Form 8-A/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 3
For Registration of Certain Classes of Securities
Pursuant to Section 12(b) or (g) of the
Securities Exchange Act of 1934
AGOURON PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
California 33-0061928
(State of incorporation (IRS Employer
or organization) Identification No.)
10350 North Torrey Pines Road
La Jolla, California 92037
(Address of principal executive offices)
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 N/A
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective upon filing pursuant to
General Instruction A.(c), please check the following box. / /
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), please check the following box. / /
Securities Act registration statement file number to which this form relates
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Stock Purchase Rights (the "Rights")
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The Registrant hereby amends the following items of its Registration
Statement on Form 8-A dated November 7, 1996, as follows:
Item 1. Description of Registrant's Securities to be Registered.
Pursuant to action of the Board of Directors of Agouron
Pharmaceuticals, Inc. (the "Company") effective November 10, 1998, the Rights
Agreement attached to the Form 8-A filed with the Securities and Exchange
Commission on November 8, 1996, as thereafter amended, was amended and restated
to, among other things, (i) change the definition of "Acquiring Person" to mean
any person who becomes a beneficial owner of common shares representing twenty
percent (20%) or more of the common shares then outstanding; and (ii) effect a
two-for-one split of the rights with a corresponding adjustment of the purchase
price therefor (reflecting a two-for-one split of the Company's common shares in
August 1997), all as more fully set forth (together with certain other
modifications) in the form of Amended and Restated Rights Agreement attached
hereto as Exhibit 1.
Item 2. Exhibits.
1. Amended and Restated Rights Agreement dated as of November 10, 1998,
between Agouron Pharmaceuticals, Inc. and ChaseMellon
Shareholder Services, L.L.C.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this Amendment
No. 3 to be signed on its behalf by the undersigned, thereto duly authorized.
Dated: January 19, 1999.
AGOURON PHARMACEUTICALS, INC.
By: /s/ PETER JOHNSON
Peter Johnson
President and
Chief Executive Officer
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EXHIBIT INDEX
Exhibit
1. Amended and Restated Rights Agreement dated as of November 10, 1998,
between Agouron Pharmaceuticals, Inc. and ChaseMellon
Shareholder Services, L.L.C.
EXHIBIT 4.1
AGOURON PHARMACEUTICALS, INC.
and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Rights Agent
------------
Amended and Restated Rights Agreement
Dated as of November 10, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
1. Certain Definitions...................................................1
2. Appointment of Rights Agent...........................................4
3. Issue of Rights Certificates..........................................5
4. Form of Rights Certificates...........................................6
5. Countersignature and Registration.....................................6
6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates............7
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.........8
8. Cancellation and Destruction of Rights Certificates..................10
9. Reservation and Availability of Preferred Shares.....................10
10. Preferred Shares Record Date.........................................11
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights...........................................11
12. Certificate of Adjusted Purchase Price or Number of Shares...........18
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.18
14. Additional Covenants.................................................21
15. Fractional Rights and Fractional Shares..............................21
16. Rights of Action.....................................................22
17. Agreement of Rights Holders..........................................23
18. Rights Certificate Holder Not Deemed a Shareholder...................23
19. Concerning the Rights Agent..........................................24
20. Merger or Consolidation or Change of Name of Rights Agent............24
21. Duties of Rights Agent...............................................25
22. Change of Rights Agent...............................................27
23. Issuance of New Rights Certificates..................................27
24. Redemption, Termination and Exchange.................................28
25. Notice of Certain Events.............................................30
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26. Notices..............................................................31
27. Supplements and Amendments...........................................32
28. Determination and Actions by the Board, etc..........................32
29. Successors...........................................................33
30. Benefits of This Agreement...........................................33
31. Severability.........................................................33
32. Governing Law........................................................33
33. Counterparts.........................................................33
34. Descriptive Headings.................................................33
Exhibit A - Form of Rights Certificate........................A-1
<PAGE>
AMENDED AND RESTATED RIGHTS AGREEMENT
THIS AMENDED AND RESTATED RIGHTS AGREEMENT (this "Agreement"), dated as
of November 10, 1998 (the "Effective Date"), is made by and between AGOURON
PHARMACEUTICALS, INC., a California corporation (the "Company"), and CHASEMELLON
SHAREHOLDER SERVICES, L.L.C., a New Jersey limited liability company (the
"Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company (the "Board") has
previously adopted and implemented a shareholder rights plan governed by the
terms of the Rights Agreement dated as of November 7, 1996 (the "Original
Agreement") and, pursuant thereto, (i) distributed one preferred share purchase
right (a "Right") for each share of common stock, no par value, of the Company
(the "Common Stock") outstanding at the close of business on November 21, 1996
and (ii) authorized the issue of one Right for each share of Common Stock issued
after November 21, 1996.
WHEREAS, on November 10, 1998, the Board approved this amendment and
restatement of the Original Agreement to be effective as of the Effective Date.
In connection with such amendment and restatement, the Board (i) effected a
two-for-one split of the Rights on the Effective Date (so that, from and after
the Effective Date, each share of Common Stock shall have one Right associated
therewith), with a corresponding adjustment of the purchase price for a Right,
and (ii) made certain other modifications to the Original Agreement (as such
modifications are reflected herein).
