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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
August 24, 1995
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(Date of Report; Date of Earliest Event Reported)
Organogenesis Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
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0-15246 04-2871690
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(Commission File Number) (IRS Employer Identification No.)
150 Dan Road, Canton, Massachusetts 01876
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(Address of principal executive offices) (Zip Code)
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(617) 575-0775
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(Registrant's telephone number, including area code)
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Item 5. Other Events.
A. On August 24, 1995, the Board of Directors of Organogenesis Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of the Company's Common Stock to stockholders of record at the close of
business on September 1, 1995. Each Right entitles the registered holder to
purchase from the Company a unit consisting of one one-thousandth of a share (a
"Unit") of Series B Junior Participating Preferred Stock, $1.00 par value (the
"Series B Preferred Stock") at a Purchase Price of $85 in cash per Unit, subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and American Stock
Transfer & Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 30% or more of such outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after September 1, 1995
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on September 1, 2005, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors and except in connection with shares of Common Stock
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issued upon the exercise of employee stock options, issuances under other
employee stock benefit plans or the conversion of convertible securities issued
hereafter, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15% or more
of the then outstanding shares of Common Stock, except pursuant to an offer for
all outstanding shares of Common Stock which the independent directors determine
to be fair to, and otherwise in the best interests of, shareholders, each holder
of a Right will thereafter have the right to receive, upon exercise, that number
of shares of Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) which equals the exercise price of the Right divided
by one-half of the current market price (as defined in the Rights Agreement) of
the Common Stock at the date of the occurrence of the event. However, Rights are
not exercisable following the event set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
Notwithstanding any of the foregoing, following the occurrence of such event,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void. The event set forth in this paragraph is referred to as a "Section
11(a)(ii) Event."
For example, at an exercise price of $85 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase for
$85 such number of shares of Common Stock (or other consideration, as noted
above) as equals $85 divided by one-half of the current market price (as defined
in the Rights Agreement) of the Common Stock. Assuming that the Common Stock had
a per share value of $42.50 at such time, the holder of each valid Right would
be entitled to purchase four shares of Common Stock for $85.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation or its Common
Stock is changed or exchanged (other than a merger which follows an offer
determined by the Board to be fair as described in the second preceding
paragraph), or (ii) 50% or more of the Company's assets or earning power is sold
or transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, that number of shares of common stock of the acquiring company which
equals the exercise
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price of the Right divided by one-half of the current market price of such
common stock at the date of the occurrence of the event.
For example, at an exercise price of $85 per Right, each Right
following an event set forth in the preceding paragraph would entitle its holder
to purchase for $85 such number of shares of common stock of the acquiring
company as equals $85 divided by one-half of the current market price (as
defined in the Rights Agreement) of such common stock. Assuming that such common
stock had a per share value of $42.50 at such time, the holder of each valid
Right would be entitled to purchase four shares of common stock of the acquiring
company for $42.50.
At any time after the occurrence of a Section 11(a)(ii) Event, and
subject to the concurrence of a majority of the Continuing Directors (as defined
in the Rights Agreement), the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person which have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-thousandth of a share of Series B Preferred Stock (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of Series B
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series B Preferred Stock, (ii) if holders of the Series
B Preferred Stock are granted certain rights or warrants to subscribe for Series
B Preferred Stock or convertible securities at less than the current market
price of the Series B Preferred Stock, or (iii) upon the distribution to holders
of the Series B Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
The number of Rights associated with each share of Common Stock is also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of Common Stock occurring, in any such case,
prior to the Distribution Date.
Shares of Series B Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. The Series B Preferred Stock will rank, with
respect to the payment of dividends and the
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distribution of assets, junior to all series of any other class of Preferred
Stock, including, but not limited to the Series A Preferred Stock, issued either
before or after the issuance of the Series B Preferred Stock, unless the terms
of any such series shall provide otherwise. Subject to the foregoing, each share
of Series B Preferred Stock will be entitled to a minimum preferential quarterly
dividend payment of $10 per share and will be entitled to an aggregate dividend
of 1,000 times the dividend declared per share of Common Stock. In the event of
liquidation, the holders of the Series B Preferred Stock will be entitled,
subject to the rights of the holders of Series A Preferred Stock and holders of
any other Preferred Stock which is senior to the Series B Preferred Stock, to a
minimum preferential liquidating payment of $10 per share and will be entitled
to an aggregate payment of 1,000 times the payment made per share of Common
Stock. Each share of Series B Preferred Stock will have 1,000 votes, voting
together with the Common Stock. In the event of any merger, consolidation or
other transaction in which Common Stock is exchanged, each share of Series B
Preferred Stock will be entitled to receive 1,000 times the amount received per
share of Common Stock. The foregoing dividend and liquidation rights of the
Series B Preferred Stock are protected against dilution in the event additional
shares of Common Stock are issued pursuant to a stock split, stock dividend or
similar recapitalization event.
Because of the nature of the Series B Preferred Stock's dividend,
liquidation and voting rights, the value of one one-thousandth of a share of
Series B Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Series B Preferred Stock on
the last trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (payable in cash or stock). Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01 redemption
price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without
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limitation, the right to vote or to receive dividends. While the distribution of
the Rights will not be taxable to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Common Stock (or other consideration) of
the Company or for common stock of the acquiring company as set forth above.
Prior to the Distribution Date, the terms of the Rights are subject to
amendment by the Board of Directors without the consent of the holders of the
Rights, except that (i) the redemption price of the Rights, the exercise price
of the Rights and the number of shares of Series B Preferred Stock issuable upon
exercise of the Rights are not subject to amendment and (ii) the expiration date
of the Rights is subject to amendment (including acceleration) only in
connection with an acquisition of the Company at a price determined to be fair
by a majority of the members of the Company's Board of Directors who are not
officers of the Company and who are not affiliated with the acquiring party.
After the Distribution Date, only limited terms of the Rights are subject to
amendment by the Board, and the consent of the Continuing Directors (as defined
in the Rights Agreement) is required where appropriate to protect the Rights.
As of August 24, 1995, there were 10,586,273 shares of Common Stock
outstanding, 250,000 shares of Series A Preferred Stock outstanding, warrants to
purchase 417,500 shares of Common Stock outstanding and there were 3,950,000
shares of Common Stock reserved for issuance under the Company's 1991 Directors'
Stock Option Plan, 1994 Director Stock Option Plan, 1986 Stock Option Plan, 1995
Stock Option Plan and 1991 Employee Stock Purchase Plan. Each outstanding share
of Common Stock on September 1, 1995 will receive one Right. As long as the
Rights are attached to the Common Stock, one additional Right (as such number
may be adjusted pursuant to the provisions of the Rights Agreement) shall be
deemed to be delivered for each share of Common Stock issued or delivered by the
Company in the future. In addition, following the Distribution Date and prior to
the expiration, redemption or exchange of the Rights, the Company may issue
Rights when it issues Common Stock only if the Board of Directors deems it to be
necessary or appropriate or in connection with the issuance of shares of Common
Stock pursuant to the exercise of stock options or under employee plans or upon
the exercise, conversion or exchange of certain securities of the Company. Fifty
Thousand shares of Series B Preferred Stock are initially reserved for issuance
upon exercise of the Rights.
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The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
The Rights, however, should not affect any prospective offeror willing to make
an offer at a fair price and otherwise in the best interests of the Company and
its stockholders, as determined by a majority of unaffiliated Directors, or
willing to negotiate with the Board of Directors. The Rights should not
interfere with any merger or other business combination approved by the Board of
Directors of the Company since the Board of Directors may, at its option, at any
time prior to the close of business on the earlier of (i) the tenth day
following the Stock Acquisition Date or (ii) September 1, 2005, redeem all but
not less than all of the then outstanding Rights at the Redemption Price.
The Form of Rights Agreement between the Company and the Rights Agent
specifying the terms of the Rights, which includes as Exhibit A the Form of
Certificate of Designations, as Exhibit B the Form of Rights Certificate, and as
Exhibit C the Summary of Rights to Purchase Series B Preferred Stock, is filed
as Exhibit 4.1 hereto and is incorporated herein by reference. The foregoing
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to such Exhibits.
