SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A/A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FHP International Corporation
(Exact name of registrant as specified in its charter)
Delaware 33-0072502
(State of incorporation or organization) (IRS Employer
Identification No.)
9900 Talbert Avenue, Fountain Valley, California 92706
(Address of principal executive offices) (Zip Code)
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
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Common Stock
(Title of Class)
<PAGE>
Item 1. Description of Securities To Be Registered.
On March 11, 1994, the Board of Directors of FHP
International Corporation, a Delaware corporation (the "Com-
pany"), approved an Amended and Restated Amended and
Restated Rights Agreement dated as of March 28, 1994 (the
"Amended and Restated Rights Agreement") between the Company
and American Stock Transfer & Trust Company, as Rights Agent
(the "Rights Agent"). The Amended and Restated Rights
Agreement amends and restates the terms of the Rights
Agreement, dated as of June 8, 1990, by and between the
Company and the Rights Agent (the "Old Rights Agreement")
and of the rights (the "Rights") issued by the Company as a
dividend to stockholders of record at the close of business
on June 29, 1990 (the "Rights Record Date"). Pursuant to
the Amended and Restated Rights Agreement, each Right now
entitles the registered holder to purchase from the Company
one one-fourth of a share of common stock, par value $.05
per share, of the Company (the "Common Shares") at a price
of $80 per full Common Share ($20 per one-fourth Common
Share) (the "Exercise Price"), subject to adjustment.
Until the earlier to occur of (i) 10 days
following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person")
have acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such
later date as may be determined by action of the Board of
Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person
or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate with a copy of the
Summary of Rights included as Exhibit A of the Old Rights
Agreement attached thereto.
The Amended and Restated Rights Agreement provides
that, until the Distribution Date, the Rights will be trans-
ferred with and only with the Common Shares. Until the Dis-
tribution Date (or earlier redemption of expiration of the
Rights), new Common Share certificates issued after the
Record Date upon transfer or new issuance of Common Shares
will contain a notation incorporating the Amended and Re-
stated Rights Agreement by reference. Until the Dis-
tribution Date (or earlier redemption of expiration of the
Rights), the surrender for transfer of any certificates for
Common Shares in respect of which Rights have bene issued
will also constitute the transfer of the Rights associated
with the Common 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 as of the close of business on the Distri-
bution 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 at the close of
business on June 29, 2000 (the "Final Expiration Date") un-
less earlier redeemed or exchanged by the Company as de-
scribed below. 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 Purchase Price payable, and the number of Com-
mon Shares or other securities 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
Common Shares, (ii) upon the grant to holders of the Common
Shares of certain rights or warrants to subscribe for a
purchase Common Shares at a price, or securities convertible
into Common Shares with a conversion price, less than the
then current market price of the Common Shares or (iii) upon
the distribution to holders of the Common Shares of
evidences of indebtedness or cash (excluding regular
periodic cash dividends), assets, stock (excluding dividends
payable in Common Shares) or of subscription rights or
warrants (other than those referred to above).
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will 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 of the acquiring
company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares,
the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment in the Purchase Price of at least 1%.
The Company is not required to issue fractional Common
Shares or other securities issuable upon the exercise of
Rights. In lieu of issuing such securities, the Company may
make a cash payment, as provided in the Amended and Restated
Rights Agreement.
At any time prior to the acquisition by a person
or group of affiliated or associated persons of beneficial
ownership of 15% or more of the outstanding Common Shares,
the Board of Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be
made effective at such time on such basis with such condi-
tions as the Board of Directors in its sole discretion may
establish. 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 terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the
holders of the Rights, including an amendment to lower
certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage
of the outstanding Common Shares then known to the Company
to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that
from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person
no such amendment may adversely affect the interests of the
holders of the Rights.
The Rights have certain anti-takeover effects.
The Rights will 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, except
pursuant to an offer conditioned on a substantial number of
Rights being acquired. The Rights should not interfere with
any merger or other business combination approved by the
Board of Directors since the Rights may be redeemed by the
Company at the Redemption Price prior to the time that a
person or group has become an Acquiring Person.
The foregoing description of the Rights Agreement
is incomplete and is qualified in its entirety by reference
to the full text of the Rights Agreement, which is attached
hereto as an exhibit and is incorporated herein by
reference.
