SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(B) OR 12(G) OF THE
SECURITIES EXCHANGE ACT OF 1934
BIO-REFERENCE LABORATORIES, INC.
(Exact name of Registrant as specified in charter)
New Jersey 0-15266 22-2405059
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) No.)
481 Edward H. Ross Drive
Elmwood, New Jersey 07407
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (201) 791-2600
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instructions A(c)(1) please check the
following box. [ ]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A,(c)(2) please check the following box. [ ]
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred share purchase rights
(Title of Class)
Item 1. Description of Registrant's Securities to be Registered
On March 31, 1998 the Board of Directors of Bio-Reference Laboratories,
Inc. (the "Company") declared a dividend distribution of one right (a "Right")
for each outstanding share of common stock, par value $.01 per share (the
"Common Shares"), and of Series A Senior Preferred Stock, par value $.10 per
share ("Senior Preference Shares") of the Company. The distribution is payable
on March 31, 1998 (the "Record Date") to the shareholders of record as of the
close of business on the Record Date. Each Right entitles the registered holder
to purchase from the Company one one-ten-thousandth of a Junior Preferred Share
(a "Unit") at a price of $4.00 (the "Purchase Price") per Unit, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement, dated as of March 31, 1998 (the "Rights Agreement"), between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares and Senior Preference Shares, respectively, then outstanding and
no separate Rights Certificates will be distributed. Until the earlier to occur
of (i) the close of business on the tenth business day (as such time period may
be extended pursuant to the Rights Agreement) following a public announcement
that a person or group of affiliated or associated persons (which does not
include the Company, any subsidiary of the Company, any employee benefit or
stock ownership plan of the Company or any subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan) has
acquired, or obtained the right to acquire, beneficial ownership of 25% or more
of the outstanding Common Shares (an "Acquiring Person"), or (ii) the close of
business on the tenth business day following the commencement of a tender offer
or exchange offer by a person or group of affiliated or associated persons, the
consummation of which would result in beneficial ownership by such person or
group of 25% or more of the outstanding Common Shares.
The Rights Agreement provides that until the Distribution Date, the Rights
will be transferred with and only with the Common Shares and the Senior
Preference Shares, respectively. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share and new Senior
Preference Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares and Senior Preference Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any certificates for Common Shares and Senior Preference Shares in respect of
which Rights have been issued will also constitute the transfer of the Rights
associated with the Common Shares and Senior Preference Shares represented by
such certificates. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights (the "Right Certificates") will be
mailed to holders of record of the Common Shares and the Senior Preference
Shares at the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
No Right is exercisable at any time prior to the Distribution Date. The
Rights will expire on March 31, 2008 (the "Final Expiration Date") unless
earlier redeemed or exchanged by the Company as described below. Until a Right
is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including without limitation the right to vote or to receive
dividends.
The Purchase Price payable, and the number of Units of a Preferred Share 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 Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
cash (excluding regular periodic cash dividends), assets, stock (excluding
dividends payable in Preferred Shares) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of one ten-thousandths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivision,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
In the event that (i) any person or group of affiliated or associated
persons becomes the beneficial owner of 25% or more of the outstanding Common
Shares, (ii) any Acquiring Person merges into or combines with the Company and
the Company is the surviving corporation or any Acquiring Person effects certain
other transactions with the Company, as described in the Rights Agreement, or
(iii) during such time as there is an Acquiring Person, there shall be any
reclassification of securities or recapitalization or reorganization of the
Company which has the effect of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity securities of the Company
or any of its subsidiaries beneficially owned by the Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights that
are or were owned beneficially by the Acquiring Person (which, from and after
the later of the Distri-bution Date and the date of the earliest of any such
events, will be void), will thereafter have the right to receive, upon exercise
Common Shares (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right.
In the event that, following the first date of public announcement that a
person has become an Acquiring Person, (i) the Company merges with or into any
person and the Company is not the surviving corporation, (ii) any person merges
with or into the Company and the Company is the surviving corporation, but its
Common Shares are changed or exchanged, or (iii) 50% or more of the Company's
assets or earning power, including without limitation securities creating
obligations of the Company, are sold, proper provision shall be made so that
each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock (or, under certain circumstances, an economically
equivalent security or securities) of such other person which at the time of
such transaction would have a market value of two times the exercise price of
the Right.
Upon the occurrence of any of the events described in the two immediately
preceding paragraphs, any Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person shall immediately become null and void.
At any time after the occurrence of any such event and prior to the
acquisition by any person or group of affiliated or associated persons of 50% or
more of the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than any Rights which have become void), in whole or
in part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $.05 per share but will be entitled to an
aggregate dividend of 10,000 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preferred Shares will be entitled
to a minimum preferential liquidation payment of $10,000 per share but will be
entitled to an aggregate payment of 10,000 times the payment made per common
Share. Each Preferred Share will have 10,000 votes, voting together with the
Common Shares and the Senior Preference Shares. Finally in the event of any
merger, consolidation or other transaction in which Common Shares are exchanged,
each Preferred Share will be entitled to receive 10,000 times the amount
received per Common Share. These rights are protected by customary anti-
dilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one ten-thousandth interest in a Preferred Share
purchasable upon exercise of each Right is intended to approximate the value of
one Common Share.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. No fractional Units will be issued. In lieu thereof, an
adjustment in cash will be made based on the per share market price of the
Preferred Shares on the last trading day prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right (the "Redemption Price"), at any time prior to the
close of business on the later of (i) the Distribution Date and (ii) the first
date of public announcement that a person has become an Acquiring Person. After
the redemption period has expired, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial ownership to 10% or
less of the outstanding Common Shares in a transaction or series of transactions
not involving the Company. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The Rights Agreement may be amended by the Company without the approval of
any holders of Right Certificates, including amendments which add other events
requiring adjustment to the purchase price payable and the number of Common
Shares or other securities issuable upon the exercise of the Rights or which
modify procedures relating to the redemption of the Rights, provided that no
amendment may be made at such time as the Rights are not then redeemable which
decreases the stated Redemption Price or the period of time remaining until the
Final Expiration Date or which modifies a time period relating to when the
Rights may be redeemed.
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.
The Rights could have certain anti-takeover effects. The Rights could
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors, in light of the ability of the Board of Directors to
redeem the Rights or amend the Rights Agreement as summarized above.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to this Registration Statement on Form 8-A. 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 this reference.
Item 2. Exhibits.
Exhibit No. Description
1 Rights Agreement, dated as of March 31, 1998,
including Exhibits thereto, between the Company
and American Stock Transfer & Trust Company, as
Rights Agent.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated: As of March 31, 1998 BIO-REFERENCE LABORATORIES, INC.
(Registrant)
By:
--------------------------
Marc D. Grodman
President and Chief
Executive Officer
EXHIBIT A
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
of
BIO-REFERENCE LABORATORIES, INC.
To: The Secretary of State
State of New Jersey
Pursuant to the provisions of Section 14A:7-2(2), Corporations, General, of
the New Jersey statutes, the undersigned corporation executes this certificate
of amendment to its certificate of incorporation:
1. The name of the corporation (hereinafter called the "Corporation") is
Bio-Reference Laboratories, Inc.
2. The following resolution has been duly adopted by the Board of
Directors of the Corporation as required by Subsection 14A:7-2(3) of the New
Jersey Business Corporation Act.
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of its
Certificate of Incorporation, the Board of Directors hereby creates a
series of Preferred Stock, $.10 par value, of the Corporation, and
hereby states the designation and amount thereof and fixes the
relative rights, preferences and limitations thereof (in addition to
the provisions set forth in the Certificate of Incorporation of the
Corporation, which are applicable to the preferred stock of all
classes and series) as follows, so that ARTICLE (3) of the
Corporation's Certificate of Incorporation be, and it hereby is,
amended by inserting therein the following paragraph B(2) immediately
following ARTICLE (3)(B), paragraph 7, paragraph B(1):
B(2). Series A Junior Participating Preferred Stock.
----------------------------------------------
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 3,000.
Section 2. Dividends and Distributions. (A) Subject to the
prior and superior rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the holders of shares
of Series A Junior Participating Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the 15th day
of March, June, September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $500
or (b) subject to the provision for adjustment hereinafter set forth, 10,000
times the aggregate per share amount of all cash dividends, and 10,000 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock, par value $.01 per share, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series A
Junior Participating Preferred Stock. In the event the Corporation shall at any
time after March 31, 1998 (the "Rights Declaration Date") (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock as provided in
paragraph (A) above immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common Stock);
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 $500
per share on the Series A Junior Participating Preferred Stock shall
nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative
on outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series A Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Junior Participating
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 A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to 10,000 votes on all matters submitted
to a vote of the stockholders of the Corporation. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the number of votes per share to which
holders of shares of Series A Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred Stock, the holders
of shares of Common Stock and the holders of Series A Senior Preferred Stock
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 A Junior
Participating Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall mark the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series A Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series A Junior
Participating Preferred Stock) with dividends thereon, voting as a class,
irrespective of series, shall have the right to elect two (2) Directors.
