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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
BIOPOOL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware 581729436
(State of incorporation or organization) (IRS Employer
Identification No.)
6025 Nicolle St., Ste. A, Ventura, California 93003
(Address of principal executive officer) (Zip Code)
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective upon filing pursuant to
General Instruction A(c) please check the following box. / /
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A(d), please check the following box. /X/
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
____________________ ______________________________
Common Stock Purchase Rights None
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ITEM 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On June 3, 1998 the Board of Directors (the "Board") of Biopool
International, Inc., a Delaware corporation (the "Company") declared a
dividend of one common stock purchase right (a "Right") for each issued and
outstanding share of common stock, par value $0.01 per share (the "Common
Stock") of the Company. The dividend is payable to the stockholders of record
on June 18, 1998.
All Rights are issued pursuant to, and will be subject to the terms and
conditions of, the Rights Agreement dated June 12, 1998, between the Company
and its Rights Agent (currently, American Stock Transfer and Trust
Corporation). The following is a brief summary of the terms of the Rights.
Each Right, when exercisable, will entitle the registered holder thereof
until the earlier of June 12, 2008 or the date of redemption or exchange of
the Rights, to purchase from the Company one share of Common Stock, par value
$0.01 per share (the "Common Stock") of the Company at an exercise price of
$6.50 per share (the "Exercise Price"), subject to certain adjustments.
The Rights are not represented by separate certificates, but, instead,
initially will be evidenced by the certificates representing Common Stock then
outstanding, and the stockholders shall receive no separate certificate
representing the Rights. The Rights are not exercisable or transferable apart
from the Common Stock until the earliest to occur of (i) ten days following a
public announcement that a person (other than an Exempt Person) or group of
affiliated or associated persons (an "Acquiring Person") has acquired or
obtained the right to acquire, beneficial ownership of 15% or more of the
outstanding Common Stock (the "Stock Acquisition Date"); (provided, that if,
prior to the expiration of the ten-day period, the Acquiring Person reduces
his stock ownership to below the 15% level in a transaction not involving the
Company, said person would no longer be deemed to be an Acquiring Person); or
(ii) ten days following the commencement of a tender offer or exchange offer,
or an announcement of a person's intent to commence a tender offer or an
exchange offer, that would result in a person or group beneficially owning 15%
or more of the Company's then outstanding Common Stock (provided, that if,
prior to the expiration of the ten-day period, the person withdraws said
tender offer, then it shall be deemed never to have occurred); or (iii) ten
days after the filing by any person of a registration statement under the
Securities Act of 1933, as amended, with respect to a contemplated exchange
offer to acquire beneficial ownership of 15% or more of the issued and
outstanding Common Stock (provided that if a tender or exchange offer is
cancelled or withdrawn prior to the expiration of the ten-day period, such
offer would be deemed never to have been made) (the earliest of these dates is
referred to as the "Distribution Date.")
An "Exempt Person" is defined as being the Company, any subsidiary of
the company and any employee benefit plan of the Company.
The Rights (unless sooner redeemed) first will become exercisable on the
Distribution Date, at which time the Corporation will distribute separate
Right Certificates representing the Rights to its then current stockholders,
and it is expected that the Rights could then begin trading separately from
the Common Stock. The Rights will expire on June 12, 2008 (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company.
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Following the Stock Acquisition Date, the Rights would give holders
(other than the Acquiring Person, its affiliates and transferees) the right to
buy, for the Exercise Price, that number of shares of Common Stock with a
value (defined pursuant to the Rights Agreement) of twice the Exercise Price.
In a merger, consolidation or sale or transfer of 50% or more of the
consolidated assets or earning power of the Company occurring after the Rights
become exercisable, each Right will be converted into the right to purchase,
for the Exercise Price, that number of shares of common stock of the surviving
entity (or, its parent) which at the time of such transaction will have a
market value of two times the Exercise Price.
Following the Distribution Date, exercisable Rights may be exercised at
the option of the holder thereof, without the payment of the Exercise Price in
cash. In any such case, such person will receive a number of shares of Common
Stock having a value equal to the difference between the value of the Common
Stock that would have been issuable upon payment of the Exercise Price and the
Exercise Price.
At any time prior to that date which is ten days following the Stock
Acquisition Date, the Board may redeem all but not less than all of the
outstanding Rights at a price of $.001 per Right. If following the occurrence
of a Stock Acquisition Date and prior to the Distribution Date, the Acquiring
Person reduces his beneficial ownership to less than 15%, the Rights again
will be redeemable.
The Exercise Price payable, and the number of shares of Common Stock or
other securities or property issuable upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (a) in the event of a
stock dividend on, or a subdivision, combination or reclassification of, the
Common Stock; (b) upon the grant to holders of the Common Stock of certain
rights or warrants to subscribe for or to purchase Common Stock at a price, or
securities convertible into Common Stock with a conversion price, less than
the then current market price of the Common Stock; or (c) upon the
distribution to holders of the Common Stock of evidences of indebtedness or
assets (excluding regular quarterly cash dividends out of retained earnings or
dividends paid out of earnings payable in shares) or of subscription rights or
warrants (other than those referred to above).
The Board of Directors may, at its option, at any time after a Stock
Acquisition Date, exchange all or part of the then outstanding and exercisable
Rights for Common Stock for consideration per Right consisting of one-half of
the securities that otherwise would be issuable. The Board of Directors may
not effect the exchange at any time after any person (other than an Exempt
Person) becomes the beneficial owner of 50% or more of the Common Stock
outstanding.