WHEREAS, each Right initially represents the right to purchase one
one-ten thousandth of a share of the Company's Series B Participating Preferred
Stock, no par value ("Series B Preferred Stock"), such preferred shares having
the rights and preferences set forth in the Certificate of Designation,
Preferences and Rights of Series B Participating Preferred Stock which, as of
the Effective Date, is on file with the Secretary of State of the State of
California, upon the terms and subject to the conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be or become, after the Effective Date, the Beneficial Owner
(as such term is hereinafter defined) of Common Shares (as such term is
hereinafter defined) representing twenty percent (20%) or more of the Common
Shares then outstanding or who was such a Beneficial Owner, at any time on or
after the Effective Date, whether or not such Person continues to be the
Beneficial Owner of Common Shares representing twenty percent (20%) or more of
the Common Shares outstanding. NOTWITHSTANDING the foregoing:
(i) in no event shall a Person who or which, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of
Common Shares representing less than twenty percent (20%) of the Common
Shares outstanding become an Acquiring Person solely as a result of a
reduction of the number of Common Shares outstanding (including
repurchases of outstanding Common Shares by the Company), which
reduction increases the percentage of the Common Shares beneficially
owned by such Person; PROVIDED, HOWEVER, that any subsequent increase
in the amount of Common Shares beneficially owned by any such Person,
together with all Affiliates and Associates of such Person, without the
prior written approval of the Board shall cause such Person to be an
Acquiring Person (unless, measured at such time, such Person would not
be an Acquiring Person);
(ii) the term Acquiring Person shall not mean (A) the Company,
(B) any subsidiary of the Company (as such term is hereinafter
defined), (C) any employee benefit plan of the Company or any of its
subsidiaries, (D) any entity holding securities of the Company
organized, appointed or established by the
<PAGE>
Company or any of its subsidiaries for or pursuan to the terms of any such
plan or (E) any underwriter acting in good faith in a firm commitment
underwriting of an offering of the Company's securities pursuant to
arrangements with the Company which have been approved by the Board
(HOWEVER, the exception provided by this clause (E) shall no longer be
available in the event that any such underwriter is otherwise an
Acquiring Person on or after the date which is forty (40) days after
the date of initial acquisition of the Company's securities by such
underwriter in connection with such offering); and
(iii) no Person shall be deemed to be an Acquiring Person if:
(A) any Schedule 13D under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or any comparable or successor report,
filed (or required to be filed) by such Person does not (or would not)
state any intention to or reserve the right to control or influence the
management or policies of the Company or engage in any of the actions
specified in Item 4 (or any comparable or successor Item) of such
Schedule 13D (other than the disposition of Common Shares), (B) either
(1) within two Business Days of being requested by the Company to
advise the Company regarding the same, such Person certifies in writing
to the Company that such Person acquired Beneficial Ownership of Common
Shares representing twenty percent (20%) or more of the Common Shares
outstanding inadvertently or without knowledge of the terms of the
Rights, or (2) the Board determines in good faith that such Person has
become an Acquiring Person inadvertently, (C) such Person divests as
promptly as practicable a sufficient number of securities representing
Common Shares so that such Person shall not be deemed to be an
Acquiring Person pursuant to the first sentence of this Section 1(a),
and (D) promptly following such Person's divestiture of such
securities, such Person certifies to the Board that such Person is no
longer an Acquiring Person as defined pursuant to the first sentence of
this Section 1(a).
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the Effective Date.
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has:
(A) the right or obligation to acquire (whether such
right or obligation is exercisable or effective immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; 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 payment or
exchange; or
(B) the right to vote or dispose of pursuant to any
agreement, arrangement or understanding (whether or not in writing);
PROVIDED, HOWEVER, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this clause (B)
if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations of the Exchange Act and (2) is not
also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which
such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding (whether or not in writing)
(other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or with which such Person or any of such Person's
Affiliates or
<PAGE>
Associates have otherwise formed a group, for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in clause (B)
of subparagraph (ii) of this paragraph (c)) or disposing of any securities of
the Company.
(d) "Business Day" shall mean any day other than a Saturday, Sunday, or
a day on which banking institutions in the State of California are authorized 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 of the Company or any other shares of capital stock of the
Company into which the Common Stock of the Company may be reclassified or
changed. "Common Shares," when used with reference to any Person other than the
Company, shall mean the capital stock with the greatest voting power, or the
equity securities or other equity interest having power to control or direct the
management, of such Person or, if such other Person is a subsidiary of another
Person, the Person or Persons which ultimately control(s) such first-mentioned
Person and which has issued and outstanding such capital stock, equity
securities or equity interests.
(g) "Distribution Date" shall have the meaning as set forth in Section
3(a).
(h) "Person" shall mean any individual, firm, corporation, partnership,
limited liability company, joint venture, association, trust or other entity,
and shall include any successor (by merger or otherwise) of such entity.
(i) "Preferred Shares" shall mean shares of Series B Preferred Stock.
(j) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(k) A "subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or voting or equity interests is owned, directly or indirectly, by such Person,
or which is otherwise controlled by such Person.
(l) "Triggering Event" shall mean a Section 11 Event (as defined in
Section 11(a)(ii) of this Agreement) or a Section 13 Event (as defined in
Section 13(a) of this Agreement).
(m) "Voting power" shall mean the voting power of all securities of the
Company (or other entity at issue) then outstanding and generally entitled to
vote in the election of directors of the Company (or such other entity).
2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agents and any Co-Rights Agents
shall be as the Company shall determine.
3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the Stock Acquisition Date or (ii) the
close of business on the tenth day (or such later date as may be determined by
action of the Board) after the date of the commencement of, or first public
announcement of the intent of any Person (other than the Company, any subsidiary
of the Company, any employee benefit plan of the Company or any of its
subsidiaries or any entity organized, appointed or established by the Company
holding Common Shares for or pursuant to the terms of any such plan) to commence
(which intention to commence remains unwithdrawn or otherwise uncanceled for
five (5) days after such announcement), a tender or exchange offer the
consummation of which would result in such Person becoming an Acquiring Person
(including any such date which is on or after the Effective Date) (the earlier
of such dates being herein referred to as the "Distribution
<PAGE>
Date"), (x) the Rights shall be evidenced by the certificates for Common Shares
registered in the names of the holders thereof (which certificates for Common
Shares shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights (and the right to receive certificates
therefor) shall be transferable only in connection with the transfer of the
underlying Common Shares. As soon as practicable after the Distribution Date,
the Rights Agent shall 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 certificate for Rights, in substantially the form of EXHIBIT A hereto
(a "Rights Certificate"), evidencing one Right for each Common Share (subject to
adjustment as provided elsewhere herein). As of and after the Distribution Date,
the Rights shall be evidenced solely by such Rights Certificates.
Until the Distribution Date (or earlier redemption, expiration or
termination of the Rights), the surrender for transfer of any certificate for
Common Shares shall also constitute the transfer of the Rights associated with
the Common Shares represented by such certificate.
(b) Certificates issued for Common Shares (including, without
limitation, certificates issued upon transfer or exchange of Common Shares)
after the Effective Date but prior to the Distribution Date (or earlier
redemption, expiration or termination of the Rights) shall be deemed also to be
certificates for Rights, and shall have impressed, printed, stamped, written or
otherwise affixed onto them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in an Amended and Restated Rights Agreement
between Agouron Pharmaceuticals, Inc. (the "Company") and ChaseMellon
Shareholder Services, L.L.C. (the "Rights Agent") dated as of November
10, 1998 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights may be redeemed, may expire,
or may be evidenced by separate Certificates and will no longer be
evidenced by this Certificate. The Company will mail to the holder of
this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances,
Rights beneficially owned by Acquiring Persons (as defined in the
Rights Agreement) or certain related Persons and any subsequent holder
of such Rights may become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the Rights associated with the Common Shares represented by such
certificates shall be evidenced by such certificates alone, and the surrender
for transfer of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Shares represented by such certificates.