(ii)During any default period, such voting right
of the holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors. If the number which may be so elected at any special meeting does
not amount to the required number, the holders of the Preferred Stock shall have
the right to make such increase in the number of Directors as shall be necessary
to permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Preferred Stock outstanding, irrespective of series,
may request, the calling of special meeting of the holders of Preferred Stock,
which meeting shall thereupon be called by the President, a Vice-President or
the Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Preferred Stock are entitled to vote pursuant to
this paragraph (C) (iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be called for a
time not earlier than 10 days and not later than 60 days after such order or
request or in default of the calling of such meeting may be called on similar
notice by any stockholder or stockholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no such special
meeting shall be called during the period within 60 days immediately preceding
the date fixed for the next annual meeting of the stockholders.
(iv)In any default period, the holders of Common
Stock, and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of Directors until the holders
of Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except as
provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority
of the remaining Directors theretofore elected by holders of the class of stock
which elected the Director whose office shall have become vacant. References in
this paragraph (C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.
(v)Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the holders of
Preferred Stock as a class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the certificate of incorporation
or by-laws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being subject, however, to
change thereafter in any manner provided by law or in the certificate of
incorporation or by-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence may be filled by
a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A
Junior Participating 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 A Junior
Participating 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 A Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not
(i)declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock;
(ii)declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Participating Preferred Stock, provided
that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to
the Series A Junior Participating Preferred Stock;
(iv)redeem or purchase or otherwise acquire
for consideration any shares of Series A Junior Participating
Preferred Stock, or any shares of stock ranking on a parity with
the Series A Junior Participating 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 A Junior
Participating 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 to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior Participating
Preferred Stock shall have received $10,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment (the "Series A Liquidation Preference"). Following
the payment of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of shares of Series A
Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 10,000 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the
Series A Liquidation Preference and the Common Adjustment in respect of all
outstanding shares of Series A Junior Participating Preferred Stock and Common
Stock, respectively, holders of Series A Junior Participating Preferred Stock
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not
sufficient assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all other series of
preferred stock, if any, which rank on a parity with the Series A Junior
Participating Preferred Stock, then such remaining assets shall be distributed
ratably to the holders of such parity shares in proportion to their respective
liquidation preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any such
case the shares of Series A Junior Participating Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 10,000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series A Junior Participating Preferred
Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 8. No Redemption. The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the Corporation's
Preferred Stock as to the payment of dividends and the distribution of assets,
unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Certificate of Incorporation of
the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of two-thirds of the outstanding
shares of Series A Junior Participating Preferred Stock, voting separately as a
class; it being understood that nothing in this Section 10 shall be deemed to
restrict the Corporation from designating additional shares of Series A Junior
Participating Preferred Stock if the Board of Directors determines that it is
necessary to do so in order to achieve the purposes of the Rights Agreement,
dated as of , 1998 between the Corporation and American Stock
Transfer & Trust Company.
Section 11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitled the
holder, in proportion to such holders fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred Stock.
IN WITNESS WHEREOF, Bio-Reference Laboratories, Inc. has caused this
Certificate of Amendment to the Certificate of Incorporation to be duly executed
this 31st day of March, 1998.
/s/Marc D. Grodman
------------------------------
Marc D. Grodman, President
Attest:
/s/Sam Singer
- -------------------------------
Sam Singer, Secretary
EXHIBIT B
Form of Right Certificate
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER MARCH 31, 2008 OR EARLIER IF REDEEMED. THE RIGHTS
ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.
Right Certificate
BIO-REFERENCE LABORATORIES, 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 March 31, 1998 (the "Rights Agreement"), between Bio-
Reference Laboratories, Inc., a New Jersey corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York limited purpose trust
company (the "Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M. (Eastern time) on March 31, 2008 at the office or offices of the
Rights Agent designated for such purpose, for each Right one one-ten-thousandth
of a fully paid nonassessable, share of Series A Junior Participating Preferred
Stock, par value $.10 per share (the "Preferred Shares"), of the Company, at a
purchase price of $4.00 per one one-ten-thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase and related Certificate duly executed. The Purchase
Price may be paid in cash or by certified bank check or money order payable to
the order of the Company. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
The number of Rights evidenced by this Right Certificate (and the number of one
one-ten-thousandths of a Preferred Share which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of March 31, 1998, based on the Preferred Shares as
constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares or other securities issuable upon the exercise of
the Rights evidenced by this Right Certificate are subject to adjustment upon
the happening of certain events, including Triggering Events (as such term is
defined in the Rights Agreement).
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent, and are
also available upon written request to the Rights Agent.
Pursuant to the Rights Agreement, from and after the later of the
Distribution Date and the first occurrence of a Flip-in Event (as such term is
defined in the Rights Agreement), (i) any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Affiliate or Associate of
such Acquiring Person) shall be void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any provision of the
Rights Agreement, (ii) no Right Certificate shall be issued pursuant to the
Rights Agreement that represents Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof, (iii) no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person or
any Affiliate or Associate thereof or to any nominee of such Acquiring Person or
Affiliate or Associate thereof, and (iv) any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person or any Affiliate or Associate
thereof shall be cancelled.
This Right Certificate, with or without other Right Certificates, may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the holder to purchase a like number of one one-
ten-thousandths of a Preferred Share (or other securities, as the case may be)
as the Right Certificate or Right Certificates surrendered shall have entitled
such holder (or former holder in the case of a transfer) to purchase, upon
presentation and surrender hereof at the principal office of the Rights Agent
designated for such purpose, with the Form of Assignment (if appropriate) and
the related Certificate duly executed.
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 $0.01 per Right. The Rights Agreement may be supplemented and amended
by the Company, as provided therein.
The Company is not required to issue fractional Preferred Shares or other
securities issuable upon the exercise of any Right or Rights evidenced hereby
(other than fractional Preferred Shares which are integral multiples of one-ten-
thousandth of a Preferred Share). In lieu of issuing such fractional Preferred
Shares (other than fractional Preferred Shares which are integral multiples of
one one-ten-thousandth of a Preferred Share) or other securities, the Company
may make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable upon the exercise of the Right or Rights represented hereby, nor shall
anything contained herein or in the Rights Agreement be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised in accordance with
the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _________, ____.
ATTEST: BIO-REFERENCE LABORATORIES, INC.
By: By:
---------------------------- ----------------------------
Secretary President
[SEAL]
COUNTERSIGNED:
AMERICAN STOCK TRANSFER
& TRUST COMPANY
By:
----------------------------
Authorized Signature
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, ________________________________________
__________________________________________ hereby sells, assigns and transfers
unto ______________________________________________
_________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________ this Right
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint _________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _____________, ____
-------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [
] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________, ____
- ------------------------------
Signature
a.FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To Bio-Reference Laboratories, Inc.:
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Right Certificate to purchase the one one-ten-
thousandth of a Preferred Share or other securities issuable upon the exercise
of each such Right and requests that certificates for such securities be issued
in the name of:
Please insert social security or other identifying number:
_________________________________________________________________
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
_________________________________________________________________
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Dated: _____________, ____
------------------------------
Signature
Signature Guaranteed:
ELECTION CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: _____________, ____
------------------------------
Signature
NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to
Purchase and in the related Certificates must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE SHARES
On March 31, 1998 the Board of Directors of Bio-Reference Laboratories,
Inc. (the "Company") declared a dividend distribution of one right (a "Right")
for each outstanding share of common stock, par value $.01 per share (the
"Common Shares"), and of Series A Senior Preferred Stock, par value $.10 per
share ("Senior Preference Shares") of the Company. The distribution is payable
on March 31, 1998 (the "Record Date") to the shareholders of record as of the
close of business on the Record Date. Each Right entitles the registered holder
to purchase from the Company one one-ten-thousandth of a Junior Preferred Share
(a "Unit") at a price of $4.00 (the "Purchase Price") per Unit, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement, dated as of March 31, 1998 (the "Rights Agreement"), between the
Company and American Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares and Senior Preference Shares, respectively, then outstanding and
no separate Rights Certificates will be distributed. Until the earlier to occur
of (i) the close of business on the tenth business day (as such time period may
be extended pursuant to the Rights Agreement) following a public announcement
that a person or group of affiliated or associated persons (which does not
include the Company, any subsidiary of the Company, any employee benefit or
stock ownership plan of the Company or any subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan) has
acquired, or obtained the right to acquire, beneficial ownership of 25% or more
of the outstanding Common Shares (an "Acquiring Person"), or (ii) the close of
business on the tenth business day following the commencement of a tender offer
or exchange offer by a person or group of affiliated or associated persons, the
consummation of which would result in beneficial ownership by such person or
group of 25% or more of the outstanding Common Shares.
