<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 28, 1995
Mycogen Corporation
-------------------
(Exact name of registrant as specified in its charter)
California 0-15881 95-3802654
- ---------- ------- ----------
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
5501 Oberlin Drive, San Diego California, 92121
-----------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 619-453-8030
Not Applicable
--------------
(Former name or former address, if changed since last report.)
ITEM 5. OTHER EVENTS
1. QUARTERLY OPERATING REVENUES BY SEGMENT (UNAUDITED)
The Company has elected to report quarterly operating revenues by segment
for the fiscal year ended August 31, 1995 as a result of the change in fiscal
year end. The new fiscal quarters end in November, February, May and August.
Seed operating revenues are concentrated mainly in the second and third fiscal
quarters and Crop Protection operating revenues are concentrated mainly in the
third and fourth quarters. Second and third quarter seed operating revenues
include estimates for returns that generally occur during the fourth quarter.
Consequently, fourth quarter seed operating revenues include adjustments for
those earlier estimates. Operating revenues for the fiscal year ended August 31,
1995 are as follows:
<TABLE>
<CAPTION>
Quarter
(In thousands) First Second Third Fourth
------- -------- -------- --------
<S> <C> <C> <C> <C>
Seed $ 596 $ 23,909 $ 44,439 $ (3,615)
Crop Protection Services 8,913 3,752 11,430 16,745
------- -------- -------- --------
$ 9,509 $ 27,661 $ 55,869 $ 13,130
======= ======== ======== ========
</TABLE>
1
<PAGE>
2. CHANGE IN STATE OF INCORPORATION FROM DELAWARE TO CALIFORNIA
The Company was reincorporated from Delaware to California on October 26,
1995 (the "Reincorporation") in accordance with an Agreement and Plan of Merger.
The Reincorporation was approved by the Company's Board of Directors and
shareholders on April 20, 1995. The Reincorporation was accomplished by merging
Mycogen Corporation, a Delaware corporation ("Mycogen-Delaware") into a wholly-
owned California subsidiary called Mycogen California, Inc. ("Mycogen-
California") formed for purposes of the Reincorporation. Each outstanding share
of Mycogen-Delaware's capital stock was exchanged for a corresponding share of
capital stock of Mycogen-California. Upon the completion of the Reincorporation,
Mycogen-California changed its name to Mycogen Corporation, a California
corporation.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) No financial statements are required to be filed with this Form 8-K because
the capital structure and the balance sheet of the Company immediately after the
reincorporation was the same as its predecessor.
(b) No pro forma financial information is required to be filed with this Form
8-K.
(c) Exhibits.
---------
Exhibit Number Description
-------------- -----------
2.1 Agreement and Plan of Merger of Mycogen
Corporation, a Delaware corporation and Mycogen
California, Inc., a California corporation.
3.1 Articles of Incorporation of the Company.
3.2 Bylaws of the Company.
3.3 Certificate of Determination of Rights,
Preferences and Privileges of Series B Junior
Participating Preferred Stock of Mycogen
Corporation.
4.1 Specimen of Common Stock Certificate, $0.001 par
value.
4.2 Amended and Restated Rights Agreement.
10.1 Form of Indemnity Agreement between the Company
and each of its directors.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Mycogen Corporation
-------------------
(Registrant)
Date: November 28, 1995 /s/ James A. Baumker
----------------- --------------------
James A. Baumker
Vice President,
Chief Financial Officer,
Chief Accounting Officer
3
<PAGE>
EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
OF
MYCOGEN CORPORATION,
A DELAWARE CORPORATION
AND
MYCOGEN CALIFORNIA, INC.,
A CALIFORNIA CORPORATION
<PAGE>
AGREEMENT AND PLAN OF MERGER
OF
MYCOGEN CORPORATION,
A DELAWARE CORPORATION
AND
MYCOGEN CALIFORNIA, INC.,
A CALIFORNIA CORPORATION
THIS AGREEMENT AND PLAN OF MERGER dated as of October 19, 1995, (the
"Agreement") is made and entered into between Mycogen California, Inc., a
California corporation ("Mycogen-California") and Mycogen Corporation, a
Delaware corporation ("Mycogen-Delaware"). Mycogen-California and Mycogen-
Delaware are sometimes referred to herein as the "Constituent Corporations."
R E C I T A L S
---------------
A. Mycogen-California is a corporation duly organized and existing under the
laws of the State of California and has an authorized capital stock of
45,000,000 shares, 40,000,000 of which are designated "Common Stock", par
value $.001 per share, and 5,000,000 of which are designated "Preferred
Stock", par value $.001 per share. As of October 15, 1995, 1,000 shares
of Common Stock were issued and outstanding, all of which were held by
Mycogen-Delaware. No shares of Preferred Stock are outstanding.
B. Mycogen-Delaware is a corporation duly organized and existing under the
laws of the State of Delaware and has an authorized capital stock of
45,000,000 shares, 40,000,000 of which are designated "Common Stock," par
value $.001 per share, and 5,000,000 of which are designated, "Preferred
Stock," par value $.001 per share. As of October 15, 1995, 19,466,821
shares of Common Stock were issued and outstanding and 3,113 shares of
Series A Preferred Stock were issued and outstanding.
C. The Board of Directors of Mycogen-Delaware has determined that, for the
purpose of effecting the reincorporation of Mycogen-Delaware in the State
of California, it is advisable and in the best interests of Mycogen-
Delaware that Mycogen-Delaware merge with and into Mycogen-California upon
the terms and conditions herein provided.
D. The Board of Directors of Mycogen-California, Mycogen-California's sole
stockholder, the Board of Directors of Mycogen-Delaware, and Mycogen-
Delaware's shareholders have approved this Agreement and have directed that
this Agreement be executed by the undersigned officers.
E. Mycogen-California is a wholly-owned subsidiary of Mycogen-Delaware.
1
<PAGE>
NOW, THEREFORE, in consideration of the mutual agreements and covenants set
forth herein, Mycogen-California and Mycogen-Delaware hereby agree, subject to
the terms and conditions hereinafter set forth, as follows:
I. MERGER
SECTION 1.1 - MERGER. In accordance with the provisions of this Agreement,
--------------------
the Delaware General Corporation Law and the California General Corporation Law,
Mycogen-Delaware will be merged with and into Mycogen-California (the "Merger"),
the separate existence of Mycogen-Delaware will cease and Mycogen-California
will be, and is herein sometimes referred to as, the "Surviving Corporation,"
and the name of the Surviving Corporation will be Mycogen Corporation.
SECTION 1.2 - FILING AND EFFECTIVENESS. The Merger will become effective
------------- ------------------------
when the following actions will have been completed:
(a) This Agreement and the Merger will have been adopted and approved by
the board of directors and/or the stockholders of each Constituent Corporation
in accordance with the requirements of the Delaware General Corporation Law and
the California General Corporation Law;
(b) All of the conditions precedent to the consummation of the Merger
specified in this Agreement will have been satisfied or duly waived by the party
entitled to satisfaction thereof; and
(c) An executed Certificate of Ownership and Merger meeting the
requirements of the Delaware General Corporation Law and an executed counterpart
of this Agreement meeting the requirements of the Delaware General Corporation
Law and California General Corporation Law will have been filed with the
Secretary of State of the State of Delaware, and the Secretary of State of the
State of California, respectively.
The date and time when the Merger will become effective, as aforesaid, is
herein called the "Effective Date of the Merger."
SECTION 1.3 - EFFECT OF THE MERGER. Upon the Effective Date of the
-----------------------------------
Merger, the separate existence of Mycogen-Delaware will cease and Mycogen-
California, as the Surviving Corporation (i) will continue to possess all of its
assets, rights, powers and property as constituted immediately prior to the
Effective Date of the Merger, (ii) will be subject to all actions previously
taken by its and Mycogen-Delaware's Board of Directors, (iii) will succeed,
without other transfer or action on the part of any other party, to all of the
assets, rights, powers and property of Mycogen-Delaware in the manner more fully
set forth in Section 1107 of the California General Corporation Law, (iv) will
continue to be subject to all of the debts, liabilities and obligations of
Mycogen-California as constituted immediately prior to the Effective Date of
2
<PAGE>
the Merger, and (v) will succeed, without other transfer or other action on the
part of any other party, to all of the debts, liabilities and obligations of
Mycogen-Delaware in the same manner as if Mycogen-California had itself incurred
them, all as more fully provided under the applicable provisions of the Delaware
General Corporation Law and the California Corporations Code.
II. CHARTER DOCUMENTS, DIRECTORS AND OFFICERS
SECTION 2.1 - ARTICLES OF INCORPORATION. The Articles of Incorporation of
----------------------------------------
Mycogen-California as in effect immediately prior to the Effective Date of the
Merger will continue in full force and effect as the Articles of Incorporation
of the Surviving Corporation except as amended pursuant to this Section 2.1:
Article I of the articles of incorporation of Mycogen-California is amended
to read: "The name of this corporation is 'Mycogen Corporation.'"
SECTION 2.2 - BYLAWS. The Bylaws of Mycogen-California as in effect
--------------------
immediately prior to the Effective Date of the Merger will continue in full
force and effect as the Bylaws of the Surviving Corporation until duly amended
in accordance with the provisions thereof and applicable law.
SECTION 2.3 - DIRECTORS AND OFFICERS. The directors and officers of
------------------------------------
Mycogen-California immediately prior to the Effective Date of the Merger will be
the directors and officers of the Surviving Corporation until their successors
will have been duly elected and qualified or until as otherwise provided by law,
the Articles of Incorporation of the Surviving Corporation or the Bylaws of the
Surviving Corporation.
III. MANNER OF CONVERSION OF STOCK
SECTION 3.1 - MYCOGEN-DELAWARE COMMON STOCK. Upon the Effective Date of
-------------------------------------------
the Merger, each share of Mycogen-Delaware Common Stock, par value $.001 per
share, issued and outstanding immediately prior thereto will by virtue of the
Merger and without any action by the Constituent Corporations, the holder of
such shares or any other person, be converted into and exchanged for one (1)
fully paid and nonassessable share of Common Stock, par value $.001 per share,
of the Surviving Corporation.
SECTION 3.2 - MYCOGEN-DELAWARE PREFERRED STOCK. Upon the Effective Date of
----------------------------------------------
the Merger, each share of Mycogen-Delaware Preferred Stock, par value $.001 per
share, issued and outstanding immediately prior thereto will by virtue of the
Merger and without any action by the Constituent Corporations, the holder of
such shares or any other person, be converted into and exchanged for one (1)
fully paid and nonassessable share of Preferred Stock, par value $.001 per
share, of the Surviving Corporation.
3
<PAGE>
SECTION 3.3 - MYCOGEN-DELAWARE 1992 STOCK OPTION PLAN,
- -------------------------------------------------------
1990 RESTRICTED STOCK ISSUANCE PLAN.
-----------------------------------
(a) Upon the Effective Date of the Merger, the Surviving Corporation will
assume all of the rights and obligations of Mycogen-Delaware under its 1992
Stock Option Plan (including the predecessor 1988 Stock Option Plan), as amended
through the date hereof (collectively, the "Plan"). Each outstanding and
unexercised option to purchase Mycogen-Delaware Common Stock (an "Option") under
the Plan will become, subject to the provisions in paragraph 3.3(d) below, on
the basis of one (1) share of the Surviving Corporation's Common Stock for each
share of Mycogen-Delaware Common Stock issuable pursuant to any such Option, an
option to purchase the Surviving Corporation's Common Stock on the same terms
and conditions set forth in such option. As of October 15, 1995, options to
purchase 3,243,626 shares of Mycogen-Delaware Common Stock were outstanding and
unexercised.
(b) Upon the Effective Date of the Merger, the Surviving Corporation will
assume all of the rights and obligations of Mycogen-Delaware under its 1990
Restricted Stock Issuance Plan, as amended through the date hereof
(collectively, the "Restricted Stock Plan").
(c) One (1) share of the Surviving Corporation's Common Stock will be
reserved for issuance under the 1992 Stock Option Plan and the Restricted Stock
Plan for each share of Mycogen-Delaware Common Stock so reserved immediately
prior to the Effective Date of the Merger.
(d) Following the Effective Date of the Merger, no "additional benefits"
(within the meaning of Section 424(a)(2) of the Internal Revenue Code of 1986,
as amended) will be accorded to the optionees pursuant to the assumption of
their options.
SECTION 3.4 - MYCOGEN-CALIFORNIA COMMON STOCK. Upon the Effective Date of
---------------------------------------------
the Merger, each share of Common Stock, par value $.001 per share, of Mycogen-
California issued and outstanding immediately prior thereto will, by virtue of
the Merger and without any action by Mycogen-California, the holder of such
shares or any other person, be canceled and returned to the status of authorized
but unissued shares.
SECTION 3.5 - EXCHANGE OF CERTIFICATES. After the Effective Date of the
--------------------------------------
Merger, each holder of an outstanding certificate representing shares of
Mycogen-Delaware Common Stock or Preferred Stock may be asked to surrender the
same for cancellation to an exchange agent, whose name will be delivered to
holders prior to any requested exchange (the "Exchange Agent"), and each such
holder will be entitled to receive in exchange therefor a certificate or
certificates representing the number of shares of the Surviving Corporation's
Common Stock or Preferred Stock, into which the surrendered shares were
converted as herein provided. Until so surrendered, each outstanding
certificate theretofore representing shares of Mycogen-Delaware Common Stock or
Preferred Stock will be deemed for all purposes to represent the number of
4
<PAGE>
shares of the Surviving Corporation's Common Stock or Preferred Stock,
respectively, into which such shares of Mycogen-Delaware Common Stock or
Preferred Stock, as the case may be, were converted in the Merger.
The registered owner on the books and records of the Surviving Corporation
or the Exchange Agent of any such outstanding certificate will, until such
certificate will have been surrendered for transfer or conversion or otherwise
accounted for to the Surviving Corporation or the Exchange Agent, have and be
entitled to exercise any voting and other rights with respect to and to receive
dividends and other distributions upon the shares of Common Stock or Preferred
Stock of the Surviving Corporation represented by such outstanding certificate
as provided above.
Each certificate representing Common Stock or Preferred Stock of the
Surviving Corporation so issued in the Merger will bear the same legends, if
any, with respect to the restrictions on transferability as the certificates of
Mycogen-Delaware so converted and given in exchange therefore, unless otherwise
determined by the Board of Directors of the Surviving Corporation in compliance
with applicable laws, or other such additional legends as agreed upon by the
holder and the Surviving Corporation.
If any certificate for shares of the Surviving Corporation's stock is to be
issued in a name other than that in which the certificate surrendered in
exchange therefor is registered, it will be a condition of issuance thereof that
the certificate so surrendered will be properly endorsed and otherwise in proper
form for transfer, that such transfer otherwise be proper and comply with
applicable securities laws and that the person requesting such transfer pay to
the Exchange Agent any transfer or other taxes payable by reason of issuance of
such new certificate in a name other than that of the registered holder of the
certificate surrendered or establish to the satisfaction of the Surviving
Corporation that such tax has been paid or is not payable.
IV. RIGHTS AGREEMENT
Upon the Effective Date of the Merger, the Surviving Corporation will
assume all of the rights and obligations of Mycogen-Delaware under that certain
Rights Agreement dated February 21, 1992, as amended, by and between Mycogen-
Delaware and The First National Bank of Boston (the "Rights Agreement"). Upon
the Effective Date of the Merger each outstanding Preferred Share Purchase Right
(a "Right") will automatically be exchanged for a Preferred Share Purchase Right
of Mycogen-California pursuant to an Amended and Restated Rights Agreement to be
dated as of the Effective Date of the Merger.
5
<PAGE>
V. COVENANTS
SECTION 5.1 - COVENANTS OF MYCOGEN-CALIFORNIA. Mycogen-California
---------------------------------------------
covenants and agrees that it will, on or before the Effective Date of the
Merger:
(a) File any and all documents with the California Franchise Tax Board
necessary for the assumption by Mycogen-California of all of the franchise tax
liabilities of Mycogen-Delaware.
(b) Take such other actions as may be required by the California General
Corporation Law to effect the Merger.
(c) Take such other actions as may be required by the Delaware General
Corporation Law to effect the Merger.
SECTION 5.2 - FURTHER ASSURANCES. From time to time, as and when required
--------------------------------
by Mycogen-California or by its successors or assigns, there will be executed
and delivered on behalf of Mycogen-Delaware such deeds and other instruments,
and there will be taken or caused to be taken by it such further and other
actions as will be appropriate or necessary in order to vest or perfect in or
conform of record or otherwise by Mycogen-California the title to and possession
of all the property, interests, assets, rights, privileges, immunities, powers,
franchises and authority of Mycogen-Delaware and otherwise to carry out the
purposes of this Agreement, and the officers and directors of Mycogen-California
are fully authorized in the name and on behalf of Mycogen-Delaware or otherwise
to take any and all such action and to execute and deliver any and all such
deeds and other instruments.
SECTION 5.3 - ABANDONMENT. At any time before the Effective Date of the
-------------------------
Merger, this Agreement may be terminated and the Merger may be abandoned for any
reason whatsoever by the Board of Directors of either Mycogen-Delaware or of
Mycogen-California, or of both, notwithstanding the approval of this Agreement
by the shareholders of Mycogen-Delaware or by the sole stockholder of Mycogen-
California, or by both.
SECTION 5.4 - AMENDMENT. The Boards of Directors of the Constituent
-----------------------
Corporations may amend this Agreement at any time prior to the filing of this
Agreement (or certificate in lieu thereof) with the Secretary of State of the
State of Delaware; provided that an amendment made subsequent to the adoption of
this Agreement by the stockholders of either Constituent Corporation will not:
(1) alter or change the amount or kind of shares, securities, cash, property
and/or rights to be received in exchange for or on conversion of all or any of
the shares of any class or series thereof of such Constituent Corporation, (2)
alter or change any term of the Articles of Incorporation of the Surviving
Corporation to be effected by the Merger, or (3) alter or change any of the
terms and conditions of this Agreement if such alteration or change would
adversely affect the holders of any class or series of capital stock of any
Constituent Corporation.
6
<PAGE>
SECTION 5.5 - AGREEMENT. Executed copies of this Agreement will be on file
-----------------------
at the principal place of business of the Surviving Corporation at 5501 Oberlin
Drive, San Diego, California 92121 and copies thereof will be furnished to any
shareholder of either Constituent Corporation, upon request and without cost.
SECTION 5.6 - GOVERNING LAW. This Agreement will in all respects be
---------------------------
construed, interpreted and enforced in accordance with and governed by the laws
of the State of California and, so far as applicable, the merger and other
provisions of the Delaware General Corporations Code.
SECTION 5.7 - COUNTERPARTS. In order to facilitate the filing and
--------------------------
recording of this Agreement, the same may be executed in any number of
counterparts, each of which will be deemed to be an original and all of which
together will constitute one and the same instrument.
SECTION 5.8 - APPROVAL OF MYCOGEN-DELAWARE AS SOLE SHAREHOLDER OF MYCOGEN-
-------------------------------------------------------------------------
CALIFORNIA. By its execution and delivery of this Agreement, Mycogen-Delaware,
- ----------
as sole shareholder of Mycogen-California, consents to, approves and adopts this
Agreement and approves the Merger. Mycogen-Delaware agrees to execute such
further instruments as may be necessary or desirable to evidence its approval
and adoption of this Agreement and the Merger as the sole shareholder of
Mycogen-California.
[Remainder of This Page Intentionally Left Blank]
7
<PAGE>
IN WITNESS WHEREOF, this Agreement having first been approved by the
resolutions of the Board of Directors of Mycogen Corporation, a Delaware
Corporation, and Mycogen California, Inc. a California Corporation, is hereby
executed on behalf of each of such two corporations and attested by their
respective officers thereunto duly authorized.
