SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT - December 19, 1997
(Date of Earliest Event Reported)
IVAX CORPORATION
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(Exact name of registrant as specified in its charter)
Commission File No. 1-09623
FLORIDA 16-1003559
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(State of Incorporation) (I.R.S. Employer
Identification No.)
4400 BISCAYNE BOULEVARD, MIAMI, FLORIDA 33137
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(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (305) 575-6000
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ITEM 5. OTHER EVENTS
On December 19, 1997, the Board of Directors of the Company
declared a dividend of one Common Stock Purchase Right (the "Right(s)") for each
outstanding share of Common Stock, par value $0.10 per share (the "Common
Stock"), of the Company. The dividend is payable as of December 29, 1997 to
stockholders of record on that date. Each Right entitles the registered holder
to purchase from the Company one-half (1/2) of a share of Common Stock of the
Company at a price of $22.50 per one-half (1/2) of a share (the "Exercise
Price"), subject to certain adjustments. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement") between the Company
and ChaseMellon Shareholder Services, LLC, as Rights Agent ("Rights Agent"),
dated as of December 29, 1997.
Initially the Rights will not be exercisable, certificates
will not be sent to stockholders, and the Rights will automatically trade with
the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Company (an "Acquiring Person") and (ii) the
tenth business day (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person) after the date of the commencement or
announcement of a person's or group's intention to commence a tender or exchange
offer the consummation of which would result in the ownership of 15% or more of
the Company's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of December 29, 1997, by such Common Stock certificate with a copy of the
Summary of Rights (included as an exhibit to the Rights Agreement) attached
thereto. An Acquiring Person does not include (A) the Company, (B) any
subsidiary of the Company, (C) any employee benefit plan or employee stock plan
of the Company or of any subsidiary of the Company, or any trust or other entity
organized, appointed, established or holding Common Stock for or pursuant to the
terms of any such plan or (D) any person or group whose ownership of 15% or more
of the shares of voting stock of the Company then outstanding results solely
from (i) any action or transaction or transactions approved by the Board of
Directors before such person or group became an Acquiring Person or (ii) a
reduction in the number of issued and outstanding shares of voting stock of the
Company pursuant to a transaction or transactions approved by the Board of
Directors (provided that any person or group that does not become an Acquiring
Person by reason of clause (i) or (ii)
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above shall become an Acquiring Person upon acquisition of an additional 1% of
the Company's voting stock unless such acquisition of additional voting stock
will not result in such person or group becoming an Acquiring Person by reason
of such clause (i) or (ii)).
Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after December
29, 1997 will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption or expiration of the Rights),
the surrender for transfer of any of the Company's Common Stock certificates
outstanding as of December 29, 1997, with or without a copy of the Summary of
Rights attached, will also constitute the transfer of the Rights associated with
the Common Stock represented by such certificate. As soon as practicable
following the Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of the Company's
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on December 18, 2007, unless
earlier redeemed by the Company as described below.
The number of shares of Common Stock issuable upon exercise of
the Rights is subject to certain adjustments from time to time in the event of a
stock dividend on, or a subdivision or combination of, the Common Stock. The
Exercise Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, in the event that,
after the time that a Person becomes an Acquiring Person, the Company were to be
acquired in a merger or other business combination (in which any shares of the
Company's Common Stock are changed into or exchanged for other securities or
assets) or more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement provides that proper
provision will be made so that each holder of record of a Right will from and
after such date have the right to receive, upon payment of the Exercise Price,
that number of shares of common stock of the acquiring company having a market
value at the time of such transaction equal to two times the Exercise Price. In
addition, unless the Rights are earlier redeemed, if a person or group (with
certain exceptions) becomes the beneficial owner of 15% or more of the Company's
voting stock, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right, other than the Acquiring Person (whose
Rights will thereupon become null and void), will thereafter have the right to
receive, upon payment of the Exercise Price, that number of shares of the
Company's Common Stock having a market value at the time of the transaction
equal to two times the Exercise Price. The Rights Agreement also grants
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the Board of Directors the option, after any person or group acquires beneficial
ownership of 15% or more of the voting stock but before there has been a 50%
acquisition, to exchange one share of Common Stock for each then valid Right
(which would exclude Rights held by the Acquiring Person that have become void).
At any time on or prior to the close of business on the tenth
day after the time that a person has become an Acquiring Person (or such later
date as a majority of the Board of Directors may determine), the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right
("Redemption Price"). Immediately upon the effective time of the action of the
Board of Directors of the Company authorizing redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
the Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Company
may, except with respect to the redemption price or date of expiration of the
Rights, amend the Rights in any manner, including an amendment to extend the
time period in which the Rights may be redeemed. At any time when the Rights are
not then redeemable, the Company may amend the Rights in any manner that does
not materially adversely affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
As of December 16, 1997, there were 121,483,572 shares of
Common Stock issued and outstanding.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group who attempts to acquire the
Company on terms not approved by the Company's Board of Directors. The Rights
should not interfere with any merger or other business combination approved by
the Board since they may be redeemed by the Company at $.01 per Right at any
time until the close of business on the tenth day (or such later date as
described above) after a person or group has obtained beneficial ownership of
15% or more of the voting stock.
The form of Rights Agreement between the Company and
ChaseMellon Shareholder Services, LLC, as rights agent, specifying the terms of
the Rights, which includes as Exhibit A the form of Summary of Rights to
Purchase Common Stock and as Exhibit B the form of Right Certificate are
attached hereto as exhibits and incorporated herein by reference. The foregoing
description of the Rights is qualified by reference to such exhibits.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
4.1 Rights Agreement dated as of December 29, 1997
between IVAX Corporation and ChaseMellon Shareholder
Services, LLC, as Rights Agent. The Rights Agreement
includes as Exhibit B the form of Right Certificate.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
By: /s/ ARMANDO A. TABERNILLA
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Armando A. Tabernilla
Senior Vice President and General Counsel
Date: December 31, 1997
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INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
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4.1 Rights Agreement dated as of December 29, 1997
between IVAX Corporation and ChaseMellon Shareholder
Services, LLC, as Rights Agent. The Rights Agreement
includes as Exhibit B the form of Right Certificate.
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IVAX CORPORATION
and
Chase Mellon Shareholder Services, L.L.C.
as Rights Agent
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Rights Agreement
Dated as of December 29, 1997
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RIGHTS AGREEMENT
Agreement, dated as of December 29, 1997, by and between IVAX
CORPORATION, a Florida corporation (the "Company"), and Chase Mellon
Shareholder Services, L.L.C., a New Jersey limited liability company (the
"Rights Agent").
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one right (a "Right") for each share of the common
stock, par value $0.10 per share ("Common Stock"), of the Company outstanding as
of the close of business on December 29, 1997 (the "Record Date"), each such
Right representing the right to purchase .50 of a share (subject to adjustment)
of Common Stock upon the terms and subject to the conditions hereinafter set
forth; and
WHEREAS, the Board of Directors of the Company has further
authorized the issuance of one Right (subject to adjustment) with respect to
each share of Common Stock that shall become outstanding (whether originally
issued or delivered from the Company's treasury) between the Record Date and the
earliest of the Distribution Date, the Expiration Date and the Final Expiration
Date (as such terms are hereinafter defined).
