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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
Cambrex Corporation
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-2476135
- ------------------------------------------ -----------------------
(State of incorporation or organization) (IRS Employer
Identification No.)
One Meadowlands Plaza
East Rutherford, New Jersey 07073
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to Name of each exchange on which each
be so registered class is to be registered
Rights to Purchase Series E
Junior Participating Cumulative American Stock Exchange
Preferred Stock, $1.00 par value ----------------------------------
per share of the Registrant
- -----------------------------------
If this Form relates to the registration of a class of debt securities
and is effective upon filing pursuant to General Instruction A.(c)(1), please
check the following box. / /
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneously with the effectiveness of a
concurrent registration statement under the Securities Act of 1933 pursuant to
General Instruction A.(c)(2), please check the following box. / /
Securities to be registered pursuant to Section 12(g) of the Act:
None
------------------
(Title of Class)
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ITEM 1. Description of Registrant's Securities
to be Registered
On May 23, 1996, the Board of Directors of Cambrex Corporation (the
"Registrant") declared a dividend of one Right for each outstanding share of
Common Stock, $.10 par value per share (the "Common Stock"), of the Registrant.
The Rights will be issued on June 10, 1996 to the stockholders of record on
June 10, 1996 and will expire in ten years, subject to earlier redemption.
Under certain circumstances, each Right entitles the registered holder to
purchase from the Registrant one one-hundredth of a share of Series E Junior
Participating Cumulative Preferred Stock (the "Preferred Stock") of the
Registrant or, in certain circumstances, shares of Common Stock of the
Registrant or common stock of an acquiring company at one-half the market price
of such Common Stock or common stock, as the case may be. The Rights are
designed to make it more likely that all the Registrant's stockholders receive
fair and equal treatment in the event of any proposed takeover of the
Registrant and to guard against the use of partial tender offers or other
coercive tactics to gain control of the Registrant. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Registrant and American Stock Transfer & Trust Company, as Rights
Agent (the "Rights Agent").
Exercise Price
When exercisable, except as set forth below, each Right entitles the
registered holder to purchase from the Registrant one one-hundredth of a share
of Preferred Stock, at a price of $174 per share (the "Purchase Price"),
subject to adjustment in certain circumstances.
Transfer and Detachment
Until the earlier of the Expiration Date (as defined in the Rights
Agreement) or the "Distribution Date," which is the earlier to occur of (i)
close of business on the tenth business day following the time (the "Stock
Acquisition Time") of a public announcement or notice to the Registrant that a
person or group of affiliated or associated persons (an "Acquiring Person") has
acquired, or obtained the right to acquire, beneficial ownership (as defined in
the Rights Agreement) of 15% or more of the outstanding shares of Common Stock
of the Registrant, and (ii) the close of business on the tenth business day, or
such later date as may be determined by the Board of
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Directors of the Registrant, after the date of the commencement or announcement
by a person of an intention to make a tender offer or exchange offer for an
amount of Common Stock which, together with the shares of such stock already
owned by such person, constitutes 15% or more of the outstanding shares of such
Common Stock, the Rights will be evidenced, with respect to any of the
Registrant's Common Stock certificates outstanding as of June 10, 1996, by such
Common Stock certificate with a copy of a Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Registrant's Common Stock. Until
the Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after June 10, 1996, upon the transfer or
issuance of new shares of Common Stock, 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 of
the Registrant's Common Stock certificates outstanding as of June 10, 1996,
even without a copy of the Summary of Rights attached thereto, will also
constitute the transfer of the Rights associated with the shares of Common
Stock 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 Stock as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
Exercisability
The Rights are not exercisable until the Distribution Date. The Rights
will expire on June 5, 2006 unless earlier redeemed by the Registrant.
Right to Acquire Stock at Half Price
In the event that after the Stock Acquisition Time, the Registrant is
acquired in a merger or other business combination transaction or 50% or more
of the Registrant's assets, cash flow or earning power are sold or otherwise
transferred, the Rights Agreement provides that proper provision shall be made
so that each holder of a Right, upon the exercise thereof at the then current
exercise price of the Right, shall thereafter be entitled to receive that
number of shares of common stock of the acquiring
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company which at the time of such transaction would have a market value (as
defined in the Rights Agreement) of two times the exercise price of the Right.
In the event that the Registrant is the surviving corporation of a merger and
its Common Stock is changed or exchanged, proper provision shall be made so
that each holder of a Right will thereafter have the right to receive upon
exercise that number of shares of common stock of the other party to the
transaction having a market value of two times the exercise price of the Right.
In the event that a person or group becomes an Acquiring Person
(otherwise than pursuant to a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms which are determined
to be fair and in the best interests of the Registrant and its stockholders by
a majority of the members of the Board of Directors of the Registrant who are
not Acquiring Persons or representatives or nominees of or affiliated or
associated with an Acquiring Person), proper provision shall be made so that
each holder of a Right, other than Rights that were beneficially owned by the
Acquiring Person, which will thereafter be void, will thereafter have the right
to receive upon exercise that number of shares of Common Stock having a market
value (as defined in the Rights Agreement) of two times the exercise price of
the Right. A person or group will not be deemed to be an Acquiring Person if
the Board of Directors of the Registrant determines that such person or group
became an Acquiring Person inadvertently and such person or group promptly
divests itself of a sufficient number of shares of Common Stock so that such
person or group is no longer an Acquiring Person.
Adjustments
The Purchase Price payable and the number of shares of Preferred Stock
or other securities or property issuable upon the 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, consolidation or
reclassification of the shares of Preferred Stock, (ii) upon the fixing of a
record date for the issuance to holders of Preferred Stock of certain rights,
options or warrants to subscribe for shares of Preferred Stock or "Equivalent
Preference Stock" (as defined in the Rights Agreement) at less than the current
market price of shares of Preferred Stock or Equivalent Preference Stock or
(iii) upon the fixing of a record date for the making of a distribution to
holders of shares of Preferred Stock of
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evidences of indebtedness or assets (excluding regular periodic cash dividends
not exceeding 125% of the last regular periodic cash dividend or dividends
payable in shares of Preferred Stock) or of subscription rights or warrants
(other than those referred to above). The number of Rights and the number of
shares of Preferred Stock issuable upon exercise of each Right are also subject
to adjustment in the case of a stock split, combination or stock dividend on
the shares of Common Stock prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fractional shares of Common Stock will be issued and, in
lieu thereof, an adjustment in cash will be made based on the market value of
shares of Common Stock on the last trading date prior to the date of exercise.
Redemption or Exchange
At any time prior to the earlier of (i) the Stock Acquisition Time and
(ii) June 5, 2006, the Registrant, by resolution of its Board of Directors, may
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). Immediately upon the action of the Board of Directors of
the Registrant electing to redeem the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
At any time after a person becomes an Acquiring Person and prior to the
acquisition by such person of 50% or more of the outstanding Common Stock of
the Registrant, the Board of Directors of the Registrant may exchange the
Rights (other than Rights beneficially owned by such person which have become
void), in whole or in part, for Common Stock of the Registrant at an exchange
ratio of one share of Common Stock per Right (subject to adjustment). The
Registrant may at its option substitute shares of Preferred Stock of the
Registrant for some or all of the shares of Common Stock exchangeable for
Rights, at an exchange ratio of one one-hundredth of a share of Preferred Stock
for each share of Common Stock to be exchanged.
Preferred Stock
The shares of Preferred Stock purchasable upon exercise of the Rights
will be nonredeemable and junior to
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any other series of preferred stock the Registrant may issue (unless otherwise
provided in the terms of such preferred stock or in the Registrant's
Certificate of Incorporation). Each share of Preferred Stock will be entitled
to receive, in the aggregate, a dividend in an amount equal to 100 times the
dividend per share of Common Stock, or, if greater, $10.00 per year. In the
event of liquidation, the holders of shares of Preferred Stock will be entitled
to receive a minimum liquidation payment equal to the greater of $10.00 per
share or an amount equal to 100 times the amount to be paid in liquidation per
share of Common Stock. Each share of Preferred Stock will have 100 votes,
voting together with the shares of Common Stock. In addition, if dividends on
the Preferred Stock are in arrears for four consecutive quarterly payment
periods, the holders of the shares of Preferred Stock will have the right,
voting as a class, to elect two members to the Board of Directors of the
Registrant. In the event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged, each share of Preferred Stock will
be entitled to receive 100 times the amount and type of consideration received
per share of Common Stock. The rights of the shares of Preferred Stock as to
dividends and liquidation, and in the event of mergers and consolidations, are
protected by antidilution provisions.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Registrant, including, without limitation, the
right to vote or to receive dividends.
Amendment
The Rights and the Rights Agreement can be amended by the Board of
Directors of the Registrant in any respect (including, without limitation, any
extension of the period in which the Right Certificates may be redeemed) at any
time prior to the Stock Acquisition Time. From and after such time, without
the approval of the stockholders of the Registrant or the holders of the
Rights, the Board of Directors may only supplement or amend the Rights
Agreement in order (i) to cure any ambiguity, (ii) to correct or supplement any
provision contained in the Rights Agreement which may be defective or
inconsistent with any other provision in the Rights Agreement, (iii) to shorten
or lengthen any time period under the Rights Agreement or (iv) to make any
changes or supplements which the Registrant may deem necessary or desirable
which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring
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Person or an affiliate or associate of any such person), provided that any such
action by the Board of Directors must have the concurrence of a majority of the
Continuing Directors (as defined in the Rights Agreement) and provided that the
Continuing Directors constitute a majority of directors then in office, and
provided that the Rights Agreement may not be supplemented or amended to
lengthen (A) a time period relating to when the Rights may be redeemed or to
modify the ability (or inability) of the Registrant's board of directors to
redeem the Rights, in either case at such time as the Rights are not then
redeemable or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the Rights of or the benefits to
the holders of Rights (other than an Acquiring Person or an affiliate or
associate of any such person).