MYCOGEN CORPORATION,
a Delaware corporation
By: /s/ Jerry D. Caulder
-----------------------------------
Jerry D. Caulder, Chief Executive
Officer, Chairman of the Board
By: /s/ Carlton J. Eibl
-----------------------------------
Carlton J. Eibl, President, Chief
Operating Officer, and Secretary
ATTEST:
/s/ Arthur Chatroo
- ------------------------------
Arthur Chatroo, Assistant Secretary
MYCOGEN CALIFORNIA, INC.,
a California corporation
By: /s/ Jerry D. Caulder
-----------------------------------
Jerry D. Caulder, Chief Executive
Officer, Chairman of the Board
By: /s/ Carlton J. Eibl
-----------------------------------
Carlton J. Eibl, President, Chief
Operating Officer, and Secretary
ATTEST:
/s/ Arthur Chatroo
- ------------------------------
Arthur Chatroo, Assistant Secretary
8
<PAGE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION
<PAGE>
ARTICLES OF INCORPORATION
OF
MYCOGEN CALIFORNIA, INC.
The undersigned Incorporator hereby executes, acknowledges and files the
following ARTICLES OF INCORPORATION for the purpose of forming a corporation
(the "Corporation") under the General Corporation Law of the State of
California.
ARTICLE I
---------
The name of the Corporation is "Mycogen California, Inc."
ARTICLE II
----------
The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business or the
practice of a profession permitted to be incorporated by the California
Corporations Code.
ARTICLE III
-----------
The name and address in the State of California of the Corporation's
initial agent for service of process is:
Carlton J. Eibl
5501 Oberlin Drive
San Diego, California 92121
ARTICLE IV
----------
(A) Classes of Stock. The Corporation is authorized to issue two classes
----------------
of stock to be designated, respectively, "Common Stock" and "Preferred Stock."
The total number of shares which this Corporation is authorized to issue is
forty-five million (45,000,000) shares. Forty million (40,000,000) shares shall
be Common Stock and five million (5,000,000) shares shall be Preferred Stock.
The Common Stock shall have a par value of $.001 per share and the Preferred
Stock shall have a par value of $.001 per share.
(B) Rights, Preferences and Restrictions of Preferred Stock. The
-------------------------------------------------------
Preferred Stock authorized by these Articles of Incorporation may be issued from
time to time in series. The rights, preferences, privileges, restrictions
granted to and imposed on the Senior Redeemable
-1-
<PAGE>
Convertible Preferred Stock, Series A (the "Series A Preferred Stock"), which
series consists of Three Thousand Nine Hundred and Forty (3,940) shares, are set
forth below in this Article IV(B). Except as to the Series A Preferred Stock,
and except as otherwise provided in these Articles of Incorporation, the Board
of Directors of the Corporation (the "Board of Directors") is hereby authorized
to fix or alter the rights, preferences, privileges and restrictions granted to
or imposed upon such additional series of Preferred Stock, and the number of
shares constituting any such series and the designation thereof, or any of them.
The Board of Directors is also authorized to increase or decrease the number of
shares of any series of Preferred Stock, subsequent to the issue of that series,
but not below the number of shares of such series then outstanding. In case the
number of shares of any series shall be so decreased, the shares constituting
such decrease shall resume the status which they had prior to the adoption of
the resolution originally fixing the number of shares of such series.
The rights, preferences, privileges, restrictions and other matters
relating to the Series A Preferred Stock are as follows:
1. Designation. The Series A Preferred Stock shall be perpetual, but may
-----------
be redeemed in accordance with the provisions hereof. Shares of Series A
Preferred Stock redeemed, purchased, converted or otherwise acquired by the
Corporation or any Wholly-Owned Subsidiary (as defined below) shall be cancelled
and shall revert to the status of authorized but unissued Preferred Stock of the
Corporation undesignated as to series.
2. Dividends.
---------
(a) Holders of shares of Series A Preferred Stock shall be entitled
to receive, when and as declared by the Board of Directors or a duly authorized
committee thereof, out of funds legally available for the payment of dividends
(after taking into account any increase therein resulting from any permitted
revaluation of the assets of the Corporation), cumulative preferential dividends
at a rate per annum, per share of (i) five percent (5%) of the Liquidation
Amount during the period commencing on the Original Issuance Date and
terminating on December 1, 1996, and (ii) eight and one-half percent (8.5%) of
the Liquidation Amount during the period from December 1, 1996, until December
1, 2000, and (iii) the greater of ten percent (10%) or the Prime Rate plus three
percent (3%) of the Liquidation Amount during the period from December 1, 2000
until the date on which all shares of Series A Preferred Stock shall be redeemed
in full; provided, that during the period beginning with the date on which any
--------
Default exists or occurs, and so long as any Default continues, the dividend
rate otherwise applicable to the Series A Preferred Stock pursuant to the
foregoing clause (i), (ii) or (iii), as the case may be, shall be increased in
an amount equal to an additional four percent (4%) per annum.
(b) All dividends payable on the Series A Preferred Stock in
accordance with Section 2(a) shall be payable quarterly on the first business
day immediately following the final days of March, June, September, and December
in each year, beginning with September 30, 1995 (each such date a "Dividend
Payment Date"), shall accrue and cumulate, in the case of each share, from the
date of issuance of such share, and any accrued dividends on the Series A
-2-
<PAGE>
Preferred Stock that are unpaid in cash or, as provided herein, in P-I-K Share,
shall accrue additional dividends in respect thereof ("Additional Dividends"),
compounded quarterly, at the dividend rate then applicable to the Series A
Preferred Sock. Dividends payable on the Series A Preferred Stock for any period
less than a full quarterly dividend period shall be computed and paid as a pro
rata portion of the full quarterly dividend amount then in effect, on the basis
of the total number of days in such quarter and the actual number of days
elapsed in such quarter to and including the date on which payment is to be
made.
(c) If at any time Full Cumulative Dividends on the outstanding
shares of Series A Preferred Stock to the end of the then current dividend
period shall not have been paid in cash or declared and a sum sufficient for the
payment thereof set aside for such payment, the amount or the deficiency shall
be fully paid, or dividends in such amount declared and a sum sufficient for the
payment thereof set aside for such payment, before (i) any sum or sums shall be
set aside by the Corporation for, or applied to, the purchase, redemption or
other acquisition of any shares of the Corporation's capital stock, (ii) the
Corporation will cause or permit any Controlled Affiliate to purchase or
otherwise acquire any shares of the Corporation's capital stock or (iii) any
dividends shall be declared or paid upon, or any other distribution shall be
ordered or made in respect of, any shares of the Corporation's capital stock,
other than dividends or distributions required to be paid or made on or in
respect of shares of Senior Stock in accordance with the terms thereof, unless
such dividend or distribution is payable solely in shares of Junior Stock.
Notwithstanding the prior sentence, no failure to pay in cash or set aside a sum
in respect of the foregoing dividends shall restrict the Corporation from
effecting any Permitted Purchase.
(d) The amount of the dividend declared and paid on each share of
Series A Preferred Stock shall equal the amount declared and paid on each other
share thereof. In any case when Full Cumulative Dividends are not declared and
paid on the outstanding shares of Series A Preferred Stock, any dividends
declared and paid on the Series A Preferred Stock shall be declared and paid
ratably in accordance with the sums which would be payable on the Series A
Preferred Stock if all such Full Cumulative Dividends were declared and paid in
full. Dividends shall be declared and paid in cash, provided, that, except as
-------- ----
otherwise provided upon a Default in Section 4, during the period commencing on
the Original Issuance Date and terminating on December 1, 1997, at the option of
the Corporation, dividends may be paid in additional shares of Series A
Preferred Stock ("P-I-K Shares"). If a dividend is declared and paid in P-I-K
Shares, such P-I-K Shares shall be issued to the holder of the Series A
Preferred Stock entitled to receive such dividend payment on the relevant
Dividend Payment Date, with such P-I-K Shares issued at the rate of $10,000 in
Liquidation Amount of such P-I-K Shares for each $10,000 of the dollar amount of
such dividend. Dividends paid in cash or in P-I-K Shares shall be paid to the
holders of record of shares of the Series A Preferred Stock as they appear on
the stock register of the Corporation on the record date established for such
dividend, which shall be not more than 30 days nor less than 10 days preceding
the relevant Dividend Payment Date, as shall be fixed by the Board of Directors
or a duly authorized committee thereof.
(e) The Corporation will use its diligent efforts to ensure that
dividends declared on the Series A Preferred Stock are treated as "dividends"
within the meaning of
-3-
<PAGE>
Section 316(a) of the Code (or any successor provision) and to ensure that
distributions made on or in respect of the Series A Preferred Stock shall not be
treated as "extraordinary dividends" within the meaning of Section 1059 of the
Code (or any successor provision). The Corporation will not claim as an expense
reducing gross income any dividends paid on the Series A Preferred Stock or any
other shares of its preferred stock in any Federal income tax return, claim for
refund, or other statement, report or submission made to the Internal Revenue
Service (except to the extent that there is no basis in law to do otherwise).
The Corporation will reasonably cooperate with any holder of Series A Preferred
Stock (at the expense of such holder) in connection with any litigation, appeal
or other proceeding (including any request for a revenue ruling) relating to the
characterization of any distribution on or in respect of the Series A Preferred
Stock as a dividend or to the eligibility for the dividends received deduction
under Section 243(a)(1) of the Code (or any successor provision). To the extent
possible, the principles of this Section 2(e) shall also apply with respect to
State and local taxes.
3. Liquidation Preference.
----------------------
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the Series A
Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to shareholders, whether from capital,
surplus or earnings, the Liquidation Amount, plus Full Cumulative Dividends
thereon to the date of final distribution to the holders of the shares of the
Series A Preferred Stock, before any distribution may be made to the holders of
shares of Junior Stock.
(b) After the payment of Full Cumulative Dividends, the amount
distributed upon any liquidation, dissolution or winding up of the Corporation
on each share of Series A Preferred Stock shall equal the amount distributed on
each other share thereof. If in any such distribution the funds of the
Corporation shall be insufficient to pay the holders of the outstanding shares
of the Series A Preferred Stock the full amounts to which they shall be
entitled, such holders shall share ratably in any distribution of assets in
accordance with the sums which would be payable on such distribution if all sums
payable thereon were paid in full.
(c) The holder of the shares of Series A Preferred Stock shall not be
entitled to receive any amounts with respect to any liquidation, dissolution or
winding up of the Corporation other than the amounts provided for in this
Section 3. Neither a merger nor consolidation of the Corporation into or with
another corporation nor a merger or consolidation of any other corporation into
or with the Corporation, nor a sale, transfer, mortgage, pledge or lease of all
or any part of the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for the purposes of
this Section 3; provided, that this sentence shall not operate to release or
--------
relieve the Corporation of any obligation to redeem or to repurchase shares of
Series A Preferred Stock by reason of the occurrence of any such merger,
consolidation, sale or other transaction.
-4-
<PAGE>
4. Dividend Provisions on Default. From and after the occurrence of a
------------------------------
Default and until Full Cumulative Dividends to the date of payment shall have
been paid to the holders of shares of Series A Preferred Stock or such Default
shall otherwise be cured or waived, (i) no dividends shall be declared or paid
upon, or any other distribution shall be ordered or made in respect of, any
shares of the capital stock of the Corporation, other than dividends or
distributions required to be paid or made on or in respect of Senior Stock in
accordance with its terms, nor shall the Corporation purchase, redeem or
otherwise acquire, or cause or permit any Controlled Affiliate to purchase or
acquire, except for Permitted Purchases, any shares of the capital stock of the
Corporation, other than purchases or acquisitions of Senior Stock required to be
made in accordance with the terms thereof; and (ii) if such Default is not cured
with any applicable grace period or, if a Financial Default, within ninety (90)
days of its occurrence, the dividend rate as of the date the Default occurred
shall be increased in accordance with Article IV(B), Section 2(a) and, anything
foregoing to the contrary notwithstanding, the Corporation may not pay dividends
in P-I-K Shares but shall pay all dividends in cash.
5. Optional Redemption. Out of cash funds legally available therefor,
-------------------
the Corporation may redeem, at its option expressed by resolution of its Board
of Directors or a duly authorized committee thereof, from time to time and at
any time, any or all shares of the Series A Preferred Stock at the Liquidation
Amount, plus, in each case, Full Cumulative Dividends on each share so to be
redeemed to the applicable Redemption Date; provided that the Corporation shall
--------
not be required, either prior to or contemporaneously with or as a result of
such an optional redemption of any shares of Series A Preferred Stock, to
satisfy by payment in cash of any amount representing Full Cumulative Dividends
on any shares of Series A Preferred Stock other than those that are the subject
of such optional redemption. Any redemption pursuant to this Section 5 shall be
accomplished in the manner and with the effect as set forth in Section 6.
6. Redemption Procedure.
--------------------
(a) Notice of every redemption of Series A Preferred Stock shall be
given by mailing the same to every holder of record, any of whose shares are to
be redeemed, not less than 10 nor more than 30 days prior to the applicable
Redemption Date, at his or her respective address as the same shall appear on
the stock register of the Corporation, but no defect in such mailed notice or in
the mailing thereof or the failure by any holder to receive any notice of
redemption shall affect the validity of the proceedings for the redemption of
any share so to be redeemed. The notice shall state that the shares specified
will be redeemed by the Corporation at their aggregate Liquidation Amount plus
Full Cumulative Dividends thereon to the applicable Redemption Date and at the
applicable Redemption Date upon the surrender for cancellation, at the place
designated in the notice, of the certificates representing the shares (including
any P-I-K Shares constituting all or any portion of Full Cumulative Dividends
thereon) so to be redeemed (or, in the event such shares are represented by
certificates that are lost, stolen, destroyed or mutilated, delivery of an
affidavit to that effect and an indemnification agreement, each in form and
substance reasonably acceptable to the Corporation, from the holder of such
shares), properly endorsed for transfer or accompanied by proper instruments of
assignment and transfer in blank and bearing all necessary transfer tax stamps.
-5-
<PAGE>
(b) In the case of a redemption of less than all the outstanding
shares of Series A Preferred Stock, the shares to be redeemed shall be selected
pro rata on the basis of the relative number of shares held of record on the
applicable Redemption Date by each record holder thereof.
(c) If such notice of redemption shall have been duly given as
provided above, and if on or before the applicable Redemption Date the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares so called for or otherwise subject to redemption, so
as to be, and continue to be, available therefor, then, notwithstanding that any
certificate for shares so called for or otherwise subject to redemption shall
not have been surrendered for cancellation, all shares of the Series A Preferred
Stock so called for or otherwise subject to redemption shall no longer be deemed
to be outstanding on and after such Redemption Date, and all rights with respect
to such shares shall forthwith on such Redemption Date cease and terminate,
except only the right of the holders thereof to receive, out of the funds so set
aside in trust, the amount payable on redemption thereof, without interest.
(d) In the alternative, if such notice of redemption shall have been
duly given as provided above, or if the Corporation shall have given to the bank
or trust company hereinafter referred to irrevocable authorization to give or
complete such notice of redemption, and if prior to the applicable Redemption
Date the funds necessary for such redemption shall have been deposited by the
Corporation with a bank or trust company in good standing (and shall have
identified such bank or trust company in a written notice given to the holders
whose shares are to be redeemed), organized under the laws of the United States
of America or a State thereof, having a capital surplus and undivided profits
aggregating at least $100,000,000 according to its last published statement of
condition, in trust for the pro rata benefit of the holders of the shares so
called for or otherwise subject to redemption, so as to be, and to continue to
be, available therefor, then, notwithstanding that any certificate for shares so
called for or otherwise subject to redemption shall not have been surrendered
for cancellation, all shares of Series A Preferred Stock so called for or
otherwise subject to redemption shall no longer be deemed to be outstanding on
and after such Redemption Date, and all rights with respect to such shares shall
forthwith cease and terminate at such time, except only the right of the holders
thereof to receive, out of the funds so set aside in trust, the amount payable
on redemption thereof, without interest. Any interest accrued on any funds so
deposited shall be the property of the Corporation and shall be paid to the
Corporation from time to time.
(e) Any funds so set aside or deposited, as the case may be, and
unclaimed at the end of one year from the applicable Redemption Date shall be
released or repaid to the Corporation, after which the holders of the shares so
called for redemption shall look only to the Corporation for payment thereof,
without interest, subject to the applicable law of escheat.
(f) If the funds of the Corporation legally available, after taking
into account any increase therein resulting from any permitted revaluation of
the assets of the Corporation, to
-6-
<PAGE>
effect any mandatory redemption of shares of the Series A Preferred Stock are
insufficient to redeem the total number of shares of Series A Preferred Stock
required to be redeemed, the Corporation shall (i) use the maximum available
amount of such funds and assets to redeem a smaller number of shares of Series A
Preferred Stock ratably from each holder thereof whose shares are to be redeemed
(based upon the number of shares of Series A Preferred Stock held by each such
holder), at the Liquidation Amount per share plus Full Cumulative Dividends
thereon to the date such redemption is effected, and thereafter shall remain
obligated to redeem the remaining portion of the shares to be redeemed (without
being required to deliver a new notice) as promptly as practicable as the funds
or assets of the Corporation become legally available (including, without
limitation, by reason of permitted revaluations of such assets) to effect such
redemptions, and (ii) take any and all action, permitted by applicable law and
determined by the Board of Directors to be in the best interests of the
Corporation and fair to its shareholders, necessary to increase its legally
available funds to an amount sufficient therefor, including without limitation,
a recapitalization or a sale of its assets.
(g) If fewer than all the shares of Series A Preferred Stock
evidenced by any certificate submitted to the Corporation for redemption
pursuant to this Section 6 are to be redeemed, the Corporation will issue new
certificate(s) for the remainder of the shares of Series A Preferred Stock that
were evidenced by the old certificate(s).
7. Conversion.
----------
(a) Each holder of shares of Series A Preferred Stock may (prior to
the date such shares are redeemed, or are considered to be redeemed, for payment
in full of all amounts due upon such redemption), at such holder's options at
any time and from time to time, convert some or all of such holder's shares of
Series A Preferred Stock into fully paid and nonassessable shares of Common
Stock at the then applicable Conversion Price, with the number of shares of
Common Stock so issuable to be equal to the aggregate Liquidation Amount of such
shares of Series A Preferred Stock to be so converted, divided by such
Conversion Price.
(b) Shares of Series A Preferred Stock may be converted by
surrendering the certificates representing such shares together with written
notice of conversion and a proper assignment of such certificates to the
Corporation or in blank. The notice of conversion shall state the name(s) and
address(es) in which the certificates representing the Common Stock issuable
(and any cash payment instead of fractional shares due) upon such conversion
shall be issued, delivered or paid. As promptly as practicable after the
Conversion Date, the Corporation shall issue and deliver, as specified in the
notice of conversion, certificates for the number of full shares of Common Stock
issuable upon such conversion together with any cash instead of fractional
shares as provided below. Such conversion shall be deemed to have been effected
immediately prior to the close of business on the Conversion Date, and at such
time all rights of the converted shares of Series A Preferred Stock shall cease
and terminate and the Person(s) in whose name(s) any certificate(s) for Common
Stock shall be issuable upon such conversion shall be deemed to have become the
holder(s) of the record of the Common Stock represented thereby. At the
Corporation's option, not later than the second business day after the
Conversion Date,
-7-
<PAGE>
Full Cumulative Dividends with respect to the converted shares of Series A
Preferred Stock may be paid in full and in cash to the converting holder;
provided, that if such payment is not so made for any reason, including without
- --------
limitation the Corporation's lack of legally available funds sufficient to make
such payment, then shares of Common Stock shall be issued, effective immediately
prior to the close of business on the Conversion Date, in satisfaction of such
Full Cumulative Dividends, with the number of shares of Common Stock so issuable
to be equal to the amount of such Full Cumulative Dividends divided by the then
applicable Conversion Price.