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NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of
this Agreement, the following terms shall have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the shares of Voting Stock (as such term is hereinafter
defined) of the Company then outstanding; provided, however, that an
Acquiring Person shall not include (i) an Exempt Person (as such term
is hereinafter defined), or (ii) any Person who or which, together with
all Affiliates and Associates of such Person, would be an Acquiring
Person solely by reason of (A) being the Beneficial Owner of shares of
Voting Stock of the Company, the Beneficial Ownership of which was
acquired by such Person pursuant to any action or transaction or series
of related actions or transactions approved by the Board of Directors
(provided that at the time of such approval of the
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Board of Directors there are then in office not less than two
Continuing Directors (as such term is hereinafter defined) and such
action or transaction or series of related actions or transactions are
approved by a majority of the Continuing Directors then in office)
before such Person otherwise became an Acquiring Person or (B) a
reduction in the number of issued and outstanding shares of Voting
Stock of the Company pursuant to a transaction or a series of related
transactions approved by the Board of Directors (provided that at the
time of such approval of the Board of Directors there are then in
office not less than two Continuing Directors and such transaction or
series of related transactions are approved by a majority of the
Continuing Directors then in office); provided, further, however, that
in the event that such Person described in the foregoing clause (ii)
does not become an Acquiring Person by reason of subclause (A) or (B)
of said clause (ii), such Person shall nonetheless become an Acquiring
Person in the event such Person thereafter acquires Beneficial
Ownership of an additional 1% of the Voting Stock of the Company,
unless the acquisition of such additional Voting Stock would not result
in such Person becoming an Acquiring
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Person by reason of subclause (A) or (B) of said clause (ii).
Notwithstanding the foregoing, if the Board of Directors determines in
good faith that a Person who would otherwise be an "Acquiring Person",
as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently (provided that at the time of such
determination there are then in office not less than two Continuing
Directors and such determination is concurred with by a majority of the
Continuing Directors then in office), and such Person divests as
promptly as practicable (as determined in good faith by the Board of
Directors) a sufficient number of shares of Voting Stock so that such
Person would no longer be an "Acquiring Person", as defined pursuant to
the foregoing provisions of this paragraph (a), then such Person shall
not be deemed to be an "Acquiring Person" for purposes of this
Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), as in effect on the
date of this Rights Agreement.
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(c) "Associate" of a Person (as such term is hereinafter
defined) shall mean (i) with respect to a corporation, any officer or
director thereof or of any Subsidiary (as such term is hereinafter
defined) thereof, or any Beneficial Owner (as such term is hereinafter
defined) of 10% or more of any class of equity security thereof, (ii)
with respect to an association, any officer or director thereof or of a
Subsidiary thereof, (iii) with respect to a partnership, any general
partner thereof or any limited partner thereof who is, directly or
indirectly, the Beneficial Owner of a 10% ownership interest therein,
(iv) with respect to a business trust, any officer or trustee thereof
or of any Subsidiary thereof, (v) with respect to any other trust or an
estate, any trustee, executor or similar fiduciary or any Person who
has a 20% or greater interest as a beneficiary in the income from or
principal of such trust or estate, (vi) with respect to a natural
person, any relative or spouse of such person, or any relative of such
spouse, who has the same home as such person, and (vii) any Affiliate
of such Person.
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(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act
and Regulation 13D-G thereunder (or any comparable or
successor law or regulation), in each case as in effect on the
date hereof; or
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time or the fulfillment of a condition or both)
pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, other
rights (other than these Rights), warrants or options, or
otherwise; provided, how ever, that a Person shall not be
deemed the "Beneficial Owner" of, or to "Beneficially Own",
secu rities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange or
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(B) the right to vote, alone or in concert with others,
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 securities if the agree ment,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to
a proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under
the Exchange Act and (2) is not at the time reportable by such
Person on a Schedule 13D report under the Exchange Act (or any
comparable or successor report), other than by reference to a
proxy or consent solicitation being conducted by such Person;
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Asso ciates has any agreement,
arrangement or under standing (whether or not in writing) for
the purpose of acquiring, holding, voting (except as de
scribed in the proviso to subclause (B) of clause
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(ii) of this paragraph (d)) or disposing of any securities of
the Company; provided, however, that for purposes of
determining beneficial ownership of securities under this
Rights Agreement, officers and directors of the Company solely
by reason of their status as such shall not constitute a group
(notwithstanding that they may be Associates of one another or
may be deemed to constitute a group for purposes of the
Exchange Act) and shall not be deemed to own shares owned by
another officer or director of the Company. Notwithstanding
anything in this paragraph (d) to
the contrary, a Person engaged in the business of underwriting
securities shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities acquired in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
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(f) "Close of Business" on any given date shall mean 5:00
P.M., New York time, on such date; provided, however, that if such date
is not a Business Day, it shall mean 5:00 P.M., New York time, on the
next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the Common Stock (presently $0.10 par value) of the Company.
"Common Stock" when used with reference to any Person other than the
Company which shall be organized in corporate form shall mean the
capital stock or other equity security with the greatest per share
voting power of such Person. "Common Stock" when used with reference to
any Person other than the Company which shall not be organized in
corporate form shall mean units of beneficial interest which shall
represent the right to participate in profits, losses, deductions and
credits of such Person and which shall be entitled to exercise the
greatest voting power per unit of such Person.
(h) "Continuing Director" shall mean any member of the Board
of Directors, while such person is a member of the Board of Directors,
who is not an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, and who either (i) was a member of
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the Board of Directors prior to the time that any Person became an
Acquiring Person, or (ii) subsequently became a member of the Board of
Directors, and whose nomination for election or election to the Board
of Directors was recommended or approved by a majority of the
Continuing Directors then on the Board of Directors.
(i) "Distribution Date" shall have the meaning set forth in
Section 3(b) hereof.
(j) "Exchange Act" shall have the meaning set forth in Section
1(b) hereof.
(k) "Exempt Person" shall mean the Company, any Subsidiary of
the Company, any employee benefit plan or employee stock plan of the
Company or of any Subsidiary of the Company, or any trust or other
entity organized, appointed, established or holding Common Stock for or
pursuant to the terms of any such plan.
(l) "Exercise Price" shall have the meaning set forth in
Sections 4 and 7(b) hereof.
(m) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Fair Market Value" of any property shall mean the fair
market value of such property as determined in accordance with Section
11(d) hereof.
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(o) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(p) "Person" shall mean any individual, firm, corporation or
other entity.
(q) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(r) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(s) "Right Certificate" shall have the meaning set forth in
Section 3(d) hereof.
(t) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such or such earlier date as a majority of
the Continuing Directors shall become aware of the existence of an
Acquiring Person.
(u) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having
voting power sufficient to elect a majority of the board of directors
or other persons performing similar functions are beneficially owned,
directly or indirectly, by such Person or by any corporation or other
entity that is otherwise controlled by such Person.
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(v) "Summary of Rights" shall have the meaning set forth in
Section 3(a) hereof.
(w) "Trading Day" shall have the meaning set forth in Section
11(b) hereof.
(x) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or
regulatory authority in respect of any transfer of any security,
instrument or right, including Rights or shares of Common Stock.
(y) "Voting Stock" shall mean (i) the Common Stock of the
Company and (ii) any other shares of capital stock of the Company
entitled to vote generally in the election of directors or entitled to
vote together with the Common Stock in respect of any merger,
consolidation, sale of all or substantially all of the Company's
assets, liquidation, dissolution or winding up.
Any determination required to be made by the Board of Direc tors of the Company
for purposes of applying the definitions contained in this Section 1 shall be
made by the Board of Directors in its good faith judgment, which determination
shall be binding on the Rights Agent and the holders of the Rights.
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Section 2. APPOINTMENT OF RIGHTS AGENT. The Com pany hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) On the Record Date (or as soon as practicable
thereafter), the Company or the Rights Agent shall send a copy of a Summary of
Rights, in substantially the form attached hereto as Exhibit A (the "Summary of
Rights"), by first class mail, postage prepaid, 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.