The Board of Directors may amend the terms of the Rights Agreement and
the terms of the Rights in any manner without the consent of the Rights
holders at any time prior to a Distribution Date. From and after a
Distribution Date, the Board of Directors may, subject to certain limitations
specified in the Rights Agreement, amend the Rights Agreement to clarify or
resolve any ambiguity, defect or inconsistency, to shorten or lengthen any
time period under the Rights Agreement or to make other changes that do not
adversely affect the interests of the Rights holders (excluding the interests
of Acquiring Persons or their affiliates or associates).
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Until a Right is exercised, the holder thereof has no rights as a
stockholder of the Company (beyond those as an existing stockholder),
including, without limitation, the right to vote or to receive dividends.
While the distribution of the Rights should 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 as set forth
above.
One Right will be distributed to stockholders of the Company for each
share of Common Stock owned of record by them on the Record Date. Until the
Distribution Date, the Company will issue one Right with each share of Common
Stock that thereafter becomes outstanding so that all shares of Common Stock
will have attached Rights. The Company initially has reserved 10,000,000
shares of Common Stock for issuance upon exercise of the Rights.
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board, except pursuant to an offer conditioned on
a substantial number of Rights being acquired. The Rights should not
interfere with any merger or other business combination approved by the Board
prior to the time that holders of the Rights become entitled to exercise their
Rights for Common Stock (or common stock of the surviving entity in a merger
with the Company), since until that time the Rights may be redeemed by the
Board at $.001 per Right.
The form of Rights Agreement between the Company and American Stock
Transfer and Trust Corporation, as Rights Agent, specifying the terms of the
Rights, which includes the form of the Right Certificate and the Summary of
Rights to Purchase Common Stock as exhibits thereto, are attached hereto as
exhibits, and are incorporated herein in their entirety by this reference.
The foregoing description of the Rights does not purport to be complete and is
qualified in its entirety by reference to such exhibits.
ITEM 2. EXHIBITS.
1. Rights Agreement, dated as of June 12, 1998, between the
Company and American Stock Transfer and Trust Corporation,
as Rights Agent.
2. Form of Right Certificate (Exhibit A to the Rights Agreement
filed as Exhibit 1 hereto).
3. Summary of Share Purchase Rights (Exhibit B to the Rights
Agreement filed as Exhibit 1 hereto).
4. Certificate of Incorporation. Incorporated by reference to
the Registrant's Registration Statement on Form S-1 (File
No. 33-20584).
5. Specimen Stock Certificate. Incorporated by reference to
the Registrant's Registration Statement on Form 8-A filed on
April 28, 1989.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, as amended, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized.
BIOPOOL INTERNATIONAL, INC.
Date: June 26, 1998 By: /s/ Michael D. Bick, Ph.D.
_____________ __________________________
Name: Michael D. Bick, Ph.D.
Title: Chief Executive Officer
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EXHIBIT INDEX
Exhibit Page No.
- ------- --------
1. Rights Agreement, dated as of June 12, 1998, between
the Company and American Stock Transfer and
Trust Corporation, as Rights Agent. 7
2. Form of Right Certificate (Exhibit A to the Rights
Agreement filed as Exhibit 1 hereto). 45
3. Summary of Share Purchase Rights (Exhibit B to the
Rights Agreement filed as Exhibit 1 hereto). 51
4. Certificate of Incorporation. Incorporated by
reference to the Registrant's Registration Statement
on Form S-1 (File No. 33-20584)
5. Specimen Stock Certificate. Incorporated by reference
to the Registrant's Registration Statement on Form 8-A
filed on April 28, 1989.
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Exhibit 1
BIOPOOL INTERNATIONAL, INC.
RIGHTS AGREEMENT
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TABLE OF CONTENTS
Page
Section 1. Certain Definitions 10
Section 2. Appointment of Rights Agent 15
Section 3. Issuance of Right Certificates 15
Section 4. Form of Right Certificates 17
Section 5. Execution, Countersignature and Registration 18
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates 18
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights 19
Section 8. Cancellation and Destruction of Right Certificates 21
Section 9. Reservation and Availability of Shares 22
Section 10. Record Date 23
Section 11. Adjustments to Purchase Price, Number and Kind of
Shares or Number of Rights 24
Section 12. Certain Adjustments 29
Section 13. Certificate of Adjusted Purchase Price or
Number of Shares 29
Section 14. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power 30
Section 15. Fractional Rights and Fractional Shares 33
Section 16. Exchange 34
Section 17. Rights of Action 35
Section 18. Agreement of Right Holders 35
Section 19. Right Certificate Holder Not Deemed a Stockholder 36
Section 20. Concerning the Rights Agent 36
Section 21. Merger or Consolidation or Change of Name
of Rights Agent 36
Section 22. Duties of Rights Agent 37
Section 23. Change of Rights Agent 39
Section 24. Issuance of New Right Certificates 40
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Section 25. Redemption 40
Section 26. Notice of Certain Events 41
Section 27. Notices 42
Section 28. Supplements and Amendments 43
Section 29. Successors 43
Section 30. Determinations and Actions by the Board of
Directors, etc. 43
Section 31. Benefits of This Rights Agreement 44
Section 32. Severability 44
Section 33. Governing Law 44
Section 34. Counterparts; Effectiveness 44
Section 35. Descriptive Headings 44
Exhibit A Form of Rights Certificate 45
Exhibit B Summary of Rights to Purchase Common Stock 51
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RIGHTS AGREEMENT
This Rights Agreement, dated as of June 12, 1998 is made by and between
Biopool International, Inc., a Delaware corporation (the "Company"), and
American Stock Transfer & Trust Company, a New York corporation, as Rights
Agent (the "Rights Agent"),
W I T N E S S E T H
WHEREAS, effective June 3, 1998 (the "Declaration Date") the Board of
Directors of the Company authorized and declared a dividend distribution of
one right (a "Right") for each share of the Common Stock, par value $0.001 per
share, of the Company (the "Common Stock") outstanding at the close of
