persons, who shall not
be members of the Board of Directors, to serve as Inspectors with respect to
such Consent and such Inspectors shall discharge the functions of the Secretary
of the Corporation under this Section 10.3. If after such investigation the
Secretary or the Inspectors (as the case may be) shall determine that the
Consent is valid and that the action therein specified has been validly
authorized, that fact shall forthwith be certified on the records of the
Corporation kept for the purpose of recording the proceedings of meetings of
stockholders, and the Consent shall be filed in such records, at which time the
Consent shall become effective as stockholder action. In conducting the
investigation required by this Section 10.3, the Secretary or the Inspectors (as
the case may be) may, at the expense of the Corporation, retain special legal
counsel and any other necessary or appropriate professional advisors, and such
other personnel as they may deem necessary or appropriate to assist them, and
shall be fully protected in relying in good faith upon the opinion of such
counsel or advisors.
SECTION 11. ADJOURNMENT OF MEETING. Any meeting of stockholders,
annual or special, may be adjourned solely by the chair of the meeting from time
to time to reconvene at the same or some other time, date and place. The
stockholders present at a meeting shall not have authority to adjourn the
meeting. Notice need not
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be given of any such adjourned meeting if the time, date and place thereof are
announced at the meeting at which the adjournment is taken. If the time, date
and place of the adjourned meeting are not announced at the meeting at which the
adjournment is taken, then the Secretary of the Corporation shall give written
notice of the time, date and place of the adjourned meeting not less than ten
(10) days prior to the date of the adjourned meeting.
At an adjourned meeting at which a quorum is present, the
stockholders may transact any business which might have been transacted at the
original meeting. Once a share is represented for any purpose at a meeting, it
shall be present for quorum purposes for the remainder of the meeting and for
any adjournment of that meeting unless a new record date is or must be set for
the adjourned meeting. A new record date must be set if the meeting is adjourned
in a single adjournment to a date more than 120 days after the original date
fixed for the meeting. If after the adjournment a new record date is fixed for
the adjourned meeting, notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the adjourned meeting consistent with
the new record date.
SECTION 12. POSTPONEMENT AND CANCELLATION OF MEETING. Any
previously scheduled annual or special meeting of the stockholders may be
postponed, and any previously scheduled annual or special meeting of the
stockholders called by the Board of Directors may be canceled, by resolution of
the Board of Directors upon public notice given prior to the time previously
scheduled for such meeting of stockholders.
ARTICLE III. DIRECTORS.
SECTION 1. GENERAL POWERS, NUMBER, AND TENURE. The business of the
Corporation shall be managed by its Board of Directors, which may exercise all
powers of the Corporation and perform all lawful acts that are not by law, the
Certificate of Incorporation, or these Bylaws directed or required to be
exercised or performed by the stockholders. The number of directors shall be
determined by the Board of Directors; if no such determination is made, the
number of directors shall be one. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Section 2 of this Article,
and each director elected shall hold office until the next annual meeting and
until his successor is elected and shall qualify. Directors need not be
stockholders.
SECTION 2. VACANCIES. If any vacancies occur in the Board of Directors, or
if any new directorships are created, they may be filled by a majority of the
directors then in office, although less than a quorum, or by a sole remaining
director. Each director so chosen shall hold office until the next annual
meeting of the stockholders and until his successor is duly elected and shall
qualify. If there are no directors in office, any officer or stockholder may
call a special meeting of stockholders in accordance with the provisions of the
Certificate of Incorporation or these Bylaws, at which meeting such vacancies
shall be filled.
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SECTION 3. REMOVAL OR RESIGNATION.
3.1 Except as otherwise provided by law or the Certificate of
Incorporation, any director or the entire Board of Directors may be removed,
with or without cause, by the holders of a majority of the share then entitled
to vote at an election of directors.
3.2 Any director may resign at any time by giving written
notice to the Board of Directors, the Chairman of the Board, if any, or the
President or Secretary of the Corporation. Unless otherwise specified in such
written notice, a resignation shall take effect on delivery thereof to the Board
of Directors or the designated officer. It shall not be necessary for a
resignation to be accepted before it becomes effective.
SECTION 4. PLACE OF MEETINGS. The Board of Directors may hold meetings,
both regular and special, either within or without the State of Delaware.