(c) No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of any shares of Series A
Preferred Stock (or Full Cumulative Dividends thereon). Instead, the
Corporation shall pay a cash adjustment in an amount equal to the applicable
fraction multiplied by the then applicable Conversion Price.
(d) The Corporation shall at all times reserve and keep available and
free of preemptive rights out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of the outstanding shares,
such number of shares of its Common Stock as shall from time to time be
sufficient to effect the conversion (at the then applicable Conversion Price) of
all outstanding shares of Series A Preferred Stock (including Full Cumulative
Dividends with respect thereto), and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding shares of Series A Preferred Stock (including Full
Cumulative Dividends with respect thereto), the Corporation shall take such
corporate action as may be necessary to increase its authorized but unissued
Common Stock to such number of shares as shall be sufficient for such purpose.
(e) The Corporation shall pay all documentary, stamp, or other
similar taxes attributable to the issuance or delivery of Common Stock upon
conversion of shares of Series A Preferred Stock (or Full Cumulative Dividends
thereon). However, the Corporation shall not be required to pay any taxes which
may be payable in respect of any transfer involved in the issuance or delivery
of any certificate for such shares in a name other than that of the holder of
the shares of Series A Preferred Stock (or Full Cumulative Dividends thereon) in
respect of which such shares are being issued.
8. Voting Rights.
-------------
(a) The holders of shares of Series A Preferred Stock shall not be
entitled to vote upon any matter relating to the business or affairs of the
Corporation.
(b) Notwithstanding the provisions of Section 8(a), without the
affirmative approval of the holders of at least a majority of the outstanding
shares of Series A Preferred Stock, given either by their vote at an annual
meeting or a special meeting called for such purpose or in writing without a
meeting, the Corporation shall not effect: (i) any amendment, alteration or
repeal (by any means, including any merger or consolidation) of any of the
provisions of this Article IV(B) or of the Articles of Incorporation of the
Corporation or of any
-8-
<PAGE>
amendment thereto (including, without limitation, any certificate of
determination or similar instrument filed in connection with any class or series
of capital stock of the Corporation) which would alter or change the absolute or
relative powers, preferences or special rights of the shares of Series A
Preferred Stock so as to affect them or any of the holders thereof adversely;
(ii) the creation of any class or series of capital stock other than Junior
Stock (created in accordance with Section 8(c), if applicable); (iii) the
issuance of any shares of Series A Preferred Stock in addition to the shares of
such stock initially issued on the Original Issuance Date and any P-I-K Shares
issued as contemplated herein; (iv) any Restricted Combination; or (v) any
Restricted Transaction.
(c) Notwithstanding the provisions of Section 8(a), without the
affirmative approval of the holders of at least a majority of the outstanding
shares of Series A Preferred Stock, given either by their vote at an annual or a
special meeting called for such purpose or in writing without a meeting, the
Corporation shall not create any Junior Stock if the issuance thereof would
cause a Default.
9. Definitions. For the purposes of this Article IV(B):
-----------
"Additional Dividends" has the meaning indicated in Section 2(b).
--------------------
"Affiliate" means, as to any Person, another Person that directly or
---------
indirectly Controls, is Controlled by or is under common Control with, such
Person.
"Base Price" means Seventeen Dollars and Ninety-Six Cents ($17.96).
----------
"Code" means the Internal Revenue Code of 1986, as amended (or any
----
successor thereto), including the rules and regulations promulgated thereunder
from time to time in effect.
"Common Stock" means the Common Stock, no par value, of the
------------
Corporation and any other class of stock into which such Common Stock is changed
pursuant to any Reclassification or Reorganization.
"Control" and its variants means possession, directly or indirectly,
-------
of power to direct or cause the direction of the management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise) of a Person.
"Controlled Affiliate" means any Affiliate Controlled directly or
--------------------
indirectly by the Corporation.
"Covenant Default" means (i) a material breach or violation by the
----------------
Corporation of any of the terms or provisions set forth in this Article IV(B)
(other than any such breach or violation of Sections 8(b) or 8(c) hereof, or
constituting either a Financial Default or a Dividend Default), which breach or
violation remains uncured 30 days after written notice thereof is given to the
Corporation or (ii) any breach or violation of Sections 8(b) or 8(c) hereof.
-9-
<PAGE>
"Conversion Date" means the date set forth in Section 7 upon which the
---------------
certificates representing the shares of Series A Preferred Stock to be
converted, the notice of conversion, and the proper assignment have all been
received by the Corporation.
"Conversion Price" means, the lesser of (i) the Base Price or (ii) One
----------------
Hundred and Twenty-Five percent (125%) of the Market Price, and in either such
case shall be subject to adjustment to reflect any share split, combination,
Reclassification, Reorganization or similar event which affects the
convertibility of the Series A Preferred Stock. For purposes of this paragraph,
"Market Price" means the average daily closing price of a share of Common Stock
------------
as reported on the Nasdaq National Market (or, if the Common Stock is listed on
the American or New York Stock Exchange, then on such Exchange) during the sixty
(60)-day period ending on the Conversion Date.
"Default" means a Covenant Default, a Financial Default or a Dividend
-------
Default.
"Dividend Default" means the failure to declare and pay (either in
----------------
cash or in P-I-K Shares), or set aside a sum sufficient for the payment of,
dividends on all outstanding shares of Series A Preferred Stock (including P-I-K
Shares) in accordance with Section 2.
"Dividend Payment Date" has the meaning indicated in Section 2(b).
---------------------
"Exchange Act" means the Securities Exchange Act of 1934, or any
------------
similar Federal statute and the rules and regulations thereunder, all as the
same may be in effect at the time.
"Financial Default" means (i) any failure by the Corporation or
-----------------
Agrigenetics, L.P., a Delaware limited partnership, or any successor thereto
("Agrigenetics") so long as it is a Controlled Affiliate, to pay when due
(taking into account all applicable grace periods, agreed extensions and
waivers) any amount of principal or interest on indebtedness of the Corporation
or Agrigenetics, so long as it is a Controlled Affiliate, which indebtedness is
in an aggregate principal amount of at least $10,000,000 ("Material
Indebtedness") or (ii) a breach or violation of any material covenant contained
in the documents establishing or evidencing any such Material Indebtedness,
which breach or violation remains uncured or unwaived more than 30 days after
the date of occurrence thereof, (iii) any Material Indebtedness being declared
or becoming due and payable prior to its stated maturity or due date, or (iv)
the failure by the Corporation to satisfy any or all of the following financial
covenants:
(1) Minimum Equity. As tabulated below, the Corporation will at
--------------
the indicated date have and maintain until the next indicated date a
minimum balance with respect to stockholders' equity, as such term is
defined under generally accepted accounting principles, except that
(a) the value of any intangible assets acquired by the Corporation or
any of its Subsidiaries after the Original Issuance
-10-
<PAGE>
Date and (b) the amount attributable to Senior Stock, Parity Stock and
Series A Preferred Stock will not be included in the calculation of
such balance.
<TABLE>
<CAPTION>
At Year Minimum
Ended December 31 Stockholders' Equity
----------------- --------------------
<S> <C>
1995 100 million
1996 100 million
1997 115 Million
1998 115 Million
1999 115 Million
</TABLE>
(2) Maximum Leverage. The sum of the total book value at
----------------
December 31st of each year of all outstanding (a) debt for money
borrowed (excluding any unused portion of any credit facility) which
is created, assumed or guaranteed in any manner, and capitalized
leases (as defined under generally accepted accounting principles) of
the Corporation and its Subsidiaries, but excluding any net increase
in accounts receivable plus inventory minus accounts payable occurring
between August 31, 1995 and December 31 of each year (which net
calculation cannot be less than zero), (b) Senior Stock and (c) Parity
Stock shall not exceed thirty-five percent (35%) of the total book
value of Series A Preferred Stock (including P-I-K Shares), Junior
Stock and stockholders' equity (calculated consistently as set forth
under item 1 above).
(3) Minimum Liquidity. As tabulated below, the Corporation will
-----------------
at the indicated date have and maintain until the next indicated date
an amount in cash plus short-term investments equal to or in excess of
the following percentages of the then outstanding amount of Series A
Preferred Stock (including P-I-K Shares):
<TABLE>
<CAPTION>
Cash Plus Short-Term
Investments as a
Percentage of Series A
Preferred Stock
At October 31st (Including P-I-K Shares)
---------------- ------------------------
<S> <C>
1996 25%
1997 31.2%
1998 37.4%
1999 43.6%
2000 50%
</TABLE>
-11-
<PAGE>
"Full Cumulative Dividends" means with reference to any share
-------------------------
(including P-I-K Shares) of the Series A Preferred Stock (whether or not in any
dividend period or part thereof in respect of which such terminology is used
there shall have been funds legally available for the payment of such dividends)
that amount which shall be equal to the dollar amounts of dividends at the
applicable rate set forth in Section 2(a) (plus Additional Dividends, if any, as
contemplated by Section 2(b)) for the period of time elapsed from the date of
cumulation of dividends on such share to the date as of which such computation
is being made, less the amount of all such dividends paid in cash upon such
share. For purposes of this Article IV(B), Full Cumulative Dividends on any
share of the Series A Preferred Stock shall be deemed to have been paid in full
only when (i) all P-I-K Shares issued in respect thereof shall have been
redeemed for payment in full and in cash and (ii) all accrued and unpaid
dividends in respect thereof shall have been paid in full and in cash.
"Junior Stock" means any class of equity stock of the Corporation
------------
which is neither Series A Preferred Stock nor Parity Stock nor Senior Stock.
"Liquidation Amount" means $10,000.00 per share of Series A Preferred
------------------
Stock.
"Original Issuance Date" means the date on which the Corporation first
----------------------
issues shares of the Series A Preferred Stock.
"Outstanding" means, as used herein with reference to shares of Series
-----------
A Preferred Stock, such shares as have been issued but, as of the time of
determination thereof, have not yet been redeemed, purchased, converted or
otherwise acquired by the Corporation (including P-I-K Shares), other than any
of such shares held or beneficially owned at such time by the Corporation or any
Controlled Affiliate.
"Parity Stock" means any other series or class of preferred stock of
------------
the Corporation which is equal in liquidation priority and preference to the
Series A Preferred Stock.
"Permitted Purchase" means any purchase or other acquisition for value
------------------
by the Corporation or a Controlled Affiliate of shares of capital stock of the
Corporation pursuant to any of the following: (i) the redemption or conversion
of shares of Series A Preferred Stock in accordance with this Article IV(B),
(ii) the redemption or conversion of any other series of preferred stock
(whether Senior Stock, Parity Stock or Junior Stock) so long as such redemption
or conversion does not result in a Default, (iii) as may be required to comply
with, or to cure violations of, applicable law, or (iv) any program of the
Corporation or a Controlled Affiliate to purchase shares of Common Stock from
time to time or to facilitate the operation of any employee benefit plan of the
Corporation; provided that in connection with any purchases pursuant to the
--------
foregoing clause (iv), the aggregate amount thereof shall not exceed five
percent (5%) of the then issued and outstanding shares of Common Stock in any
consecutive 12-month period. Notwithstanding the foregoing, such term shall not
include any acquisition referred to in clauses (ii), (iii) or (iv) of the
foregoing sentence at any time while there exists a Default.
-12-
<PAGE>
"Person" means a corporation, an association, a partnership, an
------
organization, a business, a trust, an individual, a government or political
subdivision thereof or a governmental agency.
"P-I-K Shares" has the meaning indicated in Section 2(d).
------------
"Prime Rate" means the prime interest rate as publicly announced by
----------
Citibank, N.A. in New York.
"Reclassification" means that the Common Stock is changed into the
----------------
same or a different number or amount of other shares, other securities, cash or
other property. In the event of a Reclassification, the Series A Preferred
Stock shall become convertible into the same number or amount of other shares,
other securities, cash, or other property which would have been issuable,
deliverable, or payable on account of the Common Stock issuable upon the
conversion of the shares of the Series A Preferred Stock, assuming such shares
had been converted immediately prior to such Reclassification.
"Redemption Date" means each of the dates fixed by resolution of the
---------------
Board of Directors of the Corporation pursuant to Section 5 and specified in the
notice of redemption.
"Reorganization" means the merger of the Corporation with or into, or
--------------
the consolidation of the Corporation with, any other corporation, or the sale or
exchange of substantially all of the assets of the Corporation as an entirety to
any other Person. In the event of a Reorganization, the Series A Preferred
Stock shall become convertible into the same number or amount of other shares,
other securities, cash or other property of the Corporation or other Person
surviving or resulting from the Reorganization which would have been issuable,
deliverable, or payable on account of the Common Stock issuable upon conversion
of the shares of the Series A Preferred Stock, assuming such shares had been
converted immediately prior to such Reorganization.
"Restricted Combination" means any merger, combination or
----------------------
consolidation of the Corporation with any one or more Persons without regard to
the identity of the surviving or resulting entity, and also means any sale,
lease or other disposition of all or substantially all the assets or properties
of the Corporation or the liquidation or winding up of the Corporation, except
such term shall not include a merger or consolidation of the Corporation in
which the group of Persons who together hold at least a majority of the
outstanding shares of the Common Stock of the Corporation prior to such merger
or consolidation will receive (or will retain) in such transactions, voting
securities in the surviving or resulting entity that represent at least a
majority of the voting power of all voting securities of such surviving or
resulting entity.
"Restricted Transaction" means any transaction in which the
----------------------
Corporation or any of its Subsidiaries or Affiliates is involved if, either
immediately prior to or upon and giving effect to such transaction (and related
occurrences), the Corporation is or would be in Default.
-13-
<PAGE>
"Senior Stock" means any other series or class of preferred stock of
------------
the Corporation which is superior, in liquidation priority or preference, to the
Series A Preferred Stock.
"Subsidiary" means any corporation, of which not less than a majority
----------
of the capital stock ordinarily entitled to elect directors is owned by the
Corporation and/or one or more Subsidiaries.
"Wholly-Owned Subsidiary" means any subsidiary all the capital stock
-----------------------
of which (other than director's qualifying shares, if any) is owned by the
Corporation and/or one or more Wholly-Owned Subsidiaries.
(C) Common Stock.
------------
1. Dividend Rights. Subject to the rights of holders of all classes
---------------
of stock at the time outstanding having prior rights as to dividends, the
holders of the Common Stock shall be entitled to receive, when and as declared
by the Board of Directors, out of any assets of the Corporation legally
available therefor, such dividends as may be declared from time to time by the
Board of Directors.
2. Liquidation Rights. Upon the liquidation, dissolution or winding
------------------
up of the Corporation, the assets of the Corporation shall be distributed as
provided in Section 3 of Division (B) of this Article IV hereof.
3. Redemption. The Common Stock is not redeemable.
----------
4. Voting Rights. The holder of each share of Common Stock shall
-------------
have the right to one vote, and shall be entitled to notice of any shareholders'
meeting in accordance with the Bylaws of this Corporation, and shall be entitled
to vote upon such matters and in such manner as may be provided by law.
ARTICLE V
---------
Except as otherwise provided in these Articles of Incorporation, in
furtherance and not in limitation of the powers conferred by statute, the Board
of Directors is expressly authorized to make, repeal, alter, amend and rescind
any or all of the Bylaws of the Corporation.
ARTICLE VI
----------
The number of directors of the Corporation shall be fixed from time to time
by a bylaw or amendment thereof duly adopted by the Board of Directors or by the
shareholders.
-14-
<PAGE>
ARTICLE VII
-----------
Elections of directors need not be by written ballot unless a
shareholder demands election by ballot at a meeting of shareholders or the
Bylaws of the Corporation shall so require.
ARTICLE VIII
------------
The election of directors by the shareholders shall not be by
cumulative voting. At each election of directors, each shareholder entitled to
vote may vote all the shares held by that shareholder for each of the several
nominees for director up to the number of directors to be elected. The
shareholder may not cast more votes for any single nominee than the number of
shares held by that shareholder. This Article VIII shall become effective only
when the Corporation becomes a "listed corporation" within the meaning of the
California Corporations Code Section 301.5(d).
ARTICLE IX
----------
Meetings of shareholders may be held within or without the State of
California, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
California at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of the Corporation.
ARTICLE X
---------
(A) Liability of Directors. The liability of the directors of the
----------------------
Corporation for monetary damages shall be eliminated to the fullest extent
permissible under California law.
(B) Indemnification of Directors, Officers and Agents. The
-------------------------------------------------
Corporation is authorized to indemnify the directors and officers of this
Corporation to the fullest extent permissible under California law. The
Corporation is authorized to provide indemnification of agents (as defined in
Section 317 of the California Corporations Code) through bylaw provisions,
agreements with agents, vote of shareholders or disinterested directors or
otherwise, in excess of the indemnification otherwise permitted by Section 317
of the California Corporations Code, subject only to applicable limits set forth
in Section 204 of the California Corporations Code with respect to actions for
breach of duty to the Corporation and its shareholders.
(C) Repeal or Modification. Any repeal or modification of the
----------------------
foregoing provisions of this Article X shall be prospective and shall not
adversely affect any right of indemnification or liability of a director,
officer or agent of the Corporation relating to acts or omissions occurring
prior to such repeal or modification.
-15-
<PAGE>
ARTICLE XI
----------
The Corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon shareholders
herein are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned Incorporator of the Corporation
has executed these Articles of Incorporation on November 22, 1995.
Dated: November 22, 1995
/s/Loreen P. Collins
--------------------
Loreen P. Collins
Incorporator
ACKNOWLEDGMENT
I hereby declare that I am the person who executed the foregoing
Articles of Incorporation, which execution is my own act and deed.
Executed on November 22, 1995.
/s/ Loreen P. Collins
---------------------
Loreen P. Collins
Incorporator
-16-
<PAGE>
EXHIBIT 3.2
BY LAWS
OF
MYCOGEN CALIFORNIA, INC.
<PAGE>
BYLAWS
OF
MYCOGEN CALIFORNIA, INC.
ARTICLE I - OFFICES
-------------------
1.1 PRINCIPAL EXECUTIVE OFFICE. The principal executive offices of Mycogen
--------------------------
California, Inc., a California corporation (the "Corporation"), shall be at such
place, inside or outside, the State of California as the Board of Directors of
the Corporation (the "Board") may determine from time to time.
1.2 OTHER OFFICES. The Corporation may also have offices at such other places
-------------
as the Board may from time to time designate, or as the business of the
Corporation may require.
ARTICLE II - SHAREHOLDERS' MEETINGS
-----------------------------------
2.1 ANNUAL MEETINGS. The annual meeting of the Shareholders of the Corporation
---------------
(the "Shareholders", or individually, a "Shareholder") for the election of
Directors of the Corporation (the "Directors", or individually, a "Director") to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting shall be held between thirty (30) and
one hundred twenty (120) days following the end of the fiscal year of the
Corporation (the first such meeting to be held after the end of fiscal year 1995
of the Corporation) and at such place as may be determined by the Board. If the
annual meeting of the Shareholders is not held as herein prescribed, the
election of Directors may be held at any meeting thereafter called pursuant to
these Bylaws of the Corporation (the "Bylaws").
2.2 SPECIAL MEETINGS. Special meetings of the Shareholders, for any purpose
----------------
whatsoever, unless otherwise prescribed by statute, may be called at any time by
the chairman of the Board
-1-
<PAGE>
of the Corporation (the "Chairman"), the president of the Corporation (the
"President"), or by the Board, or by one or more Shareholders holding not less
than ten percent (10%) of the voting power of the Corporation.
2.3 PLACE. All meetings of the Shareholders shall be at any place within or
-----
without the State of California designated either by the Board or by written
consent of the holders of a majority of the shares entitled to vote thereat,
given either before or after the meeting. In the absence of any such
designation, Shareholders' meetings shall be held at the principal executive
office of the Corporation.