Issuance of Rights
Each outstanding share of Common Stock on June 10, 1996 will receive
one Right. As long as the Rights are attached to the shares of Common Stock,
the Registrant will issue one Right with each share of Common Stock it issues,
so that all such shares have attached Rights. 100,000 shares of Preferred
Stock have been reserved for issuance upon exercise of the Rights.
A copy of the Rights Agreement, which includes as Exhibit B the form of
Right Certificate, is attached hereto as Exhibit 1 and is incorporated herein
by reference. The foregoing description of the Rights is qualified in its
entirety by reference to such Exhibit.
ITEM 2. Exhibits
1. Rights Agreement between the Registrant and American Stock
Transfer & Trust Company, Rights Agent, dated as of June 5,
1996, which includes as Exhibit B the form of Right
Certificate.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
CAMBREX CORPORATION
(Registrant)
By Peter E. Thauer
-------------------------------------
Peter E. Thauer
Vice President - Law and
Environment, General Counsel and
Secretary
DATE: June 12, 1996
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------------- -----------------------------------------------------------
<S> <C>
1. Rights Agreement between the Registrant and American Stock
Transfer & Trust Company, Rights Agent, dated as of June 5,
1996, which includes as Exhibit B the form of Right
Certificate.
</TABLE>
8
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================================================================================
CAMBREX CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
----------------
RIGHTS AGREEMENT
Dated as of June 5, 1996
================================================================================
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C> <C>
1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7. Exercise of Rights; Purchase Price; Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . . 22
8. Cancellation and Destruction of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9. Reservation and Availability of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10. Preferred Stock Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights . . . . . . . . . . . . . . . . 32
12. Certificate of Adjusted Purchase Price or Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . 54
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power . . . . . . . . . . . . . . . . . . . . 55
14. Fractional Rights and Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
17. Right Certificate Holder Not Deemed a Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
18. Concerning the Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
</TABLE>
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<TABLE>
<S> <C>
19. Merger or Consolidation or Change of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . 70
20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
22. Issuance of New Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
23A. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
24. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
25. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
27. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
28. Determinations and Actions by the Board of Directors, etc . . . . . . . . . . . . . . . . . . . . . . . . . 90
29. Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
31. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Exhibit A - Certificate of Designation
Exhibit B - Form of Right Certificate
Exhibit C - Form of Summary of Rights
</TABLE>
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RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of June 5, 1996 (the
"Agreement"), between CAMBREX CORPORATION, a Delaware corporation (the
"Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY (the "Rights Agent"),
W I T N E S S E T H :
WHEREAS, the Board of Directors of the Company has authorized
and declared a dividend of one Right (as hereinafter defined) for each share of
Common Stock, par value $.10 per share, of the Company outstanding at the Close
of Business (as hereinafter defined) on June 10, 1996 (the "Record Date"), each
Right representing the right to purchase one one-hundredth (1/100th) of a share
of Series E Junior Participating Cumulative Preferred Stock, par value $1.00
per share, of the Company having the rights and preferences set forth in the
form of Certificate of Designation attached hereto as Exhibit A, and has
further authorized the issuance of one Right with respect to each share of
Common Stock of the Company that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Expiration Date and the
Final Expiration Date (as such terms are hereinafter defined);
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NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares of
Common Stock of the Company then outstanding, but shall not include
any employee benefit plan of the Company or any Subsidiary of the
Company or any Person organized, appointed or established by the
Company or such Subsidiary for or pursuant to the terms of any such
employee benefit plan. Notwithstanding the foregoing:
(i) no Person shall become an "Acquiring Person"
as the result of an acquisition of shares of Common Stock by
the Company which, by reducing the number of shares of Common
Stock outstanding, increases the proportionate number of
shares Beneficially Owned by such Person to 15% or more of the
shares of Common Stock of the Company then outstanding,
provided, however, that if a Person shall become the
Beneficial Owner of 15% or more
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of the shares of Common Stock of the Company by reason of
share purchases by the Company and shall, after such share
purchases by the Company, at a time when such Person
Beneficially Owns 15% or more of the Common Stock, become the
Beneficial Owner of any additional shares of Common Stock of
the Company, then such Person shall be deemed to be an
"Acquiring Person";
(ii) if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be
an "Acquiring Person" has become such inadvertently
(including, without limitation, because (A) such Person was
unaware that he or it Beneficially Owned a percentage of
Common Stock that would otherwise cause such Person to be an
"Acquiring Person" or (B) such Person was aware of the extent
of his or its Beneficial Ownership but had no actual knowledge
of the consequences of such Beneficial Ownership under this
Agreement) and without any intention of changing or
influencing control of the Company, and if such Person as
promptly as practicable divested or divests himself or itself
of Beneficial Ownership of a sufficient number of shares of
Common Stock so that such Person would no longer be an
"Acquiring
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Person", then such Person shall not be deemed to be or to have
become an "Acquiring Person" for any purposes of this
Agreement; and
(iii) no Person shall become an "Acquiring Person"
by virtue of ownership of Common Stock of the Company by any
Affiliate and/or Associate of such Person, which Affiliate
and/or Associate is deemed to be an Affiliate and/or Associate
of such Person solely by reason of such Affiliate and/or
Associate being a director or officer of the Company.
(b) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(c) "Affiliate" and "Associate", when used with reference to
any Person, shall have the respective meanings ascribed to such terms
in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the Record Date.
(d) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of,
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including pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy given to such Person in response
to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations
of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or
successor report);
(ii) which such Person or any of such Person's
Affiliates or Associates has the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (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, (A) securities
tendered pursuant to a tender or exchange offer made by or on
behalf of
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such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of Rights
at any time prior to the occurrence of either a Section
11(a)(ii) Event or a Section 13 Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence
of either a Section 11(a)(ii) Event or a Section 13 Event,
which Rights were acquired by such Person or any of such
Person's Affiliates or Associates prior to the Distribution
Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any
Original Rights; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in subparagraph (i) of this paragraph (d))
or disposing of any securi-
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ties of the Company in a manner that relates or is reasonably
likely potentially to relate to influencing the control or
management of the Company;
provided, however, that nothing in this paragraph (d) shall cause a
person engaged in business as an underwriter of securities to be the
Beneficial Owner of, or to beneficially own, any securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such
acquisition.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New
Jersey are authorized or obligated by law or executive order to close.
(f) "Certificate of Designation" shall mean the Certificate
of Designation of Junior Participating Cumulative Preferred Stock
setting forth the powers, preferences, rights, qualifications,
limitations and restrictions of such series of preferred stock of the
Company, a form of which is attached hereto as Exhibit A.
(g) "Close of Business" on any given date shall mean 5:00
P.M., Eastern Standard Time, on such date; provided, however, that if
such date is not a Business
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Day, it shall mean 5:00 P.M., Eastern Standard Time, on the next
succeeding Business Day.
(h) "Common Stock" when used with reference to the
Company shall mean the Common Stock, par value $.10 per share, of the
Company. "Common Stock" when used with reference to any Person other
than the Company which is organized in corporate form shall mean the
capital stock with the greatest voting power, or the equity securities
or other equity interest having power to control or direct the
management, of such Person, or, if such Person is a Subsidiary of
another Person, the capital stock with the greatest voting power of
the Person which ultimately controls such first-mentioned Person.
"Common Stock" when used with reference to any Person which is not
organized in corporate form shall mean units of beneficial interest
which (i) shall represent the right to participate generally in the
profits and losses of such Person (including, without limitation, any
flow-through tax benefits resulting from an ownership interest in such
Person) and which (ii) shall be entitled to exercise the greatest
voting power of such Person or, in the case of a limited partnership,
shall have the power to remove the general partner or partners.
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(i) "Common Stock Equivalents" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(j) "Company" shall have the meaning set forth in the
first paragraph of this Agreement.
(k) "Continuing Director" shall mean any member of the
Board of Directors of the Company (while such person is a member of
such Board of Directors) who either (i) was a member of such Board of
Directors prior to the Stock Acquisition Time or (ii) is not an
Acquiring Person, an Affiliate or Associate of an Acquiring Person, or
a representative or nominee of an Acquiring Person or of any such
Affiliate or Associate, and subsequently became a member of such Board
of Directors, and whose nomination for election or election thereto was
recommended or approved by a majority of the Continuing Directors then
on such Board of Directors.
(l) "Current Market Price" shall have the meaning set
forth in Section 11(d) hereof.
(m) "Current Value" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(n) "Distribution Date" shall have the meaning specified
in Section 3(a) hereof.
(o) "Equivalent Preference Stock" shall have the meaning
set forth in Section 11(b) hereof.
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<PAGE> 13
(p) "Expiration Date" shall have the meaning specified in
Section 7(a) hereof.
(q) "Final Expiration Date" shall have the meaning
specified in Section 7(a) hereof.
(r) "NASDAQ" shall have the meaning set forth in Section
11(d) hereof.
(s) "Outside Directors" shall have the meaning set forth
in Section 11(a)(ii) hereof.
(t) "Person" shall mean any individual, firm,
corporation, partnership, trust or other entity, and shall
include any successor (by merger or otherwise) of such entity.