The Rights Agreement provides that until the Distribution Date, the Rights
will be transferred with and only with the Common Shares and the Senior
Preference Shares, respectively. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share and new Senior
Preference Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares and Senior Preference Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date
(or earlier redemption or expiration of the Rights), the surrender for transfer
of any certificates for Common Shares and Senior Preference Shares in respect of
which Rights have been issued will also constitute the transfer of the Rights
associated with the Common Shares and Senior Preference Shares represented by
such certificates. As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights (the "Right Certificates") will be
mailed to holders of record of the Common Shares and the Senior Preference
Shares at the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
No Right is exercisable at any time prior to the Distribution Date. The
Rights will expire on March 31, 2008 (the "Final Expiration Date") unless
earlier redeemed or exchanged by the Company as described below. Until a Right
is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including without limitation the right to vote or to receive
dividends.
The Purchase Price payable, and the number of Units of a Preferred Share 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 Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
cash (excluding regular periodic cash dividends), assets, stock (excluding
dividends payable in Preferred Shares) or of subscription rights or warrants
(other than those referred to above).
The number of outstanding Rights and the number of one ten-thousandths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivision,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
In the event that (i) any person or group of affiliated or associated
persons becomes the beneficial owner of 25% or more of the outstanding Common
Shares, (ii) any Acquiring Person merges into or combines with the Company and
the Company is the surviving corporation or any Acquiring Person effects certain
other transactions with the Company, as described in the Rights Agreement, or
(iii) during such time as there is an Acquiring Person, there shall be any
reclassification of securities or recapitalization or reorganization of the
Company which has the effect of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity securities of the Company
or any of its subsidiaries beneficially owned by the Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights that
are or were owned beneficially by the Acquiring Person (which, from and after
the later of the Distri-bution Date and the date of the earliest of any such
events, will be void), will thereafter have the right to receive, upon exercise
Common Shares (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the exercise price of the
Right.
In the event that, following the first date of public announcement that a
person has become an Acquiring Person, (i) the Company merges with or into any
person and the Company is not the surviving corporation, (ii) any person merges
with or into the Company and the Company is the surviving corporation, but its
Common Shares are changed or exchanged, or (iii) 50% or more of the Company's
assets or earning power, including without limitation securities creating
obligations of the Company, are sold, proper provision shall be made so that
each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock (or, under certain circumstances, an economically
equivalent security or securities) of such other person which at the time of
such transaction would have a market value of two times the exercise price of
the Right.
Upon the occurrence of any of the events described in the two immediately
preceding paragraphs, any Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by any Acquiring
Person shall immediately become null and void.
At any time after the occurrence of any such event and prior to the
acquisition by any person or group of affiliated or associated persons of 50% or
more of the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than any Rights which have become void), in whole or
in part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $.05 per share but will be entitled to an
aggregate dividend of 10,000 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preferred Shares will be entitled
to a minimum preferential liquidation payment of $10,000 per share but will be
entitled to an aggregate payment of 10,000 times the payment made per common
Share. Each Preferred Share will have 10,000 votes, voting together with the
Common Shares and the Senior Preference Shares. Finally in the event of any
merger, consolidation or other transaction in which Common Shares are exchanged,
each Preferred Share will be entitled to receive 10,000 times the amount
received per Common Share. These rights are protected by customary anti-
dilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one ten-thousandth interest in a Preferred Share
purchasable upon exercise of each Right is intended to approximate the value of
one Common Share.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. No fractional Units will be issued. In lieu thereof, an
adjustment in cash will be made based on the per share market price of the
Preferred Shares on the last trading day prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in part, at
a price of $0.01 per Right (the "Redemption Price"), at any time prior to the
close of business on the later of (i) the Distribution Date and (ii) the first
date of public announcement that a person has become an Acquiring Person. After
the redemption period has expired, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial ownership to 10% or
less of the outstanding Common Shares in a transaction or series of transactions
not involving the Company. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The Rights Agreement may be amended by the Company without the approval of
any holders of Right Certificates, including amendments which add other events
requiring adjustment to the purchase price payable and the number of Common
Shares or other securities issuable upon the exercise of the Rights or which
modify procedures relating to the redemption of the Rights, provided that no
amendment may be made at such time as the Rights are not then redeemable which
decreases the stated Redemption Price or the period of time remaining until the
Final Expiration Date or which modifies a time period relating to when the
Rights may be redeemed.
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.
The Rights could have certain anti-takeover effects. The Rights could
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Company's Board of Directors. The Rights
should not interfere with any merger or other business combination approved by
the Board of Directors, in light of the ability of the Board of Directors to
redeem the Rights or amend the Rights Agreement as summarized above.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A, dated
March 31, 1998. 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 this reference.
BIO-REFERENCE LABORATORIES, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
RIGHTS AGREEMENT
Dated as of March 31, 1998
RIGHTS-AGT.6:MSF:2/18/98
TABLE OF CONTENTS
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . 5
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . 5
Section 4. Form of Right Certificates. . . . . . . . . . . . . . . . . 7
Section 5. Countersignature and Registration . . . . . . . . . . . . . . 7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated,Destroyed, Lost or
Stolen Right Certificates. . . . . . . . . . . . . . . . . . 8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 8. Cancellation and Destruction of Right Certificates. . . . . .11
Section 9. Company Covenants Concerning Securities and Rights. . . . . .11
Section 10. Preferred Shares Record Date. . . . . . . . . . . . . . . . .13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights 14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. .24
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 14. Fractional Rights and Fractional Securities . . . . . . . . .27
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . . . . .29
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . .29
Section 17. Right Certificate Holder Not Deemed a Shareholder . . . . . .30
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . . . . .30
Section 19. Merger or Consolidation or Change of Name of Rights Agent . 31
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . . . . .32
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . . . . .34
Section 22. Issuance of New Right Certificates. . . . . . . . . . . . . .35
Section 23. Redemption. . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 24. Notice of Certain Events. . . . . . . . . . . . . . . . . . 36
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . .37
Section 26. Supplements and Amendments. . . . . . . . . . . . . . . . . .38
Section 27. Exchange. . . . . . . . . . . . . . . . . . . . . . . . . . .39
Section 28. Successors; Certain Covenants . . . . . . . . . . . . . . . .40
Section 29. Determination of Outstanding Shares . . . . . . . . . . . . 40
Section 30. Benefits of this Agreement. . . . . . . . . . . . . . . . . .40
Section 31. Severability. . . . . . . . . . . . . . . . . . . . . . . . .40
Section 32. Governing Law . . . . . . . . . . . . . . . . . . . . . . . .41
Section 33. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . .41
Section 34. Descriptive Headings. . . . . . . . . . . . . . . . . . . . .41
Exhibit A - Form of Certificate of Amendment to
Certificate of Incorporation . . . . . . . . . . . . . . . . . . .41
Exhibit B - Form of Right Certificate. . . . . . . . . . . . . . . . . . . . .50
Exhibit C - Form of Summary of Rights. . . . . . . . . . . . . . . . . . . . .58
RIGHTS AGREEMENT, dated as of March 31, 1998 (the "Agreement"), is made
and entered into by and between BIO-REFERENCE LABORATORIES, INC., a New
Jersey corporation (the "Company"), and AMERICAN STOCK TRANSFER & TRUST
COMPANY, a New York corporation with limited corporate trust powers
(the "Rights Agent").
RECITALS
--------
On March 31, 1998 the Board of Directors of the Company authorized and
declared a dividend distribution of one right for (i) each share of Common
Stock, par value $.01 per share, of the Company (a "Common Share") and (ii)
for each share of Series A Senior Preferred Stock, par value $.10 per share
(a "Preference Share"), outstanding as of the Close of Business (as
hereinafter defined) on March 31, 1998, (the "Record Date"), each Right
initially representing the right to purchase one one-ten-thousandth of a
share of Series A Junior Participating Preferred Stock of the Company having
the rights, powers and preferences set forth in the Certificate of
Amendment to the Certificate of Incorporation of the Company attached
hereto as Exhibit A, upon the terms and subject to the conditions herein
set forth (the "Rights"), and further authorized and directed the issuance
of one Right with respect to each Common Share and to each Preferred Share
issued or delivered by the Company (whether originally issued or delivered
from the Company's treasury) after the Record Date but prior to the earlier
of the Distribution Date (as hereinafter defined) and the Expiration Date (as
hereinafter defined).