SECTION 5. ANNUAL MEETING. The annual meeting of each newly elected Board
of Directors may be held at a time convenient to the Board. The annual meeting
may be held immediately following the annual meeting of stockholders, and if so
held, no notice of such meeting shall be necessary to the newly elected
directors in order to constitute the meeting legally, provided a quorum shall be
present.
SECTION 6. REGULAR MEETINGS. Additional regular meetings of the Board of
Directors may be held without notice of such time and place as may be determined
from time to time by the Board of Directors.
SECTION 7. SPECIAL MEETINGS. Special meetings of the Board of Directors may
be called by the Chairman of the Board, the President, or by two or more
directors. Notice of a special meet ing of the Board of Directors shall be given
by the person or persons calling the meeting at least twenty-four hours before
the special meeting if such notice is given personally or by telephone or sent
by telegram, telecopier or other electronic means. Notice of a special meeting
of the Board of Directors shall be given by the person or persons calling the
meeting at least three days before the special meeting if given by regular mail.
No notice of a special meeting shall be necessary if the time and place of the
special meeting was set by resolution at a validly convened meeting of the Board
of Directors. The notice of a special meeting need not state the purpose or
purposes of the meeting.
SECTION 8. QUORUM AND ADJOURNMENTS. At all meetings of the Board of
Directors, a majority of the directors then in office shall constitute a quorum
for the transaction of business, and the act of a majority of the directors
present at any meeting at which there is a quorum shall be the act of the Board
of Directors, except as may be otherwise specifically provided by law or the
Certificate of Incorporation. If a quorum is not present at any meeting of the
Board of Directors, the directors present may adjourn the meeting from time to
time, without notice other than announcement at the meeting at which the
adjournment is taken, until a quorum shall be present.
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SECTION 9. COMPENSATION. Directors shall be entitled to such compensation
for their services as directors and to such reimbursement for any reasonable
expenses incurred in attending directors' meetings as may from time to time be
fixed by the Board of Directors. The compensation of directors may be on such
basis as is determined by the Board of Directors. Any director may waive
compensation for any meeting. Any director receiving compensation under these
provisions shall not be barred from serving the Corporation in any other
capacity and receiving compensation and reimbursement for reasonable expenses
for such other services.
SECTION 10. ACTION BY CONSENT. Any action required or permitted to be taken
at any meeting of the Board of Directors may be taken without a meeting, and
without prior notice, if a written consent to such action is signed by all
members of the Board of Directors and such written consent is filed with the
minutes of its proceedings.
SECTION 11. MEETINGS BY TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. The
Board of Directors may participate in a meeting by conference telephone or
similar communications equipment by means of which all directors participating
in the meeting can hear each other, and participation in such a meeting shall
constitute presence in person by any such director at such meeting.
ARTICLE IV. COMMITTEES.
SECTION 1. EXECUTIVE COMMITTEE. The Board of Directors, by resolution
adopted by a majority of the whole Board, may appoint an Executive Committee
consisting of one director, whom shall be designated as Chairman of the
Executive Committee. A member of the Executive Committee shall continue as a
member thereof until the expiration of his term as a director or his earlier
resignation, unless sooner removed as a member or as a director.
SECTION 2. POWERS. The Executive Committee shall have and may exercise
those rights, powers, and authority of the Board of Directors as may from time
to time be granted to it by the Board of Directors to the extent permitted by
law, and may authorize the seal of the Corporation to be affixed to all papers
that may require it.
SECTION 3. PROCEDURE AND MEETINGS. The Executive Committee shall fix its
own rules of procedure and shall meet at such times and at such place or places
as may be provided by such rules or as the members of the Executive Committee
shall fix. The Executive Committee shall keep regular minutes of its meetings,
which it shall deliver to the Board of Directors from time to time. The Chairman
of the Executive Committee shall preside at meetings of the Executive Committee
and shall act as Secretary of the Executive Committee.
SECTION 4. QUORUM. A majority of the Executive Committee shall constitute a
quorum for the transaction of business, and the affirmative vote of a majority
of the members present at any meeting at which there is a quorum shall be
required for any action of the Executive Committee;
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provided, however, that when an Executive Committee of one member is authorized
under the provisions of Section 1 of this Article, that one member shall
constitute a quorum.