4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
shares and of assignment and certificates to be printed on the reverse thereof)
shall be substantially in the form set forth as EXHIBIT A hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or interdealer
quotation system on which the Rights may from time to time be listed or traded,
or to conform to usage. Subject to the provisions of Section 11 and Section 23,
the Rights Certificates shall entitle the holders thereof to purchase such
number of one one-ten thousandths of a Preferred Share as shall be set forth
therein at the price per one one-ten thousandth of a Preferred Share set forth
therein (the "Purchase Price"), but the number of such one one-ten thousandths
of a Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) that
represents Rights beneficially owned by an Acquiring Person or any Associate or
Affiliate thereof and any Rights Certificate issued at any time upon the
transfer of any Rights to such an Acquiring Person or any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and
any Rights Certificate issued pursuant to Section 6 or Section 11 upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain the following legend:
<PAGE>
The Rights represented by this Rights Certificate were issued to a
Person who was an Acquiring Person or an Affiliate or an Associate of
an Acquiring Person, as such terms are defined in the Rights Agreement.
This Rights Certificate and the Rights represented hereby may become
void under the circumstances specified in Section 7(e) of the Rights
Agreement.
The provisions of Section 7(e) shall be operative whether or not the foregoing
legend is contained on any such Rights Certificate.
5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the Company
by its President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights Certificates
shall be countersigned by the Rights Agent, either manually or by facsimile
signature, and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent, and issued and delivered by the Company with the same force and effect as
though the Person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on behalf of
the Company by any Person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Agreement any such
Person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for such purpose, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 7(f) and 15, at any
time after the close of business on the Distribution Date, and at or prior to
the close of business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder to
purchase a like number of one-ten thousandths of a Preferred Share (or, after
the occurrence of a Triggering Event, Common Shares or other securities or
property, as the case may be) as the Rights Certificate or Rights Certificates
surrendered then entitled such holder (or former holder in the case of a
transfer) to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Rights Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Rights Certificates to be transferred, split up, combined
or exchanged at the principal office of the Rights Agent. Thereupon the Rights
Agent shall (subject to Section 7(e)) countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f) and 15, upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Rights Certificate
and such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company shall execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for
<PAGE>
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to the provisions of Sections 7(e) and 7(f), the registered
holder of any Rights 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 presentation of the Rights Certificate, with the
appropriate form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-ten thousandth of a
Preferred Share (or such other number, securities or property, as the case may
be) as to which the Rights are exercised, at or prior to the earliest of (i) the
close of business on November 21, 2006 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 24, (iii) the
consummation of a transaction contemplated by Section 13(d), or (iv) the time at
which the Rights are exchanged as provided in Section 24(c) (such earliest time
being herein referred to as the "Expiration Date").
(b) The Purchase Price with respect to each Right shall initially be
$250.00 for each one one-ten thousandth of a share of Series B Preferred Stock,
subject to adjustment from time to time as provided in Sections 11 and 13 and
payable in lawful money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the appropriate form of election to purchase duly executed,
accompanied by payment of the Purchase Price for fractional interests in the
Preferred Shares (or other securities or property) to be purchased and an amount
equal to any applicable transfer tax (as determined by the Rights Agent) in
cash, or by certified check or bank draft payable to the order of the Company,
the Rights Agent shall, subject to Section 21(k), thereupon promptly (i)(A)
requisition from any transfer agent of the Preferred Shares to be purchased (or
make available, if the Rights Agent is the transfer agent) certificates for the
number of fractional interests in Preferred Shares to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company, in its sole discretion, shall have elected to
deposit the fractional interests in Preferred Shares issuable upon exercise of
the Rights hereunder into a depositary, requisition from the depositary agent
depositary receipts representing such number of one one-ten thousandths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the transfer
agent with the depositary agent) and the Company shall direct the depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash, if any, to be paid in lieu of issuance of fractional
shares in accordance with Section 15, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the order of
the registered holder of such Rights Certificate. In the event that the Company
is obligated to issue other securities of the Company, and/or distribute other
property pursuant to Section 11(a), the Company shall make all arrangements
necessary so that such other securities and/or property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In the case of an exercise of the Rights by a holder pursuant to
Section 11(a)(ii), the Rights Agent shall return such Rights Certificate to the
registered holder thereof after imprinting, stamping or otherwise indicating
thereon that the rights represented by such Rights Certificate no longer include
the rights provided by Section 11(a)(ii); PROVIDED, HOWEVER, that if less than
all the Rights represented by such Rights Certificate were so exercised, the
Rights Agent shall indicate on the Rights Certificate the number of Rights
represented thereby which continue to include the rights provided by Section
11(a)(ii). In case the registered holder of any Rights Certificate shall
exercise (except pursuant to Section 11(a)(ii)) less than all the Rights
evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the
Rights remaining unexercised shall be issued by the Rights Agent and delivered
to the registered holder of such Rights Certificate or to such registered
holder's duly authorized assigns, subject to the provisions of Section 15.
(e) Notwithstanding anything in this Agreement to the contrary, if
there occurs any Triggering Event, then any Rights that are or were on or after
the Distribution Date beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee from an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such (and any subsequent
transferees of such
<PAGE>
transferee), or (iii) a transferee of an Acquiring Person (or such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board determines is
part of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and void without
any further action, and any holder (including any subsequent holder) of such
Rights shall thereupon have no rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to insure that the provisions of this Section 7(e)
are complied with, but shall have no liability to any holder of Right
Certificates or any other Person as a result of its failure or inability to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless the certificate contained in the appropriate
form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise shall have been properly completed and
duly executed by the registered holder thereof and the Company shall have been
provided with such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it shall cause to be reserved
and kept available, out of its authorized and unissued Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities), the number of Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) that will be sufficient
(in accordance with the terms of this Agreement, including Section 11(a)(iii))
to permit the exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) issuable upon the
exercise of the Rights may be listed on any national securities exchange or
quoted on any national quotation system, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable, all shares
(or other securities) reserved for such issuance to be listed on such exchange
or quoted on such system upon official notice of issuance upon such exercise.
(c) If then required by applicable law, the Company shall use its best
efforts to (i) file, as soon as practicable following the earliest date after
the occurrence of a Triggering Event as to which the consideration to be
delivered by the Company upon exercise of the Rights has been determined
pursuant to this Agreement, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, (B) the Expiration Date or (C) the date the Company receives an
opinion of counsel to the effect that the maintenance of such registration
statement in effect is no longer necessary. If then required by applicable law,
the Company will also take such action as may be appropriate under the
securities or "blue sky" laws of the various states. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of this
<PAGE>
Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement or to comply with such blue sky laws. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained.
(d) The Company covenants and agrees that it shall take all such action
as may be necessary to ensure that all Preferred Shares and/or other securities
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares or other securities (subject to payment
of the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares or securities.
