SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Serologicals Corporation
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(Exact name of registrant as specified in its charter)
Delaware 58-2142225
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(State of incorporation (IRS Employer
or organization) Identification No.)
780 Park North Blvd., Suite 110, Clarkston, GA 30021
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which each class is to
To be so registered be registered
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights
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(Title of Class)
Item 1. Description of Registrant's Securities to be Registered.
On July 26, 1999, the board of directors of Serologicals Corporation
(the "Company") declared a dividend of one preferred stock purchase right
for each outstanding share of common stock, par value $.01 per share, of
the Company, payable to stockholders on August 25, 1999. The description
and terms of the rights are contained in a rights agreement, dated as of
August 2, 1999, between the Company and State Street Bank & Trust Company,
N.A., as rights agent. You should carefully read the rights agreement
attached hereto as Exhibit 2.2.
Each right will entitle its registered holder from and after the
Distribution Date (as defined below) until August 2, 2009, or, if earlier,
until the redemption or exchange of the rights, to buy 1/1,000 of a share
of the Company's Series B preferred stock, par value $.01 per share, at an
exercise price of $45.00, subject to certain antidilution adjustments.
The rights will not, however, be exercisable, transferable separately
or trade separately from the shares of common stock, until the earlier of
I. the 10th business day after the date a person or group publicly
announces that it is an Acquiring Person, or
II. the 10th business day (or such later day as the Company's board
of directors determines) after a person or group announces a
tender or exchange offer, which, if consummated, would result
in such person or group becoming an Acquiring Person
The earlier of such dates is referred to herein as the "Distribution
Date."
In general, an "Acquiring Person" refers to any person or group of
affiliated persons (other than the Company, any of its subsidiaries, or
certain benefit plans and other entities affiliated with the Company or its
subsidiaries and any person or group of affiliated persons whose acquisition
of 15% or more is approved by the Company's board of directors in advance)
who, after the date of adoption of the rights agreement, acquires beneficial
ownership of 15% or more of the outstanding shares of common stock.
No person or group who beneficially owned 15% or more of the outstanding
shares of common stock on August 25, 1999 will be considered an Acquiring
Person unless such person or group acquires an additional number of shares of
Common Stock greater than 2% of the number of such shares outstanding, other
than in a transaction approved by the Company's Board of Directors in advance.
If a person or group of affiliated persons becomes an Acquiring Person,
then each right (other than rights owned by such Acquiring Person, and its
affiliates and associates, which will be null and void) will entitle the
holder to purchase, for the exercise price, a number of shares of the
Company's common stock having a then current market value of twice) the
exercise price. Accordingly, at the original exercise price of $45.00, each
right would entitle its registered holder to purchase $90.00 worth of common
stock for $45.00.
-2-
If at any time after the date of public announcement of the existence
of an Acquiring Person
III. the Company merges into another entity
IV. an acquiring entity merges into the Company and the common
stock of the Company is changed into or exchanged for other
securities or assets of the acquiring entity, or
V. the Company sells more than 50% of its assets or earning
power
then each right will entitle the holder thereof to purchase, for the exercise
price, a number of shares of common stock of such other entity having a
current market value of twice the exercise price.
The foregoing will not apply to a transaction approved by a majority of
the board of directors.
The rights are redeemable at the Company's option, at any time until the
10th day following a public announcement of an Acquiring Person, for $.01 per
right, payable in cash or shares of common stock.
At any time after any person becomes an Acquiring Person, the board of
directors of the Company may exchange the rights (other than rights owned by
the Acquiring Person and its affiliates and associates, which will be null and
void), in whole or in part, for common stock on the basis of an exchange ratio
of one share of common stock for each right (subject to adjustment).
As long as the rights are attached to the common stock, each share of
common stock issued by the Company will also evidence one right. Until the
Distribution Date, the rights will be represented by the common stock
certificates and will be transferred only with the common stock certificates;
separate certificates representing the rights will be mailed, however, to
holders of the common stock as of the Distribution Date. The holders of
rights will not have any voting rights or be entitled to dividends until the
rights are exercised.
The purchase price payable, and the number of shares of preferred stock
or other securities or property issuable, upon exercise of the rights are
subject to adjustment from time to time to prevent dilution in the event of
certain stock dividends on, or subdivisions, combinations or reclassifications
of, the shares of common stock prior to the Distribution Date, and in certain
other events.
-3-
The board of directors of the Company may amend the rights agreement in
any manner prior to the Distribution Date. After the Distribution Date, the
board of directors may amend the rights agreement only
VI. to cure ambiguities,
VII. to shorten or lengthen any time period (subject to certain
limitations), or
VIII. if such amendment does not adversely affect the interests of
the rights holders and does not relate to any principal
economic term of the rights.
Item 2. Exhibits.
2.1. Specimen Form of Rights Certificate (attached as Exhibit B to the
Rights Agreement).
2.2. Form of Rights Agreement, dated as of August 2, 1999, between
Serologicals Corporation and State Street Bank & Trust Company, N.A.
2.3 Form of Certificate of Designation, Preferences and Rights of
Series B Preferred Stock (attached as Exhibit A to the Rights
Agreement).
2.4 Summary of Rights Agreement (attached as Exhibit C to the Rights
Agreement).
2.5. Press Release.
SIGNATURE
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Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
SEROLOGICALS CORPORATION
Date: August 2, 1999 By /s/ Russell H. Plumb
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Russell H. Plumb
Vice President, Finance and
Chief Financial Officer
-4-
EXHIBIT INDEX
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2.1 Specimen Form of Rights Certificate (attached as
Exhibit B to the Rights Agreement).
2.2 Form of Rights Agreement, dated as of August 2, 1999, between
Serologicals Corporation and State Street Bank & Trust Company, N.A.
2.3 Form of Certificate of Designation, Preferences and Rights of
Series B Preferred Stock (attached as Exhibit A to the Rights
Agreement).
2.4 Summary of Rights Plan (attached as Exhibit C
to the Rights Agreement).
2.5 Press Release.
- 5 -
EXHIBIT B
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/FORM OF RIGHTS CERTIFICATE/
Certificate No. R- Rights
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NOT EXERCISABLE AFTER THE CLOSE OF BUSINESS ON AUGUST 2, 2009 OR EARLIER IF
REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT ONE CENT ($.01) PER RIGHT, ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR IS AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.]1
RIGHTS CERTIFICATE
OF
SEROLOGICALS CORPORATION
THIS RIGHTS CERTIFICATE (this "Rights Certificate") 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 2, 1999 (the "Rights Agreement"), between
SEROLOGICALS CORPORATION, a Delaware corporation (the "Company"), and STATE
STREET BANK & TRUST COMPANY, N.A. (the "Rights Agent"), to purchase from
the Company at any time prior to 5:00 P.M. (New York City time) on August
2, 2009 at the office or offices of the Rights Agent, designated for such
purpose, or its successors as Rights Agent, one one-thousandth (.001) of a
fully paid, non-assessable share of Series B Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of forty-five
dollars ($45.00) per one-one thousandth (.001) of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with
the Form of Election to Purchase and related Certificate of Assignment duly
executed. The Purchase Price shall be paid in cash. 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
25, 1999, based on the Preferred Stock as constituted at such date.
Capitalized terms used and not otherwise defined herein shall have the
respective meanings given to those terms in the Rights Agreement.