Item 2. Exhibits.
1. Amended and Restated Rights Agreement, dated as of
March 28, 1994, between the Company and the Rights
Agent, which includes the form of Right Cer-
tificate as Exhibit A. Pursuant to the Rights
Agreement, printed Right Certificates will not be
mailed until as soon as practicable after the
earlier of the tenth day after public announcement
that a person or group become an Acquiring Person
or the tenth business day (or such later date as
may be determined by action of the Board of
Directors) after a person commences, or announces
its intention to commence, a tender offer or ex-
change offer the consummation of which would
result in a person or group becoming an Acquiring
Person.
<PAGE>
SIGNATURE
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: March 31, 1994
FHP INTERNATIONAL CORPORATION
By:/s/ Jack D. Massimino
Name: Jack D. Massimino
Title: Executive Vice President
<PAGE>
AMENDED AND RESTATED
RIGHTS AGREEMENT
This AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of
March 28, 1994 (this "Agreement"), is made and entered into
by and between FHP INTERNATIONAL CORPORATION, a Delaware
corporation (the "Company"), and AMERICAN STOCK TRANSFER &
TRUST COMPANY, a New York banking corporation (the "Rights
Agent") and amends and restates the Rights Agreement, dated
as of June 8, 1990, between the Company and the Rights Agent
(the "Original Rights Agreement").
RECITALS
WHEREAS, on June 8, 1990, the Board of Directors of the
Company authorized and declared a dividend distribution of
one right ("Right") for each share of Common Stock, par
value $.05 per share, of the Company (a "Common Share")
outstanding as of the Close of Business (as hereinafter
defined) on June 29, 1990 (the "Record Date"), each Right
initially representing the right to purchase one one-fourth
of a Common Share, upon the terms and subject to the con-
ditions herein set forth, and further authorized and
directed the issuance of one Right with respect to each
Common 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 defined in the Original Rights Agreement;
and
WHEREAS, on March 11, 1994 the Board of Directors of
the Company authorized and directed the issuance of one
Right with respect to each Common 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, the Redemption Date
(as hereinafter defined) and the Final Expiration Date;
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 indi-
cated:
(a) "Acquiring Person" shall mean any Person (other
than the Company or any Subsidiary of the Company or any em-
ployee 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 15% 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; and provided further,
however, that no Person who or which, together with all
Affiliates and Associates of such Person, is the Beneficial
Owner as of the date hereof of 15% or more, but less than
20%, of the Common Shares outstanding as of the date hereof
shall be deemed to be an Acquiring Person unless and until
such Person, together with all Affiliates and Associates of
such Person, shall at any time after the date hereof become
the Beneficial Owner of 20% or more of the Common Shares
then outstanding. Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith
that a Person who would otherwise be an "Acquiring Person",
as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer
be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an "Acquiring Person" for any pur-
poses of this Agreement.
(b) "Affiliate" and "Associate" shall have the respec-
tive 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.
(c) 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 Af-
filiates or Associates, beneficially owns, directly or
indirectly, or has the right to acquire (whether such
right is exercisable immediately or only after the pas-
sage 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 Af-
filiates 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), (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, or (C) of
which any other Person is the Beneficially Owner solely as a
result of such Person and such other Person each being a
party to that certain Shareholders' Agreement, dated as of
May 28, 1986, as amended from time to time, among the
Company and certain stockholders of the Company; and
provided, further, that nothing in this paragraph (c) shall
cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to beneficially
own, any securities acquired through such Person's
participation in good faith in an underwriting syndicate
until the expiration of 40 calendar days after the date of
such acquisition, or such later date an the Board of
Directors of the Company may determine in any specific case.
Notwithstanding anything in this definition of Benefi-
cial Ownership to the contrary, the phrase "then outstand-
ing," when used with reference to a Person's Beneficial Own-
ership of securities of the Company, shall mean the number
of such securities then issued and outstanding together with
the number of such securities not then actually issued and
outstanding which such Person would be deemed to own benefi-
cially thereunder.