B. In addition, on August 24, 1995, the Board of Directors of the Company
declared a 25% Common Stock dividend (the "Stock Dividend") whereby one share of
Common Stock will be distributed on or about September 8, 1995 for each four
shares of Common Stock held of record on September 1, 1995 (the "Record Date")
to holders of record on the Record Date. No fractional shares will be issued in
connection with the Stock Dividend. Cash payments will be made in lieu of
fractional shares based upon the closing price of the Company's Common Stock on
the American Stock Exchange on the Record Date. In addition, the Board voted to
make appropriate adjustments in the number of shares of Common Stock (i)
reserved for issuance and/or issuable under the Corporation's 1986 Stock Option
Plan, as amended, Amended and Restated 1991 Employee Stock Purchase Plan, 1994
Director Stock Option Plan, and the 1995 Stock Option Plan and upon exercise of
all outstanding options under such Plans and (ii) upon conversion of the
outstanding warrants of the Company.
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Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
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Exhibit No. Exhibit
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4.1 Rights Agreement, dated as of September
1, 1995, between Organogenesis Inc and
American Stock Transfer & Trust Company,
which includes as Exhibit A the Form of
Certificate of Designations, as Exhibit B
the Form of Rights Certificate, and as
Exhibit C the Summary of Rights to
Purchase Series B Preferred Stock.
4.2 Certificate of Designation, filed with
the Secretary of State of the State of
Delaware on August 29, 1995.
99.1 Press Release, dated August 24, 1995,
announcing adoption of the Shareholder
Rights Plan and declaration by the Board
of Directors of the Company of a 25%
Common Stock Dividend.
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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 thereunto duly authorized.
Date: August 30, 1995
/s/ HERBERT M. STEIN
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By: Herbert M. Stein
Title: Chief Executive Officer
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Exhibit 4.1
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of September 1, 1995 (the "Agreement"),
between Organogenesis Inc., a Delaware corporation (the "Company"), and American
Stock Transfer & Trust Company, a New York corporation, as Rights Agent (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, on August 24, 1995 the Board of Directors of the Company (the
"Board") authorized and declared a dividend distribution of one Right for each
share of Common Stock (as hereinafter defined) of the Company outstanding at the
close of business on September 1, 1995 (the "Record Date") and authorized the
issuance, including those shares of Common Stock to be issued in connection with
the one-for-four Common Stock Dividend declared by the Board at its meeting on
August 24, 1995, of one Right (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(p) hereof) for each share of Common
Stock of the Company issued between the Record Date (whether originally issued
or delivered from the Company's treasury) and the earlier of the Distribution
Date or the Expiration Date, each Right initially representing the right to
purchase one one-thousandth of a share of Series B Junior Participating
Preferred Stock of the Company having the rights, powers and preferences set
forth in the form of Certificate of Designations attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth (the
"Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding, but shall not
include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee
benefit plan of the Company or of any Subsidiary of the Company, or (iv) any
Person organized, appointed or established by the
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Company for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Stock by the Company which, by reducing the number of
shares outstanding, increase the proportionate number of shares beneficially
owned by such Person to 15% or more of the shares of Stock of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the shares of Common Stock of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of any additional
Common Stock of the Company, then such Person shall be deemed to be an
"Acquiring Person." Notwithstanding the foregoing, if the Board of Directors of
the Company 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, and such Person divests as
promptly as practicable a sufficient number of shares of Common 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 any purposes of this Agreement unless and until
such Person shall again become an "Acquiring Person."
(b) "Act" shall mean the Securities Act of 1933.
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended and in effect on the date of
this Agreement (the "Exchange Act").
(d) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, beneficially owns or has the
right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities), whether or not in writing, or upon the
exercise of conversion rights, exchange rights, other rights, warrants
or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own,"
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(A) securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (B) securities issuable
upon exercise of Rights at any time prior to the occurrence of a Triggering
Event, or (C) securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior to the Distribution Date or
pursuant to Section 3(a) or Section 22 hereof (the "Original Rights") or
pursuant to Section 11(i) hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act, or any comparable or successor
rule), including pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), whether or
not in writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under this
subparagraph (ii) as a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act, and (B) is not then
reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such Person (or
any of such Person's Affiliates or Associates) has any agreement, arrangement or
understanding (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), whether or not in writing, for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (d)) or disposing of any voting securities
of the Company.
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Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M., Boston
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., Boston time, on the next succeeding Business Day.
(g) "Common Stock" shall mean the common stock, $.01 par value, of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock of such Person with the greatest
voting power, or the equity securities or other equity interest having power to
control or direct the management, of such Person.
(h) "Common stock equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(i) "Continuing Director" shall mean (i) any member of the Board, while
such Person is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and was a member of the
Board prior to the date of this Agreement, or (ii) any Person who subsequently
becomes a member of the Board, while such Person is a member of the Board, who
is not an Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate, if such Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing Directors.
(j) "Current market price" shall have the meaning set forth in Section
11(d)(i) hereof.
(k) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
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(l) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(m) "Exchange Act" shall have the meaning set forth in Section 1(c)
hereof.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(o) "Final Expiration Date" shall mean the close of business on
September 1, 2005.
(p) "Permitted Offer" shall mean a tender offer or an exchange offer
for all outstanding shares of Common Stock at a price and on terms determined by
at least a majority of the members of the Board of Directors who are not
officers of the Company and who are not representatives, nominees, Affiliates or
Associates of an Acquiring Person, after receiving advice from a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, to be (a) at a price that is fair to stockholders (taking into account
all factors which such members of the Board deem relevant including, without
limitation, prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (b)
otherwise in the best interests of the Company and its stockholders.
(q) "Person" shall mean any individual, firm, corporation, partnership,
trust, association or other entity.
(r) "Series B Preferred Stock" shall mean shares of Series B Junior
Participating Preferred Stock, $1.00 par value, of the Company having the rights
and preferences set forth in the form of Certificate of Designations attached to
this Agreement as Exhibit A and, to the extent that there is not a sufficient
number of shares of Series B Junior Participating Preferred Stock authorized to
permit the full exercise of the Rights, any other series of Preferred Stock,
$1.00 par value, of the Company designated for such purpose containing terms
substantially similar to the terms of the Series B Junior Participating
Preferred Stock.
(s) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(t) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
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(u) "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of the Agreement.
(v) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(w) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(x) "Rights" shall have the meaning set forth in the WHEREAS clause at
the beginning of the Agreement.
(y) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.
(z) "Section 11(a)(ii) Event" shall mean an acquisition of Common Stock
described in the first sentence of Section 11(a)(ii) hereof.
(aa) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(bb) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(cc) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(dd) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such.
(ee) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is beneficially owned, directly
or indirectly, by such Person, or otherwise controlled by such Person.
(ff) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(gg) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
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(hh) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights.
(a) Until the earlier of (i) the close of business on the
tenth day after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the close of business on the
Record Date), or (ii) the close of business on the tenth Business Day after the
date that a tender or exchange offer by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person organized, appointed or established by
the Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such Person
would be the Beneficial Owner of 30% or more of the shares of Common Stock then
outstanding (the earlier of (i) and (ii) being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for the
Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Common Stock (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Distribution Date, at the address of such holder shown on the
records of the Company, one or more rights certificates, in substantially the
form of Exhibit B hereto (the "Rights Certificates"), evidencing one Right for
each share of Common Stock so held, subject to adjustment as provided herein. In
the event that an adjustment in the number of Rights per share of Common Stock
has been made pursuant to Section 11(p)
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hereof, at the time of distribution of the Right Certificates, the Company shall
make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced
solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Series B Preferred
Stock, in substantially the form attached hereto as Exhibit C, by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for the Common Stock
outstanding as of the close of business on the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights.
(c) Rights shall be issued in respect of all shares of Common
Stock that are issued (either as an original issuance or from the Company's
treasury) after the Record Date but prior to the earlier of the Distribution
Date or the Expiration Date. Certificates representing such shares of Common
Stock (including, without limitation, certificates issued upon transfer or
exchange of Common Stock) shall also be deemed to be certificates for Rights,
and shall bear the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in the Rights Agreement between
Organogenesis Inc. (the "Company") and American Stock Transfer & Trust
Company (the "Rights Agent") dated as of September 1, 1995 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person or any Affiliate or
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<PAGE> 9
Associates thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights.
(d) Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7 hereof), the transfer of
any certificates representing shares of Common Stock in respect of which Rights
have been issued shall also constitute the transfer of the Rights associated
with such shares of Common Stock. In the event that the Company purchases or
acquires any shares of Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such shares of Common Stock shall
be deemed cancelled and retired so that the Company shall not be entitled to
exercise any Rights associated with the shares of Common Stock which are no
longer outstanding.