(e) The Company further covenants and agrees that it shall pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Rights Certificates or
of any certificates for Preferred Shares and/or other securities upon the
exercise of Rights. The Company shall not, however, be required to (i) pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or in respect of the issuance or
delivery of the Preferred Shares and/or other securities in a name other than
that of, the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or (ii) issue or deliver any certificates for Preferred
Shares and/or other securities in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for Preferred Shares (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Shares (or other securities) represented thereby on, and
such certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly presented and payment of the Purchase Price (and
any applicable transfer taxes) was made; PROVIDED, HOWEVER, that if the date of
such presentation and payment is a date upon which the Preferred Shares (or
other securities) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Shares
(or other securities) transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights Certificate, as
such, shall not be entitled to any rights of a shareholder of the Company with
respect to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number of Preferred Shares (or number or kind
of other shares of capital stock, as the case may be) covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the Effective
Date (A) declare or pay any dividend on the outstanding Preferred Shares payable
in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of shares or (D) issue
any shares of its capital stock in a reclassification of the outstanding
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and in Section
7(e), the Purchase Price relating to the Preferred Shares in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number of Preferred Shares or
other securities, as the case may be, which, if such Right had been exercised
immediately prior to such date and at a time when the Preferred Shares transfer
books of the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
<PAGE>
(ii) Subject to Section 24(c), in the event any Person, alone or
together with its Affiliates and Associates, shall become an Acquiring Person (a
"Section 11 Event") (except pursuant to a tender or exchange offer for all
outstanding Common Shares at a price and on terms determined by at least a
majority of the members of the Board who are not officers of the Company and are
not Acquiring Persons or Affiliates or Associates thereof to be in the best
interests of the Company and its shareholders (other than the Person or an
Affiliate or Associate thereof on whose behalf the offer is being made) (a
"Permitted Offer")), then, promptly following the first occurrence of such a
Section 11 Event, proper provision shall be made so that each holder of a Right,
except as provided in Section 7(e), shall, for a period of sixty (60) days after
the later of the occurrence of any such Section 11 Event or the effective date
of an appropriate registration statement pursuant to Section 9, have a right to
receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of fractional interests in Preferred
Shares and subject to the provisions of Section 11(a)(iii), such number of
Common Shares as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-ten thousandths of a Preferred
Share for which a Right was exercisable immediately prior to the date of the
occurrence of the Section 11 Event at issue, and dividing such products by (y)
fifty percent (50%) of the then current per share market price of a Common Share
(determined pursuant to Section 11(d)) on the date of the occurrence of the
Section 11 Event at issue (such number of shares being referred to herein as the
"Adjustment Shares"); PROVIDED, HOWEVER, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13, then only the provisions of Section 13 shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii); and PROVIDED,
FURTHER, that such sixty (60) day period shall not be deemed to run during any
period in which the exercise of any of the Rights or the fulfillment by the
Company or the Rights Agent of its or their obligations under this Agreement
shall be enjoined or otherwise prohibited in full or in part by any court or
other governmental agency or body.
(iii) In lieu of issuing Adjustment Shares in accordance with Section
11(a)(ii), the Company may, if the Board determines that such action is
necessary or appropriate and not contrary to the interests of holders of Rights,
elect to (and, in the event that the Board has not exercised the exchange right
contained in Section 24(c) and there are not sufficient authorized but unissued
Common Shares to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Company shall) take all such action as may
be necessary to authorize, issue or pay, upon the exercise of the Rights, cash
(including by way of a reduction of the Purchase Price), property, Common
Shares, other securities (whether equity or debt securities of the Company, any
subsidiary of the Company, or otherwise) or any combination thereof having an
aggregate value equal to the value of the Adjustment Shares which otherwise
would have been issuable pursuant to Section 11(a)(ii), which aggregate value
shall be determined by a nationally recognized investment banking firm selected
by the Board. For purposes of the preceding sentence, the value of the
Adjustment Shares shall be determined pursuant to Section 11(d) and the value of
any fractional interests in Preferred Shares or preference stock which the Board
determines to be a "common share equivalent" shall be deemed to have the same
value as the Adjustment Shares. Any such election by the Board must be made and
publicly announced within sixty (60) days following the date on which the
Section 11 Event at issue shall have occurred. Following the occurrence of such
Section 11 Event, the Board may suspend the exercisability of the Rights for a
period of up to sixty (60) days following the date on which such Section 11
Event shall have occurred to the extent that the Board has not determined
whether to exercise its rights of election under this Section 11(a)(iii). If the
Board shall determine in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full of the
Rights, the sixty (60) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days following the occurrence of the
Section 11 Event at issue, in order that the Company may seek shareholder
approval for the authorization of such additional shares. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them (for a
period expiring within forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same or more
favorable rights, privileges and preferences as Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or per equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than the
then current market price (as defined in Section 11(d)) per Preferred Share 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
<PAGE>
date by a fraction, the numerator of which shall be the number of Preferred
Shares outstanding on such record date plus the number of Preferred Shares which
the aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of additional
Preferred Shares and/or equivalent preferred shares so to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined reasonably and with good
faith to the holders of Rights by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and conclusive for all purposes. Preferred Shares owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed; and in the event that such rights 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) If the Company shall fix a record date for the making of a distribution to
all holders of Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash (other than a regular quarterly
dividend out of the earnings or retained earnings of the Company), assets (other
than a dividend payable in Preferred Shares, but including any dividend payable
in stock other than Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), 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 then current market price (as defined in Section
11(d)) per Preferred Share on such record date, less the fair market value (as
determined reasonably and with good faith to the holders of Rights by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and conclusive for all purposes)
of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants distributable in respect
of one Preferred Share and the denominator of which shall be the then current
market price (as defined in Section 11(d)) per Preferred Share. 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 be in effect if such record date
had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than as
provided in Section 11(a)(iii), the "current market price" per share of the
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 thirty (30) consecutive Trading
Days (as such term is hereinafter defined) 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 (A) a dividend or distribution on such
Common Shares payable in such Common Shares or securities convertible into such
Common Shares or (B) any subdivision, combination or reclassification of such
Common Shares, and prior to the expiration of thirty (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 market price" shall be properly adjusted to take into account
ex-dividend trading. 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 the
National Association of Securities Dealers, Inc. Automated Quotation System
("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. If on any such date no market maker is
making a market in the Common Shares at issue, the fair value of such shares on
such date as determined reasonably and with good faith by the Board shall be
used and shall be binding on the Rights Agent and conclusive for all purposes.
The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Shares at issue are listed or admitted
to trading is open for the transaction of business or, if the Common Shares at
issue are not listed or
<PAGE>
admitted to trading on any national securities exchange, a Business Day. If the
Common Shares at issue are not publicly held or not so listed or traded,
"current market price" per share shall mean the fair value per share determined
reasonably and with good faith to the holders of Rights by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market
price" per share (or one one-ten thousandth of a share) of the Preferred Shares
shall be determined in the same manner as set forth above for Common Shares in
Section 11(d)(i) (other than the last sentence thereof). If the current market
price per share (or one one-ten thousandth of a share) of the Preferred Shares
cannot be determined in the manner provided above or if the Preferred Shares at
issue are not publicly held or listed or traded in a manner described in Section
11(d)(i), the "current market price" per share of Series B Preferred Stock shall
be conclusively deemed to be an amount equal to 10,000 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalization with respect to the Series B Preferred Stock or the Common
Stock, as the case may be, occurring after the Effective Date) multiplied by the
current market price per share of the Common Stock and the "current market
price" per one one-ten thousandth of a share of Series B Preferred Stock shall
be conclusively deemed to be an amount equal to the current market price per
share of the Common Stock (and in each case as appropriately adjusted). If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, "current market price" per share shall mean the fair value per
share as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest thousandth of a Common Share or other
share or one-ten millionth of a Preferred Share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment or
(ii) the Expiration Date.