SECTION 5. OTHER COMMITTEES. The Board of Directors, by resolutions adopted
by a majority of the whole Board, may appoint such other committee or committees
as it shall deem advisable and with such rights, power, and authority as it
shall prescribe. Each such committee shall consist of one or more directors.
SECTION 6. COMMITTEE CHANGES. The Board of Directors shall have the power
at any time to fill vacancies in, to change the membership of, and to discharge
any committee.
SECTION 7. COMPENSATION. Members of any committee shall be entitled to such
compensation for their services as members of the committee and to such
reimbursement for any reasonable expenses incurred in attending committee
meetings as may from time to time be fixed by the Board of Directors. Any member
may waive compensation for any meeting. Any committee member receiving
compensation under these provisions shall not be barred from serving the
Corporation in any other capacity and from receiving compensation and
reimbursement of reasonable expenses for such other services.
SECTION 8. ACTION BY CONSENT. Any action required or permitted to be taken
at any meeting of any committee of the Board of Directors may be taken without a
meeting if a written consent to such action is signed by all members of the
committee and such written consent is filed with the minutes of its proceedings.
SECTION 9. MEETINGS BY TELEPHONE OR SIMILAR COMMUNICATIONS EQUIPMENT. The
members of any committee designated by the Board of Directors may participate in
a meeting of such committee by conference telephone or similar communications
equipment by means of which all persons participating in such meeting can hear
each other, and participation in such a meeting shall constitute presence in
person by any such committee member at such meeting.
ARTICLE V. NOTICES.
SECTION 1. FORM AND DELIVERY. Except as otherwise provided by law, the
Certificate of Incorporation, or these By-laws, notices to directors and
stockholders may be given personally or in writing by United States regular mail
addressed to the directors or stockholders at their addresses appearing on the
books of the Corporation. Notice shall be deemed given when deposited in the
United States mail with postage pre-paid. Notice to directors also may be given
by telegram, telecopier, telephone or other electronic means.
SECTION 2. WAIVER. Whenever any notice is required to be given under the
provisions of any law, the Certificate of Incorporation, or these Bylaws, a
written waiver thereof signed by the person entitled to said notice, whether
before or after the time stated therein, shall be deemed to be equivalent to
such notice. In addition, any stockholder who attends a meeting of stockholders
in
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person or is represented at such meeting by proxy, without protesting at
the commencement of the meeting the lack of notice thereof to him, or any
director who attends a meeting of the Board of Directors without protesting at
the commencement of the meeting of the lack of notice, shall be conclusively
deemed to have waived notice of such meeting.
ARTICLE VI. OFFICERS.
SECTION 1. DESIGNATIONS. The officers of the Corporation shall be chosen by
the Board of Directors. The Board of Directors may choose a Chairman of the
Board, a President, a Vice President or Vice Presidents, a Secretary, a
Treasurer, one or more Assistant Secretaries and/or Assistant Treasurers, and
other officers and agents that it shall deem necessary or appropriate. All
officers of the Corporation shall exercise the powers and perform the duties
that shall from time to time be determined by the Board of Directors. Any number
of offices may be held by the same person, unless the Certificate of
Incorporation or these Bylaws provide otherwise.
SECTION 2. TERM OF, AND REMOVAL FROM, OFFICE. At its first regular meeting
after each annual meeting of stockholders, the Board of Directors shall choose a
President, a Secretary, and a Treasurer. It may also choose a Chairman of the
Board, a Vice President or Vice Presidents, one or more Assistant Secretaries
and/or Assistant Treasurers, and such other officers and agents as it shall deem
necessary or appropriate. Each officer of the Corporation shall hold office
until his successor is chosen and shall qualify. Any officer elected or
appointed by the Board of Directors may be removed, with or without cause, at
any time by the affirmative vote of a majority of the directors then in office.
Removal from office, however, shall not prejudice the contract rights, if any,
of the person removed. Any vacancy occurring in any office of the Corporation
may be filled for the unexpired portion of the term by the Board of Directors.
SECTION 3. COMPENSATION. The salaries of all officers of the Corporation
shall be fixed from time to time by the Board of Directors, and no officer shall
be prevented from receiving a salary because he is also a director of the
Corporation.