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1The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Acquiring Person,
(ii) a transferee of any such Acquiring Person or Associate or Affiliate of
such Acquiring Person who becomes a transferee after such Acquiring Person,
Associate or Affiliate becomes such, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of any such Acquiring
Person, Associate, or Affiliate who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such, such Rights shall
become null and void and no holder hereof shall have any right with respect
to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities, 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, including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates, which limitations of rights include the temporary suspension
of the exercisability of such Rights under the specific circumstances set
forth in the Rights Agreement. Copies of the Rights Agreement are on file
at the above-mentioned office of the Rights Agent and are also available
upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares (in one
one-thousandth (.001) of a share increments) of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (A) may be redeemed by the Company at its
option at a redemption price of one cent ($.01) per Right in cash or in
shares of Common Stock at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock Acquisition Date (as
such time period may be extended pursuant to the Rights Agreement), and
(ii) the Final Expiration Date (as defined in the Rights Agreement) and
(B) may be exchanged at the election of the Company in whole or in part
for shares of the Company's Common Stock, par value one cent ($.01) per
share, as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-thousandth (.001) of a share of
Preferred Stock, which may, at the election of the Company, be evidenced
by depository receipts), but in lieu thereof a cash payment will be made,
as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares 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 corporate action, or, to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as
provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
SEROLOGICALS CORPORATION
By:
---------------------------------
ATTEST: Name:
-------------------------------
By: Title:
----------------------------- ------------------------------
Name:
--------------------------
Secretary
Countersigned:
By:
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Name:
/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)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
------------------------
Attorney, to transfer this Rights Certificate on the books of the
Within-named Company, with full power of substitution.
Dated:
------------------, --------
Signature
Signature Guaranteed:
CERTIFICATE OF ASSIGNMENT
THE UNDERSIGNED hereby certifies by checking the appropriate boxes the
following:
(1) That the Rights Certificate of Serologicals Corporation,
Certificate No. R- for Rights (the "Rights Certificate")
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/ / is / / is not being sold, assigned and transferred by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) That after due inquiry and to the best knowledge of the
undersigned, it / / did / / did not acquire the Rights evidenced by the
Rights Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,
----- Signature
Signature Guaranteed:
NOTICE
------
THE SIGNATURE TO THE FOREGOING ASSIGNMENT AND CERTIFICATE OF
ASSIGNMENT MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE OF THE
RIGHTS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT
OR ANY CHANGE WHATSOEVER.
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise Rights represented
by the Rights Certificate.)
TO: SEROLOGICALS CORPORATION
THE UNDERSIGNED hereby irrevocably elects to exercise Rights
represented by the Rights Certificate of Serological Corporation,
Certificate No. R- (the "Rights Certificate"), to purchase the shares
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of Preferred Stock issuable upon the exercise of the Rights (or such other
securities of Serologicals Corporation or of any other person which may be
issuable upon the exercise of the Rights) as of this day of ,
--- ----------
, and requests that certificates for such shares be issued in the
- -------
name of and delivered to:
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 the
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
-------------------------
(Please print name and address)
Dated: ,
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Signature
Signature Guaranteed:
CERTIFICATE OF ELECTION TO PURCHASE
-----------------------------------
THE UNDERSIGNED hereby certifies by checking the appropriate boxes as
follows:
(1) That the Rights evidenced by the Rights Certificate of
Serologicals Corporation, Certificate No. R- (the "Rights
-----
Certificate"), are / / are / / not being exercised by or on behalf of a
Person who is or was an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined pursuant to the Rights
Agreement); and
(2) That after due inquiry and to the best knowledge of the
undersigned, it / / did / / did not acquire the Rights evidenced by the
Rights Certificate from any Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ,
---- Signature
Signature Guaranteed:
NOTICE
------
THE SIGNATURE TO THE FOREGOING ELECTION TO PURCHASE AND CERTIFICATE OF
ELECTION TO PURCHASE MUST CORRESPOND TO THE NAME AS WRITTEN UPON THE FACE
OF THE RIGHTS CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER.
- -----------------------------------------------------------------------------
SEROLOGICALS CORPORATION
AND
STATE STREET BANK & TRUST COMPANY, N.A.
as Rights Agent
RIGHTS AGREEMENT
DATED AS OF AUGUST 2, 1999
- -----------------------------------------------------------------------------
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (this "Agreement"), dated as of this first day of
August, 1999, is entered into by and between SEROLOGICALS CORPORATION, a
Delaware corporation (the "Company"), and STATE STREET BANK & TRUST COMPANY,
N.A. (the "Rights Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, on July 26, 1999 (the "Rights Dividend Declaration Date"),
the Board authorized and declared a dividend of one Right for each share of
common stock, par value one cent ($.01) per share, of the Company ("Common
Stock") outstanding at the close of business on August 25, 1999 (the
"Record Date"), and has further authorized the issuance of one Right (as
such number may hereinafter be adjusted pursuant to the provisions of
Section 11(p) hereof) for each share of Common Stock of the Company issued
between the Record Date (whether originally issued and delivered from the
Company's treasury) and the earlier of the Expiration Date or Distribution
Date, each Right initially representing the right to purchase one one-
thousandth (.001) of a share of Series B Preferred Stock of the Company
having the rights, powers and preferences set forth in the form of
Certificate of Designation, Preferences and Rights, attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set
forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of fifteen percent (15%) or more of the shares of Common
Stock then outstanding, but shall not include an Exempt Person.
(b) "Act" shall mean the Securities Act of 1933, as amended, and
any subsequent federal statute succeeding to the provisions thereof.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
(e) "Agreement" shall mean this Rights Agreement as originally
executed or as it may be supplemented or amended from time to time pursuant
to the applicable provisions hereof.
(f) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities as follows:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities) or upon the exercise of conversion rights, exchange rights,
rights (other than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the "Beneficial Owner"
3
of, or to "beneficially own," (A) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, or (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Triggering Event, or (C)
securities issuable upon exercise of Rights from and after the occurrence
of a Triggering Event which Rights were acquired by, or on behalf of, such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(a)(i) hereof in connection
with an adjustment made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), including pursuant
to any agreement, arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own," any security which (A) arises solely from a
revocable proxy given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable provisions of the
General Rules and Regulations under the Exchange Act, and (B) is not also
then reportable by such Person on Schedule 13D or 13G under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to subparagraph (ii) of this paragraph
(c)) or disposing of any voting securities of the Company; provided,
however, that nothing in this paragraph (c) shall cause a person engaged in
business as an underwriter of securities to be the "Beneficial Owner" of,
or to "beneficially own," any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition.
4
(iv) Notwithstanding anything to the contrary contained
herein, no director or officer or other employee of the Company shall be
deemed the "Beneficial Owner" of, or to "beneficially own," any security
beneficially owned by any other director, officer or other employee by
virtue of the common status of such persons as directors, officers or
employees of the Company, as the case may be.
(g) "Board" shall mean the Board of Directors of the Company.
(h) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which is a legal holiday in the city in which the
principal executive offices of the Company are located.
(i) "Close of Business" on any given date shall mean 5:00 P.M.,
Eastern Standard Time (EST), on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., EST, on the next
succeeding Business Day.