(f) If as a result of any provision of this Section 11, the holder of
any Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares, thereafter the number
of such other shares 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 Preferred Shares (and the Purchase
Price) contained in this Section 11, and the provisions of Sections 7, 9, 10, 13
and 15 with respect to Preferred Shares shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-ten thousandths
of a Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-ten thousandths
of a Preferred Share (calculated to the nearest one-ten millionth) obtained by
(i) multiplying (x) the number of one one-ten thousandths of a Preferred Share
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-ten thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one one-ten thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one millionth) obtained by dividing the Purchase
Price in
<PAGE>
effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 15, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in substitution
and replacement for the Rights Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number of one one-ten thousandths of a Preferred
Share which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Preferred Shares,
Common Shares or other securities issuable upon exercise of the Rights
(aggregating, for this purpose, an appropriate amount of the Purchase Price for
fractional shares to compare such aggregated amount to the par value for a whole
share), the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares, Common Shares or other
securities at such adjusted Purchase Price. If upon any exercise of the Rights,
a holder is to receive a combination of Common Shares and common share
equivalents, or Preferred Shares and equivalent preferred shares, a portion of
the consideration paid upon such exercise, equal to at least the then par value,
if any, of a Common Share or a Preferred Share, as the case may be, shall be
allocated as the payment for each Common Share or Preferred Share, as the case
may be, so received.
(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 issuing to the holder of any Right exercised after such record date
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything to the contrary in this Section 11 notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of Preferred Shares, any issuance
wholly for cash of any Preferred Shares at less than the current market price,
any issuance wholly for cash of Preferred Shares or securities which by their
terms are convertible into or exchangeable for Preferred Shares, any stock
dividends or any issuance of rights, options or warrants referred to hereinabove
in this Section 11, hereafter made by the Company to holders of Preferred Shares
shall not be taxable to such shareholders.
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Effective Date and prior to
the Distribution Date (i) declare or pay any dividend on any Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares, (iii)
combine the outstanding Common Shares into a smaller number of shares or (iv)
issue any shares of its capital stock in a reclassification of the outstanding
Common Shares, the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each such share following any such event shall equal the result
obtained by multiplying the
<PAGE>
number of Rights associated with each Common Share immediately prior to such
event by a fraction the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of Common Shares outstanding
immediately following the occurrence of such event.
(o) The exercise of Rights under Section 11(a)(ii) shall only result in
the loss of rights under Section 11(a)(ii) to the extent so exercised and shall
not otherwise affect the rights represented by the Rights under this Agreement,
including the rights represented by Section 13.
12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Preferred Shares and
the Common Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 26.
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
Notwithstanding the foregoing provisions of this Section 12, the failure of the
Company to make such certification or give such notice shall not affect the
validity of or the force or effect of the requirement for such adjustment.
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event that, following the Stock Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person, (y) any Person shall consolidate with the Company, or merge
with and into the Company and the Company shall be the continuing or surviving
corporation of such merger (other than, in the case of either transaction
described in (x) or (y), a merger or consolidation which would result in all of
the voting power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all
of the voting power represented by the securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation and
the holders of such securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell, mortgage or otherwise transfer
(or one or more of its subsidiaries shall sell, mortgage or otherwise transfer),
in one or more transactions, assets or earning power aggregating more than fifty
percent (50%) of the assets or earning power of the Company and its subsidiaries
(taken as a whole) to any other Person (any of the events described in the
foregoing clauses (x), (y) or (z) being herein referred to as a "Section 13
Event"), then, and in each such case, proper provision shall be made so that (i)
following the Distribution Date, each holder of a Right (other than as provided
in Section 7(e)) shall have the right to receive, upon the exercise thereof at
the then current Purchase Price in accordance with the terms of this Agreement,
such number of freely tradable Common Shares of the Principal Party (as
hereinafter defined), free and clear of liens, rights of call or first refusal,
encumbrances or other adverse claims, as shall be equal to the result obtained
by (x) multiplying the then current Purchase Price by the number of one one-ten
thousandths of a Preferred Share for which a Right is then exercisable (without
taking into account any adjustment previously made pursuant to Section
11(a)(ii)) and (y) dividing that product by fifty percent (50%) of the current
market price per share of the Common Shares of such Principal Party (determined
pursuant to Section 11(d)) on the date of consummation of such consolidation,
merger, sale or transfer; (ii) such Principal Party 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; (iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 shall apply to such Principal Party; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9) 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, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clauses (x) or
(y) of the first sentence of this Section 13, the Person that is the
issuer of any securities into which Common Shares of the
<PAGE>
Company are converted in such merger or consolidation, and if no securities are
so issued, the Person that is the other party to the merger or
consolidation (including, if applicable, the Company, if it is the
surviving corporation); and
(ii) in the case of any transaction described in clause (z) of
the first sentence in this Section 13, the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in any such case, (A) if the Common Shares of
such Person are not at such time and have not been continuously over
the preceding twelve (12) month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect subsidiary or
Affiliate of another Person the Common Shares of which have been so
registered, "Principal Party" shall refer to such other Person; (B) in
case such Person is a subsidiary, directly or indirectly, or Affiliate
of more than one Person, the Common Shares of two or more of which are
and have been so registered, "Principal Party" shall refer to whichever
of such Persons is the issuer of the Common Shares having the greatest
aggregate market value; and (C) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the rules
set forth in (A) and (B) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party
were a "subsidiary" of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set
forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized Common Shares that have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and each Principal Party and each other Person
who may become a Principal Party as a result of such consolidation, merger, sale
or transfer shall have executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any Section 13 Event, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, will use its best efforts to
cause such registration statement to become effective as soon as
practicable after such filing and will use its best efforts to cause
such registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the Expiration
Date;
(ii) use its best efforts to (x) qualify or register the
Rights and the securities purchasable upon exercise of the Rights under
the blue sky laws of such jurisdictions as may be necessary or
appropriate and (y) cause the Rights and the securities purchasable
upon exercise of the Rights to be listed on any national securities
exchange or national quotation system upon which its Common Shares are
listed, traded or quoted; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all material respects with the requirements for registration
on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. The rights under this Section 13
shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) and shall survive any exercise thereunder.