business on June 18, 1998 (the "Record Date") and has further authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to
the provisions of this Rights Agreement) with respect to each share of Common
Stock issued between the Record Date and the earliest of the Distribution Date
and the Expiration Date (as such terms are hereinafter defined). Each Right
shall represent the right to purchase, upon the terms and subject to the
conditions hereinafter set forth, one share (subject to adjustment) of Common
Stock of the Company upon the terms and conditions set forth below;
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;
"Acquiring Person" shall mean (i) any Person (as hereinafter
defined) who is an Adverse Person (as hereinafter defined), or (ii) any Person
who or which, together with all Affiliates (as hereinafter defined) and
Associates (as hereinafter defined) of such Person, shall, subsequent to the
Declaration Date, become the Beneficial Owner (as hereinafter defined) of 15%
or more of the shares of Common Stock then outstanding, but shall not include
(x) any Exempt Person (as hereinafter defined), (y) any Permitted Holder, or
(z) any Person who becomes a Beneficial Owner of 15% or more of the shares of
Common Stock then outstanding solely because (1) of a change in the aggregate
number of shares of Common Stock outstanding since the last date on which such
Person acquired Beneficial Ownership of any shares of Common Stock, or (2) it
acquired such Beneficial Ownership in the good faith belief that such
acquisition would not (A) cause such Beneficial Ownership to equal or exceed
15% of the shares of Common Stock then outstanding (or in the case of a
Permitted Holder, the percentage the Permitted Holder may hold without ceasing
to be a Permitted Holder) and such Person relied in good faith in computing
the percentage of its Beneficial Ownership on publicly filed reports or
documents of the Company which are inaccurate or out-of-date, or (B) otherwise
cause a Distribution Date or the adjustment provided for in Section 14 to
occur. Notwithstanding clause (z) of the prior sentence, if any Person that
is not an Acquiring Person because of the operation of such clause (z) does
not reduce its Beneficial Ownership of shares of Common Stock to less than 15%
(or in the case of a Permitted Holder, the percentage the Permitted Holder may
hold without ceasing to be a Permitted Holder) by the close of business on the
fifth Business Day after notice from the Company (the date of notice being the
first day) that such Person's Beneficial Ownership of Common Stock equals or
exceeds 15% (or in the case of a Permitted Holder, the percentage the
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Permitted Holder may hold without ceasing to be a Permitted Holder), such
Person shall, at the end of such five Business Day period, become an Acquiring
Person (and clause (z) shall no longer apply to such Person). For purposes of
this definition, the determination whether any Person acted in "good faith"
shall be conclusively determined by the Board of Directors, acting by a vote
of those directors of the Company whose approval would be required to redeem
the Rights under Section 25.
"Adverse Person" shall mean any Person other than an Exempt Person
who is declared to be an Adverse Person by the Board of Directors of the
Company upon a determination that such Person, alone or together with its
Affiliates and Associates, has, at any time after the Declaration Date, become
the Beneficial Owner of a number of shares of Common Stock that the Board of
Directors determines to be substantial (which amount shall in no event be less
than 10% of the shares of Common Stock then outstanding) and a determination
by a majority of the Board of Directors after reasonable inquiry and
investigation, including consultation with such Persons as the Board of
Directors shall deem appropriate, that (i) such Beneficial Ownership by such
Person is intended to cause the Company to repurchase the shares of Common
Stock beneficially owned by such Person or to cause pressure on the Company to
take action or enter into a transaction or series of transactions intended to
provide such Person with short-term financial gain under circumstances where
the Board of Directors determines that the best long-term interest of the
Company and its stockholders would not be served by taking such action or
entering into such transaction or series of transactions at that time, or (ii)
such Beneficial Ownership is causing or reasonably likely to cause a material
adverse impact on the business or prospects of the Company.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as
in effect on the date hereof.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," and shall be deemed to have "Beneficial
Ownership" of, any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, is deemed to beneficially own (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement) or has the right
to dispose of;
(ii) which such Person or any of such Person's Affiliates
or Associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the "Beneficial Owner" of or to
"beneficially own," or to have the "Beneficial Ownership" of, (1) securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for payment or exchange; or (2) securities issuable
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upon exercise of Rights at any time prior to the occurrence of the
Distribution Date, (B) the right to vote, 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," or to have the "Beneficial Ownership" of, any security
under this clause (ii)(B) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (1) arises solely from a revocable proxy or consent given to
such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and regulations
under the Exchange Act, and (2) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor report);
or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which such
Person or any of such Person's Affiliates or Associates has any agreement
(other than customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of securities),
arrangement or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as described
in clause (B) of subparagraph (ii) of this definition) or disposing of any
voting securities of the Company.
"Board of Directors" shall mean the Board of Directors of the
Company or any duly authorized committee thereof.
"Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 P.M., New
York time, on such date; provided, however, that if such date is not a
Business Day, "Close of business" shall mean 5:00 P.M., New York time, on the
next succeeding Business Day.