(u) "Preferred Stock" shall mean shares of Series E
Junior Participating Cumulative Preferred Stock, par value $1.00 per
share, of the Company, having the rights, preferences and limitations
set forth in the form of Certificate of Designation attached to this
Agreement as Exhibit A, and, to the extent there are not a sufficient
number of shares of Series E Junior Participating Cumulative Preferred
Stock authorized to permit the full exercise of the then outstanding
Rights, any other series of preferred stock of the Company designated
for such purpose by the Board of Directors of the Company containing
terms substantially
10
<PAGE> 14
similar to the terms of the Series E Junior Participating Cumulative
Preferred Stock.
(v) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(w) "Purchase Price" shall have the meaning set forth in
Section 4(a) hereof.
(x) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(y) "Redemption Price" shall have the meaning set forth
in Section 23(a) hereof.
(z) "Right" shall have the meaning set forth in the
WHEREAS clause 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 of this Agreement.
(cc) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(dd) "Section 11(a)(ii) Trigger Date" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(ee) "Section 13 Event" shall have the meaning set forth in
Section 13(a) hereof.
(ff) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
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<PAGE> 15
(gg) "Stock Acquisition Time" shall mean the time of
occurrence of whichever of the following first occurs: (i) the first
public announcement by the Company or an Acquiring Person that the
Acquiring Person has become such, or (ii) the communication to the
Company (including, without limitation, to the directors of the
Company) of any notice (including, without limitation, any written
consent or notice related thereto) from an Acquiring Person indicating
or reflecting that the Acquiring Person has become such.
(hh) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions are at the time beneficially
owned, directly or indirectly, by such Person or otherwise controlled
by such Person.
(ii) "Substitution Period" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(jj) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(kk) "Trading Day" shall have the meaning set forth in
Section 11(d) hereof.
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<PAGE> 16
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. Any actions which may be taken by the
Rights Agent pursuant to the terms of this Agreement may be taken by any such
Co-Rights Agent.
Section 3. Issue of Right Certificates. (a) Until the
earlier of the Close of Business on (i) the tenth Business Day after the Stock
Acquisition Time, or (ii) the tenth Business Day, or such specified or
unspecified later date as may be determined by action of the Board of Directors
of the Company, after the date of the commencement of (as determined by
reference to Rule 14d-2(a), as in effect under the Exchange Act on the Record
Date), or first public announcement of the intent of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person organized, appointed
or established by the Company or such Subsidiary as a fiduciary pursuant to the
terms of any such employee benefit plan) to commence (which intention to
commence remains in effect for five Business Days after such announcement), a
tender or exchange
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<PAGE> 17
offer for an amount of Common Stock of the Company which, together with the
shares of such stock already owned by such Person, constitutes 15% or more of
the outstanding Common Stock of the Company (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 described in clauses (i) and (ii) above being herein
referred to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for shares of Common Stock registered in the names of the holders
of Common Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate Right Certificates, and (y) the
right to receive Right Certificates will be transferable only in connection
with the transfer of the underlying Common Stock. As soon as practicable after
the Distribution Date, the Rights Agent will send, by first class, insured,
postage-prepaid mail, to each record holder of Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right for each share
of Common Stock so held, subject to adjustment as provided herein and to the
provisions of Section 14(a) here-
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<PAGE> 18
of. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) On the Record Date or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase
Preferred Stock, in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Stock outstanding as of the Record Date, until the
earlier of the Distribution Date or the Expiration Date, the Rights will be
evidenced by such certificates for Common Stock registered in the names of the
holders of Common Stock with a copy of the Summary of Rights attached thereto.
Until the earliest of the Distribution Date, the Expiration Date and the Final
Expiration Date, the surrender for transfer of any of the certificates for
Common Stock outstanding on the Record Date, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate.
(c) Certificates for Common Stock issued (or delivered
from the Company's treasury) after the Record Date but prior to the earliest of
the Distribution Date, the
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<PAGE> 19
Expiration Date and 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 a Rights Agreement between Cambrex
Corporation (the "Corporation") and American Stock Transfer & Trust
Company, dated as of June 5, 1996 (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 the
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. The Corporation will
mail to the holder of this certificate a copy of the Rights Agreement
without charge promptly after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights
issued to an Acquiring Person or any Associate or Affiliate thereof
(as such terms are defined in the Rights Agreement) may be null and
void. The Rights shall not be exercisable, and shall be void so long
as held, by a holder in any jurisdiction where the requisite
qualification for the issuance to such holder, or the exercise by such
holder of the Rights in such jurisdiction, shall not have been
obtained or be obtainable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
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<PAGE> 20
Section 4. Form of Right Certificates. (a) The Right
Certificates (and the forms of election to purchase shares, certification and
assignment to be printed on the reverse thereof) shall be substantially in the
form set forth in 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 on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 11 and 22 hereof, the
Right Certificates, whenever distributed, which are distributed in respect of
shares of Common Stock which were issued and outstanding as of the Record Date,
shall be dated as of the Record Date, and all Right Certificates which are
distributed in respect of other shares of Common Stock shall be dated as of the
respective dates of issuance of such Common Stock, and in each such case on
their face shall entitle the holders thereof to purchase such number of one
one-hundredths of a share of Preferred Stock as shall be set forth therein at
the price per one one-hundredth of a share of Preferred Stock set forth therein
(the "Purchase Price"), but the number and type of secu-
17
<PAGE> 21
rities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided in this Agreement.
(b) Any Right Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
(whether or not in writing) which has as a primary purpose or effect the
avoidance of the provisions of Section 7(e), Section 11(a)(ii) or of Section 13
hereof with respect to the limitation of the Rights beneficially owned by an
Acquiring Person (or any Associate or Affiliate thereof), and any
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<PAGE> 22
Right Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend modified as necessary to apply to such Person:
The Rights represented by this Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement). Accordingly, this Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company manually or by
facsimile signature by the Chairman of the Board, the President or any Vice
President and have affixed thereto the Company's seal or a facsimile thereof
which shall be attested by the Secretary or any Assistant Secretary, either
manually or by facsimile signature. The Right Certificates shall be
countersigned by the Rights Agent manually and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates, nevertheless, may be countersigned by
the Rights Agent, and issued and delivered
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<PAGE> 23
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its principal office in New York, New York,
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 and certificate number of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 4(b) and 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 Expiration Date and the Final
Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certifi-
20
<PAGE> 24
cates, entitling the registered holder to purchase a like number of shares of
Preferred Stock (or other securities, cash, and/or assets, as the case may be)
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 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, with the
form of assignment and certificate appropriately executed, at the principal
office of the Rights Agent in New York, New York. Neither the Rights Agent nor
the Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Right Certificate or Right Certificates
until the registered holder shall have completed and signed the certificate
contained in the form of assignment on the reverse side of such Right
Certificate or Right Certificates and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall 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
21
<PAGE> 25
tax or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of any Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, if requested by
the Company, 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
execute and deliver a new Right Certificate of like tenor to the Rights Agent
for counter-signature and delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights. (a) Subject to Section 7(e) hereof, 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 certificate on the reverse side thereof duly executed,
to the Rights Agent at the principal office of the Rights Agent in New York,
New
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<PAGE> 26
York, together with payment of the Purchase Price for each one one-hundredth of
a share of Preferred Stock as to which the Rights are exercised, at or prior to
the earliest of (i) the Close of Business on June 5, 2006 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided
in Section 23 hereof, (iii) the time at which the Rights are exchanged as
provided in Section 23A hereof, or (iv) the time at which the Rights expire
pursuant to Section 13(d) hereof (the earliest of such times being herein
referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a
share of Preferred Stock issued pursuant to the exercise of a Right shall
initially be $174, 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 and certificate duly
executed, accompanied by payment (by certified check or bank draft payable to
the order of the Company) of the Purchase Price for the Preferred Stock (or
other shares, securities, cash or other assets, as the case may be) to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of the Rights pursuant hereto in cash, or by certified check
or
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<PAGE> 27
bank draft payable to the order of the Company, the Rights Agent shall, subject
to Section 20(k) hereof, (i)(A) promptly requisition from any transfer agent of
the Preferred Stock (or make available, if the Rights Agent is the transfer
agent) certificates for the number of shares of Preferred Stock to be purchased
(and the Company hereby irrevocably authorizes its transfer agent to comply
with all such requests), or (B) if the Company shall have elected to deposit
the total number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-hundredths of a share
of Preferred Stock as are to be purchased (in which case certificates for the
shares of Preferred Stock represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company hereby directs
the depositary agent to comply with such 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) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt, promptly deliver such
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<PAGE> 28
cash to or upon the order of the registered holder of such Right Certificate.
In the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(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 and delivered to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
such Acquiring Person becomes such, or (iii) a transferee of any such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with such Acquiring Person becoming such
25
<PAGE> 29
and receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from such Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become null
and void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Right Certificates
or any other Person as a result of its failure to make any determination with
respect to an Acquiring Person or any of its respective Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Right
Certificate upon the occurrence of any purported transfer or exercise as set
forth in this Section 7 unless such registered holder shall have (i) com-
26
<PAGE> 30
pleted and signed the certificate following the form of assignment or election
to purchase set forth on the reverse side of the Right Certificate surrendered
for such assignment or exercise, and (ii) provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of 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
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.
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<PAGE> 31
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued shares of Preferred Stock or
any authorized and issued shares of Preferred Stock held in its treasury (and
will use its best efforts, following the occurrence of a Section 11(a)(ii)
Event, to cause to be reserved and kept available out of its authorized and
unissued shares of Common Stock and/or other securities or out of its
authorized and issued shares of Common Stock and/or other securities held in
its treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Section 11(a)(ii) Event, Common Stock and/or other securities)
that will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first occurrence
of a Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with
Section 11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form,
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<PAGE> 32
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company may, acting by resolution
of its Board of Directors, temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(b), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained.
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<PAGE> 33
(c) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one one-hundredths of a
share of Preferred Stock (and, following the occurrence of a Section 11(a)(ii)
Event, Common Stock and/or other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares.