(e) In connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration Date,
the Company (i) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities issued
by the Company, and (ii) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (A) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and
(B) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase, certification and assignment to be printed on the reverse thereof)
shall each be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or
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<PAGE> 10
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any applicable law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange or over-the-counter market on which the Rights may from time
to time be listed, or to conform to usage. Subject to the provisions of Section
11 and Section 22 hereof, the Rights Certificates, whenever distributed, shall
entitle the holders thereof to purchase such number of one one-thousandths of a
share of Series B Preferred Stock as shall be set forth therein at the price set
forth therein (such exercise price per one one-thousandth of a share, the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3 or
Section 22 hereof that represents Rights beneficially owned by persons known to
be: (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
that has as a primary purpose or effect avoidance of Section 7(e) hereof, and
any Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
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<PAGE> 11
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof, which shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by the Rights
Agent and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before countersignature by the
Rights Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept, at its office designated as the appropriate place for
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates, the Certificate number and the date of each of the Rights
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the Expiration
Date, any Rights Certificate or Certificates (other than Rights Certificates
representing Rights that have become void pursuant to Section 7(e) hereof or
that have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one one-thousandths
of a share of Series B Preferred
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<PAGE> 12
Stock (or, following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged,
with the form of assignment and certificate appropriately executed, at the
office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14 hereof, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)
hereof) in
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<PAGE> 13
whole or in part at any time after the Distribution Date upon surrender of the
Rights Certificate, with the form of election to purchase and the certificate on
the reverse side thereof duly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment of the aggregate
Purchase Price with respect to the total number of one one-thousandths of a
share (or other securities, cash or other assets, as the case may be) as to
which such surrendered Rights are then exercisable, at or prior to the earlier
of (i) the Final Expiration Date, (ii) the time at which the Rights expire as
provided in Section 13(d) hereof, (iii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the "Redemption Date"), or (iv) the
time at which such Rights are exchanged as provided in Section 24 hereof (the
earlier of (i), (ii), (iii) and (iv) being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-thousandth of a share
of Series B Preferred Stock pursuant to the exercise of a Right shall initially
be $85, and shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance with paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment, with respect to each Right so exercised,
of the Purchase Price per one one-thousandth of a share of Series B Preferred
Stock (or other shares, securities, cash or other assets, as the case may be) to
be purchased as set forth below and an amount equal to any applicable transfer
tax, the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly
(i) (A) requisition from any transfer agent of the shares of Series B Preferred
Stock (or make available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-thousandths of a share of
Series B Preferred Stock to be purchased and the Company hereby authorizes its
transfer agent to comply with such requests, or (B) if the Company shall have
elected to deposit the total number of shares of Series B Preferred Stock
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a share of Series B Preferred Stock as are to
be purchased (in which case certificates for the shares of Series B Preferred
Stock represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby directs the depositary agent to
comply with such requests, (ii) requisition from the Company the amount of cash,
if any, to be paid in lieu of
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<PAGE> 14
fractional shares in accordance with Section 14 hereof, (iii) after receipt of
such certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the Purchase Price
(as such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be
made in cash or by certified bank check or money order payable to the order of
the Company. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash and/or distribute
other property pursuant to Section 11(a) hereof, the Company shall make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in such name or names
as may be designated by such holder, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes such, or (iii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the Board
of Directors of the Company has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to insure that the provisions of this
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<PAGE> 15
Section 7(e) and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Rights Certificates or other Person as a result of
its failure to make any determinations with respect to an Acquiring Person or
its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported transfer or exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate following
the form of assignment or election to purchase set forth on the reverse side of
the Rights Certificate surrendered for such assignment or 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 Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of Series
B Preferred Stock (and, following the occurrence of a Triggering Event, out of
its authorized and unissued shares of Common Stock and/or other securities or
out of its authorized and issued shares held in its treasury), the number of
shares of Series B Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) that, as provided in
this Agreement including
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<PAGE> 16
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Series B Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights are
eligible for listing on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the Act,
with respect to the securities 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 Expiration
Date. The Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite registration or qualification in such
jurisdiction shall have been effected or obtained.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-thousandths of a
share of Series B Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) delivered upon exercise of Rights
shall, at the time
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<PAGE> 17
of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
that may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-thousandths of a
share of Series B Preferred Stock (or Common Stock and/or other securities, as
the case may be) upon the exercise of Rights. The Company shall not, however, be
required (i) to pay any transfer tax that may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of a number of one one-thousandths of a share of Series B
Preferred Stock (or Common Stock and/or other securities, as the case may be) in
respect of a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or (ii) to issue or
deliver any certificates for a number of one one-thousandths of a share of
Series B Preferred Stock (or Common Stock and/or other securities, as the case
may be) in a name other than that of the registered holder upon the exercise of
any Rights until such tax shall have been paid (any such tax being payable by
the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company's satisfaction that no such tax is due.
Section 10. Series B Preferred Stock Record Date. Each Person in whose
name any certificate for a number of one one-thousandths of a share of Series B
Preferred Stock (or Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Series B Preferred
Stock (or Common Stock and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided, however,
that if the date of such surrender and payment is a date upon which the Series B
Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the Series
B Preferred Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a
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<PAGE> 18
stockholder of the Company with respect to securities for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Series B Preferred
Stock payable in shares of Series B Preferred Stock, (B) subdivide the
outstanding Series B Preferred Stock, (C) combine the outstanding
Series B Preferred Stock into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the Series B
Preferred Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind
of shares of Series B Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Series B Preferred Stock or
capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date and at a time when the Series
B Preferred Stock transfer books of the Company were open, he would
have owned upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an
event occurs that would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(a)(ii) Subject to Section 24 of this Agreement, in the event
that any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or
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of any Subsidiary of the Company, or any Person organized, appointed or
established by the Company for or pursuant to the terms of any such
plan), alone or together with its Affiliates and Associates, shall, at
any time after the Record Date, become the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding (unless pursuant to
a Permitted Offer) then, promptly following the first occurrence of
such event, proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement,
in lieu of a number of one one-thousandths of a share of Series B
Preferred Stock, such number of shares of Common Stock of the Company
that equals the result obtained by (x) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share of
Series B Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, and (y)
dividing that product (which, following such first occurrence, shall
thereafter be referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share of Common Stock
on the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
that are authorized by the Company's certificate of incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii)
of this Section 11(a), the Company shall: (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a
Right (the "Current Value") over (2) the Purchase Price (such excess,
the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company has deemed
to have the same value as shares of Common Stock (such shares of
preferred stock, "common stock equivalents")), (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors
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of the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty
(30) days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger Date"), then
the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If the Board of Directors of the Company shall determine
in good faith that it is likely that sufficient additional shares of
Common Stock could be authorized for issuance upon exercise in full of
the Rights, the thirty (30) day period set forth above may be extended
to the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
shareholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Stock on such
date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Series B Preferred
Stock entitling them to subscribe for or purchase (for a
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period expiring within forty-five (45) calendar days after such record date)
Series B Preferred Stock (or shares having the same rights, privileges and
preferences as the shares of Series B Preferred Stock ("equivalent preferred
stock")) or securities convertible into Series B Preferred Stock or equivalent
preferred stock at a price per share of Series B Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per share, if a
security convertible into Series B Preferred Stock or equivalent preferred
stock) less than the current market price (as determined pursuant to Section
11(d) hereof) per share of Series B Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of shares of Series B
Preferred Stock outstanding on such record date, plus the number of shares of
Series B Preferred Stock which the aggregate offering price of the total number
of shares of Series B Preferred Stock and/or equivalent preferred stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Series B Preferred
Stock outstanding on such record date, plus the number of additional shares of
Series B Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
by delivery of consideration part or all of which may be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors of the Company, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. Shares of Series B Preferred Stock owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed, and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Series B Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation) of evidences of indebtedness, cash (other
than a regular quarterly cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Series B Preferred
Stock, but including any dividend payable in stock other
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than Series B Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the current market price (as determined pursuant to Section 11(d)
hereof) per share of Series B Preferred 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 and shall be conclusive for all purposes) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Series B Preferred
Stock and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Series B Preferred
Stock on such record date. Such adjustments shall be made successively whenever
such a record date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase Price which would
have been in effect if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Stock for the thirty (30) consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) hereof,
the "current market price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing prices per share of
such Common Stock for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the
current market price per share of the Common Stock is determined during
a period following the announcement by the issuer of such Common Stock
of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of
such Common Stock (other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock, and prior to
the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
"current market price" shall be properly adjusted to take into account
ex-dividend trading. The
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closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the American Stock
Exchange or, if the shares of Common Stock are not listed or admitted
to trading on the American Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the Nasdaq National Market
("Nasdaq") or such other system then in use, or, if on any such date
the shares of Common Stock are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected
by the Board of Directors of the Company. If on any such date no market
maker is making a market in the Common Stock, the fair value of such
shares on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open
for the transaction of business or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange,
a Business Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall mean the fair
value per share as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Series B Preferred Stock shall be
determined in the same manner as set forth above for the Common Stock
in clause (i) of this Section 11(d) (other than the last sentence
thereof). If the current market price per share of Series B Preferred
Stock cannot be determined in the manner provided above or if the
Series B Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current
market price" per share of Series
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B Preferred Stock shall be conclusively deemed to be an amount equal to
1,000 (as such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement) multiplied by
the current market price per share of the Common Stock. If neither the
Common Stock nor the Series B Preferred Stock is publicly held or so
listed or traded, "current market price" per share of the Series B
Preferred Stock shall mean the fair value per share 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 and shall be conclusive for all purposes. For all purposes of
this Agreement, the "current market price" of one one-thousandth of a
share of Series B Preferred Stock shall be equal to the "current market
price" of one share of Series B Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-millionth of a share of
Series B Preferred Stock, or hundred-thousandth of a share of Common Stock or
other share, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the transaction which
mandates such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than Series B
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Series B Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m), and
the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Series
B Preferred Stock shall apply on like terms to any such other shares.