"Common Stock" when used with reference to the Company shall mean
the shares of Common Stock, presently par value $0.001 per share, of the
Company, or any other shares of capital stock of the Company into which the
Common Stock shall be reclassified or changed. "Common Stock" when used with
reference to any Person other than the Company shall mean the Common Stock
(or, in the case of a trust, partnership or other unincorporated entity, the
equivalent equity interest) with the greatest voting power of such Person (or,
(i) if such Person is a Subsidiary of another Person, the Person which
ultimately controls such first-mentioned Person, or (ii) if such Person is
ultimately controlled by two or more Persons, the controlling Person having
Common Stock or equivalent equity interests with the greatest aggregate
current market value (determined by reference to the Current Market Price of
such Common Stock or equivalent equity interests), together with all rights
and benefits (however denominated or constituted) relating to such Common
Stock (including, without limitation, any rights or warrants to acquire
additional shares of such Common Stock or other securities or assets, or to
participate in any trust for the benefit of holders of such shares, or to
share in the benefits of any agreements or other arrangements for the benefit
of such holders), whether or not such rights are yet exercisable, and together
with any other securities which are represented by the certificates for such
shares or are transferred in connection with transfers of such shares.
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"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 is not an Acquiring Person or 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 who either (i) was a member of such Board
of Directors prior to the Stock Acquisition Date or (ii) subsequently became a
member of such Board of Directors, and whose nomination for election or
reelection thereto was recommended or approved by a majority of the Continuing
Directors then on such Board of Directors.
"Current Market Price" per share of Common Stock on any date shall
be deemed to be the average of the daily closing price per share of 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, 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 such dividend or
distribution, or the record date for such subdivision, combination or
reclassification of such Common Stock, then, and in such case, the "Current
Market Price" shall be proportionately adjusted to take into account ex-
dividend or ex-distribution 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 Common Stock is 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 or the principal national
securities exchange on which the Common Stock is listed or admitted to trading
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange, the last price or, if not so quoted, the average of the
closing bid and asked prices per share for the securities 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 security is not quoted by such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock selected by the Board of
Directors. If on any such date no market maker is making a market in the
Common Stock the fair value of such shares on such date as determined in good
faith by the Board of Directors shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
shares of the Common Stock are listed or admitted to trading or traded is open
for the transaction of business or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, a Business Day. If
the Common Stock is not publicly held or not so listed or traded, "Current
Market Price" per share shall mean the fair value per share of Common Stock as
determined in good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall be
conclusive and binding for all purposes.
"Distribution Date" shall have the meaning set forth in Section 3
hereof.
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"Exchange Act" shall mean the Securities Exchange Act of 1934, as
in effect on the date in question, unless otherwise specifically provided.
"Exempt Person" shall include (i) the Company, (ii) any Subsidiary
(as hereinafter defined) of the Company, and (iii) any employee benefit plan
of the Company or any of its Subsidiaries, or any entity holding shares of
Common Stock which was organized, appointed or established by the Company or
any Subsidiary of the Company for or pursuant to the terms of any such plan.
"Permitted Acquisition" shall mean an acquisition of shares of
Common Stock by a Person in a transaction or series of transactions which has
been previously approved by a majority of the Board of Directors with the
concurrence of a majority of the Continuing Directors.
"Permitted Holder" shall mean a Person who acquires Beneficial
Ownership of the Common Stock of the Company pursuant to a Permitted
Acquisition; provided, however, a Permitted Holder shall remain a Permitted
Holder so long as the aggregate Beneficial Ownership of Common Stock held by
such Person does not exceed that number of shares of Common Stock held by such
Person immediately following the Permitted Acquisition pursuant to which such
Person became a Permitted Holder (reduced by the number of shares of Common
Stock from time to time disposed of by such Person) plus a number of
additional shares of Common Stock equal to 1% of the then outstanding shares
of Common Stock of the Company; provided, however, any shares of Common Stock
issued or issuable to a Permitted Holder pursuant to employee benefit plans
maintained by the Company for the benefit of its employees, directors and
consultants shall be disregarded and not counted for purposes of calculating
the limitations imposed by the immediately preceding sentence.
"Person" shall mean any individual, firm, corporation, limited
liability company, trust, partnership or other entity, whether similar or
dissimilar to the foregoing.
"Purchase Price" with respect to each Right shall mean $6.50, as
such amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references
herein to the Purchase Price shall mean the Purchase Price as in effect at the
time in question.
"Record Date" shall mean June 18, 1998.
"Redemption Date" shall have the meaning set forth in Section 25.
"Redemption Price" with respect to each Right shall mean $0.001,
as such amount may from time to time be adjusted in accordance with Section
25. All references herein to the Redemption Price shall mean the Redemption
Price in effect at the time in question.
"Right Certificate" shall mean a certificate representing a Right
in substantially the form attached hereto as Exhibit "A."
"Rights" shall mean the rights to purchase shares of Common Stock
and/or other securities, as the case may be, as provided in this Rights
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as in
effect on the date in question, unless otherwise specifically provided.
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"Stock Acquisition Date" shall mean 5:00 P.M., New York time, on
the first date of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.
"Subsidiary" shall mean, with respect to any Person, any other
Person of which securities or other ownership interests having ordinary voting
power, in the absence of contingencies, to elect a majority of the board of
directors of such Person (if such Person is a corporation) or to participate
in the management and control of such Person (if such Person is not a
corporation), are at the time directly or indirectly owned by such first
Person.
The terms set forth below are defined in the Sections indicated
below:
Term Section
---- -------
Declaration Date RECITAL
Distribution Date 3(a)
Exchange Consideration 16
Expiration Date 7(a)
Final Expiration Date 7(a)
Principal Party 14(b)
Summary of Rights 3(b)
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. In the event the Company appoints one or more co-
Rights Agents, the respective duties of the Rights Agent and any co-Rights
Agents shall be as the Company shall determine.