NOW THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (other than the
Company or any Subsidiary of the Company or any employee benefit or stock
ownership plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan)
who or which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 25% or more of the Common Shares then
outstanding; provided, however, that a Person shall not be deemed to have
become an Acquiring Person solely as a result of a reduction in the number of
Common Shares outstanding unless and until (i) such time as such Person or
any Affiliate or Associate of such Person shall thereafter become the
Beneficial Owner of any additional Common Shares, other than as a result of
a stock dividend, stock split or similar transaction effected by the Company
in which all holders of Common Shares are treated equally, or (ii) any other
Person who is the Beneficial Owner of any Common Shares shall thereafter
become an Affiliate or Associate of such Person, nor shall a Person become
an Acquiring Person solely because of the occurrence of the Distribution
Date, and the issuance of separate Rights Certificates as a consequence of
another Person first becoming an Acquired Person.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(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 Exchange Act, as in effect on the date
of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and to
"beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (whether or not in writing),
or upon the exercise of conversion rights, exchange rights, rights, warrants
or options, or otherwise (in each case, other than upon exercise or exchange
of the Rights); provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered pursuant to
a tender or exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of,
including pursuant to any agreement, arrangement or understanding (whether
or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing) with such
other Person (or any of such other Person's Affiliates or Associates) with
respect to acquiring, holding, voting or disposing of any securities of the
Company; provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security (A) if such Person has the
right to vote such security pursuant to an agreement, arrangement or
understanding (whether or not in writing) which (1) arises solely from a
revocable proxy given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report),
or (B) if such beneficial ownership arises solely as a result of such
Person's status as a "clearing agency", as defined in Section 3(a)(23) of the
Exchange Act; and provided, further, that nothing in this paragraph (d) shall
cause a Person engaged in business as an underwriter of securities to be the
Beneficial Owner of, or to beneficially own, any securities acquired through
such Person's participation in good faith in an underwriting syndicate until the
expiration of 40 calendar days after the date of such acquisition, or such
later date as the Board of Directors of the Company may determine in any
specific case.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York (or
such other state in which the principal office of the Rights Agent is
located) 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.,
Eastern time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(g) "Common Shares" when used with reference to the Company shall
mean the Common Stock, par value $.01 per share of the Company; provided,
however, that, if the Company is the continuing or surviving corporation in a
transaction described in Section 11(a)(ii) or Section 13(a)(ii) hereof,
"Common Shares" when used with reference to the Company shall mean the
capital stock or equity security with the greatest aggregate voting power of
the Company. "Common Shares" when used with reference to any corporation or
other legal entity, other than the Company, including an Issuer, shall mean
the capital stock or equity security with the greatest aggregate voting power
of such corporation or other legal entity.
(h) "Company" shall mean Bio-Reference Laboratories, Inc., a New
Jersey corporation.
(i) "Distribution Date" shall mean the earlier of: (i) the Close
of Business on the tenth Business Day after the Share Acquisition Date, or
(ii) the Close of Business on the tenth Business Day after the date of the
commencement of a tender or exchange offer by any Person (other than the
Company or any Subsidiary of the Company or any employee benefit or stock
ownership plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan),
if upon the consummation thereof such Person would be the Beneficial Owner of
25% or more of the outstanding Common Shares; provided, however, that if the
earlier of such dates would otherwise occur prior to the Record Date, the
Distribution Date shall mean the Close of Business on the Record Date.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(k) "Expiration Date" shall mean the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, and (iii) the time at which all
exercisable Rights are exchanged as provided in Section 27 hereof.
(l) "Final Expiration Date" shall mean the tenth anniversary of
the Record Date.
(m) "Flip-in Event" shall mean any event described in clauses (A),
(B) or (C) of Section 11(a)(ii) hereof.
(n) "Flip-over Event" shall mean any event described in
subsections (i), (ii) or (iii) of Section 13(a) hereof.
(o) "Issuer" shall have the meaning set forth in Section 13(b)
hereof.
(p) "NASDAQ" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System, either National Market System,
Small Cap or Bulletin Board, as the case may be.
(q) "Person" shall mean any individual, firm, corporation,
partnership or other legal entity, and shall include any successor (by
merger or otherwise) of such entity.
(r) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, $.10 par value, of the Company and, to the
extent that there is not a sufficient number of shares of Series A Junior
Participating Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock, $.10 par value, of the Company
designated for such purpose containing terms substantially similar to the
terms of the Series A Junior Participating Preferred Stock.
(s) "Purchase Price" shall mean initially $4.00 per one-ten-
thousandth of a Preferred Share, subject to modification as set forth in this
Agreement.
(t) "Redemption Price" shall mean $0.01 per Right, subject to
adjustment by resolution of the Board of Directors of the Company to reflect
any stock split, stock dividend or similar transaction occurring after the
date hereof.
(u) "Right" shall have the meaning set forth in the Recitals to
this Agreement.
(v) "Right Certificates" shall mean certificates evidencing the
Rights, in substantially the form of Exhibit B attached hereto.
(w) "Rights Agent" shall mean American Stock Transfer & Trust
Company, unless and until a successor Rights Agent shall have become such
pursuant to the terms of this Agreement, and thereafter, "Rights Agent"
shall mean such successor Rights Agent.
(x) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(y) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an
Acquiring Person has become such.
(z) "Subsidiary" when used with reference to any Person shall mean
any corporation or other legal entity of which a majority of the voting power
of the voting equity securities or equity interests is owned, directly or
indirectly, by such Person.
(aa) "Summary of Rights" shall mean the Summary of Rights to
Purchase Series A Junior Participating Preferred Stock of the Company, in
substantially the form of Exhibit C attached hereto.
(ab) "Trading Day" shall mean any day on which the principal
national securities exchange or automated quotation system (as the case may
be) on which the Common Shares are listed or admitted to trading is open for
the transaction of business or, if the Common Shares are not listed or
admitted to trading on any national securities exchange or automated
quotation system, a Business Day.
(ac) "Triggering Event" shall mean any Flip-in Event or Flip-over
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 also be, prior to the
Distribution Date, the holders of the Common Shares) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time act as Co-Rights Agent or
appoint such Co-Rights Agents as it may deem necessary or desirable. Any
actions which may be taken by the Rights Agent pursuant to the terms of this
Agreement may be taken by any such Co-Rights Agent. To the extent that any
Co-Rights Agent takes any action pursuant to this Agreement, such Co-Rights
Agent shall be entitled to all of the rights and protections of, and subject
to all of the applicable duties and obligations imposed upon, the Rights
Agent pursuant to the terms of this Agreement.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights shall be evidenced
by the certificates representing Common Shares and Preference Shares
registered in the names of the respective record holders thereof (which
certificates representing Common Shares and Preference Shares shall also be
deemed to be Right Certificates), together with a copy of the Summary of
Rights, (ii) the Rights shall be transferable only in connection with the
transfer of the underlying Common Shares and Preference Shares, and (iii) the
surrender for transfer of any certificates evidencing Common Shares and
Preference Shares in respect of which Rights have been issued, with or
without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Shares and Preference Shares
evidenced by such certificates.
(b) As promptly as practicable after the Record Date, the Company
shall send a copy of the Summary of Rights by first-class, postage prepaid
mail, to each record holder of Common Shares and of Preference Shares as of
the close of business on the Record Date, at the address of such holder shown
on the records of the Company as of such date.
(c) Rights shall be issued by the Company in respect of all Common
Shares and Preference Shares issued or delivered by the Company (whether
originally issued or delivered from the Company's treasury) after the Record
Date but prior to the earlier of the Distribution Date and the Expiration
Date. Certificates evidencing such Common Shares and Preference Shares shall
have stamped on, impressed on, printed on, written on or otherwise affixed to
them the following legend or such similar legend as the Company may deem
appropriate and as is 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 transaction reporting system on which the Common Shares and
Preference Shares, respec-tively, may from time to time be listed or quoted,
or to conform to usage:
This Certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between Bio-Reference
Laboratories, Inc. and American Stock Transfer & Trust Company (the "Rights
Agent"), dated as of March 31, 1998 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of Bio-Reference Laboratories, Inc.,
and at the offices of the Rights Agent. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be redeemed, may expire, may
be amended or may be evidenced by separate certificates and no longer be
evidenced by this Certificate. The Rights Agent will mail to the holder of
this Certificate a copy of the Rights Agreement without charge promptly after
receipt of a written request therefor. Under certain circumstances as set
forth in the Rights Agreement, Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement) may become null and void.
(d) As promptly as practicable after the Distribution Date, the
Company shall prepare and execute, the Rights Agent will countersign and the
Company shall send or cause to be sent (and the Rights Agent shall, if
requested, send), by first-class, insured, postage prepaid mail, to each
record holder of Common Shares and of Preference Shares as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, evidencing one Right for each
Common Share and each Preference Share so held, subject to adjustment. As of
and after the Distribution Date, the Rights shall be evidenced solely by such
Right Certificates.
Section 4.Form of Right Certificates.