(d) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in clauses (x) and (y) of
Section 13(a) if (i) such transaction is consummated with a Person or Persons
who acquired Common Shares of the Company pursuant to a Permitted Offer (or a
wholly owned subsidiary of any such Person or Persons), (ii) the price per
Common Share offered in such transaction is not less than the price per Common
Share paid to all holders of Common Shares whose shares were purchased pursuant
to such Permitted
<PAGE>
Offer and (iii) the form of consideration being offered to the remaining
holders of Common Shares pursuant to such transaction is the same as the form of
consideration paid to all holders of Common Shares pursuant to such Permitted
Offer. Upon consummation of any such transaction contemplated by this subsection
(d), all Rights hereunder shall expire.
14. ADDITIONAL COVENANTS.
(a) The Company covenants and agrees that after the Stock Acquisition
Date it shall not (i) consolidate with, (ii) merge with or into, or (iii) sell
or transfer to any other Person, in one or more transactions, assets or earning
power aggregating more than fifty percent (50%) of the assets or earning power
of the Company and its subsidiaries taken as a whole, if at the time of or after
such consolidation, merger or sale there are any charter or bylaw provisions or
any rights, warrants or other instruments outstanding or any other action taken
which would diminish or otherwise eliminate the benefits intended to be afforded
by the Rights. The Company shall not consummate any such consolidation, merger
or sale unless prior thereto the Company and such other Person shall have
executed and delivered to the Rights Agent a supplemental agreement evidencing
compliance with this subsection.
(b) The Company covenants and agrees that, after the Stock Acquisition
Date, it will not, except as permitted by Section 24, take any action the
purpose or effect of which is to diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(n), or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 15(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price of the Rights for any day shall
be the last sale price, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter market, as reported
by Nasdaq or such other system then in use or, if on any such date the Rights
are not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Rights selected by the Board. 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
reasonably and with good faith to the holders of Rights by the Board shall be
used and shall be binding on the Rights Agent and conclusive for all purposes.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-ten
thousandth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-ten thousandth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-ten thousandth of
a Preferred Share may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the Company
and a depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights, privileges
and preferences to which they are entitled as beneficial owners of the
fractional interests in Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral multiples
of one one-ten thousandth of a Preferred Share, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market price of one one-ten thousandth of a Preferred Share (as determined
pursuant to Section 11(d) for the Trading Day immediately prior to the date of
such exercise).
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of Common Shares or units of common share
equivalents or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional shares of such common share equivalents
or other securities. In lieu of fractional shares or units of such common share
equivalents or other securities, the Company may pay to the registered holders
of Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of a
share or unit of such common share equivalent or other securities. For purposes
of this Section 15(c), the current market value shall be determined in the
manner set forth in Section 11(d) for
<PAGE>
the Trading Day immediately prior to the date of such exercise and, if a
common share equivalent is not traded, each such common share equivalent shall
have the value of one one-ten thousandth of a Preferred Share (as determined
pursuant to Section 11(d) for the Trading Day immediately prior to the date of
exercise).
(d) Except as otherwise expressly provided herein, the holder of a
Right by the acceptance of the Rights expressly waives such holder's right to
receive any fractional Rights or any fractional shares (other than, in the case
of Preferred Shares, fractions which are integral multiples of one one-ten
thousandth of a Preferred Share) upon exercise of a Right.
16. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, except those rights of action vested in the Rights Agent pursuant to
Section 21, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Rights 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 Rights Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in such holder's own behalf and
for such holder's own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, such holder's right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement. Holders of Rights shall be
entitled to recover the reasonable costs and expenses, including attorneys'
fees, incurred by them in any action to enforce the provisions of this
Agreement.
17. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the Person in
whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated Common Shares
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; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of the inability of the Company or the Rights
Agent to perform any of its or their 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.
18. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the Preferred Shares, Common Shares or
any other securities of the Company which may at any time be issuable upon
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder of the Company
or any right to vote for the election of directors or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as
<PAGE>
provided in Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions thereof.
19. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom, directly
or indirectly.
The Rights Agent shall be protected and shall incur no liability for or
in respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Shares or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
corporation or other entity into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation or
other entity resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation or
other entity succeeding to the corporate trust or shareholder services 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 or other entity would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
21. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the
President, any Vice President, the Chief Financial Officer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent;
<PAGE>
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. In no case will the Rights Agent be
liable for special, indirect, incidental or consequential loss or damages of any
kind whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the possibility of such damages.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except as to the fact that it has countersigned the Rights
Certificates) or be required to verify the same, but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it
be responsible for any adjustment required under the provisions of Section 11 or
13 or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Rights Certificates
after receipt of a certificate pursuant to Section 12 describing any such
adjustment); nor shall it be responsible for any determination by the Board of
the current market value of the Rights or Preferred Shares or Common Shares
pursuant to the provisions of Section 15; nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Preferred Shares or other securities to be issued pursuant to
this Agreement or any Rights Certificate or as to whether any Preferred Shares
or other securities will, when so issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from the President, any
Vice President, the Secretary, any Assistant Secretary or the Chief Financial
Officer of the Company, and is authorized to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent with respect to its duties or obligations under this Agreement and the
date on and/or after which such action shall be taken or omitted and the Rights
Agent shall not be liable for any action taken or omitted in accordance with a
proposal included in any such application on or after the date specified therein
(which date shall not be less than three (3) Business Days after the date any
such officer actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking or
omitting any such action, the Rights Agent has received written instructions in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not the Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in
any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for
<PAGE>
any loss to the Company or to the holders of the Rights resulting from any such
act, omission, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
22. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon
thirty (30) days notice in writing mailed to the Company and to each transfer
agent of the Common Shares and Preferred Shares by registered or certified mail,
and to holders of the Rights Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon thirty (30) days
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares and Preferred
Shares by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit such holder's Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a corporation or other entity
organized and doing business under the laws of the United States or of the State
of New York or the State of California (or of any other state of the United
States so long as such corporation or other entity is authorized to do business
as a banking institution in the State of New York or the State of California),
in good standing, having a principal office in the State of New York or the
State of California, which is authorized under such laws to exercise corporate
trust or shareholder services powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50,000,000.00 or (b) an affiliate of a corporation or other entity described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall mail notice
thereof in writing to the predecessor Rights Agent and each transfer agent of
the Common Shares and Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 22, 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.
23. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment or change in the Purchase
Price per share and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of Common Shares following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
Common Shares so issued or sold pursuant to the exercise of stock options or
otherwise under any employee plan or arrangement, which plan or arrangement is
existing as of the Distribution Date, or upon the exercise, conversion or
exchange of any other securities issued by the Company on or prior to the
Distribution Date, and (b) may, in any other case, if deemed necessary or
appropriate by the Board, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; PROVIDED, HOWEVER,
that (i) no such Rights Certificates shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material
<PAGE>
adverse tax consequences to the Company or the Person to whom such Rights
Certificates would be issued, and (ii) no such Rights Certificates shall be
issued if, and to the extent that appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
24. REDEMPTION, TERMINATION AND EXCHANGE.
.