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth
day after the Stock Acquisition Date (including any such date which is after
the Declaration Date and prior to the issuance of the Rights), (ii) the close
of business on the tenth day (or such later day as may be determined by action
of the Board of Directors) after the date of the commencement of a tender or
exchange offer by any Person (other than an Exempt Person) to acquire (when
added to any equity securities as to which such Person is the Beneficial Owner
immediately prior to such commencement) Beneficial Ownership of that number of
shares of the issued and outstanding Common Stock which would cause such
Person to become an Acquiring Person pursuant to the terms of this Agreement
(including any such date which is after the Declaration Date and prior to the
issuance of the Rights), and (iii) the close of business on the tenth day (or
such later day as may be determined by action of the Board of Directors) after
the filing by any Person (other than an Exempt Person) of a registration
statement under the Securities Act, with respect to a contemplated exchange
offer to acquire (when added to any equity securities as to which such Person
is the Beneficial Owner immediately prior to such filing) Beneficial Ownership
of that number of shares of the issued and outstanding Common Stock which
would cause such Person to become an Acquiring Person pursuant to the terms of
this Agreement (including any such date which is after the Declaration Date
and prior to the issuance of the Rights) (the earliest of such dates referred
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to in clauses (i), (ii) and (iii) of this Section 3(a) being herein referred
to as the "Distribution Date"), (A) the Rights will be evidenced (subject to
the provisions of Section 3(b) hereof) by the certificates for the Common
Stock registered in the names of the holders of the Common Stock (which
certificates for shares of Common Stock shall also be deemed to be Right
Certificates (as such term is hereinafter defined)) and not by separate Right
Certificates, and (B) the Rights (and the right to receive Right Certificates)
will be transferable only in connection with the transfer of the underlying
Common Stock; provided, that if the Distribution Date would be prior to the
Record Date, the Record Date shall be the Distribution Date, and provided,
further, that (x) if, following the occurrence of the Stock Acquisition Date
and prior to the Distribution Date, (1) a Person who is an Acquiring Person
shall have transferred or otherwise disposed of a number of shares of Common
Stock of the Company in one transaction or a series of transactions (not
directly or indirectly involving the Company or any of its Subsidiaries) such
that such Person is thereafter the Beneficial Owner of less than 15% (or (a)
in the case of a Permitted Holder, the percentage the Permitted Holder may
hold without ceasing to be a Permitted Holder, and (b) in the case of an
Adverse Person, the percentage such Person may hold as determined by the Board
of Directors, which in no event may the Board of Directors require to be less
than 10% of the shares of Common Stock then outstanding, so that the Board of
Directors no longer declares such Person to be an Adverse Person) of the
outstanding Common Stock of the Company, (2) there are no other Persons,
immediately following the occurrence of the event described in clause (1), who
are Acquiring Persons, and (3) the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors) shall so approve, then,
for purposes of this Agreement, the Stock Acquisition Date shall be deemed
never to have occurred, and (y) if a tender or exchange offer referred to in
clauses (ii) or (iii) above is canceled or withdrawn prior to the Distribution
Date, such offer shall be deemed, for purposes of this Agreement, never to
have been made. As soon as practicable after the Company has notified the
Rights Agent of the occurrence of the Distribution Date, the Rights Agent will
send, by first-class, insured, postage prepaid mail, to each record holder of
the 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, one or more Right
Certificates, evidencing one Right for each share of Common Stock so held,
subject to adjustment as herein provided. As of and after 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 Common Stock, in
substantially the form of Exhibit "B" hereto (the "Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of the Common Stock
on the Record Date, as shown by the records of the Company, 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 Distribution
Date (or the earlier redemption, exchange, expiration or termination of the
Rights), the Rights will be evidenced solely by such certificates for Common
Stock registered in the names of the holders of the Common Stock and the
registered holders of the Common Stock shall also be registered holders of the
associated Rights. Until the Distribution Date (or the earlier redemption,
exchange, expiration or termination of the Rights), the surrender for transfer
of any certificate for Common Stock in respect of which Rights have been
issued shall also constitute the transfer of the Rights associated with the
Common Stock represented by such certificates.
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(c) The Company will mail to any record holder of a Right
(including, prior to the Distribution Date, a record holder of Common Stock) a
copy of this Rights Agreement, without charge, within ten Business Days of
receipt of a written request therefor.
(d) Rights shall be issued in respect of all shares of Common
Stock which are issued or sold out of treasury after the Record Date but prior
to the Distribution Date (or the earlier redemption, exchange, expiration or
termination of the Rights). All certificates for Common Stock issued or sold
after the Record Date but prior to the earlier of the Distribution Date and
the Expiration Date shall be deemed also to be certificates for Rights and
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 Biopool
International, Inc. (the "Company") and American Stock Transfer &
Trust Company, as Rights Agent, dated as of June 12, 1998, as it
may from time to time be supplemented or amended pursuant to its
terms (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 Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
may be redeemed, may expire, or may be evidenced by separate
certificates and no longer be evidenced by this certificate. The
Company will mail to the holder of record of this certificate a
copy of the Rights Agreement without charge within ten business
days after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, Rights issued
to, or held by, any Person who is, was or becomes an Acquiring
Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null
and void.
With respect to certificates containing the foregoing legend, until the
Distribution Date (or the earlier redemption, exchange, expiration or
termination of the Rights) 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. Notwithstanding this clause (d), the
omission of a legend shall not affect the enforceability of any part of this
Rights Agreement or the rights of any holder of Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and the
forms of election to purchase and of assignment to be printed on the reverse
thereof) shall be substantially in the form of Exhibit "A" hereto and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Rights Agreement, or as may be
required to comply with any applicable law, rule or regulation or with any
rule or regulation of any stock exchange or quotation system on which the
Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 7, Section 11 and Section 24 hereof, the Right
Certificates, whenever issued, shall be dated as of the Distribution Date, and
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on their face shall entitle the holders thereof to purchase such number of
shares of Common Stock as shall be set forth therein at the Purchase Price set
forth therein, but the number and type of shares of Common Stock and other
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein. To the extent
provided in Section 7(f) hereof, certain Rights Certificates shall contain the
legend provided for therein.