(d) 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 shares of Preferred Stock (or shares of Common
Stock and/or other securities, as the case may be) 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 a number of one one-hundredths of a share of Preferred Stock (or
shares of Common Stock and/or other securities, as the case may be), in a name
other than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates for
shares of Pre-
30
<PAGE> 34
ferred Stock (or Common Stock and/or other securities, as the case may be) or
depositary receipts for Preferred Stock 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 satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each person in
whose name any certificate for a number of one one-hundredths of a share of
Preferred Stock (or shares of Common Stock and/or other securities, as the case
may be) is issued upon the exercise of Rights shall for all purposes be deemed
to have become the holder of record of shares of Preferred Stock (or shares of
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the 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 Stock (or shares of Common Stock and/or other securities, as the case
may be) transfer books of the Company are closed, such person shall be deemed
to have become the record holder of such shares (fractional and otherwise) on,
and such certificate shall be dated, the next succeeding
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<PAGE> 35
Business Day on which the Preferred Stock (or shares of Common Stock and/or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate, as such, shall not be entitled to any rights of a stockholder of
the Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any meetings or other proceedings of the Company,
except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares,
or fractions thereof, 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 Stock payable in
shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock into a
greater number of shares, (C) combine or consolidate the outstanding Preferred
Stock into a smaller number of shares, or (D) issue any shares of its capital
stock in a reclassifica-
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tion of the Preferred Stock (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in Section 7(e) hereof and
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 Preferred Stock or
capital stock, as the case may be, issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Stock transfer books of the
Company were open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification.
If an event occurs which would require an adjustment under
both Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii) hereof.
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<PAGE> 37
(ii) In the event (a "Section 11(a)(ii) Event") that any
Person, alone or together with its Affiliates and Associates, shall become an
Acquiring Person, unless the event causing such Person to become an Acquiring
Person is a Section 13 Event or is an acquisition of Common Stock of the
Company pursuant to a tender or exchange offer for all outstanding Common Stock
of the Company at a price and on terms determined by at least a majority of the
members of the Board of Directors of the Company who are not Acquiring Persons
or representatives, nominees, Affiliates or Associates of an Acquiring Person
(the "Outside Directors"), after receiving advice from one or more investment
banking firms, to be (A) at a price which is fair to stockholders (taking into
account all factors which such Outside Directors deem relevant, including,
without limitation, prices which could reasonably be achieved if the Company or
its assets were to be sold on an orderly basis designed to realize maximum
value) and (B) otherwise in the best interests of the Company and its
stockholders, then proper provision shall be made so that each holder of a
Right (except as provided below and in Section 7(e) hereof), shall thereafter
have the right to receive, upon exercise thereof following the Distribution
Date at the then current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one-hundredths of a share of Preferred Stock,
such number
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<PAGE> 38
of shares of Common Stock of the Company as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of such Section 11(a)(ii) Event,
whether or not such Right was then exercisable, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by 50%
of the Current Market Price per share of the Common Stock of the Company
(determined pursuant to Section 11(d) hereof) on the date of the occurrence of
such Section 11(a)(ii) Event (such number of shares being hereinafter referred
to as the "Adjustment Shares"). The Company shall notify the Rights Agent as
to any Persons who are deemed by the Company to be Acquiring Persons or
Associates, Affiliates or transferees (as described in subparagraphs (ii) and
(iii) of Section 7(e) hereof) of such Persons and shall identify any Rights
pertaining thereto.
(iii) In lieu of issuing shares of Common Stock of the
Company in accordance with Section 11(a)(ii) hereof, the Company, acting by
resolution of its Board of Directors (which resolution shall be effective only
with the concurrence of a majority of the Continuing Directors), may (and, in
the event that the number of shares of Common Stock
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<PAGE> 39
which are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof, the Company, acting by resolution of
its Board of Directors (which resolution shall be effective only with the
concurrence of a majority of the Continuing Directors), shall): (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the exercise
of a Right (the "Current Value"), over (2) the Purchase Price attributable to
each Right (such excess, the "Spread") and (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3) Common Stock or other equity securities
of the Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors) has deemed to have the
same value as shares of Common Stock of the Company (such shares or units of
preferred stock hereinafter called "Common Stock Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing having an aggregate value equal to the Current
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<PAGE> 40
Value, where such aggregate value has been determined by action of the Board of
Directors of the Company (with the concurrence of 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 which has theretofore
performed no services for the Company or any Subsidiary of the Company in the
past five years; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii) Event
and (y) the first date that the right to redeem the Rights pursuant to Section
23 hereof, as such date may be amended pursuant to Section 26 hereof, shall
expire (the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock of the Company (to the extent available)
and then, if necessary, cash, securities and/or assets, that in the aggregate
have a value equal to the Spread. If, after the occurrence of a Section
11(a)(ii) Event, the number of shares of Common Stock that are authorized by
the Company's Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not
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<PAGE> 41
sufficient to permit exercise in full of the Rights in accordance with Section
11(a)(ii) hereof and the Company, acting by resolution of its Board of
Directors (which resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), shall determine in good faith that it is
likely that sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such period as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action is to be taken pursuant to
the terms of this Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek such stockholder
approval for the authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to the first sentence of
this Section 11(a)(iii) and to determine the value thereof. In the event of
any such suspension, the Company shall issue a public
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<PAGE> 42
announcement stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement at such time as the suspension is
no longer in effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the Current Market Price per share of Common Stock (as
determined pursuant to Section 11(d) hereof) on the date of the first
occurrence of the Section 11(a)(ii) Event, and the per share or per unit value
of any Common Stock Equivalents shall be deemed to equal the Current Market
Price per share of the Common Stock of the Company 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 shares of
Preferred Stock entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Preferred
Stock ("Equivalent Preference Stock")) or securities convertible into shares of
Preferred Stock or Equivalent Preference Stock at a price per share of
Preferred Stock or Equivalent Preference Stock (or having a conversion price
per share, if a security convertible into shares of Preferred Stock or
Equivalent Preference Stock) less than the Current Market Price per share of
the Preferred Stock (as defined in Section 11(d) hereof) on such
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<PAGE> 43
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date plus the number of
additional shares of Preferred Stock and/or Equivalent Preference Stock which
the aggregate offering price of the total number of such shares so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price, and
the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Preference Stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be
paid 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 (with the concurrence of a majority of
the Continuing Directors), whose determination shall be described in a
statement filed with the Rights Agent. Preferred Stock owned by or held for
the account of the Company shall not be deemed outstanding for the purpose of
any such
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<PAGE> 44
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 Preferred Stock (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 periodic cash dividend at a rate
not in excess of 125% of the rate of the last regular periodic cash dividend
theretofore paid or a dividend payable in Preferred Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Market Price per
share of Preferred Stock (as defined in Section 11(d) hereof) on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, with the concurrence of a majority of the Continuing
Directors, whose determination shall be described
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<PAGE> 45
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 share of Preferred Stock, and the denominator of
which shall be such Current Market Price per share of Preferred Stock. Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, the
"Current Market Price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common Stock for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event that the
Current Market Price per share of Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (a) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into such Common Stock or (b) any subdivision,
combination or reclassification of such Common Stock, and prior to the
expiration of 30 Trading Days after the ex-dividend date for
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<PAGE> 46
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, as the case may be, then, and in each such
case, the "Current Market Price" shall be appropriately adjusted to take into
account the ex-dividend trading. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the American Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the American Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the shares of Common Stock
are listed or admitted to trading or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing bid and asked
prices as
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<PAGE> 47
furnished by a professional market maker making a market in shares of Common
Stock selected by the Company, acting by resolution of the Board of Directors
of the Company (which resolution shall be effective only with the concurrence
of a majority of the Continuing Directors). If on any such date no market
maker is making a market in shares of Common Stock, the fair value of such
shares on such date as determined in good faith by the Company, acting by
resolution of the Board of Directors of the Company (which resolution shall be
effective only with the concurrence of a majority of the Continuing Directors),
shall be used. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares
of Common Stock are not listed or admitted to trading on any national
securities exchange but are quoted on NASDAQ, a day on which NASDAQ is in
operation or if the shares of Common Stock are neither listed or admitted to
trading on any national securities exchange nor quoted on NASDAQ, a Business
Day. If the current per share market price of the Common Stock cannot be
determined in the manner provided above, or if the Common Stock is not publicly
held or not so listed or traded, "Current Market Price" per share of Common
Stock shall mean the fair value per share as determined in good
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<PAGE> 48
faith by the Company, acting by resolution of the Board of Directors of the
Company (which resolution shall be effective only with the concurrence of a
majority of the Continuing Directors), whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the
"Current Market Price" per share of Preferred Stock shall be determined in the
same manner as set forth for the Common Stock in Section 11(d)(i) hereof (other
than the last sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in Section 11(d)(i) hereof, the "Current Market Price" per share of Preferred
Stock shall be conclusively deemed to be an amount equal to 100 (as such number
may be appropriately adjusted for such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock occurring after the date
of this Agreement) multiplied by the Current Market Price per share of the
Common Stock. If neither the Common Stock nor the Preferred Stock is publicly
held or so listed or traded, the "Current Market Price" per share of Preferred
Stock shall mean the fair value per share as determined in good faith by the
Company, acting by resolution of its Board
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<PAGE> 49
of Directors (which resolution shall be effective only with the concurrence of
a majority of the Continuing Directors), whose determination shall be described
in a statement filed with Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "Current Market Price" of
one one-hundredth of a share of Preferred Stock shall be equal to the "Current
Market Price" of one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common Stock or
other share or the nearest one-millionth of a share of Preferred Stock, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any
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Right thereafter exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Stock, thereafter the
Purchase Price and the number of such other shares so receivable upon exercise
of any Right and the number of Rights outstanding 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 Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock
shall apply on like terms to any such other shares, provided, however, that the
Company shall not be liable for its inability or failure to reserve and keep
available for issuance upon exercise of the Rights pursuant to Section
11(a)(ii) a number of shares of Common Stock greater than the number then
authorized by the Certificate of Incorporation of the Company but not
outstanding or reserved for any other purpose.