2.4 NOTICE. Notice of meetings of the Shareholders shall be given in writing
------
to each Shareholder entitled to vote, either personally or by first-class mail
(unless the Corporation has five hundred (500) or more Shareholders determined
as provided by the California Corporations Code on the record date for the
meeting, in which case notice may be sent by third-class mail) or other means of
written communication, charges prepaid, addressed to the Shareholder at the
Shareholder's address appearing on the books of the Corporation or given by the
Shareholder to the Corporation for the purpose of notice. Notice of any such
meeting of Shareholders shall be sent to each Shareholder entitled thereto not
less than ten (10) (or, if sent by third-class mail, thirty (30)) nor more than
sixty (60) days before the meeting. Said notice shall state the place, date and
hour of the meeting and, (a) in the case of special meetings, the general nature
of the business to be transacted, and no other business may be transacted, or
(b) in the case of annual meetings, those matters which the Board, at the time
of the mailing of the notice, intends to present for action, by the
Shareholders, but subject to Section 601(f) of the California Corporations Code,
any proper matter may be presented at the meeting for Shareholder action,
-2-
<PAGE>
and (c) in the case of any meeting at which Directors are to be elected, the
names of the nominees intended at the time of the mailing of the notice to be
presented by management for election.
2.5 ADJOURNED MEETINGS. Any Shareholders' meeting may be adjourned from time
------------------
to time by the vote of the holders of a majority of the voting shares present at
the meeting either in person or by proxy. Notice of any adjourned meeting need
not be given unless a meeting is adjourned for forty-five (45) days or more from
the date set for the original meeting.
2.6 QUORUM. The presence in person or by proxy of the persons entitled to vote
------
a majority of the shares entitled to vote at any meeting constitutes a quorum
for the transaction of business. The Shareholders present at a duly called or
held meeting at which a quorum is present may continue to do business until
adjournment, notwithstanding the withdrawal of enough Shareholders to leave less
than a quorum, if any action taken (other than adjournment) is approved by at
least a majority of the shares required to constitute a quorum. In the absence
of a quorum, any meeting of Shareholders may be adjourned from time to time by
the vote of a majority of the shares, the holders of which are either present in
person or represented by proxy thereat, but no other business may be transacted,
except as provided above.
2.7 CONSENT TO SHAREHOLDER ACTION. Any action which may be taken at any
-----------------------------
meeting of Shareholders may be taken without a meeting and without prior notice,
if a consent in writing, setting forth the action so taken, shall be signed by
the holders of outstanding shares having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted; provided,
however, that (a) unless the consents of all Shareholders entitled to vote have
been solicited in
-3-
<PAGE>
writing, notice of any Shareholder approval without a meeting by less than
unanimous written consent shall be given as required by the California
Corporations Code, and (b) Directors may not be elected by written consent
except by unanimous written consent of all shares entitled to vote for the
election of Directors. Any written consent may be revoked by a writing received
by the Secretary of the Corporation (the "Secretary") prior to the time that
written consents of the number of shares required to authorize the proposed
action have been filed with the Secretary.
2.8 WAIVER OF NOTICE. The transactions of any meeting of Shareholders,
----------------
however called and noticed, and wherever held, are as valid as though had at a
meeting duly held after regular call and notice, if a quorum is present either
in person or by proxy, and if, either before or after the meeting, each of the
persons entitled to vote, not present in person or by proxy, signs a written
waiver of notice, or a consent to the holding of the meeting, or an approval of
the minutes thereof. All such waivers, consents, or approvals shall be filed
with the corporate records or made a part of the minutes of the meeting.
2.9 VOTING. The voting at all meetings of Shareholders need not be by ballot,
------
but any qualified Shareholder before the voting begins may demand a stock vote
whereupon such stock vote shall be taken by ballot, each of which shall state
the name of the Shareholder voting and the number of shares voted by such
Shareholder, and if such ballot be cast by a proxy, it shall also state the name
of any such proxy.
At any meeting of the Shareholders, every Shareholder having the right to
vote shall be entitled to vote in person, or by proxy appointed in a writing
subscribed by such Shareholder and bearing a date not more than eleven (11)
months prior to said meeting, unless the writing
-4-
<PAGE>
states that it is irrevocable and satisfies Section 705(e) of the California
Corporations Code, in which event it is irrevocable for the period specified in
said writing and said Section 705(e).
2.10 RECORD DATES. In the event the Board fixes a day for the determination of
------------
Shareholders of record entitled to vote as provided in Section 5.1 of Article V
of these Bylaws, then, subject to the provisions of the General Corporation Law
of the State of California only persons in whose name shares entitled to vote
stand on the stock records of the Corporation at the close of business on such
day shall be entitled to vote.
If no record date is fixed, (a) the record date for determining
Shareholders entitled to notice of or to vote at a meeting of Shareholders shall
be at the close of business on the business day next preceding the day notice is
given or, if notice is waived, at the close of business on the business day next
preceding the day on which the meeting is held; (b) the record date for
determining Shareholders entitled to give consent to corporate action in writing
without a meeting, when no prior action by the Board is necessary, shall be the
day on which the first written consent is given; and (c) the record date for
determining Shareholders for any other purpose shall be at the close of business
on the day on which the Board adopts the resolution relating thereto, or the
sixtieth (60th) day prior to the date of such other action, whichever is later.
A determination of Shareholders of record entitled to notice of or to vote
at a meeting of Shareholders shall apply to any adjournment of the meeting
unless the Board fixes a new record date for the adjourned meeting, but the
Board shall fix a new record date if the meeting is adjourned for more than
forty-five (45) days.
-5-
<PAGE>
2.11 CUMULATIVE VOTING FOR ELECTION OF DIRECTORS. Provided the candidate's
-------------------------------------------
name has been placed in nomination prior to the voting and one or more
Shareholders has given notice at the meeting prior to the voting of the
Shareholder's intent to cumulate the Shareholder's votes, every Shareholder
entitled to vote at any election for Directors shall have the right to cumulate
such Shareholder's votes and give one candidate a number of votes equal to the
number of Directors to be elected multiplied by the number of votes to which the
Shareholder's shares are normally entitled, or distribute the Shareholder's
votes on the same principle among as many candidates as the Shareholder shall
think fit. The candidates receiving the highest number of votes of the shares
entitled to be voted for them up to the number of Directors to be elected by
such shares are elected. Notwithstanding anything to the contrary contained
herein, if the Corporation becomes a "listed corporation" within the meaning of
Section 301.5 of the California Corporations Code, the election of Directors by
the Shareholders shall not be by cumulative voting and instead, (i) each
Shareholder entitled to vote may vote all the shares held by the Shareholder for
each of the several nominees for Director up to the number of Directors to be
elected; and (ii) each Shareholder may not cast more votes for any single
nominee than the number of shares held by that Shareholder.
-6-
<PAGE>
ARTICLE III - DIRECTORS
-----------------------
3.1 POWERS. Subject to any limitations in the Articles of Incorporation of the
------
Corporation filed August 29, 1995 (the "Articles of Incorporation") or these
Bylaws and to any provision of the California Corporations Code requiring
Shareholder authorization or approval for a particular action, the business and
affairs of the Corporation shall be managed and all corporate powers shall be
exercised by, or under the direction of, the Board. The Board may delegate the
management of the day-to-day operation of the business of the Corporation to a
management company or other person provided that the business and affairs of the
Corporation shall be managed and all corporate powers shall be exercised, under
the ultimate direction of the Board.
3.2 NUMBER, TENURE AND QUALIFICATIONS. The number of Directors which shall
---------------------------------
constitute the whole board shall not be less than five (5) nor more than nine
(9). The first Board shall consist of six (6) Directors until changed by a
duly adopted resolution of the Board or the Shareholders. Directors shall hold
office until the next annual meeting of Shareholders and until their respective
successors are elected. If any such annual meeting is not held, or the
Directors are not elected thereat, the Directors may be elected at any special
meeting of Shareholders held for that purpose. Directors need not be
Shareholders.
3.3 REGULAR MEETINGS. A regular annual meeting of the Board shall be held
----------------
without other notice than this Bylaw immediately after, and at the same place
as, the annual meeting of Shareholders. The Board may provide for other regular
meetings from time to time by resolution.
3.4 SPECIAL MEETINGS. Special meetings of the Board may be called at any time
----------------
by the Chairman, the President, the Secretary, or any two Directors. Written
notice of the time and
-7-
<PAGE>
place of all special meetings of the Board shall be delivered personally or by
telephone or telegraph to each Director at least forty-eight (48) hours before
the meeting, or sent to each Director by first-class mail, postage prepaid, at
least four (4) days before the meeting. Such notice need not specify the purpose
of the meeting. Notice of any meeting of the Board need not be given to any
Director who signs a waiver of notice, whether before or after the meeting, or
who attends the meeting without protesting prior thereto, or at its
commencement, the lack of notice to such Director.
3.5 PLACE OF MEETINGS. Meetings of the Board may be held at any place within
-----------------
or without the State of California, which has been designated in the notice, or
if not stated in the notice or there is no notice, the principal executive
office of the Corporation or as designated by the resolution duly adopted by the
Board.
3.6 PARTICIPATION BY TELEPHONE. Members of the Board may participate in a
--------------------------
meeting through use of conference telephone or similar communications equipment,
so long as all members participating in such meeting can hear one another.
3.7 QUORUM. A majority of the Directors shall constitute a quorum. In the
------
absence of a quorum, a majority of the Directors present may adjourn any meeting
to another time and place. If a meeting is adjourned for more than twenty-four
(24) hours, notice of any adjournment to another time or place shall be given
prior to the time of the reconvened meeting to the Directors who were not
present at the time of adjournment.
3.8 ACTION AT MEETING. Every act or decision done or made by a majority of the
-----------------
Directors present at a meeting duly held at which a quorum is present is the act
of the Board. A meeting at which a quorum is initially present may continue to
transact business notwithstanding the
-8-
<PAGE>
withdrawal of Directors, if any action taken is approved by at least a majority
of the required quorum for such meeting.
3.9 WAIVER OF NOTICE. The transactions of any meeting of the Board, however
----------------
called and noticed or wherever held, are as valid as though had at a meeting
duly held after regular call and notice if a quorum is present and if, either
before or after the meeting, each of the Directors not present signs a written
waiver of notice, a consent to holding the meeting, or an approval of the
minutes thereof. All such waivers, consents and approvals shall be filed with
the corporate records or made a part of the minutes of the meeting.
3.10 ACTION WITHOUT MEETING. Any action required or permitted to be taken by
----------------------
the Board may be taken without a meeting, if all members of the Board
individually or collectively consent in writing to such action. Such written
consent or consents shall be filed with the minutes of the proceedings of the
Board. Such action by written consent shall have the same force and effect as a
unanimous vote of such Directors.
3.11 REMOVAL. The Board may declare vacant the office of a Director who has
-------
been declared of unsound mind by an order of court or who has been convicted of
a felony. The entire Board or any individual Director may be removed from
office without cause by a vote of Shareholders holding a majority of the
outstanding shares entitled to vote at an election of Directors; provided,
however, that unless the entire Board is removed, no individual Director may be
removed when the votes cast against removal, or not consenting in writing to
such removal, would be sufficient to elect such Director if voted cumulatively
at an election at which the same total number of votes cast were cast (or, if
such action is taken by written consent, all shares entitled to vote were voted)
and the entire number of Directors authorized at the time of the
-9-
<PAGE>
Director's most recent election were then being elected. In the event an office
of a Director is so declared vacant or in case the Board or any one or more
Directors be so removed, new Directors may be elected at the same meeting.
Notwithstanding anything to the contrary contained herein, if the
Corporation becomes a "listed corporation" pursuant to Section 301.5 of the
California Corporations Code, a Director may not be removed if the votes cast
against removal of the Director, or not consenting in writing to the removal,
would be sufficient to elect the Director if voted cumulatively (without regard
to whether shares may otherwise be voted cumulatively) at an election at which
the same total number of votes were cast (or, if the action is taken by written
consent, all shares entitled to vote were voted) and either the number of
Directors elected at the most recent annual meeting of Shareholders, or if
greater, the number of Directors for whom removal is being sought, were then
being elected.
3.12 RESIGNATIONS. Any Director may resign effective upon giving written
------------
notice to the Chairman, the President, the Secretary or the Board, unless the
notice specifies a later time for the effectiveness of such resignation. If the
resignation is effective at a future time, a successor may be elected to take
office when the resignation becomes effective.
3.13 VACANCIES. Except for a vacancy created by the removal of a Director, all
---------
vacancies in the Board, whether caused by resignation, death or otherwise, may
be filled by a majority of the remaining Directors, though less than a quorum,
or by a sole remaining Director, and each Director so elected shall hold office
until his successor is elected at an annual, regular or special meeting of the
Shareholders. Vacancies created by the removal of a Director may be filled only
by approval of the Shareholders. The Shareholders may elect a Director at any
time to fill any
-10-
<PAGE>
vacancy not filled by the Directors. Any such election by written consent
requires the consent of a majority of the outstanding shares entitled to vote.
3.14 COMPENSATION. No stated salary shall be paid Directors, as such, for
------------
their services, but, by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or special
meeting of such Board; provided that nothing herein contained shall be construed
to preclude any Director from serving the Corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
3.15 COMMITTEES. The Board may, by resolution adopted by a majority of the
----------
authorized number of Directors, designate one or more committees, each
consisting of two (2) or more Directors, to serve at the pleasure of the Board.
The Board may designate one or more Directors as alternate members of any
committee, who may replace any absent member at any meeting of the committee.
The appointment of members or alternate members of a committee requires the vote
of a majority of the authorized number of Directors. Any such committee, to the
extent provided in the resolution of the Board, shall have all the authority of
the Board in the management of the business and affairs of the Corporation,
except with respect to (a) the approval of any action requiring Shareholders'
approval or approval of the outstanding shares, (b) the filling of vacancies on
the Board or any committee, (c) the fixing of compensation of Directors for
serving on the Board or a committee, (d) the adoption, amendment or repeal of
Bylaws, (e) the amendment or repeal of any resolution of the Board which by its
express terms is not so amendable or repealable, (f) a distribution to
Shareholders, except at a rate or in a
-11-
<PAGE>
periodic amount or within a price range determined by the Board, and (g) the
appointment of other committees of the Board or the members thereof.
ARTICLE IV - OFFICERS
---------------------
4.1 NUMBER AND TERM. The officers of the Corporation shall be a President, a
---------------
Secretary, an Assistant Secretary and a Chief Financial Officer (which may be a
Vice President responsible for finance), all of which shall be chosen by the
Board. In addition, the Board may appoint a Chairman of the Board, a Chief
Executive Officer, one or more Vice Presidents and such other officers as may be
deemed expedient for the proper conduct of the business of the Corporation, each
of whom shall have such authority and perform such duties as the Board may from
time to time determine. The officers to be appointed by the Board shall be
chosen annually at the regular meeting of the Board held after the annual
meeting of Shareholders and shall serve at the pleasure of the Board. If
officers are not chosen at such meeting of the Board, they shall be chosen as
soon thereafter as shall be convenient. Each officer shall hold office until
his successor shall have been duly chosen or until his removal or resignation.
4.2 INABILITY TO ACT. In the case of absence or inability to act of any
----------------
officer of the Corporation and of any person herein authorized to act in his
place, the Board may from time to time delegate the powers or duties of such
officer to any other officer, or any Director or other person whom it may
select.
4.3 REMOVAL AND RESIGNATION. Any officer chosen by the Board may be removed at
-----------------------
any time, with or without cause, by the affirmative vote of a majority of all
the members of the Board. Any officer chosen by the Board may resign at any
time by giving written notice of said resignation to the Corporation. Unless a
different time is specified therein, such
-12-
<PAGE>
resignation shall be effective upon its receipt by the Chairman, the President,
the Secretary or the Board.
4.4 VACANCIES. A vacancy in any office for any cause may be filled by the
---------
Board for the unexpired portion of the term.
4.5 CHAIRMAN OF THE BOARD. The Chairman shall preside at all meetings of the
---------------------
Board.
4.6 PRESIDENT. The President shall be the chief operating officer, the general
---------
manager and chief executive officer (unless a separate Chief Executive Officer
is elected by the Board) of the Corporation, subject to the control of the
Board, and as such shall preside at all meetings of Shareholders, shall have
general supervision of the affairs of the Corporation, shall sign or countersign
or authorize another officer to sign all certificates, contracts, and other
instruments of the Corporation as authorized by the Board, shall make reports to
the Board and Shareholders, and shall perform all such other duties as are
incident to such office or are properly required by the Board.
4.7 VICE PRESIDENT. In the absence of the President, or in the event of such
--------------
officer's death, disability or refusal to act, the Vice President, or in the
event there be more than one Vice President, the Vice Presidents in the order
designated at the time of their selection, or in the absence of any such
designation, then in the order of their selection, shall perform the duties of
President, and when so acting, shall have all the powers and be subject to all
restrictions upon the President. Each Vice President shall have such powers and
discharge such duties as may be assigned from time to time by the President or
by the Board.
4.8 SECRETARY. The Secretary shall see that notices for all meetings are given
---------
in accordance with the provisions of these Bylaws and as required by law, shall
keep minutes of all meetings,
-13-
<PAGE>
shall have charge of the seal and the corporate books, and shall make such
reports and perform such other duties as are incident to such office, or as are
properly required by the President or by the Board.
The Assistant Secretary or the Assistant Secretaries, in the order of their
seniority, shall, in the absence or disability of the Secretary, or in the event
of such officer's refusal to act, perform the duties and exercise the powers and
discharge such duties as may be assigned from time to time by the President or
by the Board.
4.9 CHIEF FINANCIAL OFFICER. The Chief Financial Officer may also be
-----------------------
designated by the alternate title of "Vice President-Finance" or "Treasurer."
The Chief Financial Officer shall have custody of all moneys and securities of
the Corporation and shall keep regular books of account. Such officer shall
disburse the funds of the Corporation in payment of the just demands against the
Corporation, or as may be ordered by the Board, taking proper vouchers for such
disbursements, and shall render to the Board from time to time as may be
required of such officer, an account of all transactions as Chief Financial
Officer and of the financial condition of the Corporation. Such officer shall
perform all duties incident to such office or which are properly required by the
President or by the Board.
The Assistant Chief Financial Officer or the Assistant Chief Financial
Officers, in the order of their seniority, shall, in the absence or disability
of the Chief Financial Officer, or in the event of such officer's refusal to
act, perform the duties and exercise the powers of the Chief Financial Officer,
and shall have such powers and discharge such duties as may be assigned from
time to time by the President or by the Board.
-14-
<PAGE>
4.10 SALARIES. The salaries of the officers shall be fixed from time to time
--------
by the Board and no officer shall be prevented from receiving such salary by
reason of the fact that such officer is also a Director of the Corporation.
4.11 OFFICERS HOLDING MORE THAN ONE OFFICE. Any two or more offices may be
-------------------------------------
held by the same person.
4.12 APPROVAL OF LOANS TO OFFICERS. The Corporation may, upon the approval of
-----------------------------
the Board alone, make loans of money or property to, or guarantee the
obligations of, any officer of the Corporation or its parent or subsidiary,
whether or not a Director, or adopt an employee benefit plan or plans
authorizing such loans or guaranties provided that (i) the Board determines that
such a loan or guaranty or plan may reasonably be expected to benefit the
Corporation, (ii) the Corporation has outstanding shares held of record by one
hundred (100) or more persons (determined as provided in Section 605 of the
California Corporation Code) on the date of approval by the Board, and (iii) the
approval of the Board is by a vote sufficient without counting the vote of any
interested Director or Directors.