(j) "Common Stock" shall mean the common stock, par value one
cent ($.01) per share of the Company, or such other amount as may
hereinafter be designated, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock
of such other Person or the equity securities or other equity interest
having power to control or direct the management, of such Person.
(k) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii) hereof.
5
(l) "Company" shall mean the person named as the "Company" in the
first paragraph of this Agreement until a successor corporation shall have
become such, or until a Principal Party shall assume, and thereafter be
liable for, all obligations and duties of the Company hereunder, pursuant
to the applicable provisions of this Agreement, and thereafter "Company"
shall mean such successor corporation or Principal Party.
(m) The term "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) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(p) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
(q) "Exchange Ratio" shall have the meaning set forth in Section
23(a) hereof.
(r) "Exempt Person" shall mean (i) the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any Subsidiary
of the Company, or any Person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan; (ii) any
Person who is the Beneficial Owner of fifteen percent (15%) or more of the
outstanding shares of Common Stock on the date of this Agreement until such
time hereafter as such person shall become the Beneficial Owner (other than
by means of a stock dividend or stock split or in connection with an
employee or other direct stock option program of the Company) an additional
number of shares of Common Stock greater than two percent (2%) of the
6
number of such shares outstanding; (iii) any Person who inadvertently
acquired Beneficial Ownership of fifteen (15%) or more of the outstanding
shares of Common Stock or otherwise acquired Beneficial Ownership of shares
of Common Stock without any plan or intention to seek control of the
Company and without knowledge that such acquisition would make such Person
an Acquiring Person, if, in either case, such Person promptly divests
(without exercising or retaining any power, including voting, with respect
to such shares) a sufficient number of shares of Common Stock (or
securities convertible into Common Stock) so that such Person ceases to be
the Beneficial Owner of a number of shares of Common Stock that would
otherwise cause such Person to be an Acquiring Person, after notice by the
Company that such Person will be deemed by the Company to be an Acquiring
Person unless it makes such divestitures; or (iv) any Person whose
Beneficial Ownership of fifteen percent (15%) or more of the outstanding
shares of Common Stock is approved in advance (but only to the extent of
Beneficial Ownership which is so approved) by the Board (any such
transaction or series of transactions in this clause (iv) is referred to
herein as an "Approved Transaction"). Notwithstanding the foregoing, no
Person shall become an Acquiring Person as the result of an acquisition of
shares of Common Stock by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares
beneficially owned by such Person to fifteen percent (15%) or more of the
shares of Common Stock then outstanding, provided, however that if a Person
shall become the Beneficial Owner of fifteen percent (15%) or more of the
shares of Common Stock then outstanding by reason of such share
acquisitions by the Company and thereafter become the Beneficial Owner of
any additional shares of Common Stock, then such Person shall be deemed to
be an Acquiring Person unless, upon the consummation of the acquisition of
such additional shares of Common Stock, such Person does not own fifteen
percent (15%) or more of the shares of Common Stock then outstanding. The
phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of
such securities then issued and outstanding together with the number of
such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
7
(s) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(t) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(u) "Original Rights" shall have the meaning set forth in Section
1(g)(i) hereof.
(v) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(w) "Preferred Stock" shall mean shares of Series B Preferred
Stock, par value one cent ($.01) per share, of the Company having the
rights and preferences set forth in the form of Certificate of Designation,
Preferences and Rights attached to this Agreement as Exhibit A and, to the
extent that there are not a sufficient number of shares of Series B
Preferred Stock authorized to permit the full exercise of the Rights, any
other series of Preferred Stock, par value one cent ($.01) per share, of
the Company designated for such purpose containing terms substantially
similar to the terms of the Series B Preferred Stock.
(x) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(y) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.
(z) "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(aa) "Redemption Price" shall have the meaning set forth in
Section 24(a) hereof.
8
(bb)"Rights" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(cc) "Rights Agent" shall mean the Person named as the "Rights
Agent" in the first paragraph of this Agreement until a successor Rights
Agent shall have become such pursuant to the applicable provisions hereof,
and thereafter the "Rights Agent" shall mean such successor Rights Agent.
If at any time there is more than one Person appointed by the Company as
Rights Agent pursuant to the applicable provision of this Agreement,
"Rights Agent" shall mean and include each such Person.
(dd) "Rights Certificates" shall have the meaning set forth in
Section 3(a) hereof.
(ee) "Rights Dividend Declaration Date" shall have the meaning
set forth in the WHEREAS clause at the beginning of this Agreement.
(ff) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(gg) "Section 11(a)(iii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(hh) "Section 13 Event" shall have the meaning set forth in
clauses (x), (y), or (z) of Section 13(a) hereof.
(ii) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
(jj) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
9
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(kk) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at
least a majority of the directors of such corporation is beneficially
owned, directly or indirectly, by such Person, or otherwise controlled by
such Person.
(ll) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(mm) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(nn) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(oo) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such 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 shall in no event be liable for, the acts or omissions
of any such co-Rights Agent.
10
Section 3. Issue of Rights Certificates.
(a) Until the earliest to occur of (i) the Close of Business on
the tenth (10th) day after the Stock Acquisition Date (or, if the tenth
(10th) day after the Stock Acquisition Date occurs before the Record Date,
the Close of Business on the Record Date), or (ii) the Close of Business on
the tenth (10th) business day (or such later day as may be determined by
action of the Board of Directors prior to such time as any Person becomes
an Acquiring Person) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan) is first published or sent or given
within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if upon consummation thereof, such Person would be
the Beneficial Owner of fifteen percent (15%) or more of the shares of
Common Stock then outstanding (the earlier to occur of the events described
in clauses (i) and (ii) of this paragraph (a) being herein referred to as
the "Distribution Date"), the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders thereof (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and will be transferable only in
connection with the transfer of the underlying 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 record holder of the
Common Stock as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more
rights certificates, in substantially the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
11
(b) On or as promptly as practicable following the Record Date,
the Company will send a copy of a Summary of Rights, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"), by first-
class, postage prepaid mail, to each record holder of the Common Stock as
of the close of business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for the
Common Stock outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for the Common
Stock and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any certificates
representing shares of Common Stock in respect of which Rights have been
issued shall also constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date. Certificates representing
such shares of Common Stock shall also be deemed to be certificates for
Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between Serologicals Corporation (the "Company") and State
Street Bank & Trust Company, N.A. (the "Rights Agent") dated
as of August 2, 1999 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which
is on file at the principal offices of the Rights Agent. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without charge promptly after
12
receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is or was an Acquiring Person or
any Affiliate or Associate thereof (as such terms are defined in
the Rights Agreement), whether currently held by or on behalf of
such Person or by any subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration Date,
the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone, 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 certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall each
be substantially in the form set forth in Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase such
number of shares (in one one-thousandth (.001) of a share increments) of
Preferred Stock as shall be set forth therein at the price set forth
13
therein (the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by (i) an
Acquiring Person, or any Associate or Affiliate of any Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement, or understanding regarding the transferred Rights or (B) a
transfer which the Board has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of the
provisions of Section 7(e) hereof, and any Rights Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange,
replacement or adjustment of any other Rights Certificate referred to in
this sentence, shall contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or is an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of
such Agreement.