(a) (i) The Board may, at its option, at any time prior to the earlier
of (x) the Stock Acquisition Date or (y) 5:00 p.m., Pacific time, on the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of $0.001 per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the Effective
Date (such redemption price being hereinafter referred to as the "Redemption
Price").
(ii) In addition, and notwithstanding the provisions of Section 24(a)(i),
the Board may redeem all but not less than all of the then outstanding Rights at
the Redemption Price following the Stock Acquisition Date but prior to any
Section 13 Event either (x) in connection with any Section 13 Event in which all
holders of Common Shares are treated alike with all other holders and not
involving (other than as a holder of Common Shares being treated like all other
such holders) an Acquiring Person or an Affiliate or Associate thereof or any
other Person in which such Acquiring Person or Affiliate or Associate thereof
has any interest, or any other Person acting directly or indirectly on behalf of
or in association with any such Acquiring Person or Affiliate or Associate
thereof, or (y) following the occurrence of a Section 11 Event, and the
expiration of any period during which the holder of Rights may exercise the
rights under Section 11(a)(ii) as a result thereof, if and for as long as any
Acquiring Person having triggered the Section 11 Event at issue is not
thereafter the Beneficial Owner of Common Shares representing twenty percent
(20%) or more of the Common Shares then outstanding, and at the time of
redemption there are no other Persons who are Acquiring Persons.
(b) In the case of a redemption permitted under Section 24(a)(i),
immediately upon the action of the Board ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. In the case of a redemption permitted only under
Section 24(a)(ii), evidence of which shall have been filed with the Rights
Agent, the right to exercise the Rights will terminate and represent only the
right to receive the Redemption Price only after ten (10) Business Days
following the giving of notice of such redemption to the holders of such Rights
if no Section 11 Event shall have occurred, and, if a Section 11 Event shall
have occurred, upon the later of ten (10) Business Days following the giving of
such notice or the expiration of any period during which the Rights may be
exercised under Section 11(a)(ii) as a result thereof. Within ten (10) days
after the action of the Board ordering any such redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to the Rights Agent and to
all such holders at their last addresses as they appear upon the registry books
of the Rights Agent or, prior to the Distribution Date, on the registry books of
the transfer agent for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
In the case of a redemption permitted under Section 24(a)(i) or (ii),
the Company may, at its option, discharge all of its obligations with respect to
the Rights by (i) issuing a press release announcing the manner of redemption of
the Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent of the Common Shares, and upon such action, all
outstanding Rights Certificates shall be null and void without any further
action by the Company.
(c) (i) Subject to the limitations of applicable laws, the Board may,
at its option and at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
7(e)) for (A) Common Shares at an exchange ratio of one Common Share for each
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the Effective Date (referred to herein as
the "Exchange Shares"), or (B) Substitute Consideration (as that term is defined
below). The Board may determine, in its sole discretion, whether to deliver
Exchange Shares or Substitute Consideration. Notwithstanding the foregoing, the
Board shall not be empowered to effect such exchange at any time after any
Person (other than the Company, any subsidiary of the
<PAGE>
Company, any employee benefit plan of the Company or any such subsidiary, or any
entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of Common Shares representing fifty percent (50%) or more of
the Common Shares then outstanding.
(ii) In the event the Board shall determine to deliver
Substitute Consideration in exchange for Rights, the Company shall (A) determine
the value of the Exchange Shares (referred to herein as the "Exchange Value"),
and (B) with respect to each Right to be exchanged, make adequate provision to
substitute for Exchange Shares the following (the "Substitute Consideration"):
(v) cash, (w) Common Shares or common share equivalents (as that term is defined
in Section 11(a)(iii)) or Preferred Shares or equivalent preferred shares (as
that term is defined in Section 11(b)), (x) debt securities of the Company, (y)
other assets, or (z) any combination of the foregoing, having an aggregate value
equal to the Exchange Value where such aggregate value has been determined by
the Board based upon the advice of a nationally recognized investment banking
firm selected by the Board. For purposes of this Section 24(c), the value of a
Common Share (insofar as the same relates to the determination of the value of
Exchange Shares) shall be the current per share market price (as determined
pursuant to Section 11(d)) of such Common Shares on the day that is the later of
(x) the first occurrence of a Section 11 Event or (y) the date on which the
Company's right of redemption pursuant to Section 24(a)(i) expires; and the
value of any common share equivalent shall be deemed to have the same value as
the related Common Share on such date.
(iii) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to this Section 24(c), and without any further
action and without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to receive
Exchange Shares or appropriate Substitute Consideration for each Right exchanged
by such holder. The Company shall promptly give public notice of any such
exchange; PROVIDED, HOWEVER, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of Common Shares (or Substitute
Consideration) for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e)) held by each
holder of Rights.
(iv) In the event that there shall not be sufficient Common
Shares or Preferred Shares issued but not outstanding or authorized but unissued
to permit any exchange of Rights as contemplated in accordance with this Section
24(c), the Company shall take all such action as may be necessary to authorize
additional Common Shares or Preferred Shares for issuance upon exchange of the
Rights.
(v) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Rights 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 Section 24(c)(v), the current market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
Section 11(d)) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24(c).
25. NOTICE OF CERTAIN EVENTS. In case the Company shall propose (a) to
pay any dividend payable in stock of any class to any holders of Preferred
Shares or to make any other distribution to any holders of Preferred Shares
(other than a regular quarterly dividend out of earnings or retained earnings of
the Company) or (b) to offer to any holders of Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options, or (c)
to effect any reclassification of Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), or (d) 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 more than
fifty percent (50%) of the assets or earning power of the Company and its
subsidiaries (taken as a whole) to, any other Person, or (e) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Rights Certificate, in accordance
with Section 26, a notice of such proposed action, which shall specify the
record
<PAGE>
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by holders of the Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (a) or (b) above at least twenty (20) days prior to the record
date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by holders of the Preferred Shares, whichever shall be the
earlier.
In case any Triggering Event shall occur, then, in any such case, the
Company or the Principal Party, as the case may be, shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in accordance with
Section 26, a notice of the occurrence of such Triggering Event, which shall
specify the Triggering Event and the consequences of the Triggering Event to
holders of Rights under Section 11(a)(ii) or 13(a), as the case may be.
The failure to give notice required by this Section 25 or any defect
therein shall not affect the legality or validity of the action taken by the
Company or the vote upon any such action.
26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, or sent by nationwide overnight delivery, addressed
(until another address is filed in writing with the Rights Agent) as follows:
Agouron Pharmaceuticals, Inc.