(b) Until the close of business on the day which is the
earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth
business day (or such later date 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 of the commencement by any Person (other than an Exempt Person) of, or
the first public announcement of the intent of any Person (other than an
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Exempt Person) to commence, a tender or exchange offer upon the successful
consummation of which such Person, together with its Affiliates and Associates,
would be the Beneficial Owner of 15% or more of the then outstanding shares of
Voting Stock of the Company (irrespective of whether any shares are actually
purchased pursuant to any such offer) (the earlier of such dates being herein
referred to as the "Distribution Date"), (x) the Rights shall be evidenced by
the certificates for Common Stock registered in the name of the holders of the
Common Stock (together with, in the case of certificates for Common Stock
outstanding as of the Record Date, the Summary of Rights) and not by separate
Right Certificates and the record holders of such certificates for Common Stock
shall be the record holders of the Rights represented thereby and (y) each Right
shall be transferable only simultaneously and together with the transfer of a
share of Common Stock (subject to adjustment as hereinafter provided). Until the
Distribution Date (or, if earlier, the Expiration Date or Final Expiration
Date), the surrender for transfer of any certificate for Common Stock shall
constitute the surrender for transfer of the Right or Rights associated with the
Common Stock evidenced thereby, whether or not accompanied by a copy of the
Summary of Rights.
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(c) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to the earlier of
the Distribution Date, the Expiration Date or the Final Expiration Date and, in
certain circumstances provided in Section 22 hereof, may be issued in respect of
shares of Common Stock that become outstanding after the Distribution Date.
Certificates issued for Common Stock (including, without limitation,
certificates issued upon original issuance, disposition from the Company's
treasury or transfer or exchange of Common Stock) after the Record Date but
prior to the earlier of the Distribution Date, the Expiration Date or the Final
Expiration Date (or, in certain circumstances as provided in Section 22 hereof,
after the Distribution Date) shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and en titles the holder
hereof to the same number of Rights (subject to adjustment) as
the number of shares of Common Stock represented by this
certificate, such Rights being on the terms provided under the
Rights Agreement between IVAX Corporation and Chase Mellon
Shareholder Services, L.L.C. (the "Rights Agent"), dated as
of December 29, 1997, as it may be amended from time to time
(the "Rights Agreement"), the terms of which are incorporated
herein by refer ence and a copy of which is on file at the
principal executive offices of IVAX Corporation. Under certain
circumstances, as set forth in the Rights
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Agreement, such Rights shall be evidenced by separate
certificates and shall no longer be evidenced by this
certificate. IVAX Corporation shall mail to the registered
holder of this certificate a copy of the Rights Agree ment
without charge within five days after receipt of a written
request therefor. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN
THE RIGHTS AGREEMENT, RIGHTS ISSUED TO OR BENEFICIALLY OWNED
BY ACQUIRING PERSONS OR THEIR AFFILIATES OR ASSOCIATES (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND
MAY NOT BE TRANSFERRED TO ANY PERSON.
(d) As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send), by first class mail, postage prepaid, to each record holder of the Common
Stock as of the close of business on the Distribution Date, as shown by the
records of the Company, at the address of such holder shown on such records, a
certificate in the form provided by Section 4 hereof (a "Right Certificate"),
evidencing one Right (subject to adjustment as provided herein) for each share
of Common Stock so held. As of and after the Distribution Date, the Rights shall
be evidenced solely by Right Certificates and may be transferred only by the
transfer of the Right
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Certificates as permitted hereby, separately and apart from any transfer of one
or more shares of Common Stock.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the forms of election to purchase shares, certificate and assignment to be
printed on the reverse thereof), when, as and if issued, shall be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Common Stock or the Rights may from time to time be listed
or as the Company may deem appropriate to conform to usage or otherwise and as
are not inconsistent with the provisions of this Rights Agreement. Subject to
the provisions of Section 22 hereof, Right Cer tificates evidencing Rights
whenever issued, (i) shall be dated as of the date of issuance of the Rights
they represent and (ii) subject to adjustment from time to time as provided
herein, on their face shall entitle the holders thereof to purchase such number
of shares of Common Stock as shall be set forth therein at the price per .50
of a share payable upon exercise of a Right provided by Section 7(b)
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hereof as the same may from time to time be adjusted as pro vided herein (the
"Exercise Price").
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) Each Right Certificate shall be executed on behalf of the
Company by its Chairman of the Board, Chief Executive Officer or any Vice
President, either manually or by facsimile signature, and have affixed thereto
the Com pany'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. Each Right Certificate shall be countersigned by the Rights
Agent either manually or by facsimile signature and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any Right Certificate shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery of the
certificate by the Company, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company. Any Right Certificate may be signed on
behalf of the Company by any person who, on the date of the execution of such
Right Certificate, shall be a proper officer of the
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Company to sign such Right Certificate, although at the date of the execution of
this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or one or more offices
designated as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, and in such other locations as may be required by law,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the earlier of the Expiration Date or the
Final Expiration Date, any Right Certificate may be (i) transferred or (ii)
split up, combined or exchanged for one or more other Right Certificates,
entitling the registered
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holder to purchase a like number of shares (or fraction of a share) of Common
Stock as the Right Certificate or Rights Certificates surrendered then entitled
such holder to pur chase. Any registered holder desiring to transfer any Right
Certificate shall surrender the Right Certificate at the principal office of the
Rights Agent with the form of certificate and assignment on the reverse side
thereof duly endorsed (or enclosed with such Right Certificate a written
instrument of transfer in form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate to be split up, combined or exchanged at the principal
office of the Rights Agent. Thereupon, the Rights Agent shall countersign and
deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificates.
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(b) Subject to the provisions of Sections 7(e), 7(f) and 14
hereof, upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certi ficate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancella tion of
the Right Certificate if mutilated, the Company shall issue and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION
DATE OF RIGHTS.
(a) The Rights shall not be exercisable until, and shall
become exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Sections 7(e), 11(m) and 23(a) hereof). Except as otherwise provided herein, the
Rights may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Right Certificate, with the form of
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election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the principal office
of the Rights Agent in Ridgefield Park, New Jersey, together with payment of the
Exercise Price with respect to each Right exercised, subject to adjustment as
hereinafter provided, at or prior to the close of business on the earlier of (i)
December 18, 2007 (the "Final Expiration Date") or (ii) the date on which the
Rights are redeemed as provided in Section 23 hereof (the "Expiration Date").
(b) The Exercise Price shall initially be $22.50 for each .50
of a share of Common Stock purchasable pursuant to the exercise of a Right. The
Exercise Price and the number of shares (or fraction of a share) of Common Stock
or other securities to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 11 and 13 hereof. The
Exercise Price shall be payable in lawful money of the United States of America,
in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights with the form of election to
purchase duly executed, accompanied by payment of the aggregate Exercise Price
for the shares to be purchased and an amount equal to any
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applicable Transfer Tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check, bank draft or money order payable to the Company or the Rights Agent, the
Rights Agent shall thereupon promptly (i) requisition from any transfer agent of
the Common Stock of the Company one or more certificates representing the number
of shares of Common Stock to be so purchased, and the Company hereby authorizes
and directs such transfer agent to comply with all such requests, (ii) as
provided in Section 14(b), at the election of the Company, cause depositary
receipts to be issued in lieu of fractional shares of Common Stock, (iii) if the
election provided for in the immediately preceding clause (ii) has not been
made, requisition from the Company the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with Section 14(b) hereof, (iv)
after receipt of such Common Stock certificates and/or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may be des ignated
by such holder, and (v) when appropriate, after receipt, promptly deliver such
cash to or upon the order of the registered holder of such Right Certificate;
provided, however, that in the case of a purchase of securities, other
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than Common Stock, pursuant to Section 13 hereof, the Rights Agent shall
promptly take the appropriate actions cor responding in such case to that
referred to in the foregoing clauses (i) through (v) of this Section 7(c).
Notwithstand ing the foregoing provisions of this Section 7(c), the Company may
suspend the issuance of shares of Common Stock or other securities upon exercise
of a Right for a reasonable period, not in excess of 90 days, during which the
Company seeks to register under the Securities Act of 1933, as amended, and any
applicable securities law of any other jurisdiction, the shares of Common Stock
or such other securities to be issued pursuant to the Rights; provided, however,
that nothing contained in this Section 7(c) shall relieve the Company of its
obligations under Section 9(c) hereof.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evi denced thereby, a new Right
Certificate evidencing Rights equivalent to the exercisable Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of such
Right Certificate or his assign, subject to the provisions of Section 14(b)
hereof.