SECTION 4. THE CHAIRMAN OF THE BOARD. The Chairman of the Board, if any,
shall be an officer of the Corporation and, subject to the direction of the
Board of Directors, shall perform such executive, supervisory, and management
functions and duties as may be assigned to him from time to time by the Board of
Directors. He shall, if present, preside at all meetings of stockholders and of
the Board of Directors.
SECTION 5. THE PRESIDENT.
5.1 The President shall be the chief executive officer of the
Corporation and, subject to the direction of the Board of Directors, shall have
general charge of the business, affairs, and property of the Corporation and
general supervision over its other officers and agents. In general, he shall
perform all duties incident to the office of President and shall see that all
orders and resolutions of the Board of Directors are carried into effect.
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5.2 Unless otherwise prescribed by the Board of Directors, the
President shall have full power and authority to attend, act, and vote on behalf
of the Corporation at any meeting of the security holders of other corporations
in which the Corporation may hold securities. At any such meeting, the President
shall possess and may exercise any and all rights and powers incident to the
ownership of such securities that the Corporation might have possessed and
exercised if it had been present. The Board of Directors may from time to time
confer like powers upon any other person or persons.
SECTION 6. THE VICE PRESIDENT. The Vice President, if any, or in the event
there be more than one, the Vice Presidents in the order designated, or in the
absence of any designation, in the order of their election, shall, in the
absence of the President or in the event of his disability, perform the duties
and exercise the powers of the President and shall generally assist the
President and perform such other duties and have such other powers as may from
time to time be prescribed by the Board of Directors.
SECTION 7. THE SECRETARY. The Secretary shall attend all meetings of the
Board of Directors and the stockholders and record all votes and the proceedings
of the meetings in a book to be kept for that purpose. He shall perform like
duties for the Executive Committee or other committees, if required. He shall
give, or cause to be given, notice of all meetings of stockholders and special
meetings of the Board of Directors, and shall perform such other duties as may
from time to time be prescribed by the Board of Directors, the Chairman of the
Board, or the President, under whose supervision he shall act. He shall have
custody of the seal of the Corporation, and he, or an Assistant Secretary, shall
have authority to affix it to any instrument requiring it, and, when so affixed,
the seal may be attested by his signature or by the signature of the Assistant
Secretary. The Board of Directors may give general authority to any other
officer to affix the seal of the Corporation and to attest the affixing thereof
by his signature.
SECTION 8. THE ASSISTANT SECRETARY. The Assistant Secretary, if any, or in
the event there be more than one, the Assistant Secretaries in the order
designated, or in the absence of any designation, in the order of their
election, shall, in the absence of the Secretary or in the event of his
disability, perform the duties and exercise the powers of the Secretary and
shall perform such other duties and have such other powers as may from time to
time be prescribed by the Board of Directors.
SECTION 9. THE TREASURER. The Treasurer shall have custody of the corporate
funds and other valuable effects, including securities, and shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable effects in the name
and to the credit of the Corporation in such depositories as may from time to
time be designated by the Board of Directors. He shall disburse the funds of the
Corporation in accord with the orders of the Board of Directors, taking proper
vouchers for such disbursements, and shall render to the Chairman of the Board,
if any, the President, and the Board of Directors, whenever they may require it
or at regular meetings of the Board, an account of all his transactions as
Treasurer and of the financial condition of the Corporation.
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SECTION 10. THE ASSISTANT TREASURER. The Assistant Treasurer, if any, or in
the event there shall be more than one, the Assistant Treasurers in the order
designated, or in the absence of any designation, in the order of their
election, shall, in the absence of the Treasurer or in the event of his
disability, perform such other duties and have such other powers as may from
time to time be prescribed by the Board of Directors.
ARTICLE VII. INDEMNIFICATION
SECTION 1. RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and/or
hold harmless, as such separate and independent rights shall be applicable to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person (a "Covered Person") who was or is made or is
threatened to be made a party or is otherwise involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
"proceeding"), by reason of the fact that he, or a person for whom he is the
legal representative, is or was a director or officer of the Corporation or,
while a director or officer of the Corporation, is or was serving at the request
of the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust, enterprise or nonprofit
entity, including service with respect to employee benefit plans, against all
liability and loss suffered and expenses (including attorneys' fees) reasonably
incurred by such Covered Person. Notwithstanding the preceding sentence, except
as otherwise provided in Article VII, Section 3 hereof, the Corporation shall be
required to indemnify a Covered Person in connection with a proceeding (or part
thereof) commenced by such Covered Person only if the commencement of such
proceeding (or part thereof) by the Covered Person was authorized by the Board
of Directors.