The Right Certificates (and the form of election to purchase and form
of assignment to be printed on the reverse thereof) shall be substantially
in the form set forth as Exhibit B hereto with such changes, marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or transaction
reporting system on which the Rights may from time to time be listed or
quoted, or to conform to usage. Subject to the provisions of Section 22
hereof, the Right Certificates, whenever issued, on their face shall entitle
the holders thereof to purchase such number of one one-ten-thousandths of a
Preferred Share as shall be set forth therein at the Purchase Price set forth
therein, but the Purchase Price, the number and kind of securities issuable
upon exercise of each Right and the number of Rights outstanding shall be
subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right 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 Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right Certificates, 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 Right Certificates had not ceased
to be such officer of the Company; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution
of such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this 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 the principal office of the Rights Agent designated
for such purpose and at such other offices 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 any transaction
reporting system on which the Rights may from time to time be listed or
quoted, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face
by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of Sections 7(c) and 14 hereof, at
any time after the Close of Business on the Distribution Date and prior to
the Expiration Date, any Right Certificate or Right Certificates representing
exercisable Rights may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-ten-thousandths of a Preferred
Share (or other securities, as the case may be) as the Right Certificate or
Right Certificates surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any such Right Certificate shall make
such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose. Thereupon or as promptly as practicable thereafter, subject to the
provisions of Sections 7(c) and 14 hereof, the Company shall prepare, execute
and deliver to the Rights Agent, and the Rights Agent shall countersign and
deliver a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
(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 Right 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 Right
Certificate if mutilated, the Company shall prepare, execute and deliver a
new Right Certificate of like tenor to the Rights Agent and the Rights Agent
shall countersign and deliver such new Right Certificate to the registered
holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Subsection (c), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
and prior to the Expiration Date, upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the office or offices of the Rights Agent
designated for such purpose, together with payment in cash, in lawful money
of the United States of America by certified check or bank draft payable to
the order of the Company equal to the (i) aggregate Purchase Price with
respect to the total number of one one-ten-thousandths of a Preferred Share
(or other securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable by payment, with respect to each
Right so exercised, of the Purchase Price per one one-ten-thousandths of a
Preferred Share (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(j)
hereof, thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the transfer
agent for such shares) certificates for the total number of one one-ten-
thousandths of a Preferred Share to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests,
or (B) if the Company shall have elected to deposit the total number of
Preferred Shares issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent depositary receipts
representing such number of one one-ten-thousandths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company will direct the depositary agent to
comply with such request, (ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash,
if any, to or upon the order of the registered holder of such Right
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 will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when appropriate.
(b) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, the Company shall
prepare, execute and deliver a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised and the Rights Agent shall
countersign and deliver such new Right Certificate to the registered holder
of such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
(c) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Flip-in Event, any Rights
beneficially owned by (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, (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 oral or
written plan, agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of the
Company determines is part of any oral or written plan, agreement,
arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(c), 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 this Agreement or otherwise. The
Company shall use all reasonable efforts to insure that the provisions of
this Section 7(c) are complied with, but shall have no liability to any
holder of Rights Certificates or other Person as a result of its failure to
make any determinations hereunder with respect to an Acquiring Person or the
Affiliates, Associates or transferees of an Acquiring Person.
(d) 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 any purported transfer, split up, combination or
exchange of any Right Certificate pursuant to Section 6 hereof or exercise of
a Right Certificate as set forth in this Section 7 unless the registered
holder of such Right Certificate shall have (i) completed and signed the
certificate following the form of assignment or form of election to purchase,
as applicable, set forth on the reverse side of the Right Certificate
surrendered for such transfer, split up, combination, exchange 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 have reasonably requested.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its stock transfer 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 Right Certificates shall be issued in lieu thereof
except as expressly permitted by 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 Right Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights Agent
shall deliver all cancelled Right Certificates to the Company, or shall, at
the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Company Covenants Concerning Securities and Rights. The
Company covenants and agrees that:
(a) It will cause to be reserved and kept available out of its
authorized and unissued Preferred Shares (and, following the occurrence of a
Triggering Event, out of its authorized and unissued Common Shares and/or
other securities or out of its authorized and issued shares held in its
treasury), the number of Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares (and, following the occurrence
of a Triggering Event, Common Shares and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause, from
and after such time as the Rights become exercisable, all shares reserved for
such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) It shall take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) and/or other securities
delivered upon exercise of Rights, at the time of delivery of the
certificates for such securities shall be (subject to payment of the
Purchase Price) duly and validly authorized and issued, fully paid and
nonassessable securities.
(d) It shall 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 Right Certificates and of any certificates
representing securities issued upon the exercise of Rights; provided,
however, that the Company shall not be required to pay any transfer tax or
charge which may be payable in respect of any transfer or delivery of Right
Certificates to a person other than, or the issuance or delivery of
certificates representing securities issued upon the exercise of Rights in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or deliver any
certificates representing securities issued upon the exercise of any Rights
until any such tax or charge shall have been paid (any such tax or charge
being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
(e) It shall use its best efforts (i) to file on an appropriate
form, as soon as practicable following the later of the first occurrence of a
Triggering Event or the Distribution Date, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as soon
as practicable after such filing, and (iii) to cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities and (B) the Expiration
Date. The Company shall 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 after the date set
forth in clause (i) of the first sentence of this Section 9(e), the
exercisability of the Rights in order to prepare and file such registration
statement and to permit it to become effective. Upon any such suspension,
the Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. In
addition, if the Company shall determine that a registration statement should
be filed under the Securities Act or any state securities laws following the
Distribution Date, the Company may temporarily suspend the exercisability of
the Rights in each relevant jurisdiction until such time as a registration
statement has been declared effective and, 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 anything in this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite registration or qualification in such
jurisdiction shall not have been effected or the exercise of the Rights shall
not be permitted under applicable law.
(f) The Company covenants and agrees that it shall not at any time
after the Distribution Date (i) consolidate with, (ii) merge with or into,
or (iii) sell or transfer to, in one or more 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, any other Person if at the
time of or after such consolidation, merger or sale there are any charter or
by-law provisions or any rights, warrants or other instruments outstanding or
any other action taken which would diminish or otherwise eliminate the
benefits intended to be afforded by the Rights. The Company shall not
consummate any such consolidation, merger or sale 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 subsection.
(g) The Company covenants and agrees that after the Distribution
Date it shall not, except as permitted by Section 23 or Section 26 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 eliminate or
otherwise diminish the benefits intended to be afforded by the Rights.
(h) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Sections 11, 13 or 14
hereof, it shall make all arrangements necessary so that such other
securities and/or cash are available for distribution by the Rights Agent, if
and when appropriate.
Section 10. Preferred Shares Record Date. Each Person in whose name
any certificate for a number of one one-ten-thousandths of a Preferred Share
(or Common Shares and/or other securities, as the case may be) is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of such fractional Preferred Share (or Common Shares and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares
(or Common Shares and/or other securities, as the case may be) transfer books
of the Company are closed, such Person shall be deemed to have become the
record holder of such securities on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Shares (or Common Shares
and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights evidenced thereby, the holder
of a Right Certificate shall not be entitled to any rights of a shareholder
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 that the Company shall at any time after the
date of this Agreement (A) effect a dividend on the Preferred Shares payable
in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of shares or
(D) issue any shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), 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/or the number and/or kind of Preferred Share or shares of capital stock,
as the case may be, issuable on such date upon exercise of a Right, 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 Preferred Shares or shares of 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 Preferred Shares
transfer books of the Company were open, the holder of such Right would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof or Section 13 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) or Section 13 hereof.