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(e) Notwithstanding any provision of this Rights Agreement to
the contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that are beneficially owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the invalidation time or (z) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (II) a transfer which the Board of Directors
has determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this Section 7(e), and
subsequent transferees of such Persons, shall be void without any further action
and any holder of such Rights shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this Rights Agreement. The Company
shall use all reasonable effort to insure that the provisions of this Section
7(e) are complied with, but shall
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have no liability to any holder of Right Certificates or any other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder. No Right
Certificate shall be issued pursuant to Section 3 hereof that represents Rights
beneficially owned by an Acquiring Person whose Rights would be void pursuant to
the provisions of this Section 7(e) or any Associate or Affiliate thereof; no
Right Certificate shall be issued at any time upon the transfer of any Rights to
an Acquiring Person whose Rights would be void pursuant to the provisions of
this Section 7(e) or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right Certificate
delivered to the Rights Agent for transfer to an Acquiring Person whose Rights
would be void pursuant to the provisions of this Section 7(e) shall be canceled.
(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 following the form of
election to purchase set forth on the reverse side of the Right Certificate
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surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or ex change shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and re tirement, and the Rights Agent shall
cancel and retire, any Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
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Section 9. RESERVATION AND AVAILABILITY OF SHARES OF COMMON
STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of Common
Stock not reserved for another purpose or shares of Common Stock not reserved
for another purpose held in its treasury, a number of shares of Common Stock as
will be sufficient to permit the exercise in full of all outstanding Rights in
accordance with Section 7. The Company shall not be required to reserve and keep
available shares of Common Stock or other securities sufficient to permit the
exercise in full of all outstanding Rights pursuant to the adjustments set forth
in Section 11(a)(ii) or Section 13 hereof unless the Rights become exercisable
pursuant to such adjustments, and then only to the extent the Rights become
exercisable pursuant to such adjustments.
(b) As long as the shares of Common Stock (or any other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, the
Rights and all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance.
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(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Securities Act of 1933, as
amended (the "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 may temporarily suspend, for a
period of time not to exceed ninety days, the exercisability of the Rights in
order to prepare and file a registration statement under the Act and permit it
to become effective. 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.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such
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<PAGE>
jurisdiction shall have been obtained and until a registration statement under
the Act (if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all shares of Common Stock (or
other securities, as the case may be) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (subject to payment
of the Exercise Price in respect thereof), be duly and validly authorized and
issued and fully paid and non assessable shares.
(e) The Company shall not be required to pay any Transfer Tax
which may be payable in respect of any transfer or delivery of a Right
Certificate to any Person or the issuance or delivery of certificates for Common
Stock (or other securities, as the case may be) upon exercise of Rights in the
name of any Person, and the Company shall not be required to issue or deliver a
Right Certificate or certificate for Common Stock (or other securities, as the
case may be) to a Person until any such Transfer Tax shall have been paid (any
such Transfer Tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's satis
faction that no such Transfer Tax is due.
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Section 10. COMMON STOCK RECORD DATE. Each Person in whose
name any certificate for shares of Common Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the Common Stock represented thereby on, and such certificate shall be dated as
of, the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price (and any applicable Transfer
Taxes) was made; provided, however, that, if the date of such surrender and
payment is a date upon which the Common Stock transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated as of, the next succeeding
Business Day on which the Common Stock transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate, as such, 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.
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Section 11. ADJUSTMENT OF EXERCISE PRICE OR NUMBER OF SHARES
OR RIGHTS. The Exercise Price, the number and kind of shares (or fraction of a
share) which may be purchased upon exercise of a 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
Record Date (A) declare or pay any dividend on Common Stock
payable in shares of Common Stock, (B) subdivide or split the
outstanding shares of Common Stock into a greater number of
shares, (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares or effect a
reverse split of the outstanding shares of Common Stock or (D)
issue any shares of its capital stock in a reclassification of
the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a), the Exercise Price
in effect at the time of the record date for such event (if
one shall have been established or, if not, in effect on the
effective
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date of such event), and the number and kind of shares (or
fraction of a share) of Common Stock or capital stock, as the
case may be, issuable upon exercise of a Right 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 Exercise Price then in effect, the
aggregate number and kind of shares of Common Stock or capital
stock, as the case may be, that, if such Right had been
exercised immediately prior to such date and at a time when
the Common Stock transfer books of the Company were open, he
would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination,
reclassification or other event. 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).
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(ii) Subject to Section 27 of this Agreement, in the
event that any Person, alone or together with its Affiliates
and Associates, shall become an Acquiring Person, then,
subject to the last sentence of Section 23(a) and except as
otherwise provided in this Section 11, each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter
have the right to receive upon exercise of a Right in
accordance with the terms of this Rights Agreement and payment
of the Exercise Price with respect to the total number of
shares (or fraction of a share) of Common Stock for which a
Right was exercisable immediately prior to the first
occurrence of the event described in this Section 11(a)(ii),
such number of shares (or fraction of a share) of Common Stock
as shall equal the result obtained by (x) multiplying the then
current Exercise Price by the number of shares (or fraction of
a share) of Common Stock for which a Right was exercisable
immediately prior to the first occurrence of the event
described in this Section 11(a)(ii) and (y) dividing that
product by 50% of the then current per share Fair Market
Value of the Common Stock
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(determined pursuant to Section 11(d) hereof) on the date of
such first occurrence.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Stock or securities convertible into Common
Stock at a price per share of Common Stock (or having a conversion price per
share, if a security convertible into shares of Common Stock) less than the then
current per share Fair Market Value of the Common Stock (as defined in Section
11(d)) on such record date, the Exercise Price to be in effect after such record
date shall be determined by multiplying the Exercise Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of shares of Common Stock which the aggregate offering price of the total number
of shares of Common Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current Fair Market Value and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date plus the number
of additional shares of
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Common Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Shares of Common Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed and in the event
that such rights, options or warrants are not so issued, the Exercise Price
shall be adjusted to be the Exercise 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 the making
of a distribution to all holders of the Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend not in excess
of 150% of the previous regular quarterly cash dividend out of the earnings
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<PAGE>
or retained earnings of the Company), assets (other than a dividend payable in
shares of Common Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Fair Market Value of the Common Stock on such record date, less the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one share
of Common Stock and the denominator of which shall be such current Fair Market
Value of the Common Stock. Such adjustment shall be made successively whenever
such a record date is fixed and in the event that such distribution is not so
made, the Exercise Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) For the purpose of this Rights Agreement, the "Fair Market
Value" of any share of Common Stock or any other stock or any Right or other
security or any other property on any date shall be determined as provided in
this
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Section 11(d). In the case of a publicly-traded stock or other security, the
Fair Market Value on any date shall be deemed to be the average of the daily
closing prices per share of such stock or per unit of such other security for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that the
Fair Market Value per share of any share of Common Stock is determined during a
period which includes any date that is within 30 Trading Days after (i) the
ex-dividend date for a dividend or distribution on such stock payable in shares
of Common Stock or securities convertible into shares of Common Stock, or (ii)
the effective date of any subdivision, split, combination, consoli dation,
reverse stock split or reclassification of such stock, then, and in each such
case, the Fair Market Value shall be appropriately adjusted by the Board of
Directors of the Company to take into account ex-dividend or post-effective
date trading. The closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way (in either case, as reported in
the applicable transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange), or, if the securities are
not listed or
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admitted to trading on the New York Stock Exchange, as reported in the
applicable transaction reporting system with respect to securities listed on the
principal national securities exchange on which such security is listed or
admitted to trading; or, if not listed or admitted to trading on any national
securities exchange, the last quoted price (or, if not so quoted, the average of
the high bid and low asked prices) in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other system then in use; or, if no bids for such
security are 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 such
security selected by the Board of Directors of the Company. The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which such security is listed or admitted to trading is open for the transaction
of business or, if such security is not listed or admitted to trading on any
national securities exchange, a Business Day. If a security is not publicly held
or not so listed or traded, "Fair Market Value" shall mean the fair value per
share of stock or per other unit of such other security, as determined by an
independent investment banking firm experienced in the
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valuation of securities selected in good faith by the Board of Directors of the
Company, or, if no such investment bank ing firm is, in the good faith judgment
of the Board of Directors, available to make such determination, in good faith
by the Board of Directors of the Company. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good faith by
the Board of Directors of the Company based upon such appraisals or valuation
reports of such independent experts as the Board of Directors of the Company
shall in good faith determine to be appropriate in accordance with good business
practices and the interests of the holders of Rights. Any such deter mination of
Fair Market Value shall be described in a state ment filed with the Rights Agent
and shall be binding upon the Rights Agent.