(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 share of Preferred Stock purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
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(h) Unless the Company shall have exercised its election
as provided in Section 11(i) hereof, upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(b) and (c) hereof, 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 share of Preferred Stock (calculated to the
nearest one-millionth of a share of Preferred Stock) obtained by (i)
multiplying (A) the number of one one-hundredths of a share covered by a Right
immediately prior to such adjustment of the Purchase Price by (B) 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 share
of Preferred Stock 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 share of Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record
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<PAGE> 52
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest 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
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<PAGE> 53
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares of Preferred Stock, or fraction thereof,
issuable upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of shares 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 the then par value, if any, of the
one one-hundredths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made
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<PAGE> 54
effective as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the holder of any Right
exercised after such record date the Preferred Stock, or a fraction thereof,
and other capital stock or securities of the Company, if any, issuable upon
such exercise over and above the Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company, acting by resolution of its Board of Directors
(which resolution shall be effective only with the concurrence of a majority of
the Continuing Directors), 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
Stock, any issuance wholly for cash of any Preferred Stock at less than the
current market price, any issuance wholly
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for cash of Preferred Stock or securities which by their terms are convertible
into or exchangeable for Preferred Stock, any stock dividends or any issuance
of rights, options or warrants referred to herein above in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such shareholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or in a series of related transactions, assets,
cash flow or earning power aggregating more than 50% of the assets, cash flow
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding
or agreements in effect that would substantially diminish or otherwise
eliminate the benefits
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intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights previously
owned by such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event the Company shall at any time after the date of
this Agreement and prior to the Distribution Date (i) declare or pay any
dividend on the Common Stock of the Company payable in such Common Stock or
(ii) subdivide the outstanding Common Stock of the Company into a greater
number of shares (by reclassification or otherwise than by payment of dividends
in such Common Stock) or (iii) combine or consolidate the outstanding Common
Stock of the Company into a smaller number of shares, then in any such case,
(x) the number of one one-hundredths of a share
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<PAGE> 57
of Preferred Stock purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one one-hundredths of a
share of Preferred Stock so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of shares of Common Stock of the
Company outstanding immediately before such event and the denominator of which
is the number of shares of such Common Stock outstanding immediately after such
event and (y) action shall be taken such that each share of Common Stock of the
Company outstanding immediately after such event shall have issued with respect
to it that number of Rights which each share of such Common Stock outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(p) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected. If an event occurs which would require an
adjustment under Section 11(a)(ii) hereof and this Section 11(p), the
adjustments provided for in this Section 11(p) shall be in addition and prior
to any adjustment required pursuant to Section 11(a)(ii) hereof.
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 (a) promptly prepare a certificate setting forth such
ad-
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justment, and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Common Stock and Preferred Stock a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate (or if prior to the
Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25 of this Agreement. Notwithstanding
the foregoing sentence, the failure of the Company to make such certificates or
give such notice shall not affect the validity 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 therein contained. Any
adjustment to be made pursuant to Sections 11 and 13 hereof shall be effective
as of the date of the event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. (a) In the event (a "Section 13 Event") that,
following the Stock Acquisition Time, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof) and the Company shall not be the surviving or continuing corporation of
such merger, consolidation or combination, (y) any Person (other
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than a Subsidiary of the Company in a transaction which complies with Section
11(o) hereof) shall consolidate with the Company, or merge with and into the
Company, and the Company shall be the surviving or continuing corporation of
such merger or consolidation and, in connection therewith, all or part of the
Common Stock shall be changed into or exchanged for stock or other securities
of the Company or of any Person or cash or any other property, or (z) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets, cash
flow or earning power aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as a whole and
calculated on the basis of the Company's most recent regularly prepared
financial statement) to any other Person or Persons (other than the Company or
any Subsidiary of the Company in one or more transactions each of which
complies with Section 11(o) hereof), then, and in each such case (except as
provided in Section 13(d) hereof), proper provision shall be made so that (i)
each holder of a Right (except as otherwise provided in Section 7(e) hereof)
shall thereafter have the right to receive, upon the exercise thereof at the
then current Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid, nonassessable and
freely
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tradable shares of Common Stock of the Principal Party (as hereinafter
defined), not subject to any liens, encumbrances, rights of call, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a Sec-
tion 11(a)(ii) Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred to as
the "Purchase Price" for each Right and for all purposes of this Agreement) by
(B) 50% of the Current Market Price per share of Common Stock of such Principal
Party (determined pursuant to Section 11(d) hereof) on the date of consummation
of such merger, consolidation, sale or transfer; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to such
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Principal Party, it being specifically intended that the provisions of Section
11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with Section 9 hereof) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be possible, in
relation to its Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the first occurrence of any Section 13 Event. The Company
shall not consummate any such merger, consolidation, sale or transfer unless
prior thereto the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement containing the provisions required by
this Section 13.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a) hereof, the Person
that is the issuer of any securities into which shares of Common Stock
of the Company are converted in such merger or consolidation,
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and if no securities are so issued, the Person that is the other party
to such merger or consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a) hereof, the Person that is
the party receiving the greatest portion of the assets, cash flow or
earning power transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such
Person is not at any time and has not been continuously over the preceding
twelve month period registered under Section 12 of the Exchange Act, and such
Person is a direct or indirect Subsidiary of another Person the Common Stock of
which is and has been so registered, "Principal Party" shall refer to such
other Person; and (2) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Stock of two or more of which
are and have been so registered, "Principal Party" shall refer to whichever of
such Persons is the issuer of the Common Stock having the greatest aggregate
market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of shares of
authorized Common Stock which have not been issued or reserved for issuance to
permit the exer-
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cise in full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement containing the provisions set forth in
paragraphs (a) and (b) of this Section 13 and further providing that, as soon
as practicable after the date of any such Section 13 Event, the Principal Party
will:
(i) prepare and file a registration statement under the
Act with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form and will use its best
efforts to cause such registration statement to (A) become effective
as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that a Section 13
Event shall occur at any time after the occurrence of a Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised
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shall thereafter become exercisable in the manner described in Section 13(a)
hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, this Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) hereof if (i) such transaction is
consummated with a Person or Persons who acquired Common Stock of the Company
pursuant to a tender offer or exchange offer for all outstanding Common Stock
of the Company which complies with the provisions of Section 11(a)(ii) hereof
(or a wholly owned Subsidiary of any such Person or Persons), (ii) the price
per share of Common Stock of the Company offered in such transaction is not
less than the price per share of Common Stock of the Company paid to all
holders of Common Stock of the Company whose shares were purchased pursuant to
such tender offer or exchange offer and (iii) the form of consideration being
offered to the remaining holders of Common Stock of the Company pursuant to
such transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
(e) The Company covenants and agrees that it will not,
after the Stock Acquisition Time, engage in any Sec-
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tion 13 Event if at the time of or after such event there are any charter or
by-law provisions or any rights, warrants or other instruments outstanding or
any other action taken which would diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
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 fractions of 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 of the Rights for any day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the American
Stock Exchange or, if the Rights are not listed or admitted to trading on the
American
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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 Company, acting by resolution of its Board of
Directors, which resolution shall be effective only with the concurrence of 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 Company, acting by resolution of its
Board of Directors (which resolution shall be effective only with the
concurrence of a majority of the Continuing Directors), shall be used.
(b) The Company shall not be required to issue fractions
of shares of Preferred Stock (other than fractions which are integral multiples
of one one-hundredths of a share of Preferred Stock) upon exercise of the
Rights or to
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distribute certificates which evidence fractional shares (other than fractions
which are integral multiples of one one-hundredths of a share of Preferred
Stock). Fractions of Preferred Stock in integral multiples of one
one-hundredths of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided that
such agreement shall provide that the holders of depositary receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock. In lieu of fractional shares which
are not integral multiples of one one-hundredths of a share of Preferred Stock,
the Company may pay to the registered holders of Right Certificates at the time
such Right Certificates are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one share of
Preferred Stock. For purposes of this Section 14(b), the current market value
of a share of Preferred Stock shall be the closing price of a share of
Preferred Stock (as determined pursuant to the second sentence of Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of a Section 11(a)(ii)
Event or a Section 13 Event, the Company shall not be required to issue
fractions of shares of its
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Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of its Common Stock. In lieu of fractional shares
of its Common Stock, the Company may 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 share of
its Common Stock. For purposes of this Section 14(c), the current market value
of one share of Common Stock of the Company shall be the closing price of one
share of Common Stock of the Company (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, except the rights of action vested in the Rights
Agent pursuant to Section 18 hereof, are vested in the respective registered
holders of the Right Certificates (and, prior to the Distribution Date, the
registered holders of Common Stock); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of Common Stock), without the
consent of the Rights Agent or of any holder of any other Right Certificate
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<PAGE> 69
(or, prior to the Distribution Date, of Common Stock), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such 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 such Right consents and agrees with the Company and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for shares of Common Stock registered in
the name of the holders of such shares (which certificates for shares
of Common Stock shall also constitute certificates for Rights) and
each Right will be transferable only in connection with the transfer
of Common Stock;
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(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 with the
appropriate forms and certificates duly completed and fully executed;
(c) the Company and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock 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 Stock certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of 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
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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
Shareholder. No holder, as such, of any Right or Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
one one-hundredth of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right or 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 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certifi-
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cate 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, or
expense, incurred without negligence, bad faith or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises.