(d) "Business Day" shall mean any day ether than a
Saturday, Sunday or a day on which banking institutions in
the State of California (or such other state in which the
principal office of the Rights Agent is located) are author-
ized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean
5:00 P.M., Pacific time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00
P.M., Pacific time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the Common Stock, par value $.05 per
share, of the Company; provided, however, that, if the Com-
pany 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 or, if such corporation or
other legal entity is a Subsidiary of another corporation or
other legal entity, the corporation or other legal entity
which ultimately controls such first mentioned corporation
or legal entity.
(g) "Company" shall mean FHP International
Corporation, a Delaware corporation.
(h) Omitted.
(i) "Distribution Date" shall mean the earlier of:
(i) the Close of Business on the tenth calendar day after
the Share Acquisition Date and (ii) the Close of Business on
the tenth business day (or such later date as may be
determined by action of the Board of Directors prior to such
time as a person becomes an Acquiring Person) after the date
of the commencement of, or the first public announcement of
the intention to commence, 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 15% or more of the
outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance
of Rights).
(j) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(k) Omitted.
(l) "Final Expiration Date" shall mean the Close of
Business on the tenth anniversary of the Record Date.
(m) Omitted.
(n) Omitted.
(o) "NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotation System.
(p) "Person" shall mean any individual, firm, corpora-
tion or other legal entity, and shall include any successor
(by merger or otherwise) of such entity.
(q) "Purchase Price" shall mean initially $80 per full
Common Share ($20 per one-fourth Common Share) and shall be
subject to adjustment from time to time as provided in Sec-
tions 11 and 13 of this Agreement.
(r) "Redemption Date" shall have the meaning set forth
in Section 7 hereof.
(s) "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.
(t) "Right" shall have the meaning set forth in the
Recitals to this Agreement.
(u) "Right Certificates" shall mean, subject to the
provisions of Section 3(a) hereof, certificates evidencing
the Rights, in substantially the form of Exhibit A attached
hereto.
(v) "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 Agree-
ment, and thereafter, "Rights Agent" shall mean such succes-
sor Rights Agent.
(w) "Securities Act" shall mean the Securities Act of
1933, as amended.
(x) "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 Ex-
change Commission or otherwise) that an Acquiring Person has
become such.
(y) "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.
(z) "Trading Day" shall mean any day on which the
principal national securities exchange 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, a Business Day.
(aa) "Triggering Event" means (i) any Person becoming
an Acquiring Person or (ii) any event described in clause
(i), (ii) or (iii) of Section 13(a).
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 Distri-
bution Date, the holders of the Common Shares) in accordance
with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment and hereby certifies that it
complies with the requirements of the New York Stock
Exchange governing transfer agents and registrars. The
Company may from time to time 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
(subject to the provisions of Section 3(b) hereof) by the
certificates representing Common Shares registered in the
names of the record holders thereof (which certificates rep-
resenting Common Shares shall also be deemed to be Right
Certificates) and not by separate Right Certificates, (ii)
the right to receive Right Certificates shall be
transferable only in connection with the transfer of the
underlying Common Shares, and (iii) the transfer of any
certificates evidencing Common Shares in respect of which
Rights have been issued shall also constitute the transfer
of the Rights associated with the Common Shares evidenced by
such certificates.
(b) As promptly as practicable after the Record Date,
the Company shall send a copy of a Summary of Rights to Pur-
chase Common Shares in substantially the form attached
hereto as Exhibit B, by first-class, postage prepaid mail,
to each record holder of Common 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. With
respect to certificates for Common Shares outstanding as of
the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates registered in the
names of the holders thereof together with a copy of the
Summary of Rights attached thereto. Until the Distribution
Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record
Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the
Rights associated with the Common Shares represented
thereby.
(c) Rights shall be issued by the Company in respect
of all Common Shares (other than Common Shares issued upon
the exercise or exchange of any Right) issued or delivered
by the Company (whether originally issued or delivered from
the Company's treasury) after the Record Date but prior to
the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date. Certificates evidencing such
Common 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
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 FHP International
Corporation and American Stock Transfer & Trust
Company, dated as of June 8, 1990 as amended (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 FHP
International Corporation. Under certain circum-
stances, 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. FHP
International Corporation will mail to the holder of
this Certificate a copy of the Rights Agreement with-
out charge promptly after receipt of a written
request therefor. As described in the Rights
Agreement, Rights issued to any Person who becomes an
Acquiring Person or any Affiliate or Associate of an
Acquiring Person (as such terms are defined in the
Rights Agreement) shall become null and void.