SECTION 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, President,
Chief Operating Officer, Chief Financial Officer or any Vice President, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company whose manual or
facsimile signature is affixed to 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, issued and delivered 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. 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 or offices designated as the
appropriate place for surrender of Right Certificates upon exercise or
transfer, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face
by each of the Right Certificates and the date of each of the Right
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 7(f) and Section 15
hereof, at any time after the close of business on the Distribution Date and
at or prior to the close of business on the Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become null and void pursuant to Section 7(f) hereof or that
have been exchanged pursuant to Section 16 hereof) may be transferred, split
up, combined or exchanged for another Right Certificate or Right Certificates,
representing, in the aggregate, the same number of Rights as the Right
Certificate or Right Certificates surrendered then represented. Any
registered holder desiring to transfer, split up, combine or exchange any
Right Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the
principal office or offices of the Rights Agent designated for such purpose.
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
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completed and signed the certificate contained in the form of assignment on
the reverse side of such Right Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner, former Beneficial
Owner and transferee Beneficial Owner (and Associates and Affiliates of the
foregoing) as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 7(f) and Section 15 hereof, 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 by such holder of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will execute and deliver a new Right
Certificate of like tenor to the Rights Agent for countersignature and
delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company and
the Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Right Certificates.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(f), each Right shall entitle the
registered holder thereof, upon exercise thereof as provided herein, to
purchase for the Purchase Price at any time after the Distribution Date and
prior to the earlier of (i) the close of business on June 12, 2008 (the "Final
Expiration Date"), (ii) the Redemption Date and (iii) the time at which all
exercisable Rights are exchanged pursuant to Section 16 hereof (the earlier of
(i), (ii) and (iii) being herein referred to as the "Expiration Date"), one
share of Common Stock, subject to adjustment from time to time as provided in
Sections 11, 12 and 14 hereof.
(b) The registered holder of any Right Certificate may exercise
the Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date, upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights
Agent, together with payment of the Purchase Price for each one share of
Common Stock as to which the Rights are exercised, at or prior to the
Expiration Date.
(c) The Purchase Price for each share of Common Stock pursuant
to the exercise of a Right shall initially be $6.50, shall be subject to
adjustment from time to time as provided in Sections 11, 12 and 14 hereof and
shall, except as otherwise provided in this Section 7(c), be payable in lawful
money of the United States of America in accordance with Section 7(d) below.
In lieu of the cash payment referred to in the immediately preceding sentence,
following the occurrence of a Distribution Date, the registered holder of a
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Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part upon surrender of the Right
Certificate together with an election to exercise such Rights without payment
of cash on the reverse side thereof duly completed. With respect to any such
Rights as to which such an election is made, the holder shall receive a number
of shares of Common Stock and/or other securities, as the case may be, having
a value equal to the difference between (i) the value of the Common Stock
and/or other securities, as the case may be, that would have been issuable
upon payment of the Purchase Price and (ii) the Purchase Price. For purposes
of this Section 7(c), the value of any securities shall be the Current Market
Price thereof (or of the security to which such security is deemed for
purposes of this Agreement to be an equivalent) on the Trading Day immediately
preceding the Distribution Date.
(d) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so exercised, of
the Purchase Price per share of Common Stock and/or other securities, as the
case may be, to be purchased, and an amount equal to any applicable transfer
tax, in cash or by certified check or bank draft payable to the order of the
Company, or a duly completed election to exercise without payment of cash, the
Rights Agent shall, subject to Section 22(k) hereof, thereupon promptly (i)(A)
requisition from any transfer agent of the Common Stock and/or other
securities, as the case may be, (or make available, if the Rights Agent is the
transfer agent) certificates for the total number of shares of Common Stock
and/or other securities, as the case may be, to be purchased or acquired
and/or (B) requisition from the depositary agent depositary receipts
representing such number of fractional shares of Common Stock and/or other
securities, as the case may be, as are to be purchased, in which case
certificates for the fractional shares of Common Stock and/or other
securities, as the case may be, so represented shall be deposited with the
depositary agent (and the Company hereby irrevocably authorizes and directs
its transfer agent and any such depositary agent to comply with all such
requests), (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 15 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 thereof, promptly deliver any such 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 (including Common Stock of the Company)
and/or distribute cash or other property pursuant to Sections 9, 11, 12 or 14
hereof, the Company will make all arrangements necessary so that such other
securities, cash or other property are available for distribution by the
Rights Agent, if and when appropriate.
(e) 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, 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, subject to the provisions of Section 15
hereof.
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(f) Notwithstanding anything in this Rights Agreement to the
contrary, from and after the Stock Acquisition Date, any Rights beneficially
owned by (i) an Acquiring Person or any Affiliate or Associate thereof, (ii) a
transferee of an Acquiring Person or any Affiliate or Associate thereof, (iii)
a transferee of an Acquiring Person (or Associate or Affiliate thereof) who
becomes the transferee of such Rights concurrently with such Acquiring Person
becoming such or at any time thereafter, or (iv) a transferee of an Acquiring
Person (or Associate of Affiliate thereof) who becomes a transferee prior to
the Acquiring Person becoming such and receives the Rights pursuant to either
(A) a transfer (whether or not for consideration) by the Acquiring Person to
holders of its stock or other equity securities 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 has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(f), shall
be null and void, and any existing or subsequent holder of any such Right
shall not have any right to exercise or transfer any such Right. Any Right
Certificate issued pursuant to this Rights Agreement that represents Rights
beneficially owned by any Person referred to in clause (A) or (B) above, and
any Right Certificate issued 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:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who is, was or became an Acquiring
Person or an Affiliate or an Associate of an Acquiring Person (as
those terms are defined in the Rights Agreement). This Right
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in the Rights Agreement.