(b) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon any
Right Certificate or certificate for Preferred Stock or Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement,
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or other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper Person
or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however, that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. The purchase of all or
substantially all of the Rights Agent's assets employed in the performance of
transfer agent activities shall be deemed a merger or consolidation for
purposes of this Section 19. 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
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such Right Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such Right
Certificates either in its prior name or in its changed name; and in all such
cases such Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
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(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel
shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter (including, without limitation, the identity of an
Acquiring Person and the determination of the Current Market Price per
share of Preferred Stock and Common Stock) be proved or established by
the Company prior to taking or suffering any action hereunder, such
fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the
President, any Vice President, the Treasurer 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 or
suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
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(c) The Rights Agent shall be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except as to its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any adjustment required under the provisions of
Sections 11 or 13 hereof or responsible for the manner, method or
amount of any such adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual
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<PAGE> 77
notice of any such adjustment), nor shall it be responsible for any
determination by the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors) of the Current
Market Price of the Rights or Preferred Stock or Common Stock, nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Common Stock or Preferred Stock or other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether
any shares of Preferred Stock or Common Stock or other securities
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or
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any Assistant Treasurer of the Company, and to apply to such officers
for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in
good faith in accordance with instructions of any such officer.
(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,
except it may not act for an Acquiring Person in an investment banking
capacity, or otherwise assist an Acquiring Person in ways hostile to
the Company, without the consent of the Company.
(i) The Rights Agent may execute and exercise any of the
rights and powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, omission,
de-
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fault, neglect or misconduct of any such attorneys or agents or for
any loss to the Company or to holders of the Rights resulting from any
such act, omission, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds
for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached
to the form of assignment or form of election to purchase, as the case
may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be dis-
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charged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Stock and
Preferred Stock by registered, certified or express mail, and to the holders of
the Right Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Common Stock and Preferred Stock by registered, certified
or express mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of 30 days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent
or by the holder of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any state
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of the United States, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $100
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 Stock and Preferred Stock, and mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or
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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 resolution of
its Board of Directors (which resolution shall, if adopted after the Stock
Acquisition Time, be effective only with the concurrence of 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 of stock 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 Stock following the Distribution Date and prior to the
redemption or expiration of the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities, notes or debentures hereinafter issued by
the Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company (with the concurrence of 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 Certificates shall be issued if, and
to the extent that, the Company shall be advised by counsel that
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such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right Certificates would
be issued, and (ii) no such Right Certificates 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, by resolution
of its Board of Directors, at its option, at any time prior to the earlier of
(x) the Stock Acquisition Time or (y) the Close of Business on the Final
Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per Right (payable in cash, shares of
Common Stock (based on the Current Market Price of the Common Stock at the time
of redemption) or any other form of consideration deemed appropriate by the
Board of Directors of the Company), appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "Redemption
Price").
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights (or at such time
subsequent to such action as the Board of Directors may determine), and without
any further action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the
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holders of Rights shall be to receive the Redemption Price. Within 10 days
after the action of the Board of Directors ordering the redemption of the
Rights, the Company shall give notice of such redemption to the holders of the
then outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase any Rights at any time in any
manner other than that specifically set forth in this Section 23, and other
than in connection with the repurchase of Common Stock of the Company prior to
the Distribution Date.
Section 23A. Exchange. (a) The Board of Directors of the
Company may, at its option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e)) for Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately
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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 wholly owned Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Stock as a fiduciary for or pursuant to the terms of any such
employee benefit plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 23A, evidence of which shall have been filed with the Rights
Agent, and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity
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of such exchange. The Company shall promptly 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 Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 23A, the
Company, at its option, may substitute shares of Preferred Stock (or any other
series of preferred stock of the Company containing terms substantially similar
to the terms of the Preferred Stock) for some or all of the shares of Common
Stock exchangeable for Rights, at the initial rate of one one-hundredth of a
share of Preferred Stock (or of such other series of preferred stock of the
Company) for each share of Common Stock, as appropriately adjusted to reflect
adjustments in the voting rights of the Preferred Stock pursuant to the terms
thereof, so that the fraction of a share of Preferred Stock (or of such other
series of pre-
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ferred stock of the Company) delivered in lieu of each share of Common Stock
shall have the same voting rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of
Common Stock or Preferred Stock (or any other series of preferred stock of the
Company containing terms substantially similar to the terms of the Preferred
Stock) issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 23A, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock or Preferred Stock (or such other series of preferred
stock of the Company) for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions
of Common Stock or to distribute certificates which evidence fractional Common
Stock. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock.
For the purposes of this paragraph (e), the current market value of a whole
share of Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Sec-
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tion 11(d) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 23A.
Section 24. Notice of Certain Events. (a) In case the
Company shall propose (i) to pay any dividend payable in stock of any class
to the holders of its Preferred Stock or to make any other distribution to the
holders of its Preferred Stock (other than a regular quarterly dividend out of
earnings on retained earnings of the Company at a rate not in excess of 125% of
the rate of the last regular quarterly cash dividend theretofore paid), or (ii)
to offer to the holders of Preferred Stock options, rights or warrants to
subscribe for or to purchase any additional Preferred Stock or shares of stock
of any class or any other securities, rights or options, or (iii) to effect any
reclassification of the Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any merger, consolidation or other combination into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to
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each holder of a Right, in accordance with Section 25 hereof, a notice of such
proposed action, which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date on which such
reclassification, merger, consolidation, combination, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of Common Stock and/or Preferred Stock, if
any such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least twenty days prior to
the record date for determining holders of Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of Common Stock and/or Preferred Stock, whichever shall
be the earlier. The failure to give notice required by this Section 24 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) In case any of the events set forth in Section
11(a)(ii) or Section 13(a) of this Agreement shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, to the extent feasible and in accordance with
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<PAGE> 90
Section 25, a notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights under Section
11(a)(ii) or Section 13(a) hereof, and (ii) all references in Section 24(a)
hereof to Preferred Stock shall be deemed thereafter to refer also to Common
Stock or other securities issuable in respect of the Rights.
Section 25. 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:
Cambrex Corporation
One Meadowlands Plaza
East Rutherford, New Jersey 07073
Attention: General Counsel and Secretary
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
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(until another address is filed in writing with the Company) as follows:
American Stock Transfer &
Trust Company
40 Wall Street
New York, New York 10005
Attention: Executive Vice President
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or if prior
to the Distribution Date to each holder of a certificate representing shares of
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such Right holder (or if prior to the
Distribution Date to such holder of Common Stock) at the address of such holder
as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Stock
Acquisition Time and subject to the penultimate sentence of this Section 26,
the Company may, by resolution of its Board of Directors, and the Rights Agent
shall, if the Company so directs, supplement or amend any provision of this
Agreement in any respect whatsoever (including, without limitation, any
extension of the period in which the Rights may be redeemed) without the
approval of any holders of certificates representing shares of Common Stock of
the Company. From and after the Stock Acquisition Time and subject
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<PAGE> 92
to the penultimate sentence of this Section 26, without the approval of any
holders of certificates representing shares of Common Stock of the Company or
of Right Certificates, the Company may, by resolution of its Board of Directors
(which resolution shall be effective only with the concurrence of a majority of
the Continuing Directors, and only if the Continuing Directors constitute a
majority of the number of directors then in office), and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement in order
(i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement or make any other provisions in any manner which
the Company may deem necessary or desirable, which shall not adversely affect
the interests of, or diminish substantially or eliminate the benefits intended
to be afforded by the Rights to, the holders of Right Certificates (other than
an Acquiring Person or an Affiliate or Associate of any such Person); provided,
however, that this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed or to modify the ability (or inability) of the Board
of Directors of the Company to redeem the Rights, in
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<PAGE> 93
either case at such time as the Rights are not then redeemable or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of or the benefits to the holders of Rights (other
than an Acquiring Person or an Affiliate or Associate of any such Person).
Upon the delivery of a certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with
the terms of this Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made which changes the Redemption
Price, the Final Expiration Date, the Purchase Price or the number of one
one-hundredths of a share of Preferred Stock for which a Right is exercisable.
Prior to the Stock Acquisition Time, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of Common Stock.
Section 27. 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 28. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agree-
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<PAGE> 94
ment, any calculation of the number of shares of Common Stock outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock 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 (with, where specifically provided
for herein, the concurrence of the Continuing Directors or the Outside
Directors) shall have the exclusive power, authority and discretion to
administer this Agreement and to exercise all rights and powers specifically
granted to such Board of Directors (with, where specifically provided for
herein, the concurrence of the Continuing Directors or the Outside Directors),
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, but not
limited to, a determination to redeem or not redeem the Rights, to amend the
Agreement or to find or to announce publicly that any Person has become an
Acquiring Person). All such actions, calculations, interpretations and
determinations (including, for purposes of clauses (i) and (iii) below, all
omissions with respect
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to the foregoing) which are done or made by the Board of Directors of the
Company (with, where specifically provided for herein, the concurrence of the
Continuing Directors or the Outside Directors), the Outside Directors or the
Company (i) shall be within the discretion of the Board of Directors or the
Outside Directors, (ii) shall be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Right Certificates and all other parties,
and (iii) shall not subject the Board of Directors of the Company, the
Continuing Directors or the Outside Directors to any liability to the holders
of the Rights and Right Certificates.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be
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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 (with the concurrence of 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 Close of Business on the tenth Business Day
following the date of such determination by the Board of Directors. Without
limiting the foregoing, if any provision of this Agreement requiring that a
determination be made by the Board of Directors with the concurrence of a
majority of the Continuing Directors or Outside Directors or by the Outside
Directors is held by a court of competent jurisdiction or other authority to be
invalid, void, or unenforceable, such determination shall then be made by the
Board of Directors in accordance with applicable law and the Company's
certificate of incorporation and by-laws.