(ii) Subject to the provisions of Section 27 hereof, in the
event that:
(A) any Acquiring Person or any Affiliate or Associate of any
Acquiring Person, at any time after the date of this Agreement, directly or
indirectly, shall (1) merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of
such merger or combination (other than in a transaction subject to Section 13
hereof), (2) merge or otherwise combine with any Subsidiary of the Company,
(3) in one or more transactions (other than in connection with the exercise
or exchange of Rights or the exercise or conversion of securities exercisable
for or convertible into shares of any class of capital stock of the Company or
any of its Subsidiaries) transfer any assets to the Company or any of its
Subsidiaries in exchange (in whole or in part) for shares of any class of
capital stock of the Company or any of its Subsidiaries or for securities
exercisable for or convertible into shares of any class of capital stock of
the Company or any of its Subsidiaries, or otherwise obtain from the Company
or any of its Subsidiaries, with or without consideration, any additional
shares of any class of capital stock of the Company or any of its
Subsidiaries or securities exercisable for or convertible into shares of any
class of capital stock of the Company or any of its Subsidiaries (other than
as part of a pro rata distribution to all holders of such shares of any class
of capital stock of the Company, or any of its Subsidiaries), (4) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose
(in one or more transactions), to, from, with or of, as the case may be, the
Company or any of its Subsidiaries (other than in a transaction subject to
Section 13 hereof ), assets, including securities, on terms and conditions
less favorable to the Company than the Company would be able to obtain in
arm's-length negotiation with an unaffiliated third party, (5) receive any
compensation from the Company or any of its Subsidiaries other than
compensation as a director or for full-time employment as a regular employee,
in either case, at rates in accordance with the Company's (or its
Subsidiaries') past practices, or (6) receive the benefit, directly or
indirectly (except proportionately as a shareholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or other
tax advantage provided by the Company or any of its Subsidiaries; or
(B)during such time as there is an Acquiring Person, there shall be any
reclassification of securities (including any reverse stock split), or
recapitalization of the Company, or any merger or consolidation of the
Company with any of its Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries (whether or not
with or into or otherwise involving an Acquiring Person), other than a
transaction subject to Section 13 hereof, which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity securities or of securities
exercisable for or convertible into equity securities of the Company or any
of its Subsidiaries of which an Acquiring Person or any Affiliate or
Associate of any Acquiring Person, is the Beneficial Owner; or
(C) any Person (other than the Company or any Subsidiary of the
Company or any employee benefit or stock ownership plan of the Company or of
any Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) who or which, together with all
Affiliates and Associates of such Person, shall at any time after date of
this Agreement, become the Beneficial Owner of 25% or more of the Common
Shares then outstanding (other than pursuant to any transaction set forth in
Section 13(a) hereof ); provided, however, that a Person shall not be deemed
to have become the Beneficial Owner of 25% or more of the Common Shares then
outstanding for the purposes of this Section 11(a)(ii)(C) solely as a result
of a reduction in the number of Common Shares outstanding unless and until
such time as (1) such Person or any Affiliate or Associate of such Person
shall thereafter become the Beneficial Owner of any additional Common Shares
other than as a result of a stock dividend, stock split or similar
transaction effected by the Company in which all holders of Common Shares are
treated equally, or (2) any other Person who is the Beneficial Owner of any
Common Shares shall thereafter become an Affiliate or Associate of such
Person, then, and in each such case, proper provision shall be made so that
each holder of a Right, except as provided below and in Section 7(c), shall
thereafter have a right to receive, upon exercise thereof in accordance with
the terms of this Agreement, in lieu of a number of one one-ten-thousandths
of a Preferred Share, such number of Common Shares as shall equal the result
obtained by (x) multiplying the then-current Purchase Price by the number of
one one-ten-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of a Flip-In Event, and
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) and dividing that product by (y) 50% of the
current per share market price of the Common Shares (determined pursuant to
Section 11(d) hereof) on the date of the first occurrence of a Flip-In Event
(such number of shares, the "Adjustment Shares"). Notwithstanding anything
in this Agreement to the contrary, from and after the later of the
Distribution Date and the first occurrence of a Flip-in Event, (1) any Rights
that are or were acquired or beneficially owned by any Acquiring Person (or
any Affiliate or Associate of such Acquiring Person) shall be void and any
holder of such Rights shall thereafter have no right to exercise such Rights
under any provision of this Agreement, (2) no Right Certificate shall be
issued pursuant to this Agreement that represents Rights beneficially owned by
an Acquiring Person or any Affiliate or Associate thereof, (3) no Right
Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person or any Affiliate or Associate thereof or to any nominee of
such Acquiring Person or Affiliate or Associate thereof, and (4) any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
or any Affiliate or Associate thereof shall be cancelled.
(iii) Upon the occurrence of the Distribution Date or a Flip-
in Event, if there shall not be sufficient Common Shares authorized but
unissued or issued but not outstanding to permit the exercise in full of
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 Shares 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 Common Shares (such shares of preferred stock being
referred to as "common share 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 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 Flip-In 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, Common Shares (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 Common Shares 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 shall
provide, subject to the last sentence of Section 11(a)(2) 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 Shares shall
be the current market price (as determine pursuant to Section 11(d) hereof)
per Common Share on the Section 11(a)(ii) Trigger Date and the value of any
"common share" equivalent shall be deemed to have the same value as the
Common Shares on such date.
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Preferred Shares (or securities
having equivalent rights, privileges and preferences as the Preferred Shares
(for purposes of this Section 11(b), "equivalent preferred shares")) or
securities convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred Shares
or equivalent preferred shares) less than the current per share market price
of the Preferred Shares (determined pursuant to Section 11(d) hereof) on such
record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or equivalent preferred shares so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current per share market price and the
denominator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially c
onvertible). In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent. Preferred Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the Purchase
Price which would then be in effect if such record date had not been fixed.
(c) In the event that the Company shall fix a record date for the
making of a distribution to all holders of Preferred Shares (including any
such distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets,
stock (other than a dividend payable in Preferred Shares) or subscription
rights, options 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
per share market price of the Preferred Shares (as determined pursuant to
Section 11(d) hereof) on such record date or, if earlier, the date on which
Preferred Shares begin to trade on an ex-dividend or when-issued basis for
such distribution, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of the evidences
of indebtedness, cash, assets or stock so to be distributed or of such
subscription rights, options or warrants applicable to one Preferred Share,
and the denominator of which shall be such current per share market price of the
Preferred Shares. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current per
share market price" of Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the
30 consecutive Trading Days immediately prior to such date; provided,
however, that in the event that the current per share market price of the
Common Shares is determined during a period following the announcement by the
issuer of such Common Shares of (i) a dividend or distribution on such Common
Shares payable in such Common Shares or securities convertible into such
Common Shares (other than the Rights) or (ii) any subdivision, combination or
reclassification of such Common Shares, and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or reclassification, then,
and in each such case, the current per share market price shall be
appropriately adjusted to take into account ex-dividend trading or to reflect
the current per share market price per Common Share equivalent. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Common Shares are not
listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange or automated
quotation system on which the Common Shares are listed or admitted to trading
or, if the Common Shares are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use, or, if on any such date the Common
Shares 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 Shares selected by the Board of Directors of the
Company. If the Common Shares are not publicly held or not so listed or
traded, or not the subject of available bid and asked quotes, "current per
share market price" 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.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of Preferred Shares on any date shall be
determined in the same manner as set forth above for the Common Shares in
clause (i) of this Section 11(d) (other than the last sentence thereof). If
the current per share market price of Preferred Shares are not publicly held
or listed or traded in a manner described in clause (i) of this Section
11(d), the "current per share market price" of Preferred Shares shall be
conclusively deemed to be an amount equal to 10,000 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Shares occurring after the date
of this Agreement) multiplied by the current per share market price of the
Common Shares. If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, "current per share market Price" of the
Preferred Shares 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 per share
market price" of one one-ten-thousandth of a Preferred Share shall be equal
to the "current per share market price" of one Preferred Share divided by
10,000.
(e) Except as set forth below, no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or
decrease of at least 1% in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or
to the nearest one- ten-thousandth of a Common Share or other share or one-
millionth of a Preferred 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 years from the date of
the transaction which requires such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof, shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares contained in
this Section 11, and the provisions of Sections 7, 9, 10, 13 and 14 hereof
with respect to the Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-ten-
thousandths of a Preferred Share issuable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(b) and Section 11(c)
hereof made with respect to a distribution of subscription rights, options or
warrants applicable to Preferred Shares, 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-ten-
thousandths of a Preferred Share (calculated to the nearest one one-
millionth of a Preferred Share) obtained by (i) multiplying (x) the number of
one one-ten thousandths of a Preferred Share issuable upon exercise of 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 substitution for any
adjustment in the number of one one-ten thousandths of a Preferred Share
issuable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number
of one one-ten thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-millionth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been
issued, shall be at least 10 calendar days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to the provisions of Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by
the Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right 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 Right Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-ten-thousandths of a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number and kind of
securities which were expressed in the initial Right Certificate issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the number
of one one-ten-thousandths of a Preferred Share or other securities issuable
upon exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable such
number of one one-ten-thousandths of a Preferred Share or such other capital
stock or securities 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-ten-thousandths of a Preferred Share and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-ten-thousandths of a Preferred
Share and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or other securities
upon the occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary,
the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that in its 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 Preferred Shares, (ii) issuance wholly
for cash of Preferred Shares at less than the current per share market price
therefor, (iii) issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred
Shares, (iv) stock dividends, or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of
its Preferred Shares shall not be taxable to such shareholders.