SECTION 2. PREPAYMENT OF EXPENSES. The Corporation shall pay the expenses
(including attorneys' fees) incurred by a Covered Person in defending any
proceeding as incurred and in advance of its final disposition, PROVIDED,
HOWEVER, that, to the extent required by law, such payment of expenses in
advance of the final disposition of the proceeding shall be made only upon
receipt of an undertaking by the Covered Person to repay all amounts advanced if
it should be ultimately determined that the Covered Person is not entitled to be
indemnified under this Article VII or otherwise. Except as otherwise provided in
Article VII, Section 3 hereof, the Corporation shall be required to pay expenses
in advance in connection with a proceeding (or part thereof) commenced by a
Covered Person only if the commencement of such proceeding (or part thereof) by
the Covered Person was authorized by the Board of Directors.
SECTION 3. CLAIMS. If a claim for indemnification or advancement of
expenses under this Article VII is not paid in full within thirty days after a
written claim therefor by the Covered Person has been received by the
Corporation, the Covered Person may file suit to recover the unpaid amount of
such claim and, if successful in whole or in part, shall be entitled to be paid
the expense of prosecuting such claim. In any such action the Corporation shall
have the burden of proving that the Covered Person is not entitled to the
requested indemnification or advancement of expenses under applicable law.
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SECTION 4. NONEXCLUSIVITY OF RIGHTS. The rights conferred on any Covered
Person by this Article VII shall not be exclusive of any other rights which such
Covered Person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, these By-laws, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 5. OTHER SOURCES. The Corporation's obligation, if any, to
indemnify or to advance expenses to any Covered Person who was or is serving at
its request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, enterprise or nonprofit entity shall be
reduced by any amount such Covered Person may collect as indemnification or
advancement of expenses from such other corporation, partnership, joint venture,
trust, enterprise or non-profit enterprise.
SECTION 6. AMENDMENT OR REPEAL. Any repeal or modification of the foregoing
provisions of this Article VII shall not adversely affect any right or
protection hereunder of any Covered Person in respect of any act or omission
occurring prior to the time of such repeal or modification.
SECTION 7. OTHER INDEMNIFICATION AND PREPAYMENT OF EXPENSES. This Article
VII shall not limit the right of the Corporation, to the extent and in the
manner permitted by law, to indemnify and to advance expenses to persons other
than Covered Persons when and as authorized by appropriate corporate action.
ARTICLE VIII. AFFILIATED TRANSACTIONS AND INTERESTED DIRECTORS.
SECTION 1. AFFILIATED TRANSACTIONS. No contract or transaction between the
Corporation and one or more of its directors or officers, or between the
Corporation and any other corporation, partnership, association, or other
organization in which one or more of its directors or officers are directors or
officers or have a financial interest, shall be void or voidable solely for this
reason, or solely because the director or officer is present at or participates
in the meeting of the Board of Directors or committee thereof that authorizes
the contract or transaction or solely because his or their votes are counted for
such purpose if:
1.1 The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board of Directors or committee in good
faith authorizes the contract or transaction by the affirmative vote of a
majority of the disinterested directors, even though the disinterested directors
be less than a quorum; or
1.2 The material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, or ratified by the Board of Directors, a committee
thereof, or the stockholders.
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SECTION 2. DETERMINING QUORUM. Common or interested directors may be
counted in determining the presence of a quorum at a meeting of the Board of
Directors or of a committee thereof which authorizes the contract or
transaction.
ARTICLE IX. STOCK CERTIFICATES.
SECTION 1. FORM AND SIGNATURES.