(e) Unless the Company shall have exercised its election as
provided in Section 11(f), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 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 Exercise Price, that number of shares (or
fraction of a share) of Common Stock obtained by (i) multiplying (x) the number
of shares (or fraction of a share) covered by a Right
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immediately prior to the adjustment pursuant to this Section 11(e) by (y) the
Exercise Price in effect immediately prior to such adjustment of the Exercise
Price and (ii) dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(f) The Company may elect on or after the date of any
adjustment of the Exercise Price pursuant to Section 11(b) and (c) to adjust the
number of Rights in substitution for any adjustment pursuant to Section 11(e) in
the number of shares (or fraction of a share) of Common Stock purchasable upon
the exercise of a Right. Each of the Rights outstanding after such adjustment of
the number of Rights shall be exercisable for the number of shares (or fraction
of a share) of Common Stock for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights obtained by dividing the
Exercise Price in effect immediately prior to adjustment of the Exercise Price
by the Exercise Price in effect immediately after adjustment of the Exercise
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
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on which the Exercise Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If the Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(f), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights, if any, to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
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(g) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at least 1% of
the Exercise Price; provided, however, that any adjustments which by reason of
this Section 11(g) 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 one-hundredth of
a share, as the case may be.
(h) Irrespective of any adjustment or change in the Exercise
Price or the number of shares (or fraction of a share) of Common Stock issuable
upon the exercise of a Right, the Right Certificates theretofore and thereafter
issued may continue to express the Exercise Price and the number of shares (or
fraction of a share) to be issued upon exercise of a Right as in the initial
Right Certificates issued hereunder but, nevertheless, shall represent the
Rights as so adjusted.
(i) Before taking any action that would cause an adjustment
reducing the price to be paid per whole share of Common Stock upon exercise of
the Rights below the then par value, if any, of the shares of Common Stock, the
Company shall use its best efforts to take any corporate action which may, in
the opinion of its counsel, be necessary in
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order that the Company may validly and legally issue fully paid and
non-assessable shares of such Common Stock at such adjusted price per share.
(j) Anything in this Section 11 to the contrary
notwithstanding, in the event of any recapitalization, reorganization or partial
liquidation of the Company or similar transaction, the Company shall be entitled
to make such further adjustments in the number of shares (or fraction of a
share) of Common Stock which may be acquired upon exercise of the Rights, and
such adjustments in the Exercise Price therefor, in addition to those
adjustments expressly required by the other paragraphs of this Section 11, as
the Board of Directors of the Company shall determine to be necessary or
appropriate in order for the holders of the Rights in such event to be treated
equitably and in accordance with the purpose and intent of this Rights Agreement
or in order that any such event shall not, but for such adjustment, in the
opinion of counsel to the Company, result in the stockholders of the Company
being subject to any United States federal income tax liability by reason
thereof.
(k) If, at any time after the Rights first become exercisable
pursuant to the terms of this Rights Agreement, the number of shares of Common
Stock that are authorized by
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the Company's Articles of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights ("Available
Shares") are not sufficient to permit exercise in full of the Rights in
accordance with the terms of this Rights Agreement, including after giving
effect to the adjustments provided for in Section 11(a)(ii) hereof, then unless
the Board of Directors shall have made adequate provision in lieu thereof
pursuant to Section 11(l) and subject to Section 11(m), the number of shares (or
fraction of a share) of Common Stock for which each Right is exercisable shall
be adjusted by multiplying the number of shares (or fraction of a share) of
Common Stock for which a Right would otherwise be exercisable without giving
effect to this Section 11(k) by a fraction, the numerator of which shall be the
number of Available Shares and the denominator of which shall be the aggregate
number of shares of Common Stock for which all outstanding Rights would
otherwise be exercisable without giving effect to this Section 11(k). In the
event of an adjustment to the number of shares (or fraction of a share) of
Common Stock for which a Right is exercisable pursuant to the preceding
sentence, the Exercise Price shall be automatically adjusted by the same
fraction appearing in the preceding sentence. The adjustment provided for in
this
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Section 11(k) shall be made after all other applicable adjustments to the
Exercise Price for each Right and the number of shares (or fraction of a share)
of Common Stock for which each Right is exercisable shall have been made in
accordance with the other provisions of this Rights Agreement.
(l) In lieu of the adjustments provided in Section 11(k)
above, the Board of Directors may make adequate provision to substitute for the
shares of Common Stock in excess of the Available Shares to be issued upon
exercise of the Rights, upon payment of the applicable Exercise Price, cash,
debt securities or other equity securities of the Company, including, without
limitation, shares, or units of shares, of preferred stock which, by virtue of
having dividend, voting and liquidation rights substantially comparable to those
of the Common Stock, are deemed in good faith by the Board of Directors to have
substantially the same value as shares of Common Stock (such shares or units of
shares of preferred stock are herein called "Common Stock equivalents"), which
cash, debt securities or Common Stock equivalents shall have an aggregate value,
as determined in good faith by the Board of Directors, as is substantially
equivalent to the value of
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such shares of Common Stock as are in excess of Available Shares.
(m) If, upon the occurrence of the event described in Section
11(a)(ii), the number of shares of Common Stock that are authorized by the
Company's Articles of Incorporation but not outstanding or reserved for issuance
for purposes other than upon exercise of the Rights are not sufficient to permit
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof, and
if the Board of Directors shall determine in good faith that it is likely that
sufficient additional shares of Common Stock (or Common Stock equivalents) could
be authorized for issuance upon exercise in full of the Rights, then, the Board
of Directors, if it so elects, may suspend the exercisability of the Rights for
a period of time not more than ninety (90) days after the event described in
Section 11(a)(ii), in order that the Company may seek stockholder approval or
take other appropriate action for the authorization for such additional shares.
During such time of suspension no adjustment shall be made under Section 11(k).
Such suspension may be rescinded by the Board of Directors in its sole
discretion at any time, whereupon the adjustment provided for in Section 11(k)
shall be applicable, unless the Board of Directors shall have made adequate
provision in
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lieu thereof pursuant to Section 11(l). 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
times as the suspension is no longer in effect.