14
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and shall have affixed thereto
the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually or by
facsimile signature countersigned by the Rights Agent and shall not be
valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement, any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office designated as the appropriate place for
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of
the Rights Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
15
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Rights Certificates 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 shares (in one one-thousandth (.001) of a share increments) of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or
former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Rights Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate
or Rights Certificates to be transferred, split up, combined or exchanged
at the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request. Thereupon
the Rights Agent shall, subject to Section 4(b), Section 7(e) and Section
14 hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and
16
delivery to the registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein, including, without limitation, the restrictions
on exercisability set forth in Section 9(c), Section 11(a)(iii), Section
23(b) and Section 24(a) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form
of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or offices of
the Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of shares (in one
one-thousandth (.001) of a share increments) of Preferred Stock (or other
shares, securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, at or prior to the earlier of
(i) the close of business on August 2, 2009 (the "Final Expiration Date"),
or (ii) the time at which the Rights are redeemed as provided in Section 24
hereof (the earlier of (i) and (ii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price of each one one-thousandth (.001) of a
share of Preferred Stock pursuant to the exercise of a Right shall
initially be forty-five dollars ($45.00), and shall be subject to
adjustment from time to time as provided in Sections 11 and 13(a) hereof
and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price and an amount equal to any applicable transfer tax,
the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(i) (A) requisition from any transfer agent of the shares of Preferred
17
Stock (or make available, if the Rights Agent is the transfer agent for
such shares) certificates for the total number of shares (in one one-
thousandth (.001) of a share increments) of Preferred Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests, or (B) if the Company shall have elected to deposit
the total number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depository agent, requisition from the depository
agent of depository receipts representing such number of shares (in one
one-thousandth (.001) of a share increments) of Preferred Stock as are to
be purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with
the depository agent) and the Company hereby directs the depository agent
to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depository receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, and
(iv) when appropriate, after receipt thereof, deliver such cash, if any, to
or upon the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) may be made in cash or by certified bank check
or bank draft payable to the order of the Company. In the event that the
Company is obligated to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that such
other securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon
the order of, the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
18
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person, or an Associate or
Affiliate of an Acquiring Person, which the Board, in its sole discretion,
determines is or was involved in or caused or facilitated, directly or
indirectly (including through any change in the Board), such Section
11(a)(ii) Event, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of any such Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such and receives such
rights pursuant to either (A) a transfer (whether or not for consideration)
from such Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any continuing
agreement, arrangement, or understanding regarding the transferred Rights,
or (B) a transfer which the Board has determined is part of a plan,
arrangement, or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or other Person as a result of its failure to make any
determinations hereunder with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
19
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any other
Rights Certificates purchased or acquired by the Company otherwise than
upon the exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out
of its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on
any national securities exchange or automated quotation system, the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed on
such exchange or quotation system upon official notice of issuance upon
such exercise.
20
(c) The Company shall use its best efforts to (i) file, as soon
as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, a registration statement under the Securities
Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the date of the expiration of the
Rights. The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of
the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed
ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. In addition, if the Company shall
determine that a registration statement is required following the
Distribution Date, the Company may temporarily suspend the exercisability
of the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained
or the exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take such
action as may be necessary to ensure that all shares (in one one-thousandth
(.001) of a share increments) of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
21
certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of shares (in one
one-thousandth (.001) of a share increments) of Preferred Stock (or Common
Stock and/or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any transfer
tax which may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a
number of shares (in one one-thousandth (.001) of a share increments) of
Preferred Stock (or Common Stock and/or other securities, as the case may
be) in respect of a name other than that of, the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise or to issue
or deliver any certificates for a number of shares (in one one-thousandth
(.001) of a share increments) of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have
been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date.
Each person in whose name any certificate for a number of shares (in
one one-thousandth (.001) of a share increments) of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or Common
Stock and/or other securities, as the case may be) represented thereby on,
and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or Common Stock and/or other securities, as the
case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a stockholder of
the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Stock
payable in shares of Preferred Stock, (B) subdivide the outstanding
Preferred Stock into a greater number of shares, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right
23
had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 23 of this Agreement, in the event that
any Person, alone or together with its Affiliates and Associates, shall
become an Acquiring Person, unless the event causing such Person to become
an Acquiring Person is a transaction set forth in Section 13(a) hereof,
then, promptly following the date of the occurrence of such event, proper
provision shall be made so that each holder of a Right (except as provided
below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of the number of
shares (in one one-thousandth (.001) of a share increments) of Preferred
Stock, such number of shares of Common Stock of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase Price by
the then number of shares (in one one-thousandth (.001) of a share
increments) of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, and
(y) dividing that product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by fifty percent (50%) of the current
market price (determined pursuant to Section 11(d) hereof) per share of
Common Stock on the date of such first occurrence (such number of shares,
the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's certificate of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit the exercise in full of the
24
Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess shall be referred to
herein as the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price,
(3) Common Stock or other equity securities of the Company (including,
without limitation, shares, or units of shares, of preferred stock which
the Board has deemed to have the same value as shares of Common Stock (such
shares of preferred stock shall be referred to herein as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment banking
firm selected by the Board; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the date on which the Company's right of
redemption pursuant to Section 24(a) expires (the "Section 11(a)(iii)
Trigger Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Board shall determine in good faith that it is
likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(iii) Trigger
Date, in order that the Company may seek shareholder approval for the
authorization of such additional shares (such period, as it may be
extended, shall be referred to herein as the "Substitution Period"). To
the extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section 11(a)(iii),
the Company (x) shall provide, subject to Section 7(e) hereof, that such
25
action shall apply uniformly to all outstanding Rights, and (y) may suspend
the exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common
Stock shall be the current market price (as determined pursuant to Section
11(d) hereof) per share of the Common Stock on the Section 11(a)(iii)
Trigger Date and the value of any "Common Stock Equivalent" shall be deemed
to have the same value as the Common Stock on such date.