The Company shall use all reasonable efforts to comply with this
Section 7(f), but neither it nor the Rights Agent shall have any liability to
any Person as a result of the failure to make any determination with respect
to an Acquiring Person, or its Associates, Affiliates or any transferees of
the foregoing.
(g) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action whatsoever with respect to a registered holder of Rights upon the
occurrence of any purported exercise as set forth in this Section 7 unless
such registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side of
the Right Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right Certificate
representing Rights that have become null and void and non-transferable
pursuant to Section 7(f) surrendered or presented for any purpose shall, if
surrendered to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
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Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any Right Certificate purchased or acquired by the Company. The Rights Agent
shall deliver all canceled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Right Certificates, and
in such case shall deliver a certificate of destruction thereof to the
Company.
SECTION 9. RESERVATION AND AVAILABILITY OF SHARES.
(a) The Company covenants and agrees that it shall use its best
efforts to at all times cause to be reserved and kept available out of its
authorized and unissued shares of Common Stock and/or other securities, as the
case may be, the number of shares of Common Stock and/or other securities, as
the case may be, that, as provided in this Agreement, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) In the event that there shall not be sufficient shares of
Common Stock and/or other securities, as the case may be, issued but not
outstanding or authorized but unissued to permit the exercise or exchange of
Rights in accordance with Section 7 and Section 16, the Company covenants and
agrees that it will take all such action as may be necessary to authorize
additional Common Stock and/or other securities, as the case may be, for
issuance upon the exercise or exchange of Rights pursuant to Section 7 and
Section 16; provided, however, that if the Company is unable to cause the
authorization of additional shares of Common Stock and/or other securities, as
the case may be, then the Company shall, or in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (A) upon surrender of a Right, pay
cash equal to the Purchase Price in lieu of issuing Common Stock and/or other
securities, as the case may be, and requiring payment therefor, (B) upon due
exercise of a Right and payment of the Purchase Price due and payable with
respect to each Right which is exercised, distribute a combination of Common
Stock, cash and/or other equity securities and/or debt securities having an
aggregate value equal to the value of the Common Stock and/or other
securities, as the case may be, which otherwise would have been issuable
pursuant to Section 7 or Section 16. To the extent that any legal or
contractual restrictions (pursuant to agreements or instruments in effect
prior to the Distribution Date to which it is party) prevent the Company from
paying the full amount payable in accordance with the foregoing sentence, the
Company shall pay to holders of the Rights as to which such payments are being
made all amounts which are not then restricted on a pro rata basis as such
payments become permissible under such legal or contractual restrictions until
such payments have been paid in full.
(c) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Common Stock or other
securities delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares of Common Stock or other securities (subject
to payment of the Purchase Price), be duly and validly authorized and issued
and fully paid and nonassessable shares.
(d) The Company 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
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of any shares of Common Stock or other securities, as the case may be, upon
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates or the issuance or delivery of
certificates or depository receipts for shares of Common Stock 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 or depository receipts for shares of
Common Stock or other securities, as the case may be, 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.
(e) So long as the shares of Common Stock and/or other
securities, as the case may be, issuable upon the exercise of the Rights may
be listed on any national securities exchange or quoted on NASDAQ, the Company
shall use its best efforts to cause, from and after such time as the Rights
become exercisable, all shares reserved for such issuance to be listed on such
exchange or quoted on NASDAQ upon official notice of issuance of such
exercise.
(f) The Company shall, unless an appropriate exemption from the
provisions of the Act is available, use its best efforts (i) to file, as soon
as practicable following the Stock Acquisition Date or at such earlier date as
may be required by law, as the case may be, a registration statement under the
Act with respect to the securities purchasable upon exercise of the Rights on
an appropriate form, (ii) cause such registration statement to become
effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act and the rules and regulations promulgated
by the Securities Exchange Commission thereunder) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities and
(B) the expiration of the Rights. The Company will also take such action as
may be appropriate to ensure compliance with the securities or "blue sky" laws
of the various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for a period of time not to exceed 90
days after the date set forth in clause (i) of the first sentence of this
Section 9(f), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective; provided,
however, that no such suspension shall remain effective after, and the Rights
without any further action by the Company or any other Person become
exercisable immediately upon, the effectiveness of such Registration
Statement. 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 (x) unless and
until the registration statement under the Act referred to above shall have
been declared effective by the Securities and Exchange Commission, (y) in any
jurisdiction, unless and until any requisite state securities or "blue sky"
qualification in such jurisdiction shall have been obtained, and (z) in a
jurisdiction in which the exercise of such Right shall not then be permitted
under applicable law.