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Section 31. 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 Delaware 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 32. Counterparts. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
CAMBREX CORPORATION
By Peter E. Thauer
-----------------------
Peter E. Thauer, Esq.
Vice President - Law and
Environment, General
Counsel and Secretary
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By Herbert Lemmer
------------------------
Herbert Lemmer
Vice President
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<PAGE> 99
EXHIBIT A
CERTIFICATE OF DESIGNATION OF SERIES E JUNIOR
PARTICIPATING CUMULATIVE PREFERRED STOCK
Par Value $1.00 Per Share
of
CAMBREX CORPORATION
Pursuant to Section 151 of the General Corporation
Law of the State of Delaware
We, Steven M. Klosk, Vice President - Administration, and
Peter E. Thauer, Esq., Vice President - Law and Environment, General Counsel
and Secretary, of Cambrex Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware (the "Corporation"),
in accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the Corporation, as
amended, the said Board of Directors on May 23, 1996, by the affirmative vote
of at least a majority of the members of the Board of Directors, adopted the
following resolution creating a series of one hundred thousand (100,000) shares
of Series E Junior Participating Cumulative Preferred Stock, par value $1.00
per share:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of this Corporation in accordance with the provisions of its
Restated Certificate of Incorporation (the "Restated Certificate"), a series of
Series Preferred Stock of the Corporation be, and it hereby
<PAGE> 100
is, created, and that the designation and amount thereof and the voting powers,
preferences and relative participating, optional and other special rights of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
Section 1. Designation and Amount.
The shares of such series shall be designated as Series E
Junior Participating Cumulative Preferred Stock, par value $1.00 per share (the
"Junior Preferred Stock") and the number of shares constituting such series
shall be one hundred thousand (100,000). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Junior Preferred Stock to a
number less than the number of shares reserved for issuance upon the exercise
of outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Junior
Preferred Stock.
Section 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 Junior Preferred Stock with respect to dividends, the
holders of shares of Junior Preferred Stock, in preference to the
holders of Common Stock, and of any other junior stock which may be
outstanding, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of January,
April, July and October 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 Junior Preferred Stock, in an amount
per share (rounded to the nearest cent) equal to the greater of (a)
$2.50 per share ($10.00 per annum), 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
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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
Junior Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on 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 Junior
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 Junior 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 $2.50 per share ($10.00 per
annum) on the Junior 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 Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares
of Junior Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends or 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 Junior 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
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<PAGE> 102
Dividend Payment Date. Accrued but unpaid dividends shall accumulate
but shall not bear interest. Dividends paid on the shares of Junior
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding. The Board of Directors may fix a record date
for the determination of holders of shares of Junior Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights.
The holders of shares of Junior Preferred Stock shall have the
following voting rights.
(A) Subject to the provisions for adjustment as hereinafter
set forth, each share of Junior Preferred Stock shall entitle the
holder thereof to 100 votes (and each one one-hundredth of a share of
Junior Preferred Stock shall entitle the holder thereof to one vote)
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 Common Stock payable in shares of Common Stock
or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by classification 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
Junior 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 the Restated
Certificate, in any other certificate of designation creating a series
of preferred stock or any similar stock, or by law, the holders of
shares of Junior Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having general
voting rights shall vote to-
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gether as one class on all matters submitted to a vote of stockholders
of the Corporation.
(C) If at any time the Corporation shall not have declared
and paid all accrued and unpaid dividends on the Junior Preferred
Stock as provided in Section 2 hereof for four consecutive Quarterly
Dividend Payment Dates, then, in addition to any voting rights
provided for in paragraphs (A) and (B), the holders of the Junior
Preferred Stock shall have the exclusive right, voting separately as
class, to elect two directors on the Board of Directors of the
Corporation (such directors, the "Preferred Directors"). The right of
the holders of the Junior Preferred Stock to elect the Preferred
Directors shall continue until all such accrued and unpaid dividends
shall have been paid. At such time, the terms of any of the Preferred
Directors shall terminate. At any time when the holders of the Junior
Preferred Stock shall have thus become entitled to elect Preferred
Directors, a special meeting of shareholders shall be called for the
purpose of electing such Preferred Directors, to be held within 30
days after the right of the holders of the Junior Preferred Stock to
elect such Preferred Directors shall arise, upon notice given in the
manner provided by law or the by-laws of the Corporation for giving
notice of a special meeting of shareholders (provided, however, that
such a special meeting shall not be called if the annual meeting of
shareholders is to convene within said 30 days). At any such special
meeting or at any annual meeting at which the holders of the Junior
Preferred Stock shall be entitled to elect Preferred Directors, the
holders of a majority of the then outstanding Junior Preferred Stock
present in person or by proxy shall be sufficient to constitute a
quorum for the election of such directors. The persons elected by the
holders of the Junior Preferred Stock at any meeting in accordance
with the terms of the preceding sentence shall become directors on the
date of such election.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Junior 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 Junior Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
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<PAGE> 104
(i) declare or pay dividends or, make any other
distributions on any shares or stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding-up) to the
Junior 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
Junior Preferred Stock except dividends paid ratably on the Junior
Preferred Stock, and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding-up) with the
Junior Preferred Stock, provided that the corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or
winding-up) to the Junior Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Junior Preferred Stock, or any shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or
winding-up) with the Junior Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares upon such terms
as the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and preferences of the
respective series 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.
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Section 5. Reacquired Shares.
Any shares of Junior 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 Series Preferred
Stock, without designation as to series, and may be reissued as part of a new
series of Series Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein, in the Restated Certificate, in any other certificate of
designation creating a series of preferred stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding-Up.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, no distribution shall be made (A) to the holders
of shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding-up) to the Junior Preferred Stock unless prior thereto,
the holders of shares of Junior Preferred Stock shall have received the higher
of (i) $10.00 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such
payment, or (ii) an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of Common Stock; nor shall any distribution be
made (B) to the holders of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding-up) with the Junior Preferred Stock,
except distributions made ratably on the Junior Preferred Stock and all other
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
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 Junior Preferred
Stock are entitled immediately prior to such event under the provision in
clause (A) of the preceding sentence shall be
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<PAGE> 106
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 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, or otherwise changed, then in any such case each share of
Junior 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 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 Junior Preferred Stock shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption.
The shares of Junior Preferred Stock shall not be redeemable.
Section 9. Rank.
Unless otherwise provided in the Restated Certificate or a
certificate of designation relating to a subsequent series of preferred stock
of the Corporation, the Junior Preferred Stock shall rank junior to all other
series of the Corporation's preferred stock as to the payment of dividends and
the distribution of assets on liquidation,
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<PAGE> 107
dissolution or winding-up, and senior to the Common Stock of the Corporation.
Section 10. Amendment.
The Restated Certificate, as amended and restated, shall not
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Junior Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Junior Preferred Stock, voting together
as a single series.
Section 11. Fractional Shares.
Junior Preferred Stock may be issued in fractions of a share
(in one one-hundredths (1/100) of a share and integral multiples thereof) which
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Junior Preferred Stock.
9
<PAGE> 108
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation by its Vice President and attested by its
Secretary this fifth day of June, 1996.
-------------------------------
Vice President - Administration
ATTEST:
- ------------------------
Vice President - Law and
Environment, General
Counsel and Secretary
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<PAGE> 109
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER June 5, 2006 OR EARLIER IF THE BOARD OF DIRECTORS ORDERS
THE REDEMPTION OR EXCHANGE OF THE RIGHTS. THE RIGHTS ARE SUBJECT TO REDEMPTION
AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID
SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE
QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER,
OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE
OBTAINABLE. [THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.](1)
Rights Certificate
CAMBREX 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 Rights Agreement, dated as of June 5, 1996 (the "Rights Agreement"),
between Cambrex Corporation, a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company, a national banking association (the
"Rights Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior
to 5:00 P.M. (Eastern Standard Time) on
- --------------------
(1.) The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
<PAGE> 110
June 5, 2006 , at the principal office of the Rights Agent, or its successors
as Rights Agent, one one-hundredth of a fully paid nonassessable share of
Series E Junior Participating Cumulative Preferred Stock, par value $1.00 per
share of the Company (the "Preferred Stock"), at a purchase price of $174 per
one one-hundredth of a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and the Certificate contained therein duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one-hundredths of
a share of Preferred Stock which may be purchased upon exercise thereof) set
forth above, and the Purchase Price per one one-hundredth of a share of
Preferred Stock set forth above, are the number and Purchase Price as of June
10, 1996, based on the shares of Preferred Stock as constituted at such date.
From and after the first occurrence of a Section 11(a)(ii)
Event (as defined in the Rights Agreement), if the Rights evidenced by this
Right Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person (or of any Associate
or Affiliate thereof) who becomes a transferee after such Acquiring Person (or
any Associate or Affiliate thereof) becomes such or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of such Acquiring
Person (or of any Associate or Affiliate thereof) who becomes a transferee
prior to or concurrently with such Acquiring Person becoming such, such Rights
shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the occurrence of such Section 11(a)(ii)
Event.
The Rights evidenced by this Right Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any jurisdiction
where the requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall not have been
obtained or be obtainable.
As provided in the Rights Agreement, the Purchase Price and
the number of one one-hundredths of a share of Preferred Stock or the number
and kind of other securities 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, including Section 11(a)(ii)
Events and Section 13 Events (as defined in the Rights Agreement).