(n) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution Date (i) declare a dividend on the outstanding
Common Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, (iii) combine the outstanding Common Shares into a smaller number of
shares or (iv) issue any of its shares of capital stock in a reclassification
of the outstanding Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving entity), then in any such case, (A) the number of
Rights associated with each Common Share or other such shares 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 Common Share or other such shares following
any such event shall equal the result obtained by multiplying the number of
Rights associated with each Common Share immediately prior to such event by a
fraction the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of Common Shares outstanding
immediately following the occurrence of such event, and (B) each Common Share
outstanding immediately after such event shall have issued with respect to it
that number of Rights (which may be represented by the certificate
representing the underlying Common Shares in accordance with Section 3) which
each Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or reclassification is effected, and shall also
apply to the Rights associated with the Preference Shares in the event the
Company takes any action with respect to the Preference Shares comparable or
similar to the action or events set forth above in this Section 11(n);
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 promptly (a) prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Preferred Shares or Common Shares, a copy of such certificate, and (c) if
such adjustment is made after the Distribution Date, mail a brief summary of
such adjustment to each holder of a Right Certificate in accordance with
Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Share Acquisition Date,
directly or indirectly:
(i) the Company shall consolidate with, or merge with or into,
any other Person and the Company shall not be the continuing or surviving
corporation of such consolidation or merger; or
(ii) any Person shall consolidate with the Company, or merge
with or into the Company and the Company shall be the continuing or surviving
corporation of such merger or consolidation and, in connection with such
merger or consolidation, all or part of the Common Shares shall be changed
into or exchanged for stock or other securities of any other Person or cash
or any other property; or
(iii)the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power (including, without limitation,
securities creating any obligation on the part of the Company and/or any of
its Subsidiaries) representing in the aggregate more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons, then, and in each such case, proper provision shall be
made so that (A) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof in
accordance with the terms of this Agreement at an exercise price per Right
equal to the product of the then-current Purchase Price multiplied by the
number of one-ten-thousands of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of a Triggering Event,
such number of validly authorized and issued, fully paid, nonassessable and
freely tradeable Common Shares of the Issuer, free and clear of any liens,
encumbrances and other adverse claims and not subject to any rights of call
or first refusal, as shall be equal to the result obtained by (x) multiplying
the then-current Purchase Price by the number of one one-ten-thousandths of a
Preferred Share for which a Right is exercisable immediately prior to the
first occurrence of a Triggering Event and dividing that product (which,
following the first occurrence of a Flip-Over Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by (y)
50% of the current per share market price of the Common Shares of the Issuer
(determined pursuant to Section 11(d) hereof), on the date of consummation of
such Flip-over Event; (B) the Issuer shall thereafter be liable for, and
shall assume, by virtue of the consummation of such Flip-over Event, all the
obligations and duties of the Company pursuant to this Agreement; (C) the
term "Company" shall thereafter be deemed to refer to the Issuer; and (D) the
Issuer shall take such steps (including, without limitation, the reservation
of a sufficient number of its Common Shares to permit the exercise of all
outstanding Rights) in connection with such consummation as may be necessary
to assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be possible, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) For purposes of this Section 13, "Issuer" shall mean (i) in
the case of any Flip-over Event described in Sections 13(a) (i) or (ii)
above, the Person that is the continuing, surviving, resulting or acquiring
Person (including the Company as the continuing or surviving corporation of a
transaction described in Section 13(a)(ii) above), and (ii) in the case of
any Flip-over Event described in Section 13(a)(iii) above, the Person that is
the party receiving the greatest portion of the assets or earning power
(including, without limitation, securities creating any obligation on the
part of the Company and/or any of its Subsidiaries) transferred pursuant to
such transaction or transactions; provided, however, that, in any such case,
(A) if (1) no class of equity security of such Person is, at the time of such
merger, consolidation or transaction and has been continuously over the
preceding 12- month period, registered pursuant to Section 12 of the Exchange
Act, and (2) such Person is a Subsidiary, directly or indirectly, of another
Person, a class of equity security of which is and has been so registered,
the term "Issuer" shall mean such other Person; and (B) in case such Person
is a Subsidiary, directly or indirectly, of more than one Person, a class of
equity security of two or more of which are and have been so registered, the
term "Issuer" shall mean whichever of such Persons is the issuer of the
equity security having the greatest aggregate market value. Notwithstanding
the foregoing, if the Issuer in any of the Flip-over Events listed above is
not a corporation or other legal entity having outstanding equity securities,
then, and in each such case, (x) if the Issuer is directly or indirectly
wholly owned by a corporation or other legal entity having outstanding equity
securities, then all references to Common Shares of the Issuer shall be
deemed to be references to the Common Shares of the corporation or other
legal entity having outstanding equity securities which ultimately controls
the Issuer, and (y) if there is no such corporation or other legal entity
having outstanding equity securities, (I) proper provision shall be made so
that the Issuer shall create or otherwise make available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement, a kind
or kinds of security or securities having a fair market value at least equal
to the economic value of the Common Shares which each holder of a Right would
have been entitled to receive if the Issuer had been a corporation or other
legal entity having outstanding equity securities; and (II) all other
provisions of this Agreement shall apply to the issuer of such securities as
if such securities were Common Shares.
(c) The Company shall not consummate any Flip-over Event, unless
the Issuer shall have a sufficient number of authorized Common Shares (or
other securities as contemplated in Section 13(b) above) 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 to such consummation the
Company and the Issuer shall have executed and delivered to the Rights Agent
a supplemental agreement providing for the terms set forth in subsections
(a) and (b) of this Section 13 and further providing that as promptly as
practicable after the consummation of any Flip-over Event, the Issuer shall:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities issuable upon
exercise of the Rights on an appropriate form, and shall 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 Securities Act) until the
Expiration Date;
(ii) take all 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; and
(iii) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the Exchange
Act.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the
event that a Flip-over Event occurs at any time after the occurrence of a
Flip-in Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.
Section 14. Fractional Rights and Fractional Securities.
(a) The Company shall not be required to issue fractions of Rights
(other than fractions which are integral multiples of one one-ten-thousandths
of a Preferred Share) or to distribute Right Certificates which evidence
Fractional Rights (other than Rights Certificates which evidence Fractional
Rights that are integral multiples of one one-ten-thousandths of a Preferred
Share). In lieu of such fractional Rights (other than fractions which are
integral multiples of one one-ten-thousandths of a Preferred Share), the Company
shall pay as promptly as practicable to the registered holders of the Right
Certificates with regard to which such fractional Rights otherwise would be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such fractional Rights
otherwise would have been issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system or automatic quotation system with respect to
securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by NASDAQ or such other system
then in use or, if on any such date the Rights are not 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
Preferred Shares (other than fractions which are integral multiples of one
one-ten-thousandths of a Preferred Share) or other securities issuable upon
exercise or exchange of the Rights or to distribute certificates which
evidence any such fractional securities (other than fractions which are
integral multiples of one one-ten-thousandths of a Preferred Share). In lieu
of issuing any fractional Preferred Shares that are not integral multiples of
one one-ten-thousandths of a Preferred Share, the Company may pay to any
Person to whom or which such fractional securities would otherwise be
issuable an amount in cash equal to the same fraction of the current per
share market value of one such security. For purposes of this Section 14(b),
the current per share market value of Preferred Shares or other security
issuable upon the exercise or exchange of Rights shall be the closing price
thereof (as determined in the same manner as set forth for Preferred Shares
in the second sentence of Section 11(d) hereof) for the Trading Day
immediately prior to the date of such exercise or exchange; provided,
however, that if neither the Preferred Shares nor any such other securities
are publicly held or listed or admitted to trading on any national
securities exchange, or the subject of available bid and asked quotes, the
current per share market value of Preferred Shares or such other security
shall be determined in good faith by the Board of Directors of the Company.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the respective
registered holders of the Common Shares and the Preference Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution
Date, of the Common Shares or of the Preference Shares, as the case may be),
subject to Section 7(c) without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Distribution Date, of
the holder of any Common Shares or any Preference Shares, as the case may
be), may in his own behalf and for his own benefit enforce, and may institute
and maintain any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate or Common Share or Preference Share certificate in the
manner provided in such Right 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 under this Agreement, and
injunctive relief against actual or threatened violations of the obligations
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 shall be
transferable only in connection with the transfer of the Common Shares and
the Preference Shares, respectively;
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(name the Right Certificate (or, prior to the Distribution Date, the
associated Common Share certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common Share
certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent shall
be affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights (other than fractions which are integral multiples of one
one-ten-thousandths of a Preferred Share) and any fractional securities upon
exercise or exchange of a Right, except as otherwise provided in Section 14
hereof.
(e) 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, that
the Company shall use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
any other securities of the Company which may at any time be issuable upon
the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 24 hereof), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions of this Agreement or exchanged pursuant to the
provisions of Section 27 hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of
this 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, suit, action, proceeding or expense,
incurred without gross negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability
arising therefrom, directly or indirectly.
(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
Right Certificate or certificate evidencing Common Shares or other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of
the predecessor Rights Agent or in the name of the successor Rights Agent;
and in all such cases such Right Certificates shall have the full force
provided in the Right 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 Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
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 any one of the Chairman of
the Board, the President or any Vice President of the Company and delivered
to the Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d)The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution and delivery hereof by the Rights Agent) or
in respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Right Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof (including any
adjustment which results in Rights becoming void) or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after
actual notice of any such adjustment); nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of stock or other securities to be issued pursuant
to this Agreement or any Right Certificate or as to whether any shares of
stock or other securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the President or any Vice President of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken
or suffered to be taken by it in good faith in accordance with instructions
of any such officer.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were
not 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.