SECTION 10. RECORD DATE. Each Person (other than the Company) in whose
name any certificate or depository receipt for Common Stock and/or other
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securities, as the case may be, is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of such Common
Stock and/or other securities, as the case may be, represented thereby on, and
such certificate or depository receipt 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 transfer books of the Company for the Common Stock and/or other securities
are closed, such Person shall be deemed to have become the record holder of
such shares of Common Stock and/or other securities on, and such certificate
or depository receipt shall be dated, the next succeeding Business Day on
which the transfer books of the Company for the Common Stock and/or other
securities are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Right Certificate shall not be entitled to any rights of a
holder of shares of Common Stock and/or other securities of the Company with
respect to which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENTS TO PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares subject
to purchase upon exercise of each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after
the date of this Rights Agreement (A) declare or pay a dividend on the Common
Stock which is payable in shares of Common Stock or other securities of the
Company, (B) subdivide or split the outstanding shares of Common Stock into a
greater number of shares, (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares of Common Stock or effect a
reverse split of the outstanding shares of Common Stock or (D) issue any
shares of its capital stock in a reclassification of the Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving entity), except as
otherwise provided in this Section 7(f) or 11, the Purchase Price in effect at
the time of the record date for such dividend or the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Common Stock or capital stock issuable upon exercise of a Right 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 an
amount equal to (x) the Purchase Price in effect immediately prior to the
record date or effective date of such dividend, subdivision, combination or
reclassification multiplied by (y) the number of shares of Common Stock, or
the number of shares of capital stock, as the case may be, as to which a Right
was exercisable immediately prior to such date, the aggregate number and kind
of shares of Common Stock or of capital stock which, if such Right had been
exercised immediately prior to such date he would have owned upon such
exercise and been entitled to receive, or would be deemed to have owned, by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, 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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(ii) Subject to the second proviso of the first sentence of
Section 3(a), and Sections 14(a) and 16 of this Agreement, in the event that
the Stock Acquisition Date occurs, then, subject to the last sentence of
Section 25(b) hereof, and in each such case, proper provision shall be made so
that each holder of a Right (except as otherwise provided in Section 7(f)
hereof) thereafter (or if the Distribution Date has not occurred, upon the
Distribution Date) shall have the right to receive, upon exercise thereof at a
price equal to the current Purchase Price in accordance with this Rights
Agreement, such number of shares of Common Stock as shall equal the result
obtained by multiplying the Purchase Price by a fraction, the numerator of
which is the number of shares of Common Stock for which a Right is then
exercisable, and the denominator of which is 50% of the then Current Market
Price of the Common Stock on the Stock Acquisition Date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of shares of Common Stock
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Common Stock (or securities having
the same rights, privileges and preferences as the Common Stock ("Equivalent
Shares")) or securities convertible into Common Stock or Equivalent Shares at
a price per share of Common Stock or per Equivalent Share (or having a
conversion or exercise price per share of Common Stock, if a security
convertible into or exercisable for Common Shares or Equivalent Shares) less
than the Current Market Price per share of Common Stock on such record date,
the Purchase Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to such date by
a fraction, the numerator of which shall be the sum of (i) the number of
shares of Common Stock and Equivalent Shares outstanding on such record date,
plus (ii) the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock and/or Equivalent Shares
to be so 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 sum of (A) the number of
shares of Common Stock and Equivalent Shares outstanding on such record date
plus (B) the number of additional shares of Common Stock and/or Equivalent
Shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In the
event that the number of shares of common Stock issuable under the terms of a
convertible security, or the conversion or exercise price of such convertible
security, changes after the initial issuance of such convertible security, an
adjustment will be made to the Purchase price that conforms with the
adjustment set forth in this Section 11(b). In case such subscription price
may be paid by delivery of consideration part or all of which shall be in a
form other than cash, the value of such consideration shall be as determined
in good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agents and shall be
conclusive and binding on the Rights Agent and the holders of Rights. Shares
of Common Stock owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of shares of Common Stock (including any such
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distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving entity) of evidences of indebtedness or
assets (other than a regular periodic cash dividend or a dividend payable in
shares of Common Stock), or convertible securities, 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 difference between (i) the
Current Market Price per share of Common Stock on such record date, minus (ii)
the fair market value (as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive and binding on the Rights Agent
and the holder of Rights) of the portion of the assets or evidences of
indebtedness to be so distributed or of such convertible securities,
subscription rights or warrants applicable to one share of Common Stock and
the denominator of which shall be such Current Market Price per share of
Common 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 the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) Anything herein to the contrary notwithstanding, no
adjustment to the Purchase Price shall be required unless such adjustment
would require an increase or decrease of at least 1% to the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(d)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be
made to the nearest cent or to the nearest one one-hundredth of a share of
Common Stock or other security, as the case may be, whichever is of lesser
value. Notwithstanding the first sentence of this Section 11(d), 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 mandates such
adjustment or (ii) the Expiration Date.
(e) In the event that at any time, as a result of an adjustment
made pursuant to Sections 11, 12 or 14 hereof, the holder of any Right
thereafter exercised shall be entitled to receive upon exercise of such Right
any securities other than shares of Common Stock or interests therein,
thereafter the number or amount of such other securities so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
Section 11(a), (b), (c), (d), (f), (g), (h), (i), (j) and (l), and the
provisions of Sections 7, 9, 10, 12, 14 and 15 hereof with respect to the
Common Stock shall apply on like terms to any such other securities.
(f) 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 shares of Common
Stock purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustments as provided herein.
(g) Unless the Company shall have exercised its election as
provided in Section 11(h) hereof, upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(a), (b) and (c) hereof,
each Right outstanding immediately prior to the making of such adjustment
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shall thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of shares of Common Stock (calculated to the nearest one
one-hundredth of a share of Common Stock) obtained by (i) multiplying (A) the
number of shares of Common Stock covered by a Right immediately prior to this
adjustment 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.
(h) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common 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 shares of Common
Stock for which such Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number
of Rights shall become that number of Rights (calculated to the nearest one
one-hundredth of a share of Common Stock) 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(h), 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 15 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 holder 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.
(i) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of shares of Common
Stock which were expressed in the