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(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Series B Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Series B Preferred Stock (calculated to the
nearest ten-millionth) obtained by (i) multiplying (x) the number of one
one-thousandths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-thousandths of a share of Series B Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights outstanding
after the adjustment in the number of Rights shall be exercisable for the number
of one one-thousandths of a share of Series B Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-hundred-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the adjustment, and,
if known at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day thereafter,
but, if the Rights Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
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cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of Series B Preferred
Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the Purchase Price per
one one-thousandth of a share and the number of one one-thousandths of a share
which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of the number
of one one-thousandths of a share of Series B Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one
one-thousandths of a share of fully paid and nonassessable Series B Preferred
Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of one one- thousandths of a share of Series B Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-thousandths of a share of Series B
Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect prior
to such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional shares (fractional
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or otherwise) or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in their good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Series B Preferred Stock, (ii) issuance
wholly for cash of any shares of Series B Preferred Stock at less than the
current market price, (iii) issuance wholly for cash of shares of Series B
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Series B Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Series B Preferred Stock shall
not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) hereof), or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the shareholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates. The Company shall not
consummate any such consolidation, merger, sale or transfer unless prior thereto
the Company and such other Person shall have executed and delivered to the
Rights Agent a supplemental agreement evidencing compliance with this Section
11(n).
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(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23, Section 24 or
Section 27 hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Record Date and prior to the Distribution Date (i) declare or pay any dividend
on the outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued
or delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to the occurrence of such event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately following the
occurrence of such event.
(q) The exercise of Rights under Section 11(a)(ii) shall only
result in the loss of rights under Section 11(a)(ii) to the extent so exercised
and shall not otherwise affect the rights represented by the Rights under this
Rights Agreement, including the rights represented by Section 13.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Series B Preferred Stock and the Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall not be deemed to
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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, on or following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), and the Company shall not
be the continuing or surviving corporation of such consolidation or merger, (y)
any Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof) shall consolidate with, or merge with or
into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding shares of Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one transaction or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case and except as
contemplated by Section 13(d) hereof, proper provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal Party (as such term is
hereinafter defined), not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one one-thousandths
of a share of Series B Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first occurrence of a Section
13 Event, multiplying the number of such one one-thousandths of a share for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately prior to
such first occurrence), and dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as
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the "Purchase Price" for each Right and for all purposes of this Agreement) by
(2) 50% of the current market price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on the date of
consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof shall
apply only to such Principal Party following the first occurrence of a Section
13 Event; (iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Stock) in connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v) the provisions
of Section 11(a)(ii) hereof shall be of no effect following the first occurrence
of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, and if no
securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value; and
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(3) in case such Person is owned, directly or indirectly, by a joint venture
formed by two or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint ventures and the Principal
Parties in each such chain shall bear the obligations set forth in this Section
13 in the same ratio as their direct or indirect interests in such Person bear
to the total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date;
(ii) use its best efforts to qualify or register the
Rights and the securities purchasable upon exercise of the Rights under
the blue sky laws of such jurisdictions as may be necessary or
appropriate; and
(iii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
that comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have
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not theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such transaction is
consummated with a Person or Persons (or a wholly owned subsidiary of any such
Person or Persons) who acquired shares of Common Stock pursuant to a tender
offer or exchange offer for all outstanding shares of Common Stock which
complies with the provisions of Section 11(a)(ii) hereof regarding the
determination of the Board of Directors of the Company, (ii) the price per share
of Common Stock paid in such transaction is not less than the price per share of
Common Stock paid to all holders of shares of Common Stock whose shares were
purchased pursuant to such tender offer or exchange offer, and (iii) the form of
consideration paid in such transaction is the same as the form of consideration
paid pursuant to such tender offer or exchange offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(i) or
(p) hereof, or to distribute Rights Certificates that evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right shall be the closing price of the Rights
for the Trading Day immediately prior to the date on which such fractional
Rights would have been otherwise issuable. The closing price of the Rights for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the American Stock Exchange or, if the Rights are not listed or
admitted to trading on the American Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last such quoted price or, if
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not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use
or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
shares of Series B Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Series B Preferred Stock) upon
exercise of the Rights or to distribute certificates that evidence fractional
shares of Series B Preferred Stock (other than fractions which are integral
multiples of one one-thousandth of a share of Series B Preferred Stock). In lieu
of fractional shares of Series B Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Series B Preferred
Stock), the Company shall pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one one-thousandth of a
share of Series B Preferred Stock. For purposes of this Section 14(b), the
current market value of one one-thousandth of a share of Series B Preferred
Stock shall be one one-thousandth of the closing price of a share of Series B
Preferred Stock (as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company shall pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market price of one (1) share of Common Stock (as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
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Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action expressly given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates duly completed and fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
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(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to prevent the issuance of any such order, decree or ruling and to have
any such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-thousandths of a share of Series B Preferred Stock or any other securities
of the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
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(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate or certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and,
where necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; provided, however, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the counter-signature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such
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Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights
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<PAGE> 38
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11, Section 13 or Section 24 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt of a
certificate describing any such adjustment, delivered pursuant to Section 12);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock or
Series B Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or Series B Preferred
Stock will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer. Any
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to
be taken or omitted by the Rights Agent with respect to its duties or
obligations under this Rights Agreement and the date on and/or after which such
action shall be taken or omitted and the Rights Agent shall not be liable for
any action taken or omitted in accordance with a proposal included in any such
application on or after the date specified therein (which date shall not be less
than five Business Days after the date any such officer actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking or omitting any such action, the Rights
Agent has received written instructions in response to such application
specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in
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any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has not been
completed, the Company and the Rights Agent will deem the beneficial owner of
the rights evidenced by such Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof and such assignment or election to purchase will
not be honored.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Series B Preferred Stock, by registered
or certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Series B Preferred Stock, by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the
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Rights Agent. If the Company shall fail to make such appointment within a period
of thirty (30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by the Company),
then any registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
(or of any state of the United States) in good standing, which is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of 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 purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Series B Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any
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employee plan or arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any other case, if
deemed necessary or appropriate by the Board of Directors of the Company, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the close of business on the tenth day
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the close of business on the tenth day
following the Record Date), or (ii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $.01 per
Right, as such amount may be appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price") and
the Company may, at its option, pay the Redemption Price either in shares of
Common Stock (based on the "current market price", as defined in Section
11(d)(i) hereof, of the shares of Common Stock at the time of redemption) or
cash. Notwithstanding anything contained in this Agreement to the contrary, the
Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption hereunder
has expired.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights shall terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding Rights by mailing
such notice to all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the Distribution
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Date, on the registry books of the Transfer Agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
(c) The Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release announcing
the manner of redemption of the Rights in accordance with this Agreement and
(ii) mailing payment of the Redemption Price to the registered holders of the
Rights at their last addresses as they appear on the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
Transfer Agent of the Common Shares, and upon such action, all outstanding
Rights and Right Certificates shall be null and void without any further action
by the Company.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after a Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which (i) shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof, and (ii) shall
include, without limitation, any Rights issued after the Distribution Date in
connection with the exercise of options pursuant to the Company's employee
benefit plans, where such option is exercised for securities of the Company or
surrendered for cash) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors may effect such an
exchange only if there are at least two Continuing Directors then in office and
a majority of such Continuing Directors concur with such exchange.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24, evidence of which shall have been filed with the Rights Agent,
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
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the validity of such exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange shall state the method
by which the exchange of 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 any exchange pursuant to this Section 24, the Company,
at its option, may substitute Series B Preferred Stock (or equivalent preferred
stock, as such term is defined in Section 11(b) hereof) for shares of Common
Stock exchangeable for Rights, at the initial rate of one one-thousandth of a
share of Series B Preferred Stock (or equivalent preferred stock) for each share
of Common Stock, as appropriately adjusted to reflect adjustments in the voting
rights of the Series B Preferred Stock pursuant to Section 3(A) of the
Certificate of Designations attached hereto as Exhibit A, so that the fraction
of a share of Series B Preferred Stock (or equivalent preferred stock) delivered
in lieu of each share of Common Stock shall have the same voting rights as one
share of Common Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock or Series B Preferred Stock issued but not outstanding or
authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock or Series B
Preferred Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares of Common Stock, there
shall be paid to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this subsection (e), the current
market value of a whole share of Common Stock shall be the closing price per
share of Common Stock (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
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Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Series B Preferred Stock or to make any other distribution to the
holders of Series B Preferred Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), or (ii) to offer
to the holders of Series B Preferred Stock rights or warrants to subscribe for
or to purchase any additional shares of Series B Preferred Stock or shares of
stock of any class or any other securities, rights or options, or (iii) to
effect any reclassification of its Series B Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of Series
B Preferred Stock), or (iv) to effect any consolidation or merger into or with
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Series B Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of Series B
Preferred Stock for purposes of such action, and in the case of any such other
action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Series B Preferred Stock, whichever shall be the earlier.