Section 12. CERTIFICATION OF ADJUSTED EXERCISE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Sections 11, 13 or 23,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock a copy of such certificate and (c) mail a brief summary thereof to
each holder of a Right Certificate in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of or the force
or effect of the requirement for such adjustment. Any adjustment to be made
pursuant to Sections 11, 13 or 23 of this Rights Agreement shall be effective as
of the date of the event giving rise to such adjustment. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained and shall not be
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deemed to have knowledge of any adjustment unless and until it shall have
received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, at any time after the time that any
Person becomes an Acquiring Person, (x) the Company shall, directly or
indirectly, consolidate with any other Person or Persons, or merge with and into
any other Person or Persons and the Company shall not be the surviving or
continuing corporation of such merger, or (y) any Person or Persons shall,
directly or indirectly, merge with and into, the Company, and the Company shall
be the continuing or surviving corporation of such merger and, in connection
with such 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
of the Company or cash or any other property, or (z) the Company or one or more
of its Subsidiaries shall, directly or indirectly, sell or otherwise transfer to
any other Person or any Affiliate or Associate of such Person, in one or more
transactions, or the Company or one or more of its Subsidiaries shall sell or
otherwise transfer to any Persons in one or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company
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and its Subsidiaries (taken as a whole) (any event described in clause (x), (y)
or (z) of this Section 13(a) being referred to as a "Section 13 Event"), then,
on the first occurrence of any such event, proper provision shall be made so
that (i) each holder of record of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof
and payment of the Exercise Price with respect to the total number of shares (or
fraction of a share) for which a Right was exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if earlier, the first occurrence of
the event described in Section 11(a)(ii)) in accordance with the terms of this
Rights Agreement, such number of shares of validly issued, fully paid and
nonassessable and freely tradeable Common Stock of the Principal Party (as
defined herein) 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 Exercise Price by the number of shares (or fraction
of a share) of Common Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 13 Event (or, if the event described in
Section 11(a)(ii) has occurred prior to the first occurrence of a Section 13
Event, multiplying the Exercise Price in effect immediately
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prior to the first occurrence of the event described in Section 11(a)(ii) by the
number of shares (or fraction of a share) of Common Stock for which a Right was
exercisable immediately prior to such first occurrence of the event described in
Section 11(a)(ii)) and (2) dividing that product by 50% of the Fair Market Value
(determined as provided in Section 11(d) hereof) per share of the Common Stock
of such Principal Party on the date of consummation of such Section 13 Event;
PROVIDED that the Exercise Price and the number of shares of Common Stock of
such Principal Party issuable upon exercise of each Right shall be further
adjusted as provided in this Rights Agreement to reflect any events occurring
after the date of the first occurrence of a 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 pur suant
to this Rights Agreement; (iii) the term "Company" for all purposes of this
Rights Agreement shall thereafter be deemed to refer to such Principal Party;
(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
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as reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; provided, however, that, upon the
subsequent occurrence of any merger, consolidation, sale of all or substantially
all of the assets, recapitalization, reclassification of shares, reorganization
or other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Exercise Price, such cash, shares, rights, warrants and
other property which such holder would have been entitled to receive had it, at
the time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x)
or (y) of the first sentence of Section 13(a) hereof: (A) the Person that is the
issuer of the securities into
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which shares of Common Stock of the Company are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Stock of which has the greatest market value or (B) if no securities are so
issued, (x) the Person that is the other party to the merger or consolidation
and that survives such merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the greatest market value
or (y) if the Person that is the other party to the merger or consolidation does
not survive the merger or consolidation, the Person that does survive the merger
or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z)
of the first sentence in 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, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons which is
the issuer of Common Stock having the greatest market value of shares
outstanding; provided, however, that in any such case described in
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Section 11(b)(i) or (b)(ii) above, if the Common Stock of such Person is not at
such time and has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which is and has been
so registered, the term "Principal Party" shall refer to such other Person, or
if such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of all of which are and have been so registered, the term
"Principal Party" shall refer to whichever of such Persons is the issuer of the
Common Stock having the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation,
merger or sale or transfer of assets or earning power referred to in Section
13(a) unless the Principal Party shall have a sufficient number of authorized
shares of its Common Stock that 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 the Principal Party involved therein shall
have executed and delivered to the Rights Agent an agreement confirming that
the Principal Party shall, upon consummation of such consolidation, merger or
sale or transfer of assets or earning power, assume this Rights Agreement in
accordance
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with Sections 13(a) and (b) hereof and that all rights of first refusal or
preemptive rights in respect of the issuance of shares of Common Stock of the
Principal Party upon exercise of outstanding Rights have been waived and that
such transaction shall not result in a default by the Principal Party under this
Rights Agreement, and further providing that, as soon as practicable after the
date of any consolidation, merger or sale or transfer of assets or earning power
referred to in Section 13(a) hereof, 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, use its best efforts to cause such registration
statement to become effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act) until the date of
expiration of the Rights, and similarly comply with applicable state securities
laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities
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exchange or to meet the eligibility requirements for quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act. In the event that any of the transactions described in Section
13(a) hereof shall occur at any time after the occurrence of the transaction
described in Section 11(a)(ii) hereof, the Rights which have not theretofore
been exercised shall, subject to the provisions of Section 7(e) hereof,
thereafter be exercisable in the manner described in Section 13(a).
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Fair
Market Value per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such
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then Fair Market Value (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special payment, tax or similar provisions in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 13, then, in such event, the Company shall
not consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) [Intentionally omitted].
(b) The Company shall not be required to issue
fractions of shares of Common Stock upon exercise or redemption of the Rights or
to distribute certificates which evidence fractional shares. In lieu of issuing
fractions of shares of Common Stock, the Company may, at its election,
(i) pay to the registered holder of Right Certificates at
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the time such Right is exercised or redeemed an amount in cash equal to the same
fraction of the Fair Market Value of a share of Common Stock or (ii) cause
depositary receipts to be issued evidencing fractions of shares pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all of the rights, privileges and preferences to which they
would be entitled as owners of the Common Stock.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares of Common Stock upon exercise or redemption of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Rights Agreement, except the rights of action given to the Rights Agent
in Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, any holder of record of
the Common Stock in its capacity as a holder of Rights); and any holder of
record of any Right Certificate (or, prior to the Dis-
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tribution Date, any holder of record of the Common Stock in its capacity as a
holder of Rights), without the consent of the Rights Agent or of the holder of
any other Right Certificate (or, prior to the Dis tribution Date, any holder of
record of the Common Stock in their capacity as holders of Rights), may, in his
own behalf and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right Certificate
in the manner provided in such Right Certificate and in this Rights Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifi cally acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Rights Agreement and will
be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of, the obligations of any Person
subject to this Rights Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Each holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for Common Stock registered in the name
of the holders of the Common Stock (together, where applicable, with
the Summary of Rights) and not by separate Right Certificates, and
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each Right shall be transferable only simultaneously and together with
the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of Common Stock
or any other securities which may at any time be issuable on the exercise
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of the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Rights Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights
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Agent, for anything done or omitted to be done by the Rights Agent in connection
with the acceptance and administration of this Rights Agreement, including the
cost and expenses of defending against any claim of liability relating to the
Rights or this Rights Agreement.
(b) The Rights Agent shall be protected against, 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 Rights Agreement in reliance
upon any Right Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
Section 19. MERGER OR CONSOLIDATION OF, OR CHANGE IN NAME OF,
THE RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business
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of the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Rights Agreement any of
the Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certif icates either in
the name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
pro vided in the Right Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
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under its prior name and deliver Right Certificates so countersigned; in case at
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name or
in its changed name; in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certifi cates, 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
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter 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
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deemed to be conclusively proved and established by a cer tificate signed by the
Chairman of the Board, the Chief Executive Officer or any Vice President and by
the Treasurer or the Secretary of the Company and delivered to the Rights Agent.
Any 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 Rights
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals con tained in this Rights Agreement or
in the Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any re sponsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition
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contained in this Rights Agreement or in any Right Certificate; nor shall it be
responsible for any adjustment required under the provisions of Sections 11, 13
or 23 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Rights Agreement or any Right
Certificate or as to whether any shares of Common Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, exe cute,
acknowledge and deliver or cause to be performed, exe cuted, 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 the Rights Agreement.