ARTICLE V - MISCELLANEOUS
-------------------------
5.1 RECORD DATE AND CLOSING OF STOCK BONDS. The Board may fix a time in the
--------------------------------------
future as a record date for the determination of the Shareholders entitled to
notice of and to vote at any meeting of Shareholders or entitled to receive
payment of any dividend or distribution, or any allotment of rights, or to
exercise rights in respect to any other lawful action. The record date so fixed
shall not be more than sixty (60) nor less than ten (10) days prior to the date
of the meeting or event for the purposes of which it is fixed. When a record
date is so fixed, only Shareholders of record at the close of business on that
date are entitled to notice of and to vote
-15-
<PAGE>
at the meeting or to receive the dividend, distribution, or allotment of rights,
or to exercise the rights, as the case may be, notwithstanding any transfer of
any shares on the books of the Corporation after the record date.
The Board may close the books of the Corporation against transfers of
shares during the whole or any part of a period of not more than sixty (60) days
prior to the date of a Shareholders' meeting, the date when the right to any
dividend, distribution, or allotment of rights vests, or the effective date of
any change, conversion or exchange of shares.
5.2 CERTIFICATES. Certificates of stock shall be issued in numerical order and
------------
each Shareholder shall be entitled to a certificate signed in the name of the
Corporation by the Chairman or the President or a Vice President, and the Chief
Financial Officer, the Secretary or an Assistant Secretary, certifying to the
number of shares owned by such Shareholder. Any or all of the signatures on the
certificate may be facsimile. Prior to the due presentment for registration of
transfer in the stock transfer book of the Corporation, the registered owner
shall be treated as the person exclusively entitled to vote, to receive
notifications and otherwise to exercise all the rights and powers of an owner,
except as expressly provided otherwise by the laws of the State of California.
5.3 REPRESENTATION OF SHARES IN OTHER CORPORATIONS. Shares of other
----------------------------------------------
corporations standing in the name of this Corporation may be voted or
represented and all incidents thereto may be exercised on behalf of the
Corporation by the Chairman, the President or any Vice President and the Chief
Financial Officer or the Secretary or an Assistant Secretary.
5.4 ANNUAL REPORTS. If the Corporation has more than one hundred (100) holders
--------------
of record of its shares (as determined by California Corporations Code Section
605) then the Annual
-16-
<PAGE>
Report to Shareholders shall be prepared and distributed as described in the
California Corporations Code Section 1501, provided, however, if the Corporation
has less than one hundred (100) holders of record of its shares then the
requirements under California Corporations Code Section 1501shall be expressly
waived and dispensed with by the Corporation.
5.5 AMENDMENTS. Bylaws may be adopted, amended, or repealed by the vote or the
----------
written consent of Shareholders entitled to exercise a majority of the voting
power of the Corporation. Subject to the right of Shareholders to adopt, amend,
or repeal Bylaws, Bylaws may be adopted, amended, or repealed by the Board,
except that a Bylaw amendment thereof changing the authorized number of
Directors may be adopted by the Board only if these Bylaws permit an indefinite
number of Directors and the Bylaw or amendment thereof adopted by the Board
changes the authorized number of Directors within the limits specified in these
Bylaws.
5.6 INDEMNIFICATION OF CORPORATE AGENTS. The Corporation shall indemnify each
-----------------------------------
of its Directors, officers, employees and agents against expenses, judgments,
fines, settlements and other amounts, actually and reasonably incurred by such
person by reason of such person's having been made or having threatened to be
made a party to a proceeding to the fullest extent permissible by the provisions
of Section 317 of the California Corporations Code. The indemnification
provided by this section shall not be deemed exclusive of any rights to which
those seeking indemnification may be entitled under any bylaw, agreement, vote
of Shareholders or disinterested Directors or otherwise, both as to action in an
official capacity and as to action in another capacity while holding such
office, to the extent such additional rights to indemnification are authorized
in the Articles of Incorporation of the Corporation. The
-17-
<PAGE>
rights to indemnity hereunder shall continue as to a person who has ceased to be
a Director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors and administrators of the person.
Expenses incurred by a Director in defending a civil or criminal action,
suit or proceeding by reason of the fact that he is or was a Director of the
Corporation (or was serving at the Corporation's request as a Director or
officer of another corporation) shall be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Director to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized by relevant sections of the California Corporations
Code.
I, Carlton J. Eibl, Secretary of Mycogen California, Inc., a California
corporation, do hereby certify that the foregoing Bylaws of Mycogen California,
Inc. are the duly adopted Bylaws of said Corporation as they are in effect on
the date hereof.
IN WITNESS WHEREOF, I have hereunto subscribed my name this 29th day of
August, 1995.
/s/ Carlton J. Eibl,
--------------------------------
Carlton J. Eibl, Secretary
-18-
<PAGE>
EXHIBIT 3.3
CERTIFICATE OF DETERMINATION
<PAGE>
CERTIFICATE OF DETERMINATION
OF
RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
MYCOGEN CORPORATION
The undersigned, Jerry D. Caulder and Carlton J. Eibl, do hereby
certify:
(a) That Jerry D. Caulder is the duly elected and acting Chief
Executive Officer of Mycogen Corporation, a California corporation (the
"Corporation") and Carlton J. Eibl is the duly elected and acting President,
Chief Operating Officer and Secretary of the Corporation.
(b) That none of the shares of the Series B Junior Participating
Preferred Stock have been issued.
(c) That pursuant to the authority conferred upon the Board of
Directors of the Corporation (the "Board") by the Articles of Incorporation of
the Corporation, the Board on October 19, 1995, adopted the following
resolutions creating a series of 200,000 shares of Preferred Stock designated as
Series B Junior Participating Preferred Stock:
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority granted to
and vested in the Board in accordance with the provisions of the Articles
of Incorporation of the Corporation, the Board hereby creates a series of
Preferred Stock, par value $.001 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares and
fixes the relative rights, preferences and limitations thereof (in addition
to the provisions set forth in the Articles of Incorporation of the
Corporation, which are applicable to the Preferred Stock of all classes and
series), as Series B Junior Participating Preferred Stock as set forth in
the Certificate of Determination, attached to the Amended and Restated
Rights Agreement as Exhibit "A".
RESOLVED FURTHER, that two hundred thousand (200,000) Preferred Shares be,
as of the Effective Date of the Merger (as such term is defined in the
Rights Agreement), initially reserved for issuance upon exercise of the
Rights, such number to be subject to adjustment from time to time in
accordance with the Rights Agreement.
1. DESIGNATION AND AMOUNT. The shares of such series shall be
----------------------
designated as "Series B Junior Participating Preferred Stock" (the "Series B
Preferred Stock") and the number of shares constituting the Series B Preferred
Stock shall be Two Hundred Thousand (200,000). Such number of shares may be
increased or decreased by resolution of the Board; provided, that no decrease
--------
shall reduce the number of shares of Series B Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options,
-1-
<PAGE>
rights or warrants or upon the conversion of any outstanding securities issued
by the Corporation convertible into Series B Preferred Stock.
2. DIVIDENDS AND DISTRIBUTIONS.
---------------------------
(a) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series B Preferred Stock with respect to dividends, the holders of shares of
Series B Preferred Stock, in preference to the holders of Common Stock, par
value $.001 per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or
(b) subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series B Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in paragraph (a) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series B Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series B Preferred Stock entitled to receive a quarterly
-2-
<PAGE>
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board may fix a record date for the
determination of holders of shares of Series B Preferred Stock entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the payment
thereof.
3. VOTING RIGHTS. The holders of shares of Series B Preferred Stock
-------------
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other Certificate of
Determination creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series B Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
4. CERTAIN RESTRICTIONS.
--------------------
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred Stock;
-3-
<PAGE>
(ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
except dividends paid ratably on the Series B Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or winding up)
to the Series B Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series B Preferred Stock, or any shares of stock ranking on a
parity with the Series B Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board) to all
holders of such shares upon such terms as the Board, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (a) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
5. RE-ACQUIRED SHARES. Any shares of Series B Preferred Stock
------------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Articles of Incorporation, or in any other Certificate of Determination creating
a series of Preferred Stock or any similar stock or as otherwise required by
law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
--------------------------------------
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series B Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provisions for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
except distributions made ratably on the Series B Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or
-4-
<PAGE>
winding up. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
--------------------------
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series B Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
8. NO REDEMPTION. The shares of Series B Preferred Stock shall not
-------------
be redeemable.
9. RANK. The Series B Preferred Stock shall rank, with respect to
----
the payment of dividends and the distribution of assets, junior to all series of
the Corporation's Preferred Stock.
[The rest of this page intentionally left blank.]
-5-
<PAGE>
10. AMENDMENT. The Articles of Incorporation of the Corporation
---------
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series B Preferred Stock so as to
effect them adversely without the affirmative vote of the holders of at least
a majority of the outstanding shares of Series B Preferred Stock, voting
together as a single class.
We further declare under penalty of perjury that the matters set forth
in the foregoing Certification of Determination are true and correct of our
own knowledge.
Executed at San Diego, California on October 19, 1995.
/s/ Jerry D. Caulder
--------------------
Jerry D. Caulder,
Chief Executive Officer
/s/ Carlton J. Eibl
-------------------------
Carlton J. Eibl, President,
Chief Operating Officer
and Secretary
-6-
<PAGE>
EXHIBIT 4.1
SPECIMEN OF COMMON STOCK
<PAGE>
M(TM)
MYCOGEN CORPORATION
<TABLE>
<S> <C> <C>
THIS CERTIFICATES IS TRANSFERABLE INCORPORATION UNDER THE LAWS OF THE STATE OF CALIFORNIA SEE REVERSE FOR STATEMENTS RELATING
IN BOSTON, MA OR NEW YORK, NY TO RIGHTS, PREFERENCES,
PRIVILEGES AND RESTRICTIONS, IF ANY
- ------------------------------------------------------------------------------------------------------------------------------------
This Certifies that CUSIP 628452 10 4
SPECIMEN
is the record holder of
- ------------------------------------------------------------------------------------------------------------------------------------
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, $.001 PAR VALUE PER SHARE, OF
-------------------------------------------MYCOGEN CORPORATION-------------------------------------
-------------------------------------------------- --------------------------------------------
------------------------------------------- -------------------------------------
transferable only on the books of the Corporation by the holder hereof in person or by duly authorized Attorney upon
surrender of this certificate properly endorsed. This certificate is not valid until countersigned by the Transfer Agent
and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
Dated COUNTERSIGNED AND REGISTERED:
THE FIRST NATIONAL BANK OF BOSTON
TRANSFER AGENT AND REGISTRAR
BY /s/ M. Denzic
AUTHORIZED SIGNATURE
/s/ Carlton J. Eibl /s/ Jerry Caulder
SPECIMEN [STAMP OF MYCOGEN CORPORATION APPEARS HERE] SPECIMEN
SECRETARY CHAIRMAN OF THE BOARD
</TABLE>
<PAGE>
A statement of the rights, preferences, privileges and restrictions granted
to or imposed upon respective classes or series of shares and upon the holders
thereof as established, from time to time, by the Articles of incorporation of
the Corporation and by any certificate of determination, and the number of
shares constituting each class and series and the designations thereof, may be
obtained by the holder hereof upon written request and without charge from the
Secretary of the Corporation at its corporate headquarters.
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in an Amended and Restated Rights Agreement between Mycogen
Corporation and The First National Bank of Boston dated as of October 19, 1995
(the "Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive offices of
Mycogen Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. Mycogen Corporation 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, as set forth
in the Rights Agreement, Rights Issued to any Person who becomes an Acquiring
Person (as defined in the Rights Agreement) may become null and void.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM -- as tenants in common UNIF GIFT MIN ACT -- ................ Custodian .................
TEN ENT -- as tenants by the entireties (Cust) (Minor)
JT TEN -- as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants Act ........................................
in common (State)
UNIF TRF MIN ACT -- ............. Custodian (until age ........)
(Cust)
.................... Under Uniform Transfers
(Minors)
to Minors Act ..............................
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED,__________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
______________________________________
______________________________________
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated_____________________________
X___________________________________________
X___________________________________________
THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
NOTICE: CORRESPOND WITH THE NAME(S) AS WRITTEN UPON
THE FACE OF THE CERTIFICATE IN EVERY
PARTICULAR. WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed
By_____________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND
LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP
IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM).
PURSUANT TO S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 4.2
AMENDED AND RESTATED
RIGHTS AGREEMENT
BY AND BETWEEN
MYCOGEN CORPORATION
AND
THE FIRST NATIONAL BANK OF BOSTON
AS
RIGHTS AGENT
DATED AS OF OCTOBER 19, 1995
<PAGE>
AMENDED AND RESTATED RIGHTS AGREEMENT
-------------------------------------
This Amended and Restated Rights Agreement (the "Agreement"), dated as of
October 19, 1995, is entered into by and between Mycogen Corporation, a
California corporation (the "Company"), and The First National Bank of Boston, a
national banking association (the "Rights Agent").
WHEREAS, the Company wishes to restate and amend that certain Rights
Agreement by and between Mycogen Corporation, a Delaware Corporation, ("Mycogen-
Delaware") and the Rights Agent dated February 21, 1992, as amended by that
certain Amendment No. 1 to Rights Agreement by and between Mycogen-Delaware and
the Rights Agent dated as of December 1, 1992; that certain Amendment No. 2 to
Rights Agreement by and between Mycogen-Delaware and the Rights Agent dated as
of December 31, 1993; and that certain Amendment No. 3 to Rights Agreement by
and between Mycogen-Delaware and the Rights Agent dated as of January 23, 1995
(collectively, the "Original Rights Agreement").
WHEREAS, the Board of Directors of Mycogen-Delaware authorized and declared
a dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of Mycogen Delaware outstanding as of the Close
of Business (as hereinafter defined) on March 6, 1992 (the "Record Date"), each
Right representing the right to purchase one one-hundredth of a Preferred Share
(as hereinafter defined) upon the terms and subject to the conditions herein set
forth, and further authorized and directed the issuance of one Right with
respect to each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date (as such terms are hereinafter defined).
WHEREAS, by that certain Agreement and Plan of Merger ("Merger Agreement")
by and between Mycogen-Delaware and the Company, dated as of October 19,1995,
the Company assumed all of the rights and obligations of Mycogen-Delaware
including, but not limited to its rights and obligations under the Original
Rights Agreement.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as
such terms are hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 25% or more
of the Common Shares of the Company then outstanding, but shall not
include (i) the Company, any
2
<PAGE>
Subsidiary (as such term is hereinafter defined) of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company,
or any entity holding Common Shares for or pursuant to the terms of
any such plan, (ii) The Lubrizol Corporation ("Lubrizol"), or any
Affiliates or Associates of Lubrizol (collectively with Lubrizol, the
"Lubrizol Investor Group") in the event that the members of the
Lubrizol Investor Group shall become the Beneficial Owner in the
aggregate of (A) up to 40% of the total combined voting power of the
Company's voting securities then outstanding pursuant to (1) the Stock
Exchange Agreement dated August 25, 1992 between Lubrizol and Mycogen-
Delaware, predecessor in interest to the Company, (2) the Stock
Purchase Agreement dated August 25, 1992 between Lubrizol and Mycogen-
Delaware, predecessor in interest to the Company, (3) the Partnership
Interest Purchase Agreement dated December 31, 1993 between Lubrizol
and Mycogen-Delaware, predecessor in interest to the Company, (4) the
acquisition of voting securities pursuant to any compensatory plan
adopted by the Company's Board of Directors, (5) the acquisition of
voting securities pursuant to the terms of the Series A Convertible
Redeemable Preferred Stock of the Company, (6) the acquisition of
voting securities pursuant to Paragraph V of the Amended and Restated
Equity Investment Agreement dated December 31, 1993 between Lubrizol
and Mycogen-Delaware, predecessor in interest to the Company, (7) the
acquisition of voting securities by members of the Lubrizol Investor
Group other than Lubrizol in an amount not exceeding 1.5% of the total
combined voting power of the voting securities in the aggregate, or
(B) up to 25% of the total combined voting power of the Company's
voting securities pursuant to Paragraph VIII.B. of the Amended and
Restated Equity Investment Agreement, and (iii) any Person who or
which (together with all Affiliates or Associates of such Person)
shall become the Beneficial Owner of 25% or more of the Common Shares
of the Company then outstanding, if the transaction or series of
related transactions in which such Person (together with all
Affiliates or Associates of such Person) became the Beneficial Owner
of 25% or more of the Common Shares of the Company then outstanding,
had received prior approval of a majority of the Continuing Directors
(such Person (together with all Affiliates or Associates of such
Person), an "Approved Person"); provided, that in the event a Person
is not an Acquiring Person by reason of clause (iii) of this Section
1(a), such Person shall become an Acquiring Person, in the event such
Person thereafter acquires Beneficial Ownership of any additional
Common Shares or other voting securities unless such acquisition of
such additional Common Shares or voting securities would not result in
such Person becoming an Acquiring Person by reason of any provision of
this Agreement, including, without limitation, clause (iii) of this
Section 1(a). Notwithstanding the foregoing, (A) the exemptions set
forth in clauses (ii) and (iii) above shall not apply to any
acquisition by the members of the Lubrizol Investor Group of voting
securities, other than (i) the acquisition of voting
3
<PAGE>
securities pursuant to the Stock Purchase Agreement and the Stock
Exchange Agreement, (ii) the acquisition of voting securities pursuant
to any compensatory plan adopted by the Company's Board of Directors,
(iii) the acquisition of voting securities pursuant to the terms of
the Series A Convertible Redeemable Preferred Stock of the Company,
(iv) the acquisition of voting securities by members of the Lubrizol
Investor Group other than Lubrizol in an amount not exceeding 1.5% of
the total combined voting power of the voting securities in the
aggregate, or (v) in accordance with Paragraph VIII.B. of the Amended
and Restated Equity Investment Agreement, if immediately following
such acquisition the Lubrizol Investor Group would be the Beneficial
Owner of more than 25% of the total combined voting power of the
voting securities in the aggregate, and (B) no Person shall become an
"Acquiring Person" as the result of any recapitalization of the
Company or any other action taken by the Company or its Affiliates or
Associates (other than, in determining whether the Lubrizol Investor
Group shall be an "Acquiring Person," an action or series of actions
taken by any of the members of the Lubrizol Investor Group, including,
without limitation, any repurchase of voting securities by the Company
that has the effect of increasing the proportionate number of shares
beneficially owned by such Person to more than 25% of the Common
Shares of the Company then outstanding (or, in the case of the
Lubrizol Investor Group, more than 40% of the total combined voting
power of the voting securities then outstanding); provided, however,
that if any Person shall become the Beneficial Owner of 25% or more of
the Common Shares of the Company then outstanding (or, in the case of
the Lubrizol Investor Group, more than 40% of the voting securities
then outstanding), by reason of the taking of such action or series of
actions by the Company or such Affiliates or Associates and such
Person shall, after such action or series of actions, increase its
beneficial ownership of Common Shares of the Company (or, in the case
of the members of the Lubrizol Investor Group or an Approved Person,
increase its beneficial ownership of voting securities), then such
Person shall be deemed to be an "Acquiring Person." Notwithstanding
any provision to the contrary in this Agreement, no amendment shall be
made to this definition without the consent of Lubrizol or an Approved
Person if the effect of such amendment would be to reduce the
aggregate percentage ownership of the total combined voting power of
the voting securities that the Lubrizol Investor Group or such
Approved Person, respectively, would be permitted to beneficially own
at any time without being deemed an "Acquiring Person" hereunder.
(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 Exchange Act (as such term is hereinafter
defined).