(iv) If the rules of the national securities exchange, registered
as such pursuant to Section 6 of the Exchange Act, or of the national
securities association, registered as such pursuant to Section 15A of the
Exchange Act, on which the Common Stock is principally traded would
prohibit such exchange or association from listing or continuing to list,
or from authorizing for or continuing quotation and/or transaction
reporting through an inter-dealer quotation system, the Common Stock or
other equity securities of the Company if the Rights were to be exercised
for shares of Common Stock in accordance with subparagraph (ii) of this
Section 11(a) because such issuance would nullify, restrict, or disparately
reduce the per share voting rights of holders of Common Stock, the Company
shall (A) determine the Spread, and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon payment of
the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) equity securities of the Company, including, without limitation,
Common Stock Equivalents, other than securities which would have the effect
of nullifying, restricting, or disparately reducing the per share voting
rights of holders of Common Stock, (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing having an aggregate
value equal to the Current Value, where such aggregate value has been
26
determined by the Board based upon the advice of an investment banking firm
selected by the Board; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above
within thirty (30) days following the Section 11(a)(iii) Trigger Date, then
the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, cash having
an aggregate value equal to the Spread. If the Board shall determine in
good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the Rights,
the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(iii)
Trigger Date, in order that the Company may seek stockholder approval for
the authorization of such additional shares (such period, as it may be
extended, shall be referred to herein as the "Substitution Period"). To
the extent that the Company determines that some action need be taken
pursuant to the first or second sentence of this Section 11(a)(iv), the
Company (x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period, in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iv), the value of the Common
Stock shall be the current market price (as determined pursuant to Section
11(d) hereof) per share of the Common Stock on the Section 11(a)(iii)
Trigger Date and the value of any Common Stock Equivalent shall be deemed
to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling
them to subscribe for or purchase (for a period expiring within forty-five
(45) calendar days after such record date) Preferred Stock (or shares
27
having the same rights, privileges and preferences as the shares of
Preferred Stock ("Equivalent Preferred Stock")) or securities convertible
into Preferred Stock or Equivalent Preferred Stock at a price per share of
Preferred Stock or per share of Equivalent Preferred Stock (or having a
conversion price per share, if a security is convertible into Preferred
Stock or Equivalent Preferred Stock) less than the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which shall
be the number of shares of Preferred Stock outstanding on such record date,
plus the number of additional shares of Preferred Stock and/or Equivalent
Preferred Stock to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration part
or all of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred Stock owned by or held for the account of the Company
or a Subsidiary shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash
28
(other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in 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, the
numerator of which shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of Preferred Stock on such
record date, less the fair market value (as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the denominator of
which shall be such current market price (as determined pursuant to Section
11(d) hereof) per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that
such distribution is not so made, the Purchase Price shall be adjusted to
be the Purchase Price which would have been in effect if such record date
had not been fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current
market price" per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for
the thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of computations
made pursuant to Section 11(a)(iii) hereof, the current market price per
share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however, that in the event that the current market price per share of the
Common Stock is determined during a period following the announcement by
the issuer of such Common Stock of (A) a dividend or distribution on such
29
Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights), or
(B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite thirty (30) Trading Day or ten
(10) Trading Day period, as set forth above, after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current
market price shall be properly adjusted to take into account such event.
The closing price for each day shall be as reported by the Nasdaq National
Market System, or such other system then in use, if the shares are listed
and admitted to trading on a national securities exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, or Nasdaq National Market System, or, if on any such date the
shares of Common Stock are not quoted by any such organization and are not
listed on a national securities exchange, the average of the closing bid
and asked prices as furnished by a professional market maker making a
market in the Common Stock selected by the Board. If on any such date no
market maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board shall be used.
The term "Trading Day" shall mean, if such shares are listed or admitted
to trading on any national securities exchange, a day on which the
principal national securities exchange on which such shares are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed for quotation or admitted, a Business
Day. If the Common Stock is not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
30
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the same
manner set forth for the Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the current market price per
share of Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), then the "current
market price" per share of Preferred Stock shall be conclusively deemed to
be an amount equal to one thousand (1,000) (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date
of this Agreement) multiplied by the current market price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "current market price" per share of
the Preferred Stock shall mean the fair value per share as determined in
good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current market price"
of one one-thousandth (.001) of a share of Preferred Stock shall be equal
to the "current market price" of one share of Preferred Stock divided by
one thousand (1,000).
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (1%) in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest ten-
thousandth (.0001) of a share of Common Stock or other share or one-
millionth (.000001) of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
31
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock
other than 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 the
Preferred Stock contained in Section 11 (a), (b), (c), (e), (g), (h), (i),
(j), (k) and (m), and the provisions of Section 7, 9, 10, 13 and 14 hereof
with respect to the Preferred Stock shall apply on like terms to any such
other shares.
(g) All rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares (in one one-
thousandth (.001) of a share increments) of Preferred Stock purchasable
from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of shares (in one one-thousandth (.001) of a share increments)
of Preferred Stock (calculated to the nearest one-millionth (.000001) of a
share) obtained by (i) multiplying (x) the number of shares (in one one-
thousandth (.001) of a share increments) covered by a Right immediately
prior to such adjustment, by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of shares (in one one-thousandth (.001) of a share
increments) of Preferred Stock purchasable upon the exercise of a Right.
32
Each of the Rights outstanding after the adjustment in the number of Rights
shall be exercisable for the number of shares (in one one-thousandth (.001)
of a share increments) 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 one-ten-thousandth (.0001)) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear,
at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares (in one one-thousandth (.001) of a share
increments) of Preferred Stock issuable upon the exercise of the Rights,
the Rights Certificates theretofore and thereafter issued may continue to
express the Purchase Price per one one-thousandth (.001) of a share and the
33
number of shares (in one one-thousandth (.001) of a share increments) which
were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated par value, if any, of the
number of shares (in one one-thousandth (.001) of a share increments) 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 fully
paid and nonassessable such number of shares (in one one-thousandth (.001)
of a share increments) 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 issuance to the holder of any Right exercised after such
record date the number of shares (in one one-thousandth (.001) of a share
increments) of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
shares (in one one-thousandth (.001) of a share increments) of Preferred
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; provided, however, that the Company shall deliver
to such holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or otherwise)
or securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section
11, as and to the extent that in their good faith judgment the Board shall
determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash or any
shares of Preferred Stock at less than the current market price, (iii)
issuance wholly for cash or shares of Preferred Stock or securities which
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
34
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than fifty percent
(50%) of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company
and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately
after such consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the stockholders of
the Person who constitutes, or would constitute, the "Principal Party"for
purposes of Section 13(a) hereof shall have received a distribution of
Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section
24 or Section 27 hereof, take (or permit any Subsidiary to take) any action
if at the time such action is taken it is reasonably foreseeable that such
action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
35
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a dividend
on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common Stock
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any
such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock immediately prior to such
event by a fraction the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the occurrence of
the event and the denominator of which shall be the total number of shares
of Common Stock outstanding immediately following the occurrence of such
event.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares.
Whenever an adjustment is made as provided in Section 11 and Section
13 hereof, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for
such adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Stock and the Common Stock, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a
Rights Certificate (or, if prior to the Distribution Date, to each holder
of a certificate representing shares of Common Stock) in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in relying on
any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), and the Company
36
shall not be the continuing or surviving corporation of such consolidation
or merger, (y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning power
aggregating more than fifty percent (50%) of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one or
more transactions each of which complies with Section 11(o) hereof) (any
event described in (x), (y) or (z) being referred to hereinafter as a
"Section 13 Event"), then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms of
this Agreement, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by (1) multiplying the then current Purchase
Price by the number of shares (in one one-thousandth (.001) of a share
increments) of Preferred Stock for which a Right is exercisable immediately
prior to the first occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of shares (in one one-thousandth (.001) of a
share increments) for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and (2) dividing the
product (which, following the first occurrence of a Section 13 Event, shall
be referred to as the "Purchase Price" for each Right and for all purposes
of this Agreement) by fifty percent (50%) of the current market price
37
(determined pursuant to Section 11(d)(i) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such Section
13 Event; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations and
duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply
only to such Principal Party following the first occurrence of a Section 13
Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the Company
are converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or consolidation;
and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at such time and has not been continuously over the preceding
twelve (12) month period registered under Section 12 of the Exchange Act,
and such Person is a direct or indirect Subsidiary of another Person the
38
Common Stock of which is and has been so registered, "Principal Party"
shall refer to such other Person; and (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered, "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued
or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and
such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date;
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act;
(iii) use its best efforts to obtain any necessary
regulatory approvals in respect of the Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights; and
39
(iv) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New York
Stock Exchange or on another national securities exchange, to list or
admit to trading (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights and the New York
Stock Exchange or such securities exchange, or, if the Common Stock of
the Principal Party shall not be listed or admitted to trading on the
New York Stock Exchange or a national securities exchange, to cause
the Rights and the securities receivable upon exercise of the Rights
to be reported by such other system then in use.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if such transaction is an
Approved Transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence
of a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section (11)(p) hereof,
or to distribute Rights Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be, if the Rights are listed or admitted to
trading on a national securities exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the Rights are
listed or admitted to trading, or, if the Rights are not listed or admitted
to trading on any national securities exchange, the last quoted price, or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq National Market System
40
or such other system then in use, or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
the Rights selected by the Board. If on any such date no such market maker
is making a market in the Rights the fair value of the Rights on such date
as determined in good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral
multiples of one one-thousandth (.001) of a share of Preferred Stock) upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth (.001) of a share of Preferred
Stock). In lieu of fractional shares of Preferred Stock that are not
integral multiples of one one-thousandth (.001) of a share of Preferred
Stock, the Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one one-
thousandth (.001) of a share of Preferred Stock. For purposes of this
Section 14(b), the current market value of one one-thousandth (.001) of a
share of Preferred Stock shall be one one-thousandth (.001) of the closing
price of a share of Preferred Stock (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights Certificates
41
at the time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one (1) share of
Common Stock. For purposes of this Section 14(c), the current market value
of one (1) share of Common Stock shall be the closing price of one (1)
share of Common Stock (as determined pursuant to Section 11(d)(i) hereof)
for the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action.