With respect to such certificates containing the
foregoing legend, until the Distribution Date, the Rights
associated with the Common Shares represented by such cer-
tificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common
Shares shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer
outstanding.
(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 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 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 A
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 Common Shares (one-fourth of a Common Share
or any multiple thereof) 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 an 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 tine 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 Ex-
change of Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates. (a) Subject to the provi-
sions of Sections 7(d) and 14 hereof, at any time after
the Close of Business on the Distribution Date and prior
to the Close of Business on the earlier of the Redemption
Date or the Final Expiration Date, any Right Certificate
or Right Certificates (other than Right Certificates that
have become void pursuant to Section 11(a)(ii) hereof or
that have been exchanged pursuant to Section 27 hereof)
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 Common
Shares (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 principal office of the
Rights Agent designated for such purpose. Thereupon or as
promptly as practicable thereafter, subject to the
provisions of Sections 7(d) 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; Expi-
ration Date of Rights. (a) 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 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 sum of (i) the exercise
price for the total number of securities as to which such
surrendered Rights are exercised and (ii) an amount equal
to any applicable transfer tax required to be paid by the
holder of such Right Certificate in accordance with the
provisions of Section 9 hereof at or prior to 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 (the "Redemption Date"), or (iii) the
time at which such Rights are exchanged as provided in
Section 24 hereof. In lieu of the cash payment referred
to in the immediately preceding sentence, following the
occurrence of a Triggering Event the registered holder of
a Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or
in part upon surrender of the Right Certificate as
described above together with an election to exercise such
Rights without payment of cash on the reverse side thereof
duly completed. With respect to any Rights as to which
such an election is made, the holder shall receive a
number of Common Shares or other securities having a value
equal to the difference between (i) the value of the
Common Shares or other securities that would have been
issuable upon payment of the cash amount as described
above, and (ii) the amount of such cash payment. For
purposes of this Section 7(a), the value of any Common
Share or other security shall be the current per share
market price of a Common Share (determined pursuant to
Section 11(d) hereof) on the Trading Day immediately pre-
ceding the date of the first occurrence of a Triggering
Event.
(b) Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to purchase
duly executed, accompanied by either payment as described
above or a duly completed election to exercise without
payment of cash, the Rights Agent shall promptly (i)
requisition from any transfer agent of the Common Shares
(or make available, if the Rights Agent is the transfer
agent) certificates representing the number of Common
Shares to be purchased (and the Company hereby irrevocably
authorizes and directs its transfer agent to comply with
all such requests), (ii) after receipt of such certifi-
cates, cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate, regis-
tered in such name or names as may be designated by such
holder, (iii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of the
issuance of fractional shares in accordance with the
provisions of Section 14 hereof or in lieu of the issuance
of Common Shares in accordance with the provisions of
Section 11(a)(iii) hereof, (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate and (v) when
appropriate, deliver any due bill or other instrument
provided to the Rights Agent by the Company for delivery
to the registered holder of such Right Certificate as
provided by Section 11(1) hereof.
(c) In case the registered holder of any Right Cer-
tificate 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.
(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) thereof
or Affiliates or Associates of such Beneficial Owner (or
former Beneficial Owner) 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) So long as the Common Shares issuable upon the
exercise of the Rights may be listed on a national securi-
ties exchange or included in the NASDAQ, it shall endeavor
to cause, from and after such time as the Rights become
exercisable, all securities reserved for issuance upon the
exercise of Rights to be listed on such exchange or in-
cluded in the NASDAQ upon official notice of issuance.
(b) It shall cause to be reserved and kept available
out of its authorized and unissued Common Shares or any Com-
mon Shares held in its treasury, the number of Common Shares
that will be sufficient to permit the exercise in full of
all outstanding Rights in accordance with Section 7. It
shall take all such action as may be necessary to ensure
that all Common Shares 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.
(c) It shall pay when due and payable any and all fed-
eral 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.
(d) Omitted.
(e) Omitted.