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
reasonable care was exercised in the selection and continued employment
thereof. The Rights Agent shall not be under any duty or responsibility to
insure compliance with any applicable federal or state securities laws in
connection with the issuance, transfer or exchange of Right Certificates.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, the
certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or indicates an
affirmative response to clause 1 or 2 thereof, the Rights Agent shall not
take any further action with respect to such requested exercise, transfer,
split up, combination or exchange, without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 calendar days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares or Preferred shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon 30 calendar 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 Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 calendar days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the State of New
York (or of any other state of the United States so long as such corporation
is authorized to exercise corporate trust powers in the State of New York),
in good standing, having a principal office in the State of New York, which
is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $10 million. 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 Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price per share or fractional share and
the number or kind of securities issuable upon exercise of the Rights made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale by the Company of Common Shares following the
Distribution Date and prior to the Expiration Date, the Company (a) shall,
with respect to Common Shares so issued or sold pursuant to the exercise or
conversion of securities issued prior to the Distribution Date which are
exercisable for, or convertible into, Common Shares, and (b) may, in any
other case, if deemed necessary, appropriate or desirable by the Board of
Directors of the Company, issue Right Certificates representing an equivalent
number of Rights as would have been issued in respect of such Common Shares
if they had been issued or sold prior to the Distribution Date, as
appropriately adjusted as provided herein as if they had been so issued or
sold; provided, however, that (i) no such Right Certificate shall be issued
if, and to the extent that, in its good faith judgment the Board of Directors of
the Company shall have determined that the issuance of such Right Certificate
could have a material adverse tax consequence to the Company or to the Person
to whom or which such Right Certificate otherwise would be issued, and (ii)
no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment otherwise shall have been made in lieu of the issuance
thereof.
Section 23. Redemption.
(a) Prior to the Expiration Date, the Board of Directors of the
Company may, at its option, redeem all but not less than all of the
then-outstanding Rights at the Redemption Price at any time prior to the
Close of Business on the later of (i) the Distribution Date and (ii) the
Share Acquisition Date, subject to extension as provided in Section 23(c) below.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, 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. Promptly after the action of its Board of Directors
ordering the redemption of the Rights, the Company shall publicly announce
such action, and within 10 calendar days thereafter, the Company shall
give notice of such redemption to the holders of the then-outstanding Rights
by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Company; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the
validity of the redemption of the Rights. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. The notice of redemption mailed to the holders of
Rights shall state the method by which the payment of the Redemption Price
will be made. The Company may, at its option, pay the Redemption Price
in cash, Common Shares (based upon the current per share market price of the
Common Shares (determined pursuant to Section 11(d) hereof) at the time of
redemption) or any other form of consideration deemed appropriate by the
Board of Directors of the Company (based upon the fair market value of such
other consideration, determined by the Board of Directors of the Company in
good faith) or any combination thereof.
(c) If, following the occurrence of the Share Acquisition Date
and/or following the expiration of the right of redemption hereunder but
prior to any Triggering Event, (x) a person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of Common Shares in one
transaction or series of transactions, not directly or indirectly involving
the Company or any of its Subsidiaries, which did not result in the
occurrence of a Triggering Event such that such Person is thereafter a
Beneficial Owner of less than 10% of the outstanding Common Shares and (y)
there are no other Persons, immediately following the occurrence of the event
described in clause (x), who are Acquiring Persons, then the right of
redemption shall be reinstated and thereafter be subject to the provisions of
this Section 23.
(d) At any time following the Share Acquisition Date, the Board of
Directors of the Company may relinquish the right to redeem the Rights under
this Section 23 by duly adopting a resolution to that effect. Immediately
upon adoption of such resolution, the rights of the Board of Directors of
the Company to redeem the Rights shall terminate without further action and
without any notice. Promptly after adoption of such a resolution, the
Company shall publicly announce such action; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the
validity of the action of the Board of Directors of the Company.
(e) The Rights may also be redeemed as provided in Section 31.
Section 24. Notice of Certain Events.
(a)In case, after the Distribution Date, the Company shall
propose (i) to pay any dividend payable in stock of any class to the holders
of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular periodic cash dividend out of earnings
or retained earnings of the Company), (ii) to offer to the holders of
Preferred Shares rights, options or warrants to subscribe for or to purchase
any additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the
subdivision of outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer (or to permit
one or more of its Subsidiaries to effect any sale or other transfer), in one
or more transactions, of assets or earning power (including, without
limitation, securities creating any obligation on the part of the Company
and/or any of its Subsidiaries) representing more than 50% of the assets and
earning power of the Company and its Subsidiaries, taken as a whole, to any
other Person or Persons, (v) to effect the liquidation, dissolution or winding
up of the Company, or (vi) to declare or pay any dividend on the Common Shares
payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section
25 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution or offering of
rights, options 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 Common Shares and/or Preferred Shares, if any such date is to be fixed,
and such notice shall be so given, in the case of any action covered by
clause (i) or (ii) above, at least 10 calendar days prior to the record date
for determining holders of the Preferred Shares for purposes of such action,
and, in the case of any such other action, at least 10 calendar days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
(b) In case any Triggering Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights.
Section 25. Notices.
(a) Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-
class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Bio-Reference Laboratories, Inc.
481 Edward H. Ross Drive
Elmwood Park, New Jersey 07407
Attention: President
(b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by
the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, New York 10005
Attention: President
(c) Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right
Certificate (or, if prior to the Distribution Date, to the holder of any
certificate evidencing Common Shares) shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution
Date and subject to the last sentence of this Section 26, if the Company so
directs, the Company and the Rights Agent shall supplement or amend any
provision of this Agreement without the approval of any holders of
certificates representing Common Shares. From and after the Distribution
Date and subject to the last sentence of this Section 26, if the Company so
directs, the Company and the Rights Agent shall supplement or amend this
Agreement without the approval of any holders of Right Certificates in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to supplement or amend the provisions hereunder in any manner which the
Company may deem desirable, including, without limitation, the addition of
other events requiring adjustment to the Rights under Sections 11 or 13
hereof or procedures relating to the redemption of the Rights, which
supplement or amendment shall not, in the good faith determination of the
Board of Directors of the Company, adversely affect the interests of the
holders of Right Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person). Upon the delivery of a certificate
from an officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment; provided, however, that
the failure or refusal of the Rights Agent to execute such supplement or
amendment shall not affect the validity of any supplement or amendment
adopted by the Company, any of which shall be effective in accordance with
the terms thereof. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment shall be made at such time as the Rights
are not then redeemable which decreases the stated Redemption Price or the
period of time remaining until the Final Expiration Date or which modifies a
time period relating to when the Rights may be redeemed.
Section 27. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after the later of the Distribution Date and the first occurrence of
a Triggering Event, exchange all or part of the then-outstanding and
exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at
an exchange ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), who or which, together
with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 27(a) hereof,
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right with respect to such Rights
thereafter of the holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. Promptly after the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
Section 27(a) hereof, the Company shall publicly announce such action, and
within 10 calendar days thereafter shall give 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; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of such
exchange. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange shall state the method by which the exchange of the
Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 11(a)(ii)
hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the Company, at
its option, may substitute for any Common Share exchangeable for a Right, (i)
equivalent common shares (as such term is used in Section 11(a)(iii) hereof),
(ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v)
any combination of the foregoing, in any event having an aggregate value
which the Board of Directors of the Company shall have determined in good
faith to be equal to the current market value of one Common Share
(determined pursuant to Section 11(d)(i) hereof) on the Trading Day
immediately preceding the date of exchange pursuant to this Section
27.
Section 28. Successors; Certain Covenants. 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. Determination of Outstanding Shares. For all purposes of
this Agreement, any calculation of the number of Common Shares outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding Common Shares or any other securities of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
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 Right Certificates (and, prior to the
Distribution Date, of the Common Shares and of the Preference Shares) 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 Right Certificates (or prior
to the Distribution Date, of the Common Shares and of the Preference Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of
such determination by the Board of Directors.
Section 32.Governing Law. This Agreement, each Right and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New Jersey and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State, except for Sections 18,
19, 20 and 21 hereof which for all purposes shall be governed by and
construed under the laws of the State of New York.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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.
[SEAL]
Attest: BIO-REFERENCE LABORATORIES, INC.
By:/s/Sam Singer By:/s/Marc D. Grodman
---------------------------- ----------------------------
Sam Singer Marc D. Grodman
Secretary President and Chief
Executive Officer
[SEAL]
Attest: AMERICAN STOCK TRANSFER &
TRUST COMPANY
By:/s/Susan Silber By:/s/Herbert J. Lemmer
----------------------------- -----------------------------
Susan Silber Herbert J. Lemmer
Assistant Secretary Vice President