All rights of action in respect of this Agreement are vested in the
respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of
the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), may, in his own behalf and for his own benefit,
enforce and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right
to exercise the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights,
it is specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and shall be
entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the
obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
42
(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 or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required to
be affected by any notice to the contrary; and
(b) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided, however,
the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
43
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the
number of shares (in one one-thousandth (.001) of a share increments) of
Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed
to confer upon the holder of any Rights Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meeting or other actions affecting stockholders
(except as provided in Section 23 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, 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 of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon
any Rights Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
44
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at the time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
45
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be proved
or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate shall be full authorization to the Rights Agent
for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
46
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or Section 13 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor shall
it by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or Preferred Stock
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance
with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
47
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; provided, however, reasonable
care was exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting
with the Company.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) days'
notice in writing mailed to the Company, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified mail, and to
the holders of the Rights Certificates by first- class mail at the expense
48
of the Company. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock, by registered or certified
mail, and to the holders of the Rights Certificates by first- class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period
of thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Rights Certificate (who
shall, with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may
apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be a corporation organized and doing business
under the laws of the United States or of the State of New York (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 in good
standing, having a principal office in the State of New York 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 fifty million dollars ($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 that purpose. Not
later than the effective date of any such appointment, the Company shall
file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock and the Preferred 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.
49
Section 22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board
of Directors to reflect any adjustment or change in the Purchase Price and
the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance
or sale of shares of Common Stock following the Distribution Date and prior
to the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or
upon the exercise, conversion or exchange of securities hereinafter issued
by the Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Exchange.
(a) 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 (which shall not include Rights that have become
void pursuant to the provisions of Section 7(e) hereof) for Common Stock at
an exchange ratio of one share of Common Stock per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter
referred to as the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors shall not be empowered to effect such exchange at any
50
time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such Subsidiary,
or any entity holding Common Shares for or pursuant to the terms of any
such plan), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of fifty percent (50%) or more of the Common
Stock then outstanding.
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 23 and
without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of
such rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company 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 will state the method by which the exchange of the
Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Stock
issued but not outstanding or Common Stock authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 23, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of
the Rights. In the event the Company shall, after good faith effort, be
unable to take all such action as may be necessary to authorize such
additional shares of Common Stock, the Company shall substitute, for each
51
share of Common Stock that would otherwise be issuable upon exchange of a
Right, Common Stock Equivalents.
(d) The Company shall not be required to issue fractional shares
of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock,
there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional shares of Common Stock would otherwise
be issuable, an amount in cash equal to the same fraction of the current
market value of a whole share of Common Stock. For the purposes of this
subsection (d), the current market value of a whole share of Common Stock
shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof for the Trading Day immediately prior
to the date of exchange pursuant to this Section 23.
Section 24. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the
earlier of (i) the Close of Business on the tenth (10th) day following the
Stock Acquisition Date (or, if the Stock Acquisition Date shall have
occurred prior to the Record Date, the Close of Business on the tenth
(10th) day following the Record Date), or (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a
redemption price of one cent ($.01) per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"), and the Company
may, at its option, pay the Redemption Price in securities, cash or other
assets. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of
a Section 11(a)(ii) Event until such time as the Company's right of
redemption hereunder has expired (as such time period may be extended
pursuant to this Agreement). The Company may, at its option, pay the
Redemption Price in cash shares of Common Stock (based on the Current
52
Market Price of the Common Stock at the time of redemption) or any other
form of consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights shall be to receive the Redemption Price for each
Right so held. Promptly after the action of the Board ordering the
redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by
mailing such notice to all such holders at each holder's last address as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular quarterly cash dividend
out of earnings or retained earnings of the Company), or (ii) to offer to
the holders of Preferred Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or shares of stock of any
class or any other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Preferred Stock),
or (iv) to effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof), or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related transactions, of more
than fifty percent (50%) of the assets or earning power of the Company and
53
its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 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 in
which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of 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 (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Preferred
Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Preferred Stock whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon
as practicable thereafter give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 25 hereof, a notice of
the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred
Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, or by overnight delivery service, addressed (until another
address is filed in writing with the Rights Agent) as follows:
54
SEROLOGICALS CORPORATION
780 Park North Boulevard
Suite 110
Clarkston, GA 30021
Attn: Harold J. Tenoso, Ph.D.
President and Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
STATE STREET BANK & TRUST COMPANY, N.A.
c/o Equiserve Limited Partnership
150 Royall Street
Canton, MA 02021
Attn: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, or by overnight delivery service,
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, and subject to the penultimate sentence of this Section 27, the
Company and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Common Stock. From and
after the Distribution Date, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval
of any holders of Rights Certificates in order (i) to cure any ambiguity,
(ii) to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to change or
supplement the provisions hereunder in any manner which the Company may
deem necessary or desirable, provided that no such amendment or supplement
55
shall be made which (x) changes the Redemption Price, the Final Expiration
Date, the Purchase Price or the number of shares (in one one-thousandth
(.001) of a share increments) of Preferred Stock for which a Right is
exercisable or (y) adversely affects the interests of the holders of Rights
Certificates (other than an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person); provided, however, that this Agreement may not be
supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other time
period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of, and/or the benefits to, the holders of Rights.
Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price, the Exchange Ratio, the Final
Expiration Date, the Purchase Price or the number of one one-thousandths
(.001) of a share of Preferred Stock for which a Right is exercisable.
Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common
Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the
General Rules and Regulations under the Exchange Act. The Board 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
56
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or
to amend this Agreement). All such actions, calculations, interpretations
and determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made by the
Board in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board to any liability to the holders of the
Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to
the Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void, or
unenforceable and the Board determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect
the purpose or effect of this Agreement, the right of redemption set forth
in Section 24 hereof shall be reinstated and shall not expire until the
close of business on the tenth (10th) day following the date of such
determination by the Board.
57
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such
State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
/SIGNATURE PAGE FOLLOWS/
58
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above
written.