(f) In the event that the Company is obligated to
issue other securities of the Company and/or pay cash pursu-
ant 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. Record Date. Each Person in whose name
any certificate representing Common Shares is issued upon
the exercise of Rights shall for all purposes be deemed to
have become the holder of record of the Common Shares
represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such
Rights was duly surrendered end 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 Common Shares 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 Common Shares 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 stockholder of the
Company with respect to securities for which the Rights
shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions
or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Securities or Number of Rights. The Purchase Price,
the number and kind of securities issuable upon exercise of
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) declare a dividend
on the Common Shares payable in Common Shares, (B) subdivide
the outstanding Common Shares, (C) combine the outstanding
Common Shares into a smaller number of shares or (D) issue
any shares of its capital stock in a reclassification of the
Common 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 shares of capital stock 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 shares of
capital stock which, if such Right had been exercised
immediately prior to such date and at a time when the Common
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; provided, however, that in
no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon
exercise of one Right.
(ii) Subject to the provisions of this Section 27
hereof, in the event that any Person should become an
Acquiring Person, each holder of a Right, except as provided
below, shall thereafter have a right to receive, upon
exercise thereof in accordance with the terms of this
Agreement at an exercise price per Right equal to the
product of four multiplied by the then-current Purchase
Price multiplied by the number of one one-fourths of a
Common Share for which a Right is then exercisable, such
number of Common Shares as shall equal the result obtained
by dividing (x) the product obtained by multiplying the
then-current Purchase Price by four and multiplying the
result by the number of one one-fourths of a Common Share
for which a Right is then exercisable 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 occurrence of such event. In the event that any Person
shall become an Acquiring Person and the Rights shall then
be outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be
afforded by the Rights. Notwithstanding anything in this
Agreement to the contrary, from and after the first occur-
rence of such 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) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights in ac-
cordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the
Rights.
(b) In the event that the Company shall fix a record
date for the issuance of rights, options or warrants to all
holders of Common shares entitling them (for a period expir-
ing within 45 calendar days after such record date) to sub-
scribe for or purchase Common Shares (or securities having
equivalent rights, privileges and preferences as the Common
Shares (for purposes of this Section 11(b), "equivalent com-
mon shares")) or securities convertible into Common Shares
or equivalent common shares at a price per Common Share or
equivalent common share (or having a conversion price per
share, if a security convertible into Common Shares or
equivalent common shares) less than the current per share
market price of the Common 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 Common Shares
outstanding on such record date plus the number of Common
Shares which the aggregate offering price of the total
number of Common Shares and/or equivalent common 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 Common Shares
outstanding on such record date plus the number of
additional Common Shares and/or equivalent common shares to
be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible), provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company issuance upon exercise of one Right.
In case such subscription price may be paid in a con-
sideration 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. Common Shares,
and/or equivalent common 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 Com-
mon Shares (including any such distribution made in connec-
tion with a consolidation or merger in which the Company is
the continuing or surviving corporation) of evidences of in-
debtedness, cash (other than a regular periodic cash divi-
dend), assets, stock (other than a dividend payable in
Common 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 Common Shares (as determined pursuant to
Section 11(d) hereof) on such record date or, if earlier,
the date on which Common 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 Common Share,
and the denominator of which shall be such current per share
market price of the Common Shares; provided, however, that
in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company to be issued
upon exercise of one Right. 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) For the purpose of any computation hereunder, 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 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. For all purposes of this Agreement, the
current per share market price of one one-fourth of a Common
Share shall be equal to the current per share market price
of one Common Share divided by four.
(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 security, as the
case may be. Notwithstanding the first sentence of this
Section ll(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 on which requires such
adjustment and (ii) the date of the expiration of the right
to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Section 11(a) hereof, the holder of any Right thereafter ex-
ercised shall become entitled to receive any securities of
the Company other than Common Shares, thereafter the number
of such other securities so receivable upon exercise of any
Right 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 Common Shares contained
in this Section 11, and the provisions of Sections 7, 9, 10
and 13 hereof with respect to the Common Shares shall apply
on like terms to any such other securities.