(b) In case a Section 11(a)(ii) Event shall occur, then, in
any such case, (i) the Company shall as soon as practicable thereafter give to
each holder of a Rights
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Certificate, to the extent feasible and in accordance with Section 26 hereof, a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding paragraph to Series B Preferred Stock
shall be deemed thereafter to refer also to Common Stock and/or, if appropriate,
other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Organogenesis Group, Inc.
150 Dan Road
Canton, MA 02021
Attention: President
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
40 Wall Street
New York NY 10005
Attention: Executive Vice President
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 27, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement (including acceleration of or other amendment to the Final
Expiration Date in connection with an event that would be deemed a Section
11(a)(ii) Event but for the fact that such event constituted a Permitted Offer
or an event that would be deemed a
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Section 13 Event but for the fact such event meets the requirements of Section
13(d) hereof) without the approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder (which shortening or lengthening
shall be effective only if there are at least two Continuing Directors then in
office and shall require the concurrence of a majority of such Continuing
Directors), or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Rights Certificates (other than
an Acquiring Person or an Affiliate or Associate of an Acquiring Person);
provided, this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable,
or (B) any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits to, the
holders of Rights. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Final Expiration Date (except as provided in
the first sentence of this Section 27), the Purchase Price or the number of one
one-thousandths of a share of Series B Preferred Stock for which a Right is
exercisable. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
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of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(l)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company, or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board to any liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the Commonwealth of Massachusetts and for all purposes shall be governed
by and construed in accordance with the laws of such Commonwealth applicable to
contracts made and to be performed entirely within such Commonwealth.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such
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counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
<TABLE>
<S> <C>
Attest: ORGANOGENESIS INC.
/s/ Albert K. Federico /s/ Herbert M. Stein
By:________________________________ By:_________________________________
Name: Albert K. Federico Name: Herbert M. Stein
Title: Assistant Secretary Title: Chairman & CEO
Attest:
AMERICAN STOCK TRANSFER &
TRUST COMPANY
/s/ Gail Domenech /s/ George Karfunkel
By:________________________________ By:_________________________________
Name: Gail Domenech Name: George Karfunkel
Title: Administrative Assistant Title: Executive Vice President
</TABLE>
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<PAGE> 49
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
ORGANOGENESIS INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
------------------------------
Organogenesis Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on August 24, 1995:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, $1.00 par value (the "Preferred Stock"), of the Corporation and hereby
states the designation and number of shares, and fixes the relative rights,
preferences and limitations thereof as follows:
Series B Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series B Junior Participating Preferred Stock" (the "Series B
Preferred Stock") and the number of shares constituting the Series B Preferred
Stock shall be 50,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series B Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of
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any outstanding securities issued by the Corporation convertible into Series B
Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of shares of
Series A Preferred Stock and of any shares of any other series
of Preferred Stock (or any similar stock) ranking prior and
superior to the Series B Preferred Stock with respect to
dividends, the holders of shares of Series B Preferred Stock,
in preference to the holders of Common Stock, par value $.01
per share (the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and
if declared by the Board of Directors out of funds of the
Corporation legally available for the payment of dividends,
quarterly dividends payable in cash on March 31, June 30,
September 30 and December 31 in each year (each such date
being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a
share of Series B Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $10
or (b) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series B Preferred Stock. In the
event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision, combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of
shares of Series B Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount
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<PAGE> 51
by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
In the event the Corporation shall at any time declare or pay
any dividend on the Series B Preferred Stock payable in shares
of Series B Preferred Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of
Series B Preferred Stock (by reclassification or otherwise
than by payment of a dividend in shares of Series B Preferred
Stock) into a greater or lesser number of shares of Series B
Preferred Stock, then in each such case the amount to which
holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (b) of the first
sentence of this Section 2(A) shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the
number of shares of Series B Preferred Stock that were
outstanding immediately prior to such event and the
denominator of which is the number of shares of Series B
Preferred Stock outstanding immediately after such event.
(B) The Corporation shall declare a dividend or
distribution on the Series B Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock) and the
Corporation shall pay such dividend or distribution on the
Series B Preferred Stock before the dividend or distribution
declared on the Common Stock is paid or set apart; provided
that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $10 per share
on the Series B Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend
Payment Date, in
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which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue
is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series B Preferred Stock in an
amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the
time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Series B
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not
more than 60 days prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. The holders of shares of Series B Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series B Preferred Stock shall
entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the stockholders of the Corporation. In
the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision, combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event. In the event the Corporation
shall at any time declare or pay any dividend on the Series B
Preferred Stock payable in shares of Series B Preferred Stock,
or effect a
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<PAGE> 53
subdivision, combination or consolidation of the outstanding
shares of Series B Preferred Stock (by reclassification or
otherwise than by payment of a dividend in shares of Series B
Preferred Stock) into a greater or lesser number of shares of
Series B Preferred Stock, then in each such case the number of
votes per share to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Series B
Preferred Stock that were outstanding immediately prior to
such event and the denominator of which is the number of
shares of Series B Preferred Stock outstanding immediately
after such event.
(B) Except as otherwise provided herein, in the
Certificate of Incorporation or by law, the holders of shares
of Series B Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the
Corporation.
(C)(i) If at any time dividends on any Series B Preferred
Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, the holders of the Series B Preferred
Stock, voting as a separate series from all other series of
Preferred Stock and classes of capital stock, shall be
entitled to elect two members of the Board of Directors in
addition to any Directors elected by any other series, class
or classes of securities and the authorized number of
Directors will automatically be increased by two. Promptly
thereafter, the Board of Directors of this Corporation shall,
as soon as may be practicable, call a special meeting of
holders of Series B Preferred Stock for the purpose of
electing such members of the Board of Directors. Said special
meeting shall in any event be held within 45 days of the
occurrence of such arrearage.
(ii) During any period when the holders of Series B
Preferred Stock, voting as a separate series, shall be
entitled and shall have exercised their right to elect two
Directors, then and during such time as such right continues
(a) the then authorized number of Directors shall be increased
by two, and the holders of Series B Preferred Stock, voting as
a separate series,
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<PAGE> 54
shall be entitled to elect the additional Directors so
provided for, and (b) each such additional Director shall not
be a member of any existing class of the Board of Directors,
but shall serve until the next annual meeting of stockholders
for the election of Directors, or until his successor shall be
elected and shall qualify, or until his right to hold such
office terminates pursuant to the provisions of this Section
3(C).