Attest: SEROLOGICALS CORPORATION
By: /s/ Russell H. Plumb By: /s/ Harold J. Tenoso
------------------------- ------------------------
Name: Russell H. Plumb Name: Harold J. Tenoso
Title: Vice President, Finance Title: President & CEO
Attest: STATE STREET BANK & TRUST COMPANY, N.A.
By: /s/ Tina Goon By: /s/ Charlie Rossi
------------------ ---------------------
Name: Tina Goon Name: Charlie Rossi
Title: Account Manager Title: President
TABLE OF CONTENTS
- -----------------
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 9
Section 3. Issue of Rights Certificates 10
Section 4. Form of Rights Certificates 12
Section 5. Countersignature and Registration 14
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates 14
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights 16
Section 8. Cancellation and Destruction of Rights Certificates 19
Section 9. Reservation and Availability of Capital Stock 19
Section 10. Preferred Stock Record Date 21
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights 22
Section 12. Certificate of Adjusted Purchase Price or Number of Shares 36
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 36
Section 14. Fractional Rights and Fractional Shares 40
Section 15. Rights of Action 42
Section 16. Agreement of Rights Holders 43
Section 17. Rights Certificate Holder Not Deemed a Stockholder 44
Section 18. Concerning the Rights Agent 44
Section 19. Merger or Consolidation or Change of Name of Rights Agent 45
Section 20. Duties of Rights Agent 46
Section 21. Change of Rights Agent 49
Section 22. Issuance of New Rights Certificates 50
Section 23. Exchange 51
Section 24. Redemption and Termination 52
Section 25. Notice of Certain Events 54
Section 26. Notices 55
Section 27. Supplements and Amendments 56
Section 28. Successors 57
Section 29. Determinations and Actions by the Board of Directors, etc 57
Section 30. Benefits of this Agreement 58
Section 31. Severability 58
Section 32. Governing Law 58
Section 33. Counterparts 59
Section 34. Descriptive Headings 59
EXHIBITS
Exhibit A. Form of Certificate of Designation, Preferences and Rights
of Series B Preferred Stock
Exhibit B. Specimen Form of Rights Certificate
Exhibit C. Summary of Rights to Purchase Preferred Stock.
EXHIBIT A
---------
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES B PREFERRED STOCK
of
SEROLOGICALS CORPORATION
------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Serologicals Corporation, a Delaware corporation (the "Corporation"),
hereby certifies that, pursuant to the authority contained in Article Fifth
of the Corporation's Amended and Restated Certificate of Incorporation, as
amended (the "Certificate of Incorporation") and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, the following resolution was duly adopted by the Board of
Directors of the Corporation, at a duly called meeting held on July 26,
1999 at which a quorum was present and acted throughout, creating a series
of its preferred stock, par value one cent ($0.01) per share, out of the
total number of one million (1,000,000) shares of preferred stock,
designated as Series B Preferred Stock.
RESOLVED, that there is hereby created and the Corporation be, and it
hereby is, authorized to issue fifty thousand (50,000) shares of a series
of its Preferred Stock designated Series B Preferred Stock (the "Series B
Preferred Stock") to have the powers, preferences and rights and the
qualifications, limitations or restrictions thereof hereinafter set forth
in this resolution:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series B Preferred Stock" and the number of shares
constituting such series shall be fifty thousand (50,000).
Section 2. Dividends and Distributions
a) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series B Preferred Stock with respect to dividends, if any,
the holders of shares of Series B Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on
the last day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Preferred Stock, in
an amount per share (rounded to the nearest cent) equal to the greater of
(a) ten cents ($.10) or (b) subject to the provision for adjustment
hereinafter set forth, one thousand (1,000) times the aggregate per share
amount of all cash dividends, and one thousand (1,000) times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of common stock or a
subdivision of the outstanding shares of common stock (by reclassification
or otherwise), declared on the common stock, par value one cent ($.01) per
share, of the Corporation ("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 Preferred Stock. In the event the Corporation shall at
any time after July 26, 1999 (the "Rights Declaration Date") (i) declare
any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock into a greater number of shares, or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
b) The Corporation shall declare a dividend or distribution on
the Series B Preferred Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock).
c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series B
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Series B Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares
of Series B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than
thirty (30) days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
a) Subject to the provisions for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the holder
thereof to one thousand (1,000) votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock into a greater number of shares, or (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
b) Except as otherwise provided herein or by law, the holders of
shares of Series B Preferred Stock and the holders of shares of Common
Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
c) Except as set forth herein, holders of Series B Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock, as provided in
Section 2 hereof, are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series B Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares
of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series B Preferred Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which dividends are payable,
or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series B Preferred Stock, or any shares of stock ranking on a parity
with the Series B Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock 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. Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock unless, prior
thereto, the holders of shares of Series B Preferred Stock shall have
received one thousand dollars ($1,000) per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (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 Preferred Stock unless, prior thereto, the
holders of shares of Common Stock 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) one thousand (1,000) (as
appropriately adjusted as set forth in subparagraph (C) below to reflect
such events as stock splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause (ii) is referred to
herein as the "Adjustment Number"). 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 Preferred Stock and Common
Stock, respectively, holders of Series B Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share
of the remaining assets to be distributed in the ratio of the Adjustment
Number to one (1) with respect to such Preferred 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 Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are not sufficient assets
available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common
Stock.
c) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock into a
greater number of shares, or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number 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 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series B Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to one thousand (1,000) 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. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock into a greater number of shares, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then
in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Series B Preferred Stock
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 8. No Redemption. The shares of Series B Preferred Stock
shall not be redeemable.
Section 9. Ranking. The Series B Preferred Stock shall rank junior
to all other series of the Corporation's Preferred Stock as to the payment
of dividends and the distribution of assets, unless the terms of any such
series shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of
the Series B Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series B Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. Series B Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to
such holders, 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 Preferred Stock.
IN WITNESS WHEREOF, the undersigned officers of Serologicals
Corporation have executed and subscribed this Certificate of Designation
and do affirm the foregoing as true under the penalties of perjury this 2nd
day of August, 1999.
/s/ Harold J. Tenoso
------------------------------------
Harold J. Tenoso, Ph.D.
President and Chief Executive Officer
Attest:
/s/ F. Janey Christine
- -------------------------
By: F. Janey Christine
----------------------
Secretary
EXHIBIT C
---------
SEROLOGICALS CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
The following is a summary description of a rights agreement
entered into by Serologicals Corporation and State Street Bank & Trust
Company, N.A. as of August 2, 1999. As this summary description of the
rights does not purport to be complete, you should carefully read the full
text of the rights agreement, a copy of which is available free of charge
from Serologicals.
On July 26, 1999, the board of directors of Serologicals Corporation
declared a dividend of one preferred stock purchase right for each
outstanding share of its common stock, par value $.01 per share, payable
to stockholders of record on August 25, 1999.
Each right will entitle its registered holder from and after the
Distribution Date (as defined below) until August 2, 2009, or, if earlier,
until the redemption or exchange of the rights, to buy 1/1000 of a share
of Serologicals' Series B preferred stock, par value $.01 per share, at an
exercise price of $45.00, subject to certain antidilution adjustments.