(g) All Rights originally issued by the Company subse-
quent to any adjustment made to the Purchase Price hereunder
shall evidence the right to purchase, at the adjusted Pur-
chase Price, the number of Common Shares 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 elec-
tion as provided in Section 11(i) hereof, upon each adjust-
ment of the Purchase Price as a result of the calculations
made in Section 11(b) and Section 11(c) hereof made with re-
spect to a distribution of subscription rights, options or
warrants applicable to Common 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-fourths of a Common
Share (calculated to the nearest one-thousandth a Common
Share) obtained by (i) multiplying (x) the number of one
one-fourths of a Common 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-fourths of a Common Share issuable upon the exercise
of a Right. Each of the Rights outstanding after such ad-
justment of the number of Rights shall he exercisable for
the number of one one-fourths of a Common 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 (calcu-
lated to the nearest one-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter,
but, if the Right Certificates have been issued, shall be at
least 10 calendar days later than the date of the public an-
nouncement. 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 or kind of securities 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 ad-
justment reducing the Purchase Price below the then par
value, if any, of the Common Shares or other securities
issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its coun-
sel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Common Shares or
such other 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 Common Shares or other securities
of the Company, if any, issuable upon such exercise over and
above the number of Common Shares or other 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 Common Shares
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 reduc-
tions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that in its sole discretion the Board of
Directors of the Company shall determine to be advisable in
order that any (i) consolidation or subdivision of the
Common Shares, (ii) issuance wholly for cash of Common
Shares at less than the current per share market price
therefor, (iii) issuance wholly for cash of Common Shares or
securities which by their terms are convertible into or
exchangeable for Common 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
Common Shares shall not be taxable to such stockholders.
Section 12. Certificate of Adjusted Purchase Price or
Number of Securities. 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 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, directly or
indirectly, at any time after a Person has become an Acquir-
ing Person:
(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 the Company) 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 other Person or Persons other than the
Company or one or more of its wholly owned
Subsidiaries, 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
four multiplied by the then-current Purchase Price
multiplied by the number of one one-fourths of a Common
Share for which a Right is then exercisable, such
number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of
such other Person (including the Company as successor
thereto or as the surviving corporation), 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
dividing (x) the product obtained by multiplying the
then-current Purchase Price by four and multiplying the
result by the number of one one-fourths of a Common
Share for which a Right is exercisable immediately
prior to the occurrence of such event, by (y) 50% of
the current per share market price of the Common Shares
of such other Person (determined pursuant to Section
11(d) hereof), on the date of consummation of such
consolidation, merger, sale or transfer; (B) the issuer
of such Common Stock shall thereafter be liable for,
and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and
duties of the Company pursuant to this Agreement; (C)
the term "Company" shall thereafter be deemed to refer
to such issuer; and (D) such 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) Omitted.
(c) The Company shall not consummate any such consoli-
dation, merger, sale or transfer unless prior to such
consum- mation the Company and such issuer shall have exe-
cuted and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in subsection
(a) of this Section 13. The Company shall not enter into
any transaction of the kind referred to in this Section 13
if at the time of such transaction there are any rights,
warrants, instrument or securities outstanding or any
agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded
by the Rights.
(d) The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or
other transfers.
Section 14. Fractional Rights and Fractional Securi-
ties. (a) The Company shall not be required to issue frac-
tions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional
Rights, 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 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 orga-
nization, 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 Com-
pany. 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 frac-
tions of Common Shares or other securities issuable upon ex-
ercise or exchange of the Rights or to distribute certifi-
cates which evidence any such fractional securities. In
lieu of issuing any such fractional securities, 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 market value of
one such security. For purposes of this Section 14(b), the
current market value of a Common Share 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 Common 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 Common 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 market value
of one Common Share 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
registered holders of the Common Shares); and any registered
holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Shares), 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), 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 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;
(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;
(c) The Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common 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 and any fractional securities upon ex-
ercise 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
Stockholder. No holder, as such, of any Right Certificate
shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of the Common 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 Certifi-
cate, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of Directors
or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate ac-
tion, or to receive notice of meetings or other actions af-
fecting stockholders (except as provided in Section 24
hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the
provisions 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 compen-
sation 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 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 Certifi-
cates 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 Agree-
ment 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 negligence, bad faith or willful misconduct.