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, as
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<PAGE> 111
it may be amended from time to time, 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, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal executive offices
of the Company and the above-mentioned office of the Rights Agent and are also
available upon written request to the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, 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 one one-hundredths of a share of Preferred Stock 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 Right Certificate may be redeemed by the Company at a
redemption price of $.01 per Right at any time prior to the earlier of (i) the
Stock Acquisition Time (as defined in the Rights Agreement) and (ii) the close
of business on the Expiration Date (as defined in the Rights Agreement).
Subject to the provisions of the Rights Agreement, the rights evidenced by this
Right Certificate may be exchanged in whole or part for shares of Common Stock
or fractional shares of Preferred Stock (or any other substantially similar
series of preferred stock of the Company).
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions
which are integral multiples of one one-hundredth of a share of Preferred
Stock, which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company in any respect whatsoever up
until the Stock Acquisition Time and thereafter in certain respects
3
<PAGE> 112
which do not adversely affect the interests of holders of Right Certificates
(other than an Acquiring Person or the Affiliates or Associates thereof).
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or 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.
4
<PAGE> 113
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of __________, 1996.
ATTEST: CAMBREX CORPORATION
By
--------------------------- -------------------------
General Counsel & Secretary Title:
Countersigned:
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By
-------------------------
Authorized Signatory
5
<PAGE> 114
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________________ hereby sells, assigns
and transfers unto ___________________________________________________________
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the within Right Certificate on the books of the within
named Company, with full power of substitution. Dated:_____________, ____
--------------------------
Signature
Signatures Guaranteed:
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
6
<PAGE> 115
NOTICE
The signature to the foregoing Assignment must correspond to
the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
7
<PAGE> 116
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To Cambrex Corporation:
The undersigned hereby irrevocably elects to exercise
_______________ Rights represented by this Right Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of: Please
insert social security or other identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
If 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:__________________, ____
8
<PAGE> 117
[Form of Election to Purchase -- continued]
------------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate.)
Signature Guaranteed:
- -------------------------------------------------------------------------------
(To be completed if applicable)
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
In the event the certification set forth above in the Forms of
Assignment and Election is not completed, the Company 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, in the case of an Assignment, will affix a legend to that
effect on any Right Certificates issued in exchange for this Rights
Certificate.
9
<PAGE> 118
Exhibit C
CAMBREX CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On May 23, 1996, the Board of Directors of Cambrex Corporation
(the "Company") declared a dividend distribution of one Preferred Share
Purchase Right (a "Right") for each outstanding share of Common Stock, par
value $.10 per share, of the Company (the "Common Stock"). The following is a
summary of the terms of the Rights.
Each Right entitles the registered holder to purchase from the
Company one one-hundredth of a share of Series E Junior Participating
Cumulative Preferred Stock, par value $1.00 per share, of the Company (the
"Preferred Stock") at a price of $174 per one one-hundredth of a share of
Preferred Stock, subject to adjustment (the "Purchase Price"). The description
and terms of the Rights are set forth in a Rights Agreement, dated as of June
5, 1996 (the "Rights Agreement"), between the Company and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate certificates
representing the Rights ("Right Certificates") will be distributed. The Rights
will separate from the Common Stock and a "Distribution Date" will occur upon
the earlier to occur of (i) ten business days following the time (the "Stock
Acquisition Time") of a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") acquired, or obtained
the right to acquire, beneficial ownership of 15% or more of the outstanding
Common Stock of the Company and (ii) ten business days (or, if determined by
the Board of Directors (with the concurrence of a majority of the Continuing
Directors (as hereinafter defined)), a specified or unspecified later date)
following the commencement or announcement of an intention to make a tender
offer or exchange offer which, if successful, would cause the bidder to own 15%
of more of the outstanding Common Stock.
The Rights Agreement provides that, until the Distribution
Date, (i) the Rights will be transferred with and only with the Common Stock,
(ii) new Common Stock certificates issued after June 10, 1996, upon transfer or
new issuance of the Common Stock, will contain a notation incor-
<PAGE> 119
porating the Rights Agreement by reference and (iii) the surrender for transfer
of any of the Common Stock certificates outstanding will also constitute the
transfer of the Rights associated with the shares of Common Stock represented
by such certificate. As soon as practicable following the Distribution Date,
separate Right Certificates will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights. Except as otherwise
determined by the Board of Directors, only shares of Common Stock issued prior
to the Distribution Date will be issued with Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on June 5, 2006, unless earlier redeemed or exchanged by
the Company as described below.
In the event that, after the Stock Acquisition Time, the
Company is acquired in a merger or other business combination transaction
(except certain transactions with a person who became an Acquiring Person as a
result of a tender offer described in the next succeeding paragraph) or 50% or
more of its assets, cash flow or earning power is sold, proper provision shall
be made so that each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company which at
the time of such transaction would have a market value (as defined in the
Rights Agreement) of two times the Purchase Price of the Right. In the event
that, after the Stock Acquisition Time, the Company were the surviving
corporation of a merger and its Common Stock were changed or exchanged, proper
provision shall be made so that each holder of a Right will thereafter have the
right to receive upon exercise that number of shares of common stock of the
Company having a market value of two times the exercise price of the Right.
In the event that a person or group becomes an Acquiring
Person (except pursuant to a tender offer for all outstanding Common Stock
determined to be at a fair price and otherwise in the best interests of the
Company and its stockholders by a majority of the Outside Directors), proper
provision shall be made so that each holder of a Right (other than the
Acquiring Person) will thereafter have the right to receive upon exercise that
number of shares of Common Stock (or, in certain circumstances, cash, a
reduction in the Purchase Price, Common Stock, other equity secu-
2
<PAGE> 120
rities of the Company, debt securities of the Company, other property or a
combination thereof) having a market value (as defined in the Rights Agreement)
of two times the Purchase Price of the Right. Notwithstanding any of the
foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person (or an
affiliate, associate or transferee thereof) will be null and void. A person
will not be an Acquiring Person if the Board of Directors of the Company
determines that such person or group became an Acquiring Person inadvertently
and such person or group promptly divests itself of a sufficient number of
shares of Common Stock so that such person or group is no longer an Acquiring
Person.
The Purchase Price payable, and the number of shares of
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders of
Preferred Stock of certain rights or warrants to subscribe for Preferred Stock
or convertible securities at less than the current market price of Preferred
Stock or (iii) upon the distribution to holders of Preferred Stock of evidences
of indebtedness or assets (excluding regular periodic cash dividends or
dividends payable in Preferred Stock) or of subscription rights or warrants
(other than those referred to above). The number of Rights and number of
shares of Preferred Stock issuable upon the exercise of each Right are also
subject to adjustment in the event of a stock split, combination or stock
dividend on the Common Stock.
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 shares of Preferred Stock will be
issued (other than fractions which are integral multiples of one one-hundredth
of a share of Preferred Stock which may, upon 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 Stock on the last
trading date prior to the date of exercise.
At any time prior to the earlier of the Stock Acquisition Time
and the Expiration Date (as defined in the Rights Agreement), the Board of
Directors may redeem the
3
<PAGE> 121
Rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 Redemption Price.
At any time after a person becomes an Acquiring Person and
prior to the acquisition by such Person of 50% or more of the outstanding
shares of Common Stock, the Board of Directors of the Company may exchange the
Rights (other than Rights beneficially owned by such Person which have become
void), in whole or part, at an exchange ratio of one share of Common Stock per
Right (subject to adjustment). The Company, at its option, may substitute one
one-hundredth of a share of Preferred Stock (or other series of substantially
similar preferred stock of the Company) for each share of Common Stock to be
exchanged.
Each share of Preferred Stock purchasable upon exercise of the
Rights will have a minimum preferential dividend of $10 per year, but will be
entitled to receive, in the aggregate, a dividend of 100 times the dividend
declared on the shares of Common Stock. In the event of liquidation, the
holders of the shares of Preferred Stock will be entitled to receive a minimum
liquidation payment of $10 per share, but will be entitled to receive an
aggregate liquidation payment equal to 100 times the payment made per share of
Common Stock. Each share of Preferred Stock will have one hundred votes,
voting together with the shares of Common Stock. In the event of any merger,
consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount and type of consideration received per share of Common Stock. The
rights of the shares of Preferred Stock as to dividends and liquidation, and in
the event of mergers and consolidations, are protected by anti-dilution
provisions.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, other than rights resulting
from such holder's ownership of shares of Common Stock, including, without
limitation, the right to vote or to receive dividends. While the distribution
of the Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company as
set forth above.
4
<PAGE> 122
Other than those provisions relating to the principal economic
terms of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors prior to the Stock Acquisition Time. After
such time, the provisions of the Rights Agreement may be amended by the Board
of Directors (only with the concurrence of a majority of the Continuing
Directors) in order to cure any ambiguity, to correct or supplement defective
or inconsistent provisions, to shorten or lengthen any time period under the
Rights Agreement, to make changes which do not adversely affect the interests
of the holders of Rights (excluding the interests of any Acquiring Person) or
to shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
The term "Continuing Director" means (i) any member of the
Board of Directors of the Company who was a member of the Board prior to the
Stock Acquisition Time, and (ii) any person who is subsequently elected to the
Board, if such person is recommended or approved by a majority of the
Continuing Directors then on the Board of Directors, and such person is not an
Acquiring Person or an affiliate, associate, representative or nominee of an
Acquiring Person.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Form 8-A dated June __,
1996. Copies of the Rights Agreement are 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,
as it may be amended from time to time, which is hereby incorporated herein by
reference.
5