(iii) A Director elected pursuant to the terms hereof may
be removed with or without cause by the holders of Series B
Preferred Stock entitled to vote in an election of such
Director.
(iv) If, during any interval between annual meetings of
stockholders for the election of Directors and while the
holders of Series B Preferred Stock shall be entitled to elect
two Directors, there is no such Director in office by reason
of resignation, death or removal, then, promptly thereafter,
the Board of Directors shall call a special meeting of the
holders of Series B Preferred Stock for the purpose of filling
such vacancy and such vacancy shall be filled at such special
meeting. Such special meeting shall in any event be held
within 45 days of the occurrence of such vacancy.
(v) At such time as the arrearage is fully cured, and all
dividends accumulated and unpaid on any shares of Series B
Preferred Stock outstanding are paid, and, in addition
thereto, at least one regular dividend has been paid
subsequent to curing such arrearage, the term of office of any
Director elected pursuant to this Section 3(C), or his
successor, shall automatically terminate, and the authorized
number of Directors shall automatically decrease by two, the
rights of the holders of the shares of the Series B Preferred
Stock to vote as provided in this Section 3(C) shall cease,
subject to renewal from time to time upon the same terms and
conditions, and the holders of shares of the Series B
Preferred Stock shall have only the limited voting rights
elsewhere herein set forth.
(D) Except as set forth herein, or as otherwise provided
by law, holders of Series B Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are
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<PAGE> 55
entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series B Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series B Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series B
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or any
shares of stock ranking on a parity with the Series B
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend
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<PAGE> 56
rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith
will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders
of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless (shares of Series B Preferred Stock
shall be deemed to be junior to shares of Series A Preferred
Stock with respect to rights to receive dividends and amounts
distributable upon liquidation, dissolution or winding up of
the Corporation), prior thereto, the holders of shares of
Series B Preferred Stock shall have received $10 per share,
plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of
such payment, provided that the holders of shares of Series B
Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate
amount to be distributed per share to holders of shares of
Common Stock, or (2) to the holders of shares of stock ranking
on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Preferred Stock,
except distributions made ratably on the Series B
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<PAGE> 57
Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
(B) Neither the consolidation, merger or other business
combination of the Corporation with or into any other
corporation nor the sale, lease, exchange or conveyance of all
or any part of the property, assets or business of the
Corporation shall be deemed to be a liquidation, dissolution
or winding up of the Corporation for purposes of this Section
6.
(C) In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series B Preferred Stock
were entitled immediately prior to such event under the
proviso in clause (1) of paragraph (A) of this Section 6 shall
be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the
Corporation shall at any time declare or pay any dividend on
the Series B Preferred Stock payable in shares of Series B
Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series B Preferred
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Series B Preferred Stock) into a greater
or lesser number of shares of Series B Preferred Stock, then
in each such case the aggregate amount to which holders of
shares of Series B Preferred Stock were entitled immediately
prior to such event under the proviso in clause (1) of
paragraph (A) of this Section 4 shall be adjusted by
multiplying such amount by a fraction, the numerator of which
is the number of shares of Series B Preferred Stock that were
outstanding immediately prior to such event and the
denominator of which is the number of shares of Series B
Preferred Stock outstanding immediately after such event.
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Section 7. Consolidation, Merger, etc. Notwithstanding anything to the
contrary contained herein, in case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision, combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series B
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event. In
the event the Corporation shall at any time declare or pay any dividend on the
Series B Preferred Stock payable in shares of Series B Preferred Stock, or
effect a subdivision, combination or consolidation of the outstanding shares of
Series B Preferred Stock (by reclassification or otherwise than by payment of a
dividend in shares of Series B Preferred Stock) into a greater or lesser number
of shares of Series B Preferred Stock, then in each such case the amount set
forth in the first sentence of this Section 7 with respect to the exchange or
change of shares of Series B Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Series B Preferred Stock that were outstanding immediately prior to such event
and the denominator of which is the number of shares of Series B Preferred Stock
outstanding immediately after such event.
Section 8. No Redemption. The shares of Series B Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series B Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Preferred
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<PAGE> 59
Stock issued either before or after the issuance of the Series B Preferred
Stock, unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series B Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series B Preferred Stock, voting
together as a single class.
Section 11. Fractional Shares. Series B Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series B Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and President and
attested by its Secretary this ___ day of [ ], 1995.
ORGANOGENESIS INC.
_________________________________
Herbert M. Stein
Chairman of the Board and
President
Attest:
_________________________________
[Name]
[Title]
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<PAGE> 60
Exhibit B
Form of Rights Certificate
Certificate No. R-
Rights
NOT EXERCISABLE AFTER SEPTEMBER 1, 2005 OR EARLIER IF REDEEMED OR EXCHANGED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
ORGANOGENESIS INC.
This certifies that, or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated
as of September 1, 1995 (the "Rights Agreement"), between Organogenesis Inc., a
Delaware corporation (the "Company"), and American Stock Transfer & Trust
Company, a New York corporation (the "Rights Agent"), to purchase from the
Company after the Distribution Date (as such term is defined on the Rights
Agreement) and at any time prior to 5:00 P.M. (Boston time) on September 1, 2005
at the office of the Rights Agent designated for such purpose, or its successors
as Rights Agent, one one-thousandth of a fully paid, non-assessable share of
Series B
- ----------------------
*The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
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<PAGE> 61
Junior Participating Preferred Stock (the "Preferred Stock") of the Company,
$1.00 par value per share, at a purchase price of $85 in cash per one
one-thousandth of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of one one-thousandths of a share of Preferred Stock
which may be purchased upon exercise hereof) set forth above, and the Purchase
Price set forth above, are the number and Purchase Price as of the close of
business on September 1, 1995, based on the Preferred Stock as constituted at
such date. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Associate or Affiliate who becomes a transferee after the Acquiring
Person becomes an Acquiring Person, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, concurrently
with or after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Section 11(a)(ii) Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
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Copies of the Rights Agreement are on file at the principal offices of the
Company and are available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
with the Form of Election and Certificate set forth on the reverse side duly
executed, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-thousandths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to the earlier of the close of
business on (i) the tenth day following the Stock Acquisition Date (as such time
period may be extended pursuant to the Rights Agreement), and (ii) the Final
Expiration Date.
Subject to the provisions of the Rights Agreement, the Company may, at
its option, at any time after a Section 11(a)(ii) Event, subject to the approval
of a majority of the Continuing Directors, exchange all or part of the Rights
evidenced by this Certificate for shares of the Company's Common Stock or for
Preferred Stock (or shares of a class or series of the Company's preferred stock
having the same rights, privileges and preferences as the Preferred Stock).
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or
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herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _______________, 199_
<TABLE>
<S> <C>
ATTEST: ORGANOGENESIS INC.
______________________________ By:___________________________
Secretary
Title:________________________
</TABLE>
COUNTERSIGNED:
AMERICAN STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
By:___________________________
Authorized Signature
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<PAGE> 64
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
SERIES B PREFERRED STOCK
On August 24, 1995, the Board of Directors of Organogenesis Inc. (the
"Company") declared a dividend distribution of one Right for each outstanding
share of the Company's Common Stock to stockholders of record at the close of
business on September 1, 1995. Each Right entitles the registered holder to
purchase from the Company a unit consisting of one one-thousandth of a share (a
"Unit") of Series B Junior Participating Preferred Stock, $1.00 par value (the
"Series B Preferred Stock") at a Purchase Price of $85 in cash per Unit, subject
to adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and American Stock
Transfer & Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date"), or (ii) 10 business days following the commencement of a
tender offer or exchange offer that would result in a person or group
beneficially owning 30% or more of such outstanding shares of Common Stock.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after September 1, 1995
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on September 1, 2005, unless earlier redeemed or
exchanged by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common
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Stock as of the close of business on the Distribution Date and, thereafter, the
separate Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Directors and except in connection with
shares of Common Stock issued upon the exercise of employee stock options,
issuances under other employee stock benefit plans or the conversion of
convertible securities issued hereafter, only shares of Common Stock issued
prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15% or more
of the then outstanding shares of Common Stock, except pursuant to an offer for
all outstanding shares of Common Stock which the independent directors determine
to be fair to, and otherwise in the best interests of, shareholders, each holder
of a Right will thereafter have the right to receive, upon exercise, that number
of shares of Common Stock (or, in certain circumstances, cash, property or other
securities of the Company) which equals the exercise price of the Right divided
by one-half of the current market price (as defined in the Rights Agreement) of
the Common Stock at the date of the occurrence of the event. However, Rights are
not exercisable following the event set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
Notwithstanding any of the foregoing, following the occurrence of such event,
all Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void. The event set forth in this paragraph is referred to as a "Section
11(a)(ii) Event."