4
<PAGE>
(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 to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than these Rights),
warrants or options, or otherwise; provided, however that a
-------- -------
Person shall not be deemed the Beneficial Owner of, or to
beneficially own, (1) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange or (2)
securities which a Person or any Person's Affiliates or
Associates may be deemed to have the right to acquire pursuant
to any merger or other acquisition agreement between the
Company and such Person (or one or more of such Person's
Affiliates or Associates) if such agreement has been approved
by the Board of Directors of the Company, upon the affirmative
vote of a majority of the Continuing Directors, prior to there
being an Acquiring Person; or (B) the right to vote pursuant to
any agreement, arrangement or understanding; provided, however,
-------- -------
that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security if the agreement, arrangement
or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then
reportable 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 with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona
fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated
by the proviso to Section 1(c)(ii)(B)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the
5
<PAGE>
number of such securities then issued and outstanding together
with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own
beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday, or
a day on which banking institutions in The Commonwealth of
Massachusetts 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., Boston,
Massachusetts time, on such date; provided, however, that if such date
-------- -------
is not a Business Day it shall mean 5:00 P.M., Boston, Massachusetts
time, on the next succeeding Business Day.
(f) "Company" shall have the meaning set forth in the first paragraph at
the beginning of this Agreement.
(g) "Common Shares" when used with reference to the Company shall mean the
shares of common stock, par value $.001 per share, of the Company.
"Common Shares" when used with reference to any Person other than the
Company shall mean the capital stock (or other equity interest) with
the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which
ultimately control such first-mentioned Person.
(h) "Common stock equivalents" shall have the meaning set forth in Section
11(a)(iv) hereof.
(i) "Continuing Director" shall mean (i) any person who is a member of the
Board of Directors of the Company, while such person is a member of
the Board of Directors, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative or
agent of an Acquiring Person or of any such Affiliate or Associate,
and who was a member of the Board of Directors prior to the date of
this Agreement, or (ii) any person who subsequently becomes a member
of the Board of Directors and who, while such person is a member of
the Board of Directors, is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person, or a representative or agent of an
Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or such Person's election to the
Board of Directors is recommended or approved by a majority of the
Continuing Directors then on the Board of Directors.
(j) "Current per share market price" shall have the meaning set forth in
Section 11 hereof.
(k) "Current Value" shall have the respective meanings set forth in
Section 11(a)(iv) hereof and Section 24(d) hereof.
6
<PAGE>
(l) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(m) "Effective Date" shall have the meaning set forth in Section 35
hereof.
(n) "Equivalent preferred shares" shall have the meaning set forth in
Section 11(b) hereof.
(o) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, as in effect on the date of this Agreement.
(p) "Exchange ratio" shall have the meaning set forth in Section 24(a)
hereof.
(q) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(r) "Issuer" shall have the meaning set forth in Section 13 hereof.
(s) "NASDAQ" shall have the meaning set forth in Section 11(d)(i) hereof.
(t) "Person" shall mean any individual, firm, corporation or other entity,
and shall include any successor (by merger or otherwise) of such
entity.
(u) "Preferred Shares" shall mean shares of Series B Junior Participating
Preferred Shares par value $.001 per share, of the Company having the
rights and preferences set forth in the Form of Certificate of
Determination attached to this Agreement as Exhibit A.
---------
(v) "Purchase Price" shall have the meaning set forth in Section 4 hereof.
(w) "Record Date" shall have the meaning set forth in the third paragraph
at the beginning of this Agreement.
(x) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(y) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(z) "Right" shall have the meaning set forth in the third paragraph at the
beginning of this Agreement.
(aa) "Right Certificate" shall have the meaning set forth in Section 3(a)
hereof.
(bb) "Rights Agent" shall have the meaning set forth in the first paragraph
at the beginning of this Agreement.
7
<PAGE>
(cc) "Securities Act" shall have the meaning set forth in Section 9(c)
hereof.
(dd) "Security" shall have the meaning set forth in Section 11(d)(i)
hereof.
(ee) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(ff) "Spread" shall have the meaning set forth in Section 11(a)(iv) hereof.
(gg) "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 equity interest is owned, directly or indirectly, by
such Person.
(hh) "Substitution Period" shall have the meaning set forth in Section
11(a)(iv) hereof.
(ii) "Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
(jj) "Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
SECTION 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.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Shares Acquisition
Date or (ii) the tenth business day (or such later date as may be determined by
action of the Board of Directors (upon approval by a majority of the Continuing
Directors) prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the Company or
any entity holding Common Shares for or pursuant to the terms of any such plan)
to commence, a tender or exchange offer the consummation of which would result
in any Person becoming the Beneficial Owner of Common Shares aggregating 15% or
more of the then outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions
8
<PAGE>
of Section 3(b) hereof) by the certificates for Common Shares registered in the
names of the holders thereof (which certificates shall also be deemed to be
Right Certificates) and not by separate Right Certificates, and (y) the right to
receive Right Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the Distribution Date,
the Company will notify the Rights Agent thereof and the Company will prepare
and execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Shares as of the
Close of Business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each Common
Share so held. As of the Distribution Date, the Rights will be evidenced solely
by such Right Certificates.
(b) On the Effective Date, or as soon as practicable thereafter, the
Company will send a revised copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of Rights"),
by first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Effective Date, at the address of such holder
shown on the records of the Company. With respect to certificates for Common
Shares outstanding as of the Effective Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights attached thereto.
Until the Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding on the Effective Date, with or without a copy of the Summary
of Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Effective Date but prior to the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to 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
Mycogen Corporation, a California corporation and The First National Bank
of Boston dated as of October 19, 1995 (the "Rights Agreement"), the terms
of which are hereby incorporated herein by reference and a copy of which is
on file at the principal executive offices of Mycogen Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such Rights
will be evidenced by separate certificates and will no longer be evidenced
by this certificate. Mycogen Corporation 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, as set forth in
the Rights Agreement, Rights issued
9
<PAGE>
to any Person who becomes an Acquiring Person (as defined in the Rights
Agreement) may become null and void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit B 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 transaction reporting system on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-hundredths of a
Preferred Share as shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "Purchase Price"), but the number of
such one one-hundredths of a Preferred Share and the Purchase Price shall be
subject to adjustment as provided herein.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
The Right Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its President, any of its Vice Presidents, or its Chief
Financial Officer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually or by facsimile
countersigned by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the person who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf of the Company
by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
10
<PAGE>
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 Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and the
date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Section 14 hereof, at any time after the Close
of Business on the Distribution Date, and at or prior to the Close of Business
on the earlier of the Redemption Date or the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share (or other securities or property) as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent designated for such purpose. Thereupon the Rights Agent shall
countersign and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and certification on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for
each one one-hundredth of a Preferred Share as to which the Rights are
exercised, at or prior to the
11
<PAGE>
earliest of (i) the Close of Business on February 20, 2002 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), (iii) the time at which such Rights
are exchanged as provided in Section 24 hereof, or (iv) the consummation of any
merger or other acquisition involving the Company pursuant to an agreement
described in Section 1(c)(ii)(A)(2) hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $65.00, shall be subject
to adjustment from time to time as provided in Sections 11 and 13 hereof and
shall be payable in lawful money of the United States of America in accordance
with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) requisition from a depositary agent properly appointed by the
Company depositary receipts representing such number of one one-hundredths 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 hereby directs the depositary
agent to comply with such request, (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of fractional shares
in accordance with Section 14 hereof, (iii) after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the order of
the registered holder of such Right Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered holder of such
Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to its duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares or any
Preferred Shares held in its treasury, the number of Preferred Shares that will
be sufficient to permit the exercise in full of all outstanding Rights in
accordance with this Section 7.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
12
<PAGE>
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such cancelled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
SECTION 9. AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will use its best efforts to
cause to be reserved and kept available out of and to the extent of its
authorized and unissued Preferred Shares not reserved for another purpose (and,
following the occurrence of an event described in Section 11(a)(ii) or Section
13(a), out of its authorized and unissued shares of Common Stock and/or other
securities), the number of Preferred Shares (and, following the occurrence of
any such event, Common Stock and/or other Securities) that will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) If the Preferred Shares (or, following the occurrence of an event
described in Section 11(a)(ii) or Section 13(a), the Common Shares and/or other
Securities) are at any time listed on a national securities exchange or included
for quotation on any transaction reporting system, then so long as the Preferred
Shares (and, following the occurrence of any such event, Common Shares and/or
other securities) issuable and deliverable upon exercise of the Rights may be
listed on such exchange or included for quotation on any such transaction
reporting system, the Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable (but only to the extent that it
is reasonably likely that the Rights will be exercised), all shares reserved for
such issuance to be listed on such exchange or included for quotation on any
such transaction reporting system upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts to: (i) file, as soon as
practicable following the earliest date after the first occurrence of an event
described in Section 11(a)(ii) in which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iv) hereof, or as soon as is required by law following the
13
<PAGE>
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Securities 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
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities or (B) the date of expiration of the
Rights. The Company may temporarily suspend, for a period not to exceed ninety
(90) days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating, and notify
the Rights Agent, that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notification to the Rights Agent
at such time as the suspension is no longer in effect. The Company will also
take such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. Notwithstanding any provision of this Agreement to
the contrary, the Rights shall not be exercisable in any jurisdiction, unless
the requisite qualification in such jurisdiction shall have been obtained, or an
exemption therefrom shall be available and until a registration statement has
been declared effective.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax is due.
SECTION 10. PREFERRED SHARES RECORD DATE.
Each person in whose name any certificate for Preferred Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
-------- --------
surrender and payment is a date upon which the Preferred Shares transfer books
of the Company
14
<PAGE>
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 transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred 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.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.
The Purchase Price, the number of Preferred Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable
in Preferred Shares; (B) subdivide the outstanding Preferred
Shares; (C) combine the outstanding Preferred Shares into a
smaller number of Preferred Shares; or (D) issue any shares of its
capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and
kind of shares of capital stock 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
and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the
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; provided, however, that in no event shall the
-------- -------
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both 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).
(a)(ii) Subject to Section 24 of this Agreement, in the event that any
Person becomes an Acquiring Person, each holder of a Right shall
thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common
Shares of the Company as shall equal
15
<PAGE>
the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable and dividing that product by (y)
50% of the then current per share market price of the Company's
Common Shares (determined pursuant to Section 11(d) hereof) on the
date of the occurrence of such event. Except as provided in
Section 23, in the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall
not take any action which would eliminate or diminish the benefits
intended to be afforded by the Rights.
Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of an event in which any Person
shall become an Acquiring Person, any Rights beneficially owned by
(A) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (B) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (C) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(1) 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 (2) a transfer which the Board of Directors,
upon approval by a majority of the Continuing Directors, has
determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section
11(a)(ii), shall become null and void without any further action
and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this
Agreement or otherwise. No Right Certificate shall be issued
pursuant to Section 3 that represents Rights beneficially owned by
an Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of any
Rights to an Acquiring Person whose Rights would be void pursuant
to the preceding sentence or any Associate or Affiliate thereof or
to any nominee of such Acquiring Person, Associate or Affiliate;
and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence shall be cancelled. The Company
shall use all reasonable efforts to ensure that the provisions of
this Section 11(a)(ii) are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to
an Acquiring person or its Affiliates, Associates or transferees
hereunder.
(a)(iii) The right to buy Common Shares of the Company pursuant to
subparagraph (ii) of this paragraph (a) shall not arise if the
event causing such Person to become an Acquiring Person (A) is a
consolidation, merger, sale, transfer or similar transaction
subject to Section 13 hereof, or (B) is an acquisition of shares
of
16
<PAGE>
Common Stock pursuant to a tender offer or an exchange offer for
all outstanding Common Shares at a price and on terms determined
by at least a majority of the Continuing Directors, and after
receiving advice from one or more investment banking firms, to be
(1) at a price which is fair to stockholders (taking into account
all factors which such members of the Board of Directors deem
relevant including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold in
an orderly basis designed to realize maximum value) and (2)
otherwise in the best interests of the Company and its
stockholders.
(a)(iv) In lieu of issuing Common Shares in accordance with Section
11(a)(ii) hereof, the Company may, if the Board of Directors of
the Company, upon approval by a majority of the Continuing
Directors, determines that such action is necessary or appropriate
and not contrary to the interest of holders of Rights (and, in the
event that the number of Common Shares which are authorized by the
Company's Articles of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in full of the
Rights, or if any necessary regulatory approval for such issuance
has not been obtained by the Company, the Company shall): (A)
determine the excess of (1) the value of the Common Shares
issuable upon the exercise of a Right (the "Current Value") over
(2) the Purchase Price (such excess being referred to as the
"Spread") and (B) with respect to each Right, make adequate
provision to substitute for such Common Shares, upon exercise of
the Rights, (1) cash, (2) a reduction in the Purchase Price, (3)
other equity securities of the Company (including, without
limitation, shares or units of shares of any series of preferred
stock which the Board of Directors of the Company, upon approval
by a majority of the Continuing Directors, has deemed to have the
same value as Common Shares (such shares or units of shares of
preferred stock are herein called "common stock equivalents")),
except to the extent that the Company has not obtained any
necessary regulatory approval for such issuance, (4) debt
securities of the Company, except to the extent that the Company
has not obtained any necessary regulatory approval for such
issuance, (5) other assets or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board of
Directors of the Company, upon approval by a majority of the
Continuing Directors, based upon the advice of a nationally
recognized investment banking firm selected by the Board of
Directors of the Company, upon approval by a majority of the
Continuing Directors; provided, however, if the Company shall not
-------- -------
have made adequate provision to deliver value pursuant to clause
(B) above within thirty (30) days following the occurrence of an
event described in Section 11(a)(ii), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, Common Shares
(to the extent available), except to the extent that the Company
has not obtained any necessary regulatory approval for such
issuance, and then, if necessary, cash, which shares and/or cash
have an aggregate value equal to the Spread. If the
17
<PAGE>
Board of Directors, upon approval by a majority of the Continuing
Directors, 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 or that any necessary
regulatory approval for such issuance will be obtained, the thirty
(30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the occurrence
of an event described in Section 11(a)(ii), in order that the
Company may seek stockholder approval for the authorization of
such additional shares or take action to obtain such regulatory
approval (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences
of this Section 11(a)(iv), the Company (x) shall provide that such
action shall apply uniformly to all outstanding Rights held by
holders entitled to receive Common Shares or other securities or
property upon exercise of such Rights and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of
additional shares, to take any action to obtain any required
regulatory approval and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect and shall promptly notify the Rights Agent of
such suspension. For purposes of this Section 11(a)(iv), the value
of the Common Shares shall be the current per share market price
(as determined pursuant to Section 11(d) hereof) of the Common
Shares at the Close of Business on the date of the occurrence of
one of the events described in Section 11(a)(ii) and the value of
any "common stock equivalent" shall be deemed to have the same
value as the Common Shares on such date.
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
forty-five (45) calendar days after such record date) to subscribe
for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible into
Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the
then current per share market price of the Preferred Shares (as
defined in Section 11(d)) on such record date, the Purchase Price
to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date plus
the number of Preferred Shares which the aggregate offering price
of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
18
<PAGE>
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 to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no
-------- -------
event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the
Board of Directors of the Company, upon approval by a majority of
the Continuing Directors, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of the Rights. Preferred Shares
owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed; and in the event that such rights, options or warrants
are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred
Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company,
upon approval by a majority of the Continuing Directors, whose
determination shall be described in a statement filed with the
Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights
or warrants applicable to one Preferred Share and the denominator
of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the
-------- -------
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments
shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the
Purchase Price shall again be adjusted to be the Purchase Price
which would then be in effect if such record date had not been
fixed.
19
<PAGE>
(d)(i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security" for
the purpose of this Section 11(d)(i)) on any date shall be deemed
to be the average of the daily closing prices per share of such
Security 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 Security is determined during a period
following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or (B)
any subdivision, combination or reclassification of such Security
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 per share market price shall be
appropriately adjusted to reflect the current market price per
share equivalent of such Security. 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 Security is 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 Security is listed or admitted to trading or, if the
Security is 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 Quotations System ("NASDAQ") or
such other system then in use, or, if on any such date the
Security is 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 Security selected by the Board
of Directors of the Company, upon approval by a majority of the
Continuing Directors. If on any such date no market maker is
making a market in the Security, the "current per share market
price" of such Security on such date as determined in good faith
by the Board of Directors of the Company as provided for above
shall be used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading
on any national securities exchange, a Business Day.
(d)(ii) For the purpose of any computation hereunder, the "current per
share market share price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the
"current per share market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of
the Common Shares as deter-
20
<PAGE>
mined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by one hundred. If
neither the Common Shares nor the Preferred Shares are publicly
held or so listed or traded, "current per share market price"
shall mean the fair value per share as determined in good faith by
the Board of Directors of the Company, upon approval by a majority
of the Continuing Directors, whose determination shall be
described in a statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 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 one one-millionth of a
Preferred Share or one ten-thousandth of any other share or
security 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 requires such adjustment or
(ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter 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 the
Preferred Shares contained in Section 11(a) through (c),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with
respect to the Preferred Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths 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 Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth of a
Preferred Share) obtained by (i) multiplying (x) the number of one
one-hundredths of a share covered by a Right
21
<PAGE>
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-hundredths of a
Preferred Share purchasable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one-hundredths
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 ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company
shall make a public announcement of its election to adjust the
number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right Certificates
have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders
shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such
holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment,
and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein and shall be registered in the names of
the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a Preferred Share issuable
upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the
Purchase Price and the number of one one-hundredths of a Preferred
Share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value,
if any, of the Preferred Shares issuable upon exercise of the
Rights, the Company shall take any corporate
22
<PAGE>
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 at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until
the occurrence of such event the issuing to the holder of any
Right exercised after such record date of 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 in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any consolidation or
subdivision of the Preferred Shares, issuance wholly for cash of
any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which
by their terms are convertible into or exchangeable for Preferred
Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to hereinabove
in Section 11(b), hereafter made by the Company to holders of its
Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement and
prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Shares payable in Common Shares or
(ii) effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares) into a greater or lesser number of
Common Shares, then in any such case (A) the number of one one-
hundredths of a Preferred Share purchasable after such event upon
proper exercise of each Right shall be determined by multiplying
the number of one one-hundredths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the
numerator of which is the number of Common Shares outstanding
immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event,
and (B) each Common Share outstanding immediately after such event
shall have issued with respect to it that number of Rights which
each Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this
23
<PAGE>
Section 11(n) shall be made successively whenever such a dividend
is declared or paid or such a subdivision, combination or
consolidation is effected.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 hereof. Notwithstanding the foregoing sentence, the failure by 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. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment contained therein and shall not be deemed to have knowledge of such
adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) Except as provided in Section 13(b) hereof, in the event, directly or
indirectly, (1) the Company shall consolidate with, or merge with and into, any
other Person, (2) 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 consolidation or merger and, in connection with such
consolidation or merger, all or part of the Common Shares shall be changed into
or exchanged for stock or other securities of any other Person (or the Company)
or cash or any other property, or (3) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
in one or more transactions, directly or indirectly, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person other than the Company or
one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other Person (including
the Company as successor thereto or as the surviving corporation) as shall equal
the result obtained by (A) multiplying the then current Purchase Price by the
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (B) 50% of the then current per share
market price of the Common Shares of such other Person (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; (ii) the issuer of such Common Shares 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
issuer; and (iv) such issuer shall take such steps (including, but not limited
to, the reservation of a sufficient number of its Common Shares in accordance
with Section 9 hereof) in connection with such
24
<PAGE>
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares thereafter deliverable upon the exercise of the Rights. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind referred to in this Section 13
if at the time of such transaction there are any rights, warrants, instruments
or securities outstanding or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights. The provisions of
this Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers.