FF 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 responsi-
bility 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 con-
tained 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 stockholder, director,
officer or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which
the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as
though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or ac-
countable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company re-
sulting 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 surren-
dered 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 ex-
change, 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 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 States of
California or New York (or of any other state of the United
States so long as such corporation is authorized to do
business as a banking institution in the States of
California or New York), in good standing, having a prin-
cipal office in the States of California or New York, which
is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by fed-
eral or state authority and which has at the time of its ap-
pointment as Rights Agent a combined capital and surplus of
at least $50 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 hold 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, 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. Not-
withstanding 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 and the
number or kind of securities issuable upon exercise of the
Rights made in accordance with the provisions of this Agree-
ment. In addition, in connection with the issuance or sale
by the Company of Common Shares following the Distribution
Date and prior to the Close of Business on the earliest of
(i) the time that the Rights become no longer exercisable;
(ii) the Redemption Date and (iii) the Final 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) The Board of Directors
of the Company may, at its option, at any time prior to such
time as any Person becomes an Acquiring Person, redeem all
but not less than all of the then-outstanding Rights at the
Redemption Price. The redemption of the Rights by the Board
of Directors may be made effective at such time, on such ba-
sis and with such conditions as the Board of Directors in
its sole discretion may establish.
(b) Immediately upon the action of the Board of Direc-
tors 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 the 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. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any
Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 27
hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Notice of Certain Events. (a) In case
the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of Common Shares or to
make any other distribution to the holders of Common Shares
(other than a regular periodic cash dividend), (ii) to offer
to the holders of Common Shares rights, options or warrants
to subscribe for or to purchase any additional Common Shares
or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of
its Common Shares (other than a reclassification involving
only the subdivision of outstanding Common 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, or (v) to effect
the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each
holder of a 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 Snares,
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 Common Shares for pur-
poses of such action, and, in the case of any such other ac-
tion, 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, whichever shall
be the earlier.
(Eshall 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 Sec-
tion 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 autho-
rized 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:
FHP International Corporation
9900 Talbert Avenue
P. O. Box 8000
Fountain Valley, CA 92728-8000
Attn: General Counsel
(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
99 Wall Street
New York, NY 10005
Attn: 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 Distri-
bution 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. The Company
may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates in
order to cure any ambiguity, to correct or supplement any
provision contained herein which may be defective or incon-
sistent with any other provisions herein, or to make any
other provisions with respect to the Rights which the
Company may deem necessary or desirable, any such supplement
or amendment to be evidenced by a writing signed by the
Company and the Rights Agent; provided, however, that from
and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended in any manner
which would adversely affect the interests of the holders of
Rights. Without limiting the foregoing, the Company may at
any time prior to such time as any Person becomes an
Acquiring Person amend this Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof to not
less than the greater of (i) the sum of .001% and the
largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of
the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan) and (ii) 10%.
Notwithstanding anything in this Agreement to the contrary,
no supplement or amendment shall be made 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 at such
time as the Rights are not then redeemable.
Section 27. Exchange. (a) The Board of Directors of
the Company may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the
then-outstanding and exercisable Rights (which shall not in-
clude 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 Direc-
tors of the Company ordering the exchange of any Rights pur-
suant 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 ll(a)(ii) hereof) held by each
holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in
accordance with this Section 27, the Company shall take all
such action as may be necessary to authorize additional Com-
mon Shares for issuance upon exchange of the Rights.
(d) The Company shall not be required to issue frac-
tions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such frac-
tional Common Shares, the Company shall pay to the
registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be
issuable an amount in cash equal to the same fraction of the
current market value of a whole Common Share. For the
purposes of this paragraph (d), the current market value of
a whole Common Share shall be the closing price of a Common
Share (as determined pursuant to the second sentence of
Section 11(d) hereof) for the Trading Day immediately prior
to the date of exchange pursuant to this Section 27.
Section 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. 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, the Common 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, the
Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement
shall remain in "full force and effect" and shall in no way
be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each
Right Certificate issued hereunder shall be deemed to be a
contract made under the internal substantive laws of the
State of Delaware and for all purposes shall be governed by
and construed in accordance with the internal substantive
laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Agreement may be exe-
cuted 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 33. 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.
<PAGE>
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: FHP INTERNATIONAL CORPORATION
By /s/ Michael J. Weinstock By /s/ Jack D. Massimino
Michael J. Weinstock Jack D. Massimino
Secretary Executive Vice President
[SEAL]
Attest: AMERICAN STOCK TRANSFER &
TRUST COMPANY, as Rights
Agent
By /s/ Herbert J. Lemmer By /s/ Michael Karfunkel
Name: Herbert J. Lemmer Michael Karfunkel
Title: Vice President President