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(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 or any Vice President or the
Secretary or the 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 shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Rights 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
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any such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was exercised
in the selection and continued employment thereof.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock by registered or certified mail. The
Company may remove the Rights Agent or any successor Rights Agent (with or
without cause) upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock by registered or certified mail. 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. Notwithstanding the foregoing
provisions of this Section 21, in no event shall the resignation or removal of a
Rights Agent be effective until a successor Rights Agent shall have been
appointed and have accepted such appointment. If the Company shall fail to make
such appointment within a period of 30 days after such removal or after it has
been notified in writing of such resignation or incapacity by the
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resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the incumbent Rights Agent or the holder of record of any Right
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state thereof, in good
standing, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination in the
conduct of its corporate trust or stock transfer business by federal or state
authorities and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $5,000,000 or (b) an Affiliate
controlled by a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed, but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the
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purpose. Not later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent and each
transfer agent of the Common Stock, and mail a notice thereof in writing to the
registered holders of the Right 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.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Company shall have the authority to act
as the Rights Agent until a successor Rights Agent shall have assumed the duties
of the Rights Agent hereunder.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price per share and the number
or kind or class of shares of stock or other securities or property purchasable
under the Right
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Certificates made in accordance with the provisions of this Rights Agreement.
Section 23. REDEMPTION.
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors, redeem all but not less than all the then
outstanding Rights, at any time prior to the close of business on the earlier of
(i) the tenth day following the Stock Acquisition Date, subject to extension by
the Company as provided in Section 26 hereof or (ii) the Final Expiration Date,
at a redemption price of $.01 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (the "Redemption Price"); provided, however, that from and after the time
that any Person shall become an Acquiring Person, the Company may redeem the
Rights only if at the time of the action of the Board of Directors there are
then in office not less than two Continuing Directors and such redemption is
approved by a majority of the Continuing Directors then in office.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable pursuant to Section 11(a)(ii) prior to the expiration
of the Company's right of redemption hereunder.
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(b) Without any further action and without any notice, the
right to exercise the Rights will terminate effective at the time so designated
by action of the Board of Directors of the Company ordering the redemption of
the Rights, and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 days after the effective time of the
action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each notice of
redemption will state the method by which the payment of the Redemption Price
will be made. At the option of the Board of Directors, the Redemption Price may
be paid in cash to each Rights holder or by the issuance of shares (and, at the
Company's election pursuant to Section 14(b) hereof, cash or depositary receipts
in lieu of fractions of shares) of Common Stock having a Fair Market Value equal
to such cash payment.
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Section 24. NOTICE OF PROPOSED ACTIONS.
(a) In case the Company, after the Distribution
Date, shall propose (i) to effect any of the transactions referred to in Section
11(a)(i) or to pay any dividend to the holders of record of its Common Stock
payable in stock of any class or to make any other distribution to the holders
of record of its Common Stock (other than a regular periodic cash dividend at a
rate not in excess of 150% of the rate of the last cash dividend theretofore
paid), or (ii) to offer to the holders of record of its Common Stock options,
warrants, or other rights to subscribe for or to purchase shares of Common Stock
(including any security convertible into or exchangeable for Common Stock) or
shares of stock of any class or any other securities, options, warrants,
convertible or exchangeable securities or other rights, or (iii) to effect any
reclassification of its Common Stock or any recapitalization or reorganization
of the Company, or (iv) to effect any consolidation or merger with or into, or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or
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winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with Section 25,
notice of such proposed action, which shall specify the record date for the
purposes of such transaction referred to in Section 11(a)(i) or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for determining
participation therein by the holders of record of Common Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
for determining holders of record of the Common Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date or participation therein
by the holders of record of Common Stock, whichever shall be the earlier. The
failure to give notice required by this Section 24 or any defect therein shall
not affect the legality or validity of the action taken by the Company or the
vote upon any such action.
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(b) In case any of the transactions referred to in either
Section 11(a)(ii) or Section 13 of this Rights Agreement are proposed, then, in
any such case, the Company shall give to each holder of Rights, in accordance
with Section 25 hereof, notice of the proposal of such transaction at least 10
days prior to consummating such transaction, which notice shall specify the
proposed event and the consequences of the event to holders of Rights under
Section 11(a)(ii) or Section 13 hereof, as the case may be, and, upon
consummating such transaction, shall similarly give notice thereof to each
holder of Rights.
Section 25. NOTICES. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the holder of
record of any Right Certificate or Right to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
IVAX Corporation
4400 Biscayne Boulevard
Miami, Florida 33137
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of record
of any Right Certificate or Right to or on the Rights Agent shall be
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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:
Chase Mellon Shareholder Services, L.L.C.
85 Challenger Road
Overpeck Centre
Ridgefield Park, NJ 07660
Notices or demands authorized by this Rights Agreement to be
given or made by the Company or the Rights Agent to the holder of record of any
Right Certificate or Right shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. For as long as the
Rights are then redeemable and except as provided in the last sentence of this
Section 26, the Company may in its sole and absolute discretion, 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 the Rights or the Common Stock.
At any time when the Rights are not then redeemable and except as provided in
the last sentence of this Section 26, the Company may, 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 (a) to cure any
ambiguity, (b) to correct or supplement any
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provision contained herein which may be defective or inconsistent with any other
provisions herein or (c) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable, provided, that no such
supplement or amendment pursuant to clause (c) above shall materially adversely
affect the interests of the holders of Right Certificates as such. 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 26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Rights Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price or the
Final Expiration Date and supplements or amendments may be made after the time
that any Person becomes an Acquiring Person only if at the time of the action of
the Board of Directors approving such supplement or amendment there are then in
office not less than two Continuing Directors and such supplement or amendment
is approved by a majority of the Continuing Directors then in office.
Section 27. EXCHANGE. (a) The Board of Directors of the
Company may, at its option, at any time after any Person becomes an Acquiring
Person, exchange all
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or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock at an exchange ratio of one share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Stock then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 27 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
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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 shares of Common Stock for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(e) hereof)
held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, 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.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares. In lieu of such fractional shares, the Company shall pay to the
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registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of Section 11(d) hereof)
for the Trading Day immediately prior to the date of exchange pursuant to this
Section 27.
Section 28. SUCCESSORS. All of the covenants and provisions of
this Rights 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. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this
Rights Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Stock in their capacity as holders of Rights) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement
shall be for the sole and exclusive benefit of the Company,
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the Rights Agent and the holders of record of the Right Certificates (and, prior
to the Distribution Date, the registered holders of Common Stock in their
capacity as holders of Rights).
Section 30. FLORIDA CONTRACT. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Florida and for all purposes shall be governed by and
con strued and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 31. COUNTERPARTS. This Rights 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 32. DESCRIPTIVE HEADINGS. Descriptive
headings of the several Sections of this Rights Agreement
are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions
hereof.
Section 33. SEVERABILITY. If any term,
provision, covenant or restriction of this Rights Agreement is held by a court
of competent jurisdiction or other
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authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
IVAX Corporation
By: /s/ ARMANDO A. TABERNILLA
-----------------------------------
Name: Armando A. Tabernilla
Title: Senior Vice President and General Counsel
Chase Mellon Shareholder Services, L.L.C.
By: /s/ KATHLEEN KENNELLY
----------------------------------
Name: Kathleen Kennelly
Title: Assistant Vice President
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EXHIBIT A
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS
AGREEMENT (AS REFERRED TO BELOW), RIGHTS ISSUED TO OR
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID
AND MAY NOT BE TRANSFERRED TO ANY PERSON.
IVAX CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On December 19, 1997, the Board of Directors of IVAX
Corporation (the "Company") declared a distribution of one Common Stock Purchase
Right for each outstanding share of common stock, par value $0.10 per share (the
"Common Stock"), of the Company. The distribution is payable as of December 29,
1997 to stockholders of record on that date. Each Right entitles the registered
holder to purchase from the Company .50 of a share of Common Stock at a price of
$22.50 (the "Exercise Price"). The description and terms of the Rights are set
forth in a Rights Agreement, as the same may be amended from time to time (the
"Rights Agreement"), between the Company and Chase Mellon Shareholder Services,
L.L.C., as Rights Agent (the "Rights Agent").