The supplemental agreement referred to above in this Section 13(a) to
be entered into by the Company and the Rights Agent shall also provide that, as
soon as practicable after the date of any of the events described in Section
13(a), such issuer shall:
(a)(i) prepare and file a registration statement under the Securities Act
with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective
as soon as practicable after such filing and use its best efforts
to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities
Act) until the Final Expiration Date, and similarly comply with
applicable state securities laws;
(a)(ii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights
on a national securities exchange or to meet the eligibility
requirements for quotation on NASDAQ; and
(a)(iii) deliver to holders of the Rights historical financial statements
for such issuer which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the
Exchange Act.
(b) In the event of any merger or other acquisition transaction involving
the Company pursuant to an agreement described in Section 1(c)(ii)(A)(2), the
provisions of Section 13(a) hereof shall not be applicable to such transaction
and this Rights Agreement and the rights of holders of Rights hereunder shall be
terminated in accordance with Section 7(a) hereof.
(c) The term "issuer," for purposes of this Section 13, shall refer to the
Person (or Affiliate or Associate) referred to in Section 13(a); provided,
however, that (i) if such Person (or Affiliate or Associate) is a direct or
indirect Subsidiary of another Person, the term "issuer" shall refer to such
other Person, and (ii) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the term "issuer" shall refer to whichever
of such Persons is the issuer of such Common Shares having the greatest
aggregate value.
25
<PAGE>
(d) If, for any reason, the Rights cannot be exercised for Common Shares
of such issuer as provided in Section 13(a), then each holder of Rights shall
have the right to exchange its Rights for cash from such issuer in an amount
equal to the number of Common Shares that it would otherwise be entitled to
purchase multiplied by 50% of the current per share market price, as determined
pursuant to Section 11(d) hereof, of such Common Shares of such issuer. If, for
any reason, the foregoing provision cannot be applied to determine the cash
amount into which the Rights are exchangeable, then the Board of Directors of
the Company, upon approval by a majority of the Continuing Directors, based upon
the advice of one or more nationally recognized investment banking firms, shall
determine such amount reasonably and with good faith to the holders of Rights.
Any such determination shall be final and binding on the Rights Agent and the
holders of Rights.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
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 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company, upon approval by a majority of the Continuing
Directors. If on any such date no such market maker is making a market in the
Rights, the fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company, upon approval by a majority of the
Continuing Directors, shall be used.
(b) The Company shall not be required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-hundredth 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-hundredth of a Preferred Share). Fractions of Preferred
Shares in integral multiples of one one-hundredth of a Preferred Share may, at
the election of the Company, be evidenced by depositary receipts, pursuant to an
26
<PAGE>
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 Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes of this Section
14(b), the current market value of a Preferred Share shall be the closing price
of a Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives his
right to receive any fractional Rights or any fractional shares upon exercise of
a Right (except as provided above).
SECTION 15. RIGHT OF ACTION.
All rights of action in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
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 Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations hereunder, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
SECTION 16. AGREEMENT OF RIGHT 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 the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by
a proper instrument of transfer; and
27
<PAGE>
(c) subject to Sections 6 and 7(f) hereof, the Company and the Rights
Agent may deem and treat the person in whose name the Right
Certificate (or, prior to the Distribution Date, the associated Common
Shares certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated
Common 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.
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must
-------- -------
use its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees
to indemnify the Rights Agent for, and to hold it harmless against, any loss,
liability, suit, action, proceeding or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
any action taken, suffered or omitted by the Rights Agent in connection with the
execution, acceptance and administration of this
28
<PAGE>
Agreement and the exercise and performance hereunder of its duties, including
the costs and expenses of defending against and appealing any claim of liability
arising therefrom. The indemnity provided herein shall survive the termination
of this Agreement and the expiration of the Rights.
(b) The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement or the exercise and performance of its
duties hereunder in reliance upon any Right Certificate or certificate for the
Preferred Shares or 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, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
29
<PAGE>
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel of its choice (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, suffered or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the administration, exercise and performance of its duties
under this Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to taking,
suffering or omitting any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken, suffered or omitted in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
representations, warranties, or statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such representations, warranties, or
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 liability or responsibility in
respect of the legality, validity or enforceability of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the legality, validity or enforceability or the
execution of any Right Certificate (except its countersignature thereof); nor
shall it be liable or responsible for any breach by the Company of any covenant
or condition contained in this Agreement or in any Right Certificate; nor shall
it be liable or responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after receipt
of the certificate described in Section 12 hereof); 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 to be issued pursuant to
30
<PAGE>
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the administration, exercise and performance of its
duties hereunder from any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Secretary or the Chief Financial
Officer of the Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be responsible or liable for any
action taken, suffered or omitted by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. 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 under
this Rights Agreement and the date on and/or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not be liable
for any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five (5) Business Days after the
date any officer of the Company actually received such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be liable or accountable
for any act, default, omission, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
omission, 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
31
<PAGE>
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, split-up, combination or exchange, the
certification on the form of assignment or form of election to purchase, as the
case may be, that the Rights evidenced by the Right Certificate are not owned by
an Acquiring Person, or an Affiliate or Associate thereof, has either not been
completed or in any manner indicates any other response thereto, the Rights
Agent shall not take any further action with respect to such requested exercise,
transfer, split-up, combination or exchange, without first consulting with the
Company.
SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days' notice in writing
mailed to the Company and to each transfer agent of the Common Shares or
Preferred Shares (as to which the Rights Agent has received prior written
notice) by registered or certified mail, and the Company shall mail notice
thereof to the holders of the Right 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 or
Preferred Shares (as to which the Rights Agent has received prior written
notice) by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 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
Right Certificate (who shall, with such notice, submit such holder's Right
Certificate for inspection by the Company), then the registered holder of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of any state of the
United States so long as such corporation is authorized to do business as a
banking institution, is in good standing, and is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50
million. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall
32
<PAGE>
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors,
upon approval by a majority of the Continuing Directors, to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right 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 under any employee benefit plan or arrangement or upon the
exercise, conversion or exchange of securities of the Company currently
outstanding or issued at any time in the future by the Company and (b) may, in
any other case, if deemed necessary or appropriate by the Board of Directors of
the Company, upon approval by a majority of the Continuing Directors, issue
Right Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Right
-------- -------
Certificate shall be issued and this sentence shall be null and void ab initio
-- ------
if, and to the extent that, such issuance or this sentence would create a
significant risk of or result in material adverse tax consequences to the
Company or the Person to whom such Right Certificate would be issued or would
create a significant risk of or result in such options' or employee plans' or
arrangements' failing to qualify for otherwise available special tax treatment
and (ii) no such Right Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
SECTION 23. REDEMPTION.
(a) The Company may, at its option, upon approval by a majority of the
Continuing Directors, at any time prior to the earliest of (i) the tenth (10th)
business day following the Shares Acquisition Date, or (ii) such date or dates
on or after the tenth (10th) business day following the Shares Acquisition Date
to which such option may be extended by a majority of the Continuing Directors
(for one or more successive ten (10) day periods) by vote(s) first taken or
written consent(s) first given prior to the tenth (10th) business day following
the Shares Acquisition Date and, thereafter, prior to the completion of any such
(ten) 10 day extension or extensions (or, if the Shares Acquisition Date shall
have occurred prior to the Record Date, prior to (A) the tenth (10th) business
day following the Record Date or (B) such date or dates on or after the tenth
business day after the Record Date to which such option may be extended by a
majority of the Continuing Directors (for one or more successive ten (10) day
periods) by vote(s) first taken or written consent(s) first given prior to the
tenth business day following the Record Date and, thereafter, prior to the
completion of any such 10 day extension or extensions), redeem all but not less
than all the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date
33
<PAGE>
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"), and the Company may, at its option, pay the Redemption Price either in
cash, Common Shares (based on the current per share market price thereof (as
determined pursuant to Section 11(d)) at the time of redemption), or any other
form of consideration deemed appropriate by the Board of Directors. The
redemption of the Rights by the Board of Directors may be made effective at such
time on such basis and with such conditions as the Board of Directors in its
sole discretion may establish, upon approval by a majority of the Continuing
Directors.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to Section 23(a), 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. The Company shall promptly give public notice of
any such redemption; provided, however, that the failure to give, or any defect
in, any such notice shall not affect the validity of such redemption. Within ten
(10) days after such action of the Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the Rights Agent
and shall mail a notice of redemption to all the holders of the then outstanding
Rights 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. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for value any Rights at
any time in any manner other than that specifically set forth in this Section 23
or in Section 24 hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date. Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable pursuant
to Section 11(a)(ii) at any time when the Rights are redeemable under this
Section 23.
SECTION 24. EXCHANGE.
(a) The Company, at its option, upon approval by a majority of the
Continuing Directors, at any time after any Person becomes an Acquiring Person,
may exchange all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common
Share per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Exchange Ratio"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or any such Subsidiary, or
any entity holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Shares then outstanding.
34
<PAGE>
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of Common Shares equal to the number of such Rights held by
such holder multiplied by the Exchange Ratio. The Company shall promptly give
public notice of any such exchange; provided, however that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
The Company promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear upon the registry
books of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which the exchange of the
Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 11(a)(ii) hereof)
held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as such
term is defined in Section 11(b) hereof) for Common Shares exchangeable for
Rights, at the initial rate of one one-hundredth of a Preferred Share (or
equivalent preferred share) for each Common Share, as appropriately adjusted to
reflect adjustments in the voting rights of the Preferred Shares pursuant to the
terms thereof, so that the fraction of a Preferred Share delivered in lieu of
each Common Share shall have the same voting rights as one Common Share.
(d) 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 Section 24(a), the
Company shall either take such action as may be necessary to authorize
additional Common Shares or Preferred Shares for issuance upon exchange of the
Rights or alternatively, at the option of the Board of Directors, upon approval
by a majority of the Continuing Directors, with respect to each Right (i) pay
cash in an amount equal to the Purchase Price, in lieu of issuing Common Shares
or Preferred Shares in exchange therefor, or (ii) issue debt or equity
securities, or a combination thereof, having a value equal to the Current Value
(as hereinafter defined) of the Common Shares or Preferred Shares exchangeable
for each such Right, where the value of such securities shall be determined by a
nationally recognized investment banking firm selected by the Board of
Directors, upon approval by a majority of the Continuing Directors, or (iii)
deliver any combination of cash, property, Common Shares, Preferred Shares
and/or other securities having a value equal to the Current Value in exchange
for each Right. The term "Current Value", for the purposes of this Section 24,
shall mean the product of the current per share market price of Common Shares
(determined pursuant to Section 11(d) on the date of the occurrence of the event
described above in subparagraph (a)) multiplied by the number of Common Shares
for which the Right otherwise would be exchangeable if there were sufficient
shares available. To the extent that the Company determines that some action
need be taken pursuant to clauses (i), (ii) or (iii) of this Section 24(d), the
Board of Directors, upon approval by a majority of the Continuing Directors, may
35
<PAGE>
temporarily suspend the exercisability of the Rights for a period of up to sixty
(60) days following the date on which the event described in Section 24(a) shall
have occurred, in order to seek any authorization of additional Common Shares or
Preferred Shares and/or to decide the appropriate form of distribution to be
made pursuant to the above provision and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended.
(e) 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 Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose: (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend); (ii) to offer to the holders of its 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; (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares); (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person; (v) to effect the liquidation, dissolution or
winding up of the Company; or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (i) or (ii) above at least ten (10)
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
ten (10) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever shall be the earlier.
36
<PAGE>
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
In the event any Person becomes an Acquiring Person, the Company will promptly
notify the Rights Agent thereof.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Mycogen Corporation
5501 Oberlin Drive
San Diego, California 92121
Attention: Carlton J. Eibl
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
The First National Bank of Boston
435 Tasso Street
Suite 250
Palo Alto, California 94301
Attention: Geoffrey Anderson
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Prior to the Distribution Date, the Company may supplement or amend this
Agreement in any respect, without the approval of any holders of Rights, by
action of its Board of Directors upon approval by a majority of the Continuing
Directors, and the Rights Agent shall, if the Company so directs, execute such
supplement or amendment. From and after the Distribution Date, the Company may
from time to time supplement or amend this Agreement without the approval of any
holders of Rights, by action of its Board of Directors, upon approval by a
majority of the Continuing Directors, in order to cure any ambiguity, to correct
or supplement
37
<PAGE>
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable and which shall be
consistent with, and for the purpose of fulfilling, the objectives of the Board
of Directors in adopting this Agreement, including, without limitation, to
change the Purchase Price, the Redemption Price, any time periods herein
specified, and any other term hereof, any such supplement or amendment to be
evidenced by a writing signed by the Company and the Rights Agent; provided,
--------
however, that from and after such time as any Person becomes an Acquiring
- -------
Person, this Agreement shall not be amended in any manner which would adversely
affect the interests of the holders of Rights. Upon receipt of a certificate
from an appropriate officer of the Company that the proposed supplement or
amendment is consistent with this Section 27 and, after such time as any Person
has become an Acquiring Person, that the proposed supplement or amendment does
not adversely affect the interests of the holders of Rights, the Rights Agent
shall execute such supplement or amendment. Without limiting the foregoing, the
Company may at any time prior to such time as any Person becomes an Acquiring
Person, by action of its Board of Directors, upon approval by a majority of the
Continuing Directors, amend this Agreement to lower the thresholds set forth in
Sections 1(a) and 3(a) to not less than the greater of (i) any percentage
greater than the largest percentage of the outstanding Common Shares then known
by the Company to be beneficially owned by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan) and (ii) 10%.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
For all purposes of this Agreement, any calculation of the number of Common
Shares outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Shares of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board of Directors of the Company (and, where specifically provided for
herein, only upon approval by a majority of the Continuing Directors) 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 the 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 of Directors (or, where
38
<PAGE>
specifically provided for herein, upon approval by a majority of the Continuing
Directors) in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Right Certificates and all other
parties and (y) not subject the Board or the Continuing Directors to any
liability to the holders of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common
Shares) any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares).
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
-------- -------
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company, upon
approval by a majority of the Continuing Directors, determines in its good faith
judgment that severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
tenth business day following the date of such determination by the Board of
Directors of the Company.
SECTION 32. GOVERNING LAW.
This Agreement and each Right Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of 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 performed entirely within such
State.
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
39
<PAGE>
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are inserted
or convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
SECTION 35. EFFECTIVE DATE.
This Agreement will be effective as of the effective date of the merger as
contemplated by the Merger Agreement (the "Effective Date").
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
ATTEST: MYCOGEN CORPORATION, a
California Corporation
By:___________________________ By:_________________________________
Arthur J. Chatroo Jerry D. Caulder, Ph.D.
Assistant Secretary Chairman of the Board
and Chief Executive Officer
By:_________________________________
Carlton J. Eibl
President, Chief Operating Officer
and Secretary
ATTEST: THE FIRST NATIONAL BANK OF
BOSTON, a National Banking Association
By:___________________________ By:______________________________
Name:_______________________ Name:__________________________
Title:______________________ Title:_________________________
40
<PAGE>
EXHIBIT A
---------
FORM OF CERTIFICATE OF DETERMINATION
OF
RIGHTS, PREFERENCES AND PRIVILEGES
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
MYCOGEN CORPORATION
[ATTACHED]
41
<PAGE>
CERTIFICATE OF DETERMINATION
OF
RIGHTS, PREFERENCES AND PRIVILEGES OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
MYCOGEN CORPORATION
The undersigned, Jerry D. Caulder and Carlton J. Eibl, do hereby
certify:
(a) That Jerry D. Caulder is the duly elected and acting Chief
Executive Officer of Mycogen Corporation, a California corporation (the
"Corporation") and Carlton J. Eibl is the duly elected and acting President,
Chief Operating Officer and Secretary of the Corporation.
(b) That pursuant to the authority conferred upon the Board of
Directors of the Corporation (the "Board") by the Articles of Incorporation of
the Corporation, the Board on October 19, 1995, adopted the following
resolutions creating a series of 200,000 shares of Preferred Stock designated as
Series B Junior Participating Preferred Stock:
NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority granted to
and vested in the Board in accordance with the provisions of the Articles
of Incorporation of the Corporation, the Board hereby creates a series of
Preferred Stock, par value $.001 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares and
fixes the relative rights, preferences and limitations thereof (in addition
to the provisions set forth in the Articles of Incorporation of the
Corporation, which are applicable to the Preferred Stock of all classes and
series), as Series B Junior Participating Preferred Stock as set forth in
the Certificate of Determination, attached to the Amended and Restated
Rights Agreement as Exhibit "A".
RESOLVED FURTHER, that two hundred thousand (200,000) Preferred Shares be,
as of the Effective Date of the Merger (as such term is defined in the
Rights Agreement), initially reserved for issuance upon exercise of the
Rights, such number to be subject to adjustment from time to time in
accordance with the Rights Agreement.
1. DESIGNATION AND AMOUNT. The shares of such series shall be
----------------------
designated as "Series B Junior Participating Preferred Stock" (the "Series B
Preferred Stock") and the number of shares constituting the Series B Preferred
Stock shall be Two Hundred Thousand (200,000). Such number of shares may be
increased or decreased by resolution of the Board; provided, that no decrease
--------
shall reduce the number of shares of Series B Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options,
42
<PAGE>
rights or warrants or upon the conversion of any outstanding securities issued
by the Corporation convertible into Series B Preferred Stock.
2. DIVIDENDS AND DISTRIBUTIONS.
---------------------------
(a) Subject to the rights of the holders of any shares of any series
of Preferred Stock (or any similar stock) ranking prior and superior to the
Series B Preferred Stock with respect to dividends, the holders of shares of
Series B Preferred Stock, in preference to the holders of Common Stock, par
value $.001 per share (the "Common Stock"), of the Corporation, and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board out of funds legally available for the purpose, quarterly dividends
payable in cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or
(b) subject to the provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series B Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount to which holders of
shares of Series B Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(b) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in paragraph (a) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the
Series B Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record
43
<PAGE>
date for the determination of holders of shares of Series B Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which events such dividends shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series B
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding. The Board may fix
a record date for the determination of holders of shares of Series B Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the date
fixed for the payment thereof.
3. VOTING RIGHTS. The holders of shares of Series B Preferred Stock
-------------
shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other Certificate of
Determination creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series B Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise provided by law,
holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
4. CERTAIN RESTRICTIONS.
--------------------
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series B Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:
44
<PAGE>
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Preferred Stock,
except dividends paid ratably on the Series B Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or winding up)
to the Series B Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock, or any shares of stock ranking on a parity
with the Series B Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board) to all holders of
such shares upon such terms as the Board, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
5. RE-ACQUIRED SHARES. Any shares of Series B Preferred Stock
------------------
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Articles of Incorporation, or in any other Certificate of Determination creating
a series of Preferred Stock or any similar stock or as otherwise required by
law.
6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation,
--------------------------------------
dissolution or winding up of the Corporation, no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock shall have
received $100 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series B Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provisions for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of
45
<PAGE>
shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series B Preferred Stock, except distributions made ratably on the
Series B Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall at
any time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the aggregate amount to which
holders of shares of Series B Preferred Stock were entitled immediately prior to
such event under the proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
--------------------------
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series B Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
8. NO REDEMPTION. The shares of Series B Preferred Stock shall not
-------------
be redeemable.
9. RANK. The Series B Preferred Stock shall rank, with respect to
----
the payment of dividends and the distribution of assets, junior to all series of
any other class of the Corporation's Preferred Stock.
10. AMENDMENT. The Articles of Incorporation of the Corporation
---------
shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series B Preferred Stock so as to
effect them adversely without the affirmative vote of the holders of at least a
majority of the outstanding shares of Series B Preferred Stock, voting together
as a single class.
46
<PAGE>
We further declare under penalty of perjury that the matters set forth
in the foregoing Certification of Determination are true and correct of our own
knowledge.
Executed at San Diego, California on October 19, 1995.