For example, at an exercise price of $85 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following an event
set forth in the preceding paragraph would entitle its holder to purchase for
$85 such number of shares of Common Stock (or other consideration, as noted
above) as equals $85 divided by one-half of the current market price (as defined
in the Rights Agreement) of the Common Stock. Assuming that the Common Stock had
a per share value of $42.50 at such time, the holder of each valid Right would
be entitled to purchase four shares of Common Stock for $85.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation or its Common
Stock is changed or exchanged (other than a merger which follows an offer
determined by the Board to be fair as described in the second preceding
paragraph), or (ii) 50% or more of the Company's assets or earning power is
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<PAGE> 66
sold or transferred, each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right to receive, upon
exercise, that number of shares of common stock of the acquiring company which
equals the exercise price of the Right divided by one-half of the current market
price of such common stock at the date of the occurrence of the event.
For example, at an exercise price of $85 per Right, each Right
following an event set forth in the preceding paragraph would entitle its holder
to purchase for $85 such number of shares of common stock of the acquiring
company as equals $85 divided by one-half of the current market price (as
defined in the Rights Agreement) of such common stock. Assuming that such common
stock had a per share value of $42.50 at such time, the holder of each valid
Right would be entitled to purchase four shares of common stock of the acquiring
company for $85.
At any time after the occurrence of a Section 11(a)(ii) Event, and
subject to the concurrence of a majority of the Continuing Directors (as defined
in the Rights Agreement), the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such Acquiring Person which have become
void), in whole or in part, at an exchange ratio of one share of Common Stock,
or one one-thousandth of a share of Series B Preferred Stock (or of a share of a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of Series B
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Series B Preferred Stock, (ii) if holders of the Series
B Preferred Stock are granted certain rights or warrants to subscribe for Series
B Preferred Stock or convertible securities at less than the current market
price of the Series B Preferred Stock, or (iii) upon the distribution to holders
of the Series B Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
The number of Rights associated with each share of Common Stock is also
subject to adjustment in the event of a stock split of the Common Stock or a
stock dividend on the Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of Common Stock occurring, in any such case,
prior to the Distribution Date.
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<PAGE> 67
Shares of Series B Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. The Series B Preferred Stock will rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of Preferred Stock, including, but not limited to
the Series A Preferred Stock, issued either before or after the issuance of the
Series B Preferred Stock, unless the terms of any such series shall provide
otherwise. Subject to the foregoing, each share of Series B Preferred Stock will
be entitled to a minimum preferential quarterly dividend payment of $10 per
share and will be entitled to an aggregate dividend of 1,000 times the dividend
declared per share of Common Stock. In the event of liquidation, the holders of
the Series B Preferred Stock will be entitled, subject to the rights of the
holders of Series A Preferred Stock and holders of any other Preferred Stock
which is senior to the Series B Preferred Stock, to a minimum preferential
liquidating payment of $10 per share and will be entitled to an aggregate
payment of 1,000 times the payment made per share of Common Stock. Each share of
Series B Preferred Stock will have 1,000 votes, voting together with the Common
Stock. In the event of any merger, consolidation or other transaction in which
Common Stock is exchanged, each share of Series B Preferred Stock will be
entitled to receive 1,000 times the amount received per share of Common Stock.
The foregoing dividend and liquidation rights of the Series B Preferred Stock
are protected against dilution in the event additional shares of Common Stock
are issued pursuant to a stock split, stock dividend or similar recapitalization
event.
Because of the nature of the Series B Preferred Stock's dividend,
liquidation and voting rights, the value of one one-thousandth of a share of
Series B Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Series B Preferred Stock on
the last trading date prior to the date of exercise.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of $.01 per
Right (payable in cash or stock). Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01 redemption
price.
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<PAGE> 68
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Prior to the Distribution Date, the terms of the Rights are subject to
amendment by the Board of Directors without the consent of the holders of the
Rights, except that (i) the redemption price of the Rights, the exercise price
of the Rights and the number of shares of Series B Preferred Stock issuable upon
exercise of the Rights are not subject to amendment and (ii) the expiration date
of the Rights is subject to amendment (including acceleration) only in
connection with an acquisition of the Company at a price determined to be fair
by a majority of the members of the Company's Board of Directors who are not
officers of the Company and who are not affiliated with the acquiring party.
After the Distribution Date, only limited terms of the Rights are subject to
amendment by the Board, and the consent of the Continuing Directors (as defined
in the Rights Agreement) is required where appropriate to protect the Rights.
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 entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
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<PAGE> 1
Exhibit 4.2
CERTIFICATE OF DESIGNATIONS
of
ORGANOGENESIS INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
------------------------------
Organogenesis Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on August 24, 1995:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation, the Board of Directors hereby creates a series of Preferred
Stock, $1.00 par value (the "Preferred Stock"), of the Corporation and hereby
states the designation and number of shares, and fixes the relative rights,
preferences and limitations thereof as follows:
Series B Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series B Junior Participating Preferred Stock" (the "Series B
Preferred Stock") and the number of shares constituting the Series B Preferred
Stock shall be 50,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series B Preferred Stock to a number less than the
number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series B Preferred Stock.
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<PAGE> 2
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of shares of Series A
Preferred Stock and of any shares of any other series of Preferred Stock (or any
similar stock) ranking prior and superior to the Series B Preferred Stock with
respect to dividends, the holders of shares of Series B Preferred Stock, in
preference to the holders of Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds of the
Corporation legally available for the payment of dividends, quarterly dividends
payable in cash on March 31, June 30, September 30 and December 31 in each year
(each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $10
or (b) subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision, combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event. In the event the Corporation shall at any time declare or pay any
dividend on the Series B Preferred Stock payable in shares of Series B Preferred
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Stock, or effect a subdivision, combination or consolidation of the outstanding
shares of Series B Preferred Stock (by reclassification or otherwise than by
payment of a dividend in shares of Series B Preferred Stock) into a greater or
lesser number of shares of Series B Preferred Stock, then in each such case the
amount to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under clause (b) of the first sentence of this
Section 2(A) shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Series B Preferred Stock that were
outstanding immediately prior to such event and the denominator of which is the
number of shares of Series B Preferred Stock outstanding immediately after such
event.
(B) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock) and the Corporation
shall pay such dividend or distribution on the Series B Preferred Stock before
the dividend or distribution declared on the Common Stock is paid or set apart;
provided that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $10
per share on the Series B Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series B Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series B Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series B
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Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series B Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series B Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series B Preferred Stock payable
in shares of Series B Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series B Preferred Stock (by
reclassification or otherwise than by payment of a dividend in shares of Series
B Preferred Stock) into a greater or lesser number of shares of Series B
Preferred Stock, then in each such case the number of votes per share to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Series B Preferred Stock that were
outstanding immediately prior to such event and the denominator of which is the
number of shares of Series B Preferred Stock outstanding immediately after such
event.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or by law, the holders of shares of Series B Preferred Stock and
the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
(C)(i) If at any time dividends on any Series B Preferred Stock shall
be in arrears in an amount equal to six quarterly
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dividends thereon, the holders of the Series B Preferred Stock, voting as a
separate series from all other series of Preferred Stock and classes of capital
stock, shall be entitled to elect two members of the Board of Directors in
addition to any Directors elected by any other series, class or classes of
securities and the authorized number of Directors will automatically be
increased by two. Promptly thereafter, the Board of Directors of this
Corporation shall, as soon as may be practicable, call a special meeting of
holders of Series B Preferred Stock for the purpose of electing such members of
the Board of Directors. Said special meeting shall in any event be held within
45 days of the occurrence of such arrearage.
(ii) During any period when the holders of Series B
Preferred Stock, voting as a separate series, shall be
entitled and shall have exercised their right to elect two
Directors, then and during such time as such right continues
(a) the then authorized number of Directors shall be increased
by two, and the holders of Series B Preferred Stock, voting as
a separate series, shall be entitled to elect the additional
Directors so provided for, and (b) each such additional
Director shall not be a member of any existing class of the
Board of Directors, but shall serve until the next annual
meeting of stockholders for the election of Directors, or
until his successor shall be elected and shall qualify, or
until his right to hold such office terminates pursuant to the
provisions of this Section 3(C).