10350 North Torrey Pines Road
La Jolla, CA 92037
Attention: President
Subject to the provisions of Section 22, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Rights Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, or sent by nationwide
overnight delivery, addressed (until another address is filed in writing with
the Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
85 Challenger Road
Ridgefield Park, NJ 07660
Attention: Compliance Area
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid, or sent
by nationwide overnight delivery, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Each such notice or demand shall be effective (i) if given by mail,
three (3) days after the notice or demand is deposited in the mails with first
class postage prepaid, addressed as specified herein, (ii) if given by
nationwide overnight delivery, the date of delivery at the address specified
herein or (iii) if given by any other means, the date of delivery at the address
specified herein.
<PAGE>
27. SUPPLEMENTS AND AMENDMENTS.
(a) The Company and the Rights Agent may from time to time supplement
or amend this Agreement without approval of any holders of Rights or Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) prior to the Distribution Date, to change or
supplement any provision hereunder in any manner which the Company may deem
necessary or desirable, or (iv) on or following the Distribution Date, to change
or supplement any provision hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment unless the Rights Agent shall have
determined in good faith that such supplement or amendment would adversely
affect its interests under this Agreement.
(b) Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Shares.
28. DETERMINATION AND ACTIONS BY THE BOARD, ETC.
(a) For all purposes of this Agreement, any calculation of the number
of Common Shares outstanding at any particular time (or the total voting power
pertaining thereto), including for purposes of determining the particular
percentage of such outstanding Common Shares or any other securities of which
any Person is the Beneficial Owner (or the total voting power pertaining
thereto), shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act as in
effect on the Effective Date.
(b) The Board shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend this Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights Certificates and all other parties and (y) not subject the
Board to any liability to the holders of the Rights Certificates.
29. SUCCESSORS. All the covenants and provisions of this Agreement by
or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, 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 Rights
Certificates (and, prior to the Distribution Date, the Common Shares).
31. SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
32. GOVERNING LAW. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of
<PAGE>
California and for all purposes shall be governed by and construed in accordance
with the laws of such state applicable to contracts to be made and to be
performed entirely within such state.
33. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
34. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: AGOURON PHARMACEUTICALS, INC.
By By
Title Title
Attest: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By By
Title Title
<PAGE>
EXHIBIT A
Form of Rights Certificate
Certificate No. R-_____________ _____________ Rights
NOT EXERCISABLE AFTER NOVEMBER 21, 2006 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $0.001 PER RIGHT, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON, AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT. THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME VOID UNDER THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(E) OF THE RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
AGOURON PHARMACEUTICALS, INC.
This certifies that ___________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Amended and Restated Rights Agreement dated as of November 10, 1998 (the "Rights
Agreement") between Agouron Pharmaceuticals, Inc., a California corporation (the
"Company"), and ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 p.m. (Pacific time)
on November 21, 2006, at the office of the Rights Agent designated for such
purpose, one one-ten thousandth of a fully paid, nonassessable share of Series B
Participating Preferred Stock (the "Preferred Shares") of the Company, at a
purchase price of $250.00 per one one-ten thousandth of a share (the "Purchase
Price"), upon presentation and surrender of this Rights Certificate with the
appropriate Form of Election to Purchase and Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of one
one-ten thousandths of a share which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the number and Purchase
Price as of the close of business on November 10, 1998, based on the Preferred
Shares as constituted at such date.
* The portion of the legend in brackets shall be inserted only if applicable.
<PAGE>
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person (as such term is defined in the
Rights Agreement), (ii) a transferee of any such Acquiring Person or an
Associate or Affiliate thereof (as such terms are defined in the Rights
Agreement), or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of an Acquiring Person, or an Affiliate or Associate of
an Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of any such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares or other securities which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such holder
to purchase. If this Rights Certificate shall be exercised (other than pursuant
to Section 11(a)(ii) of the Rights Agreement) in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised. If this Rights
Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this Rights
Certificate duly marked to indicate that such exercise has occurred as set forth
in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may, but are not required to, be redeemed by the Company at
its option at a redemption price of $0.001 per Right. Subject to the provisions
of the Rights Agreement, the Company, at its option, may elect to mail payment
of the redemption price to the registered holder of the Rights at the time of
redemption, in which event this certificate may become void without any further
action by the Company.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-ten thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
<PAGE>
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated: ______________.
Attest: AGOURON PHARMACEUTICALS, INC.
____________________________ By _______________________________
Title ______________________ Title ____________________________
Countersigned:
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By _________________________
<PAGE>
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the Rights
Certificate.)
FOR VALUE RECEIVED, _______________________________
hereby sells, assigns and transfers unto
_______________________________________________________________________
(please print name and address of transferee)
___________________________________________________________ this Rights
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ____________________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________.
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934.
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate |_| are |_| are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
|_| did |_| did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ______________.
__________________________________
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name
as written upon the face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the Certificate set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and will affix a legend to that effect on any
Rights Certificate issued in exchange for this Rights Certificate.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To AGOURON PHARMACEUTICALS, INC.:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase
the Common Shares (or such other securities of the Company) issuable upon the
exercise of the Rights and requests that certificates for such shares be issued
in the name of:
- ----------------------------------------------------------------
(Please insert social security or other identifying number)
- ----------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------
The Rights Certificate shall be returned to the undersigned (indicating
the balance, if any, of such Rights which may still
be exercised pursuant to Section 11(a)(ii) of the Rights Agreement) unless such
Person requests that the Rights Certificate be registered in the name of and
delivered to:
- ----------------------------------------------------------------
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
- ----------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------
Dated: ______________.
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934.
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate |_| are |_| are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
|_| did |_| did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ______________.
__________________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase must correspond to
the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the Certificate set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights Certificate other than pursuant to
Section 11(a)(ii) of the Rights Agreement.)
To AGOURON PHARMACEUTICALS, INC.:
The undersigned hereby irrevocably elects to exercise __________ Rights
represented by this Rights Certificate to purchase
the Preferred Shares (or such other securities of the Company or any other
Person) issuable upon the exercise of the Rights and requests that certificates
for such shares be issued in the name of:
- ----------------------------------------------------------------
(Please insert social security or other identifying number)
- ----------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------
If applicable, the Rights Certificate indicating the balance, if any,
of such Rights which may still be exercised pursuant
to Section 11(a)(ii) of the Rights Agreement shall be returned to the
undersigned unless such Person requests that the Rights Certificate be
registered in the name of and delivered to:
- ----------------------------------------------------------------
Please insert social security or other identifying number (complete only if
Rights Certificate is to be registered in a name other than the undersigned)
- ----------------------------------------------------------------
(Please print name and address)
- ----------------------------------------------------------------
Dated: ______________.
__________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor Institution, as
defined in Rule 17Ad-15 under the Securities Exchange Act of 1934.
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate |_| are |_| are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
|_| did |_| did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ______________.
__________________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase must correspond to
the name as written upon the fact of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the Certificate set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