1.1 Every holder of stock of the Corporation shall be entitled to
a certificate stating the number and class, and series, if any, of shares owned
by him, signed by the Chairman of the Board, if any, or the President and the
Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary
of the Corporation, and bearing the seal of the Corporation. The signatures and
the seal may be facsimiles. A certificate may be signed, manually or by
facsimile, by a transfer agent or registrar other than the Corporation or its
employee. In case any officer who has signed, or whose facsimile signature was
placed on, a certificate shall have ceased to be such officer before the
certificate is issued, it may nevertheless be issued by the Corporation with the
same effect as if he were such officer at the date of its issue.
1.2 All stock certificates representing shares of capital stock
that are subject to restrictions on transfer or to other restrictions may have
imprinted thereon any notation to that effect determined by the Board of
Directors.
SECTION 2. REGISTRATION OF TRANSFER. Upon surrender to the Corporation or
any transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment, or authority to
transfer, the Corporation or its transfer agent shall issue a new certificate to
the person entitled thereto, cancel the old certificate, and record the
transaction upon the books of the Corporation.
SECTION 3. REGISTERED STOCKHOLDERS.
3.1 Except as otherwise provided by law, the Corporation shall be
entitled to recognize the exclusive right of a person who is registered on its
books as the owner of shares of its capital stock to receive dividends or other
distributions and to vote or consent as such owner, and to hold liable for calls
and assessments any person who is registered on its books as the owner of shares
of its capital stock. The Corporation shall not be bound to recognize any
equitable or legal claim to, or interest in, such shares on the part of any
other person.
3.2 If a stockholder desires that notices and/or dividends shall
be sent to a name or address other than the name or address appearing on the
stock ledger maintained by the Corporation, or its transfer agent or registrar,
if any, the stockholder shall have the duty to notify the Corporation, or its
transfer agent or registrar, if any, in writing of his desire and specify the
alternate name or address to be used.
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SECTION 4. RECORD DATE. In order that the Corporation may determine the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action other than stockholder action by written consent, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date: (i) in the case of determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than sixty (60)
nor less than ten (10) days before the date of such meeting, and (ii) in the
case of any other lawful action other than stockholder action by written
consent, shall not be more than sixty days prior to such other action. If no
record date is fixed by the Board of Directors: (i) the record date for
determining stockholders entitled to notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held, and (ii) the record
date for determining stockholders for any other purpose (other than stockholder
action by written consent) shall be at the close of business on the day on which
the Board of Directors adopts the resolution relating thereto. A determination
of stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided, however,
that the Board of Directors may fix a new record date for the adjourned meeting.
SECTION 5. LOST, STOLEN, OR DESTROYED CERTIFICATES. The Board of Directors
may direct that a new certificate be issued to replace any certificate
theretofore issued by the Corporation that, it is claimed, has been lost,
stolen, or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen, or destroyed. When authorizing the
issue of a new certificate, the Board of Directors may, in its discretion and as
a condition precedent to the issuance thereof, require the owner of the lost,
stolen, or destroyed certificate, or his legal representative, to advertise the
same in such manner as it shall require, and/or to give the corporation a bond
in such sum, or other security in such form, as it may direct as indemnity
against any claims that may be made against the Corporation with respect to the
certificate claimed to have been lost, stolen, or destroyed.
ARTICLE X. GENERAL PROVISIONS.
SECTION 1. DIVIDENDS. Subject to the provisions of law and the Certificate
of Incorporation, dividends upon the outstanding capital stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, in property, or in shares of the Corporation's
capital stock.
SECTION 2. RESERVES. The Board of Directors shall have full power, subject
to the provisions of law and the Certificate of Incorporation, to determine
whether any, and if so, what part,
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of the funds legally available for the payment of dividends shall be declared as
dividends and paid to the stockholders of the Corporation. The Board of
Directors, in its sole discretion, may fix a sum that may be set aside or
reserved over and above the paid-in capital of the Corporation as a reserve for
any proper purpose, and may, from time to time, increase, diminish, or vary such
amount.
SECTION 3. FISCAL YEAR. Except as from time to time otherwise provided by
the Board of Directors, the fiscal year of the Corporation shall end on December
31 in each year.
SECTION 4. SEAL. The corporate seal shall have inscribed thereon the name
of the Corporation, the year of its incorporation, and the words "Corporate
Seal" and "Delaware".
ARTICLE XI. AMENDMENTS.
The Board of Directors shall have the power to alter and repeal these
Bylaws and to adopt new Bylaws.
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