(iii) A Director elected pursuant to the terms hereof may
be removed with or without cause by the holders of Series B
Preferred Stock entitled to vote in an election of such
Director.
(iv) If, during any interval between annual meetings of
stockholders for the election of Directors and while the
holders of Series B Preferred Stock shall be entitled to elect
two Directors, there is no such Director in office by reason
of resignation, death or removal, then, promptly thereafter,
the Board of Directors shall call a special meeting of the
holders of Series B Preferred Stock for the purpose of filling
such vacancy and such vacancy shall be filled at such special
meeting. Such special meeting shall in any event be held
within 45 days of the occurrence of such vacancy.
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<PAGE> 6
(v) At such time as the arrearage is fully cured, and all
dividends accumulated and unpaid on any shares of Series B
Preferred Stock outstanding are paid, and, in addition
thereto, at least one regular dividend has been paid
subsequent to curing such arrearage, the term of office of any
Director elected pursuant to this Section 3(C), or his
successor, shall automatically terminate, and the authorized
number of Directors shall automatically decrease by two, the
rights of the holders of the shares of the Series B Preferred
Stock to vote as provided in this Section 3(C) shall cease,
subject to renewal from time to time upon the same terms and
conditions, and the holders of shares of the Series B
Preferred Stock shall have only the limited voting rights
elsewhere herein set forth.
(D) Except as set forth herein, or as otherwise provided by law,
holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
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<PAGE> 7
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series B Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series B
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or any
shares of stock ranking on a parity with the Series B
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation, dissolution or winding up of the Corporation,
no distribution shall be made (1) to the holders of shares of stock ranking
junior (either as to dividends or upon
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liquidation, dissolution or winding up) to the Series B Preferred Stock unless
(shares of Series B Preferred Stock shall be deemed to be junior to shares of
Series A Preferred Stock with respect to rights to receive dividends and amounts
distributable upon liquidation, dissolution or winding up of the Corporation),
prior thereto, the holders of shares of Series B Preferred Stock shall have
received $10 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series B Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
except distributions made ratably on the Series B Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up.
(B) Neither the consolidation, merger or other business combination of
the Corporation with or into any other corporation nor the sale, lease, exchange
or conveyance of all or any part of the property, assets or business of the
Corporation shall be deemed to be a liquidation, dissolution or winding up of
the Corporation for purposes of this Section 6.
(C) In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of paragraph (A) of this Section 6 shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event. In the event the Corporation shall
at any time declare or pay any dividend on the Series B Preferred Stock payable
in shares of Series B Preferred Stock, or effect a subdivision, combination or
consolidation of the outstanding shares of Series B Preferred Stock (by
reclassification or otherwise than by payment of a
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dividend in shares of Series B Preferred Stock) into a greater or lesser number
of shares of Series B Preferred Stock, then in each such case the aggregate
amount to which holders of shares of Series B Preferred Stock were entitled
immediately prior to such event under the proviso in clause (1) of paragraph (A)
of this Section 4 shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Series B Preferred Stock that
were outstanding immediately prior to such event and the denominator of which is
the number of shares of Series B Preferred Stock outstanding immediately after
such event.
Section 7. Consolidation, Merger, etc. Notwithstanding anything to the
contrary contained herein, in case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case each share of Series B
Preferred Stock shall at the same time be similarly exchanged or changed into an
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision, combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series B
Preferred Stock shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event. In
the event the Corporation shall at any time declare or pay any dividend on the
Series B Preferred Stock payable in shares of Series B Preferred Stock, or
effect a subdivision, combination or consolidation of the outstanding shares of
Series B Preferred Stock (by reclassification or otherwise than by payment of a
dividend in shares of Series B Preferred Stock) into a greater or lesser number
of shares of Series B Preferred Stock, then in each such case the amount set
forth in the first sentence of this Section 7 with respect to the exchange or
change of shares of Series B Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Series B Preferred Stock that
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were outstanding immediately prior to such event and the denominator of which is
the number of shares of Series B Preferred Stock outstanding immediately after
such event.
Section 8. No Redemption. The shares of Series B Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series B Preferred Stock shall rank, with respect
to the payment of dividends and the distribution of assets, junior to all series
of any other class of the Preferred Stock issued either before or after the
issuance of the Series B Preferred Stock, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series B Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series B Preferred Stock, voting
together as a single class.
Section 11. Fractional Shares. Series B Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series B Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Chairman of the Board and President and
attested by its Secretary this 29th day of August, 1995.
ORGANOGENESIS INC.
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/s/ HERBERT M. STEIN
----------------------------------
Herbert M. Stein
Chairman of the Board and
President
Attest:
/s/ ALBERT K. FEDERICO
- ---------------------------------------
Name: Albert K. Federico
Title: Chief Accounting Officer
Treasurer & Assistant Secretary
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Exhibit 99.1
Contact: Carol Hausner
Director
Business Development
ORGANOGENESIS INC. DECLARES 25% STOCK DIVIDEND,
NAMES MARGUERITE A. PIRET TO ITS BOARD OF DIRECTORS,
AND ADOPTS SHAREHOLDER RIGHTS PLAN
Canton, MA, August 24, 1995 -- The Board of Directors of Organogenesis Inc.
(AMEX:ORG) today declared a 25% Common Stock dividend. The Stock dividend will
be distributed on September 8, 1995 to shareholders of record on September 1,
1995. One share of Common Stock will be issued for every four shares owned. No
fractional shares will be issued.
Herbert M. Stein, CEO and Chairman of the Board, said "The decision to issue
this stock dividend reflects the Company's desire to improve the marketability
and liquidity of the stock." Prior to the declaration of the stock dividend,
there were 10,580,000 shares of Common Stock outstanding. After issuance of the
stock dividend, Organogenesis will have approximately 13,230,000 shares of
Common Stock outstanding, with 20 million shares authorized for issuance.
The Company also announced today that Marguerite A. Piret has been named to the
Organogenesis Board of Directors. Ms. Piret is the President and founder of the
investment bank Newbury, Piret, & Company, Inc. Ms. Piret is also a Trustee of
Pioneer Mutual Funds, a Director of BIOSAFE, Inc., and a Trustee, the Chairman
of the Finance Committee, and a Member of the Executive Committee at Boston
University Medical Center Hospital.
Organogenesis also announced that its Board of Directors adopted a Shareholder
Rights Plan. Under the Plan, Preferred Stock purchase Rights will be distributed
to stockholders at the rate of one Right for each share of Common Stock held at
the close of business on September 1, 1995. Each Right entitles holders of
Organogenesis Common Stock to purchase one one-thousandth of a share of a new
series of Preferred Stock at an exercise price of $85, subject to adjustment.
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Herbert M. Stein, Chairman and Chief Executive Officer, said, "The Plan is a
precaution to protect the rights of our stockholders. It is designed to deter
coercive or unfair takeover tactics, and to prevent an acquirer from gaining
control of the Company without offering a fair price to all of the Company's
stockholders. The adoption of the Plan is not in response to any specific
takeover proposal, and it is not intended to prevent an acquisition of the
Company on terms that are favorable and fair to all stockholders." Mr. Stein
noted that similar plans have been adopted by over 2,500 public companies.
Following the record date, the Company will send a letter to all stockholders
outlining the Shareholder Rights Plan. Under the Plan, the Rights will be
exercisable only if a person or group has acquired beneficial ownership of 15%
or more of the outstanding Organogenesis Common Stock, or announces a tender or
exchange offer that would result in such person or group owning 30% or more of
the outstanding Common Stock. If a buyer becomes the beneficial owner of 15% or
more shares of Organogenesis Common Stock, except with a tender or exchange
offer for all shares at a fair price, all Rights holders except that buyer will
be entitled to purchase Organogenesis' Common Stock at a discounted price. If
Organogenesis is acquired in a merger, holders of unexercised Rights may be
entitled to purchase stock in the acquiring company at a discount.
Organogenesis may redeem the Rights at $0.01 per Right at any time until the
tenth business day following the public announcement that a 15% Common Stock
ownership position has been acquired and in certain other circumstances. The
Rights will expire on September 1, 2005 unless earlier redeemed or exchanged.
Organogenesis has established itself as a leader in the development and
manufacture of technologically innovative medical devices based upon the use of
living human cells and natural connective tissue components. The resulting
products are intended to interact with the body to enhance the natural healing
process by promoting the establishment of new tissues that maintain, restore or
improve normal biological function. The Company's product development focus is
on wound care, cardiovascular surgery, general surgery, urology, and
orthopedics.
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