Initially, the rights will be attached to all common stock
certificates representing shares then outstanding and no separate rights
certificates will be distributed. The rights will separate from the common
stock upon the earlier of
I. the 10th business day after the date of a public
announcement that a person or group is an Acquiring
Person (as defined below), or
II. the 10th business day (or such later day as Serologicals'
board of directors determines) after a person or group
announces a tender or exchange offer, which, if consummated,
would result in such person or group becoming an Acquiring
Person
The earlier of such dates is referred to herein as the "Distribution
Date."
In general, an "Acquiring Person" refers to any person or group of
affiliated persons (other than Serologicals, any of its subsidiaries,
certain of Serologicals' benefit plans and any person or group of
affiliated persons whose acquisition of 15% or more is approved by the
board of directors in advance) who, after the date of adoption of the
rights agreement, acquires beneficial ownership of 15% or more of the
outstanding shares of common stock.
No person or group who beneficially owned 15% or more of the
outstanding shares of common stock on August 25, 1999 will be considered
an Acquiring Person unless such person or group acquires an additional
number of shares of common stock greater than 2% of the number of such
shares outstanding, other than in a transaction approved by Serologicals'
board of directors in advance.
As soon as practicable after the Distribution Date, rights
certificates will be mailed to holders of common stock as of the close
of business on the Distribution Date and, thereafter, the separate rights
certificates alone will represent the rights. The holders of rights will
not have any voting rights or be entitled to dividends until the rights
are exercised.
If a person or group of affiliated persons becomes an Acquiring
Person, then each right (other than rights owned by such acquiring person,
and its affiliates and associates, which will be null and void) will
entitle the holder to purchase, for the exercise price, a number of shares
of Serologicals' common stock having a then current market value of twice
the exercise price.
Accordingly, at the original exercise price of $45.00, each right
would entitle its registered holder to purchase $90.00 worth of common
stock for $45.00.
If at any time after the date of public announcement of an Acquiring
Person
III. Serologicals merges into another entity
IV. an acquiring entity merges into Serologicals and the
common stock of Serologicals is changed into or exchanged for
other securities or assets of the acquiring entity, or
V. Serologicals sells more than 50% of its assets or earning
power
then each right will entitle the holder to purchase, for the exercise
price, a number of shares of common stock of such other entity having a
current market value of twice the exercise price.
The foregoing will not apply to a transaction approved by a majority
of the board of directors.
The rights are redeemable at Serologicals' option, at any time until
the 10th day following a public announcement of an Acquiring Person, for
$.01 per right, payable in cash or shares of common stock. At any time
after any person becomes an Acquiring Person, the board of directors of
Serologicals may exchange the rights (other than rights owned by the
Acquiring Person, and its affiliates and associates, which will be null
and void), in whole or in part, for common stock on the basis of an
exchange ratio of one share of common stock for each right.
The purchase price payable, and the number of shares of Series B
preferred stock or other securities or property issuable, upon exercise
of the rights are subject to adjustment from time to time. Such adjustment
is to prevent dilution in such events as certain stock dividends on, or
subdivisions, combinations or reclassifications of, the shares of common
stock prior to the Distribution Date. With certain exceptions, no
adjustment in the purchase price will be required until cumulative
adjustments amount to at least 2% of the purchase price.
No fractional shares will be issued. Instead, an adjustment in cash
will be made based on the market price of the Series B preferred stock on
the last trading date prior to the date of exercise.
The board of directors of Serologicals may amend the rights agreement
in any manner prior to the Distribution Date. After the Distribution Date,
the board of directors may amend the rights agreement only
VI. to cure ambiguities
VII. to shorten or lengthen any time period (subject to certain
limitations); or
VIII. if such amendment does not adversely affect the interests of
the rights holders and does not relate to any principal
economic term of the rights.
A copy of the rights agreement has been filed with the Securities and
Exchange Commission as an exhibit to a registration statement on Form 8-A,
dated August 2, 1999.
NEWS
FOR IMMEDIATE RELEASE
Contact: Russell H. Plumb
Chief Financial Officer
(404) 296-5595
SEROLOGICALS ADOPTS STOCKHOLDER RIGHTS PLAN
ATLANTA (July 27, 1999) - Serologicals Corporation (Nasdaq/NM: SERO) today
announced that its board of directors has adopted a stockholder rights
plan. Under the plan, stockholders will receive one right for each
outstanding share of common stock. The rights are to be distributed to
stockholders of record as of August 25, 1999, and the distribution will
not be taxable to stockholders. The rights will expire on August 2, 2009,
unless redeemed or exchanged earlier by Serologicals, and will be
represented by existing common stock certificates until they become
exercisable.
Harold J. Tenoso, Ph.D., president and chief executive officer,
remarked, "The rights are intended to protect the long-term value of
stockholders' investment in Serologicals. More than 1,300 other U.S.
corporations have adopted similar plans which are designed to encourage
any potential acquiror to treat all stockholders equally and negotiate with
a company's board of directors before attempting a takeover. We are not
aware of any current attempt to acquire control of Serologicals. The
board's decision to implement the plan was based principally on the
uncertainty about how investors will view the impact that certain changes
in the blood products and services industry are having on our near-term
financial performance at a time when we believe the Company's long-term
value is significantly greater than the current market price would
indicate."
Tenoso said that Serologicals will send a letter to all
stockholders as of the record date summarizing the plan.
Each right will, upon becoming exercisable, entitle its holder to
buy one one-thousandth (1/1,000) of a share of a new series of preferred
stock at an exercise price of $45.00. If any person or group acquires 15%
or more of the common stock of Serologicals Corporation (except in
transactions approved by the board of directors of Serologicals in
advance), each right will then entitle its holder, other than the person
or group owning 15% or such other persons or groups, to acquire, at the
exercise price, Serologicals' common stock with a market value equal to
twice the exercise price. Serologicals may elect, however, to exchange a
newly issued share of Serologicals' common stock for each right.
-MORE-
If any person or group owns 15% or more of Serologicals' common
stock, and Serologicals is acquired in a merger or other business
combination, or if 50% of its earning power or assets are sold, each right
will entitle its holder, other than the person or group owning 15%, to
acquire, at the exercise price, shares of the acquiring company's common
stock with a market value of twice the exercise price.
Persons owning 15% or more of Serologicals' common stock on the
date the plan is adopted are exempt, so long as they do not acquire an
additional number of shares greater than 2% of the outstanding shares,
other than in a transaction approved by the Board of Directors of
Serologicals in advance.
Serologicals Corporation, headquartered in Atlanta, is a leading
worldwide provider of biological materials and services to major healthcare
companies. The Company provides value added antibody-based products that
are used as the active ingredients in therapeutic products for the
treatment and management of diseases such as Rh incompatibility in
newborns, rabies and hepatitis and in diagnostic products such as blood
typing reagents and diagnostic test kits. Additionally, the Company,
through its protein fractionation facility, provides a variety of proteins
used in diagnostic reagents and tissue culture media components for use as
additives in biotech products.
This release may contain certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 including,
without limitation, statements regarding the future performance and long-
term value of the Company and the timing of the rights plan. These forward-
looking statements are subject to certain risks, uncertainties and other
factors, including the Company's ability to continue to attract and retain
qualified donors and to implement successfully its strategic plan.
Additional information on factors that could potentially affect the Company
or its financial results may be found in the Company's filings with the
Securities and Exchange Commission.
Serologicals is a registered trademark of Serologicals Royalty Company.
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