AS DISCUSSED BELOW, INITIALLY THE RIGHTS WILL NOT BE
EXERCISABLE, CERTIFICATES WILL NOT BE SENT TO STOCKHOLDERS AND THE RIGHTS WILL
AUTOMATICALLY TRADE WITH THE COMMON STOCK.
Upon the day which is the earlier of (i) the tenth day after
the date of the public announcement that a person or group of affiliated or
associated persons has acquired beneficial ownership of 15% or more of the
Company's voting stock ("Acquiring Person"), or (ii) the tenth business day (or
such later date as may be determined by the Board of Directors prior to such
time as any person becomes an Acquiring Person) after the commencement or public
announcement of a person's or group's intention to commence a tender or exchange
offer whose consummation would result in the ownership of 15% or more of the
outstanding shares of voting stock of the Company, even if no purchases actually
<PAGE>
occur pursuant to such offer (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Stock certi ficates outstanding as of December 29, 1997, by such Common
Stock certificates together with a copy of this Summary of Rights.
Notwithstanding the foregoing, the definition of Acquiring Person shall not
include (A) the Company, (B) any subsidiary of the Company, (C) any employee
benefit plan or employee stock plan of the Company or of any subsidiary of the
Company or any trust or other entity organized, appointed, established or
holding Common Stock for or pursuant to the terms of any such plan or (D) any
person whose ownership of 15% or more of the shares of voting stock of the
Company then outstanding results solely from (i) any action or transaction
approved by the Board of Directors before such person acquires such 15%
beneficial ownership or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any such person that does not
become an Acquiring Person by reason of clause (i) or (ii) above shall become an
Acquiring Person upon his acquisition of an additional 1% of the Company's
voting stock unless such acquisition of additional voting stock will not result
in such person becoming an Acquiring Person by reason of such clause (i) or
(ii)).
The Rights Agreement provides that, until the Distribution
Date, the Rights will be represented by and transferred with, and only with, the
Common Stock. Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Stock certificates issued after December 29, 1997
will contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Common Stock certifi cates outstanding as
of December 29, 1997, with or without a copy of this Summary of Rights, also
will constitute the transfer of the Rights associated with the Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate certificates alone
will evidence the Rights from and after the Distribution Date.
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The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on December 19, 2007, unless
earlier redeemed by the Company as described below.
The number of shares of Common Stock issuable upon exercise of
the Rights are subject to certain adjustments from time to time in the event of,
among other things, a stock dividend on, or a subdivision or combination of, the
Common Stock. The Exercise Price is subject to adjustment in the event of, among
other things, extraordinary distributions of cash or other property to holders
of Common Stock.
Unless the Rights are earlier redeemed, in the event that,
after the time that a Person becomes an Acquiring Person, the Company were to be
acquired in a merger or other business combination (in which any shares of the
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Company and its subsidiaries
(taken as a whole) were to be sold or transferred in one or a series of related
transactions, the Rights Agreement provides that proper provision will be made
so that each holder of record of a Right will from and after such date have the
right to receive, upon payment of the Exercise Price, that number of shares of
common stock of the acquiring company having a market value at the time of such
transaction equal to two times the Exercise Price.
In addition, unless the Rights are earlier redeemed, in the
event that a person or group, with certain exceptions, becomes the beneficial
owner of 15% or more of the Company's voting stock, the Rights Agreement
provides that each holder of record of a Right, other than the Acquiring Person
(whose Rights will thereupon become null and void), will thereafter have the
right to receive, upon payment of the Exercise Price, that number of shares of
the Common Stock having a market value at the time of the transaction equal to
two times the Exercise Price.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding voting stock, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio
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of one share of Common Stock per Right (subject to adjustment).
Fractions of shares of Common Stock which would otherwise be
issued upon exercise or redemption of the Rights may, at the election of the
Company, be evidenced by depositary receipts. The Rights Agreement also provides
that the Company may pay cash in lieu of fractional shares.
At any time on or prior to the close of business on the tenth
day after a public announcement that a person has become an Acquiring Person (or
such later date as may be authorized by the Board of Directors and a majority of
the Continuing Directors (as defined in the Rights Agreement)), the Company may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), payable at the election of the Company in cash or shares of
Common Stock. The Rights may be redeemed after the time that any Person has
become an Acquiring Person only if approved by a majority of the Continuing
Directors. Following the effective time of the redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Company
may, except with respect to the redemption price or date of expiration of the
Rights, amend the Rights in any manner, including an amendment to extend the
time period in which the Rights may be redeemed. At any time when the Rights are
not then redeemable, the Company may amend the Rights in any manner that does
not materially adversely affect the interests of holders of the Rights as such.
Amendments to the Rights Agreement from and after the time that any Person
becomes an Acquiring Person requires the approval of a majority of the
Continuing Directors.
Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
4
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A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on
Form 8-K dated December 19, 1997. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its en tirety by reference to the
Rights Agreement, as the same may be amended from time to time, which is
incorporated in this summary description herein by reference.
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EXHIBIT B
[Form of Right Certificate]
Certificate No. W- ______ Rights
NOT EXERCISABLE AFTER DECEMBER 18, 2007 OR EARLIER IF REDEEMED OR CANCELLED. THE
RIGHTS ARE SUBJECT TO REDEMPTION, AT $.01 PER RIGHT, AND CANCELLATION AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH OR REFERRED TO IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND
MAY NOT BE TRANSFERRED TO ANY PERSON.
Right Certificate
IVAX CORPORATION
This certifies that , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement dated as
of December 29, 1997, as the same may be amended from time to time (the "Rights
Agreement") between IVAX Corporation, a Florida corporation (the "Company"), and
Chase Mellon Shareholder Services, L.L.C., a New Jersey limited liability
company to purchase from the Company at any time after the Distribution Date (as
such term is defined in
<PAGE>
the Rights Agreement) and prior to 5:00 P.M. (New York time) on December 19,
2007 at the principal office of the Rights Agent, or its successors as Rights
Agent, in Ridgefield Park, New Jersey, .50 of a share of the Common Stock (the
"Common Stock") of the Company at an exercise price of $22.50, as the same may
from time to time be adjusted in accordance with the Rights Agreement (the
"Exercise Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed.
As provided in the Rights Agreement, the Exercise Price and
the number of shares (or fraction of a share) of Common Stock which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events
and, upon the happening of certain events, securities other than shares of
Common Stock, or other property, may be acquired upon exercise of the Rights
evidenced by this Right Certificate, as provided by the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are 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, obliga-
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tions, duties and immunities of the Rights Agent, the Company and the holders of
record of the Right Certificates. Copies of the Rights Agreement are on file at
the principal executive office of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder of record to purchase a like
aggregate number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right (payable in cash or in shares of Common
Stock).
No fractional shares of Common Stock are required
to be issued upon the exercise or redemption of any Right or Rights evidenced
hereby, and in lieu thereof the Company may
3
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cause depositary receipts to be issued and/or a cash payment may be made, as
provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
Common Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of __________________, 19__.
ATTEST: IVAX CORPORATION
By:
- --------------------------------- --------------
Secretary Title:
Countersigned:
By:
------------------------------
Authorized Signature
5
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED___________________________________________
hereby sells, assigns and transfers unto_______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint ___________
Attorney to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ______________________, 19__
__________________
Signature
Signature Guaranteed:
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CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined pursuant
to the Rights Agreement).
Dated: __________, 19__ ________________________
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO IVAX CORPORATION:
The undersigned hereby irrevocably elects to exercise
______________________ Rights represented by this Right Certificate to purchase
the shares of Common Stock issuable upon the exercise of such Rights and
requests that certificates for such share(s) be issued in the name: Please
insert social security or other identifying number: ___________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
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Please insert social security or other identifying number:_____________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: _______________, 19__
______________________________
Signature
(Signature must conform in all
respects to name of holder as
specified on the fact of this
Right Certificate)
Signature Guaranteed:
9