___________________________
Jerry D. Caulder,
Chief Executive Officer
___________________________
Carlton J. Eibl, President,
Chief Operating Officer
and Secretary
47
<PAGE>
EXHIBIT B
---------
Form of Right Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER FEBRUARY 20, 2002 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT THE OPTION
OF THE COMPANY AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET
FORTH IN THE AMENDED AND RESTATED RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE AMENDED AND RESTATED RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE AMENDED AND RESTATED RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SUCH AMENDED AND
RESTATED RIGHTS AGREEMENT.]/*/
--
Right Certificate
MYCOGEN CORPORATION
This certifies that____________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Amended and Restated Rights Agreement, dated as
______________________________
/*// The portion of the legend in bracket shall be inserted only if
--
applicable and shall replace the preceding sentence.
48
<PAGE>
of October 19, 1995 (the "Rights Agreement"), by and between Mycogen
Corporation, a California corporation (the "Company"), and The First National
Bank of Boston (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., Boston, Massachusetts time, on February 20, 2002 at the
office of the Rights Agent designated for such purpose, or at the office of its
successor as Rights Agent, one one-hundredth of a fully paid non-assessable
share of Series B Junior Participating Preferred Stock, par value $.001 per
share (the "Preferred Shares") of the Company, at a purchase price of $65.00 per
one one-hundredth of a Preferred Share (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
duly executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred 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 February 21, 1992 based on the Preferred
Shares as constituted at such date. As provided in the Rights Agreement, the
Purchase Price and the number of one one-hundredths of a Preferred Share which
may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and at the office of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right 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 Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $.01 per Right or (ii) may be exchanged in whole or in part for
Preferred Shares, shares of the Company's Common Stock, par value $.001 per
share, or substantially equivalent rights or other consideration as determined
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-hundredth
49
<PAGE>
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.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
50
<PAGE>
WITNESS the signature of the proper officers of the Company and its corporate
seal. Dated as of ___________, 19__.
[SEAL]
ATTEST: MYCOGEN CORPORATION,
a California Corporation
By /s/ Arthur J. Chatroo By: /s/ Jerry D. Caulder
--------------------- --------------------
Arthur J. Chatroo Jerry D. Caulder, Ph.D.
Assistant Secretary Chairman of the Board
and Chief Executive Officer
By:/s/ Carlton J. Eibl
-------------------
Carlton J. Eibl
President, Chief Operating Officer
and Secretary
ATTEST: THE FIRST NATIONAL BANK OF
BOSTON, a National Bank Association
By: __________________________ By: ____________________________
Name:______________________ Name:________________________
Title:_______________________ Title:_________________________
51
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED _____________ hereby sells, assigns and transfers
unto _______________________________________________________________________
(Please print name and address of transferee)
__________________________________________________________________________this
Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________, 19__
______________________________
Signature
Signature Guaranteed:
Signature(s) must be guaranteed by an eligible guarantor institution
(banks, savings banks, savings & loan institutions and credit unions with
membership in an approved Signature Guaranty Medallion Program), pursuant to SEC
Rule 17Ad-15.
- --------------------------------------------------------------------------------
CERTIFICATION
-------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
______________________
Signature
Form of Reverse Side of Right Certificate -- continued
52
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise the Right Certificate.)
To MYCOGEN CORPORATION
The undersigned hereby irrevocably elects to exercise________________
_________________________ Rights represented by this Right Certificate to
purchase the Preferred Shares issuable upon the exercise of such Rights and
requests that certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number _________________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number _________________________
- --------------------------------------------------------------------------------
(Please print name and address)
Dated: __________________, 19__
_________________________
Signature
Signature Guaranteed
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
- --------------------------------------------------------------------------------
53
<PAGE>
CERTIFICATION
-------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_____________________
Signature
- --------------------------------------------------------------------------------
NOTICE
------
The signature in the foregoing Forms of Assignment and Election to
Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
54
<PAGE>
EXHIBIT C
---------
MYCOGEN CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On February 21, 1992, the Board of Directors of Mycogen-Delaware the
predecessor in interest to Mycogen Corporation, a California corporation (the
"Company") declared a dividend of one preferred share purchase right (a "Right")
for each outstanding share of common stock, par value $.001 per share (the
"Common Shares"), of the Company. The dividend was payable on March 6, 1992
(the "Record Date") to the stockholders of record as of the close of business on
that date. Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series B Junior Participating Preferred
Stock, par value $.001 per share (the "Preferred Shares"), of the Company at a
price of $65.00 per one one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in an Amended and Restated Rights Agreement dated as of _______________,
1995 (the "Rights Agreement") between the Company and The First National Bank of
Boston, as Rights Agent (the "Rights Agent").
Pursuant to a merger agreement, Mycogen Corporation, a California
Corporation (the "Company") assumed all of the rights and obligations of
Mycogen-Delaware under the original Rights Agreement dated February 21, 1992 as
amended (collectively, the "Original Rights Agreement"). A Summary of Rights
was originally mailed to all shareholders of record as of the Record Date. This
new summary of Rights reflects the assumption by the Company of Mycogen-Delaware
rights and incorporates all amendments to the Original Rights Agreement
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 25% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any Person
becomes an Acquiring Person) following the commencement of, or announcement of
an intention to make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of 25% or more of
such outstanding Common Shares (the earlier of such dates being called the
"Distribution Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by such Common
Share certificate with a copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record
55
<PAGE>
Date, upon transfer or new issuance of Common Shares will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the surrender for transfer of
any certificates for Common Shares, outstanding as of the Record Date, even
without such notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Shares as of
the Close of Business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on February 20, 2002 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed by the
Company, in each case as described below.
The Purchase Price payable, and the number of Preferred Shares or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1.00 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment of $1.00 per share but will be entitled
to an aggregate payment of 100 times the payment made per Common Share. Each
Preferred Share will have 100 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
100 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
56
<PAGE>
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that, after the Rights become exercisable, the Company is
acquired in a merger or other business combination transaction with an Acquiring
Person or an affiliate thereof, or 50% or more of its consolidated assets or
earning power are sold to an Acquiring Person or an affiliate thereof, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon exercise thereof at the then current exercise price of
the Right, that number of shares of common stock of the acquiring company which
at the time of such transaction will have a market value of two times the
exercise price of the Right.
In the event that any person or group of affiliated or associated
persons becomes the beneficial owner of 25% or more of the outstanding Common
Shares (except pursuant to a tender offer for all of the Common Shares at a
price and on terms determined by a majority of the Continuing Directors to be
fair to and otherwise in the best interests of the Company and its stockholders)
proper provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of Common Shares
(or cash, other securities or property) having a market value of two times the
exercise price of the Right.
At any time after the acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 25% or more of the outstanding
Common Shares and prior to the acquisition by such person or group of 50% or
more of the outstanding Common Shares, the Board of Directors of the Company may
exchange the Rights (other than Rights owned by such person or group which have
become void), in whole or in part, at an exchange ratio of one Common Share (or
a fraction of a Preferred Share having equivalent market value) per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and, in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time within ten (10) days after a person or group of affiliated
or associated persons acquire beneficial ownership of 25% or more of the
outstanding Common Shares (unless the Board of Directors extends such ten-day
period), the Board of Directors of the Company may redeem the Rights in whole,
but not in part, at a price of $.001 per Right (the "Redemption Price"), upon
the approval of a majority of the Continuing Directors. The redemption of the
rights may be made effective at such time on such basis and with such conditions
as the Board of Directors in its sole discretion may establish. Immediately
upon any redemption of the Rights, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be
57
<PAGE>
to receive the Redemption Price. The Rights are also redeemable under other
circumstances as specified in the Rights Agreement.
The terms of the Rights may be amended by the Board of Directors of
the Company without the consent of the holders of the Rights upon the approval
of a majority of the Continuing Directors, including an amendment to lower
certain thresholds described above to not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding Common Shares
then known to the Company to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that from and after such
time as any person becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
58
<PAGE>
EXHIBIT 10.1
FORM OF INDEMNITY AGREEMENT
<PAGE>
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (the "Agreement"), made and entered
into this 19th day of October, 1995 by and between Mycogen Corporation, a
California corporation ("Corporation"), and __________________ ("Director").
RECITALS:
---------
A. Director, a member of the Board of Directors of Corporation, performs
a valuable service in such capacity for Corporation;
B. The Articles of Incorporation of the Corporation authorize and permit
contracts between Corporation and the members of its Board of Directors with
respect to indemnification of such directors;
C. In accordance with the authorization as provided by the California
General Corporation Law, as amended ("Code"), Corporation may purchase and
maintain a policy or policies of Directors and Officers Liability Insurance ("D
& O Insurance"), covering certain liabilities which may be incurred by its
directors in the performance as directors of Corporation;
D. As a result of developments affecting the terms, scope and
availability of D & O Insurance there exists general uncertainty as to the
extent of protection afforded members of the Board of Directors by such D & O
Insurance and by statutory and bylaw indemnification provisions; and
E. In order to induce Director to continue to serve as a member of the
Board of Directors of Corporation, Corporation has determined and agreed to
enter into this Agreement with Director.
NOW, THEREFORE, in consideration of Director's continued service as a
director after the date hereof, the parties hereto agree as follows:
1. INDEMNITY OF OFFICER. Corporation hereby agrees to hold harmless and
indemnify Director to the fullest extent authorized by the provisions of the
Code, as it may be amended from time to time.
2. ADDITIONAL INDEMNITY. Subject only to the limitations set forth in Section
3 hereof, Corporation hereby further agrees to hold harmless and indemnify
Director:
a. against any and all expenses (including attorneys' fees), witness fees,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by Director in connection with any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative
(including an action by or in the right of Corporation) to which Director is,
was or at any time becomes a party, or is threatened to be made a party, by
reason of the fact that Director is, was or at any time becomes a director,
officer, employee or agent of Corporation, or is or was serving or at any time
serves at the request of Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise; and
Page 1 of 7
<PAGE>
b. otherwise to the fullest extent as may be provided to Director by
Corporation under the non-exclusivity provision of the Articles of Incorporation
of Corporation and the Code.
3. LIMITATIONS ON ADDITIONAL INDEMNITY.
a. No indemnity pursuant to Section 2 hereof shall be paid by
Corporation for any of the following:
(i) except to the extent the aggregate of losses to be indemnified
thereunder exceeds the sum of such losses for which Director is indemnified
pursuant to Section 1 hereof or pursuant to any D & O Insurance purchased and
maintained by Corporation;
(ii) in respect to remuneration paid to Director if it shall be
determined by a final judgment or other final adjudication that such
remuneration was in violation of law;
(iii) on account of any suit in which judgment is rendered against
Director for an accounting of profits made from the purchase or sale by Director
of securities of Corporation pursuant to the provisions of Section 16(b) of the
Securities Exchange Act of 1934 and amendments thereto or similar provisions of
any federal, state or local statutory law;
(iv) on account of Director's acts or omissions that involve
intentional misconduct or a knowing and culpable violation of law;
(v) on account of any action, claim or proceeding (other than a
proceeding referred to in Section 8(b) hereof) initiated by the Director unless
such action, claim or proceeding was authorized in the specific case by action
of the Board of Directors of Corporation;
(vi) on account of Director's conduct which is the subject of an
action, suit or proceeding described in Section 7(c)(ii) hereof; or
(vii) if a final decision by a Court having jurisdiction in the
matter shall determine that such indemnification is not lawful (and, in this
respect, both Corporation and Director have been advised that the Securities and
Exchange Commission believes that indemnification for liabilities arising under
the federal securities laws is against public policy and is, therefore,
unenforceable and that claims for indemnification should be submitted to
appropriate courts for adjudication).
b. In addition to those limitations set forth above in paragraph (a) of
this Section 3, no indemnity pursuant to Section 2 hereof in an action by or in
the right of Corporation shall be paid by Corporation for any of the following:
(i) on account of acts or omissions that Director believes to be
contrary to the best interests of the Corporation or its shareholders or that
involve the absence of good faith on the part of Director;
Page 2 of 7
<PAGE>
(ii) with respect to any transaction from which Director derived an
improper personal benefit;
(iii) on account of acts or omissions that show a reckless disregard
for Director's duty to Corporation or its shareholders in circumstances in which
Director was aware, or should have been aware, in the ordinary course of
performing a Director's duties, of a risk of serious injury to Corporation or
its shareholders;
(iv) on account of acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of Director's duty to the
corporation or its shareholders;
(v) to the extent prohibited by Section 310 of the California
Corporations Code, "Contracts In Which Director Has Material Financial
Interest;"
(vi) to the extent prohibited by Section 316 of the California
Corporations Code, "Corporate Actions Subjecting Directors To Joint And Several
Liability" (for prohibited distributions, loans and guarantees);
(vii) in respect of any claim, issue or matter as to which Director
shall have been adjudged to be liable to Corporation in the performance of
Director's duty to Corporation and its shareholders, unless and only to the
extent that the court in which such proceeding is or was pending shall determine
upon application that, in view of all the circumstances of the case, Director is
fairly and reasonably entitled to indemnity for expenses and then only to the
extent that the court shall determine;
(viii) of amounts paid in settling or otherwise disposing of a
pending action without court approval; or
(ix) of expenses incurred in defending a pending action which is
settled or otherwise disposed of without court approval.
4. CONTRIBUTION. If the indemnification provided in Sections 1 and 2 hereof
is unavailable by reason of a Court decision described in subsection 3(a)(vii)
hereof based on grounds other than any of those set forth in subsections
3(a)(ii) through (vi) hereof or in subsections 3(b)(i) through (vi) hereof, then
in respect of any threatened, pending or completed action, suit or proceeding in
which Corporation is jointly liable with Director (or would be if joined in such
action, suit or proceeding), Corporation shall contribute to the amount of
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred and paid or payable by Director in
such proportion as is appropriate to reflect (i) the relative benefits received
by Corporation on the one hand and Director on the other hand from the
transaction from which such action, suit or proceeding arose, and (ii) the
relative fault of Corporation on the one hand and of Director on the other in
connection with the events which resulted in such expenses, judgments, fines or
settlement amounts, as well as any other relevant equitable considerations. The
relative fault of Corporation on the one hand and of Director on the other shall
be determined by reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent the
circumstances resulting in such expenses, judgments, fines or settlement
amounts. Corporation agrees that it would not be just and equitable if
Page 3 of 7
<PAGE>
contribution pursuant to this Section 4 were determined by pro rata allocation
or any other method of allocation which does not take account of the foregoing
equitable considerations.
5. CONTINUATION OF OBLIGATIONS. All agreements and obligations of
Corporation contained herein shall continue during the period Director is a
director, officer, employee or agent of Corporation (or is or was serving at the
request of Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Director shall be subject
to any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal or investigative, by reason of the fact that
Director was a director of Corporation or serving in any other capacity referred
to herein.
6. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30) days after
receipt by Director of notice of the commencement of any action, suit or
proceeding, Director will, if a claim in respect thereof is to be made against
Corporation under this Agreement, notify Corporation of the commencement
thereof; but the omission so to notify Corporation will not relieve it from any
liability which it may have to Director otherwise than under this Agreement.
With respect to any such action, suit or proceeding as to which Director
notifies Corporation of the commencement thereof:
a. Corporation will be entitled to participate therein at its own expense;
b. except as otherwise provided below, to the extent that it may wish,
Corporation jointly with any other indemnifying party similarly notified will be
entitled to assume the defense thereof, with counsel reasonably satisfactory to
Director. After notice from Corporation to Director of its election to assume
the defense thereof, Corporation will not be liable to Director under this
Agreement for any legal or other expenses subsequently incurred by Director in
connection with the defense thereof other than reasonable costs of investigation
or as otherwise provided below. Director shall have the right to employ its
counsel in such action, suit or proceeding but the fees and expenses of such
counsel incurred after notice from Corporation of its assumption of the defense
thereof shall be at the expense of Director unless (i) the employment of counsel
by Director has been authorized by Corporation, (ii) Director shall have
reasonably concluded that there may be a conflict of interest between
Corporation and Director in the conduct of the defense of such action or (iii)
Corporation shall not in fact have employed counsel to assume the defense of
such action, in each of which cases the fees and expenses of Director's separate
counsel shall be at the expense of Corporation. Corporation shall not be
entitled to assume the defense of any action, suit or proceeding brought by or
on behalf of Corporation or as to which Director shall have made the conclusion
provided for in (ii) above; and
c. Corporation shall not be liable to indemnify Director under this
Agreement for any amounts paid in settlement of any action or claim effected
without its written consent. Corporation shall be permitted to settle any
action except that it shall not settle any action or claim in any manner which
would impose any penalty or limitation on Director without Director's written
consent. Neither Corporation nor Director will unreasonably withhold its
consent to any proposed settlement.
Page 4 of 7
<PAGE>
7. ADVANCEMENT AND REPAYMENT OF EXPENSES.
a. In the event that Director employs Director's own counsel pursuant
to Section 6(b)(i) through (iii), Corporation shall advance to Director, prior
to any final disposition of any threatened or pending action, suit or
proceeding, whether civil, criminal, administrative or investigative, any and
all reasonable expenses (including legal fees and expenses) incurred in
investigating or defending any such action, suit or proceeding within ten (10)
days after receiving copies of invoices presented to Director for such expenses.
b. Director agrees that Director will reimburse Corporation for all
reasonable expenses paid by Corporation in defending any civil or criminal
action, suit or proceeding against Director in the event and only to the extent
it shall be ultimately determined by a final judicial decision (from which there
is no right of appeal) that Director is not entitled, under applicable law,
Corporation's Bylaws, this Agreement or otherwise, to be indemnified by
Corporation for such expenses.
c. Notwithstanding the foregoing, Corporation shall not be required
to advance such expenses to Director if Director (i) commences any action, suit
or proceeding as a plaintiff unless such advance is specifically approved by a
majority of the Board of Directors or (ii) is a party to an action, suit or
proceeding brought by Corporation and approved by a majority of the Board which
alleges willful misappropriation of corporate assets by Director, disclosure of
confidential information in violation of Director's fiduciary or contractual
obligations to Corporation, or any other willful and deliberate breach in bad
faith of Director's duty to Corporation or its shareholders.
8. ENFORCEMENT.
a. Corporation expressly confirms and agrees that it has entered into
this Agreement and assumed the obligations imposed on Corporation hereby in
order to induce Director to continue as a director of Corporation, and
acknowledges that Director is relying upon this Agreement in continuing in such
capacity.
b. In the event Director is required to bring any action to enforce
rights or to collect moneys due under this Agreement and is successful in such
action, Corporation shall reimburse Director for all of Director's reasonable
fees and expenses in bringing and pursuing such action.
9. SUBROGATION. In the event of payment under this Agreement, Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Director, who shall execute all documents required and shall do all
acts that may be necessary to secure such rights and to enable Corporation
effectively to bring suit to enforce such rights.
10. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Director by this
Agreement shall not be exclusive of any other right which Director may have or
hereafter acquire under any statute, provision of Corporation's Aritcles of
Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in Director's official capacity and as to action in
another capacity while holding office.
Page 5 of 7
<PAGE>
11. SURVIVAL OF RIGHTS. The rights conferred on Director by this Agreement
shall continue after Director has ceased to be a director, employee or other
agent of Corporation and shall inure to the benefit of Director's heirs,
executors and administrators.
12. SEPARABILITY. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid or unenforceable for any reason, such
invalidity or unenforceability shall not affect the validity or enforceability
of the other provisions hereof.
13. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California.
14. BINDING EFFECT. This Agreement shall be binding upon Director and upon
Corporation, and its successors and assigns, and shall inure to the benefit of
Director, Director's heirs, personal representatives and assigns and to the
benefit of Corporation, and its successors and assigns.
15. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year first above written.
"CORPORATION" "DIRECTOR"
MYCOGEN CORPORATION, By:_____________________________
a California Corporation _______________
Director
By:_____________________________
CARLTON J. EIBL
President
Page 6 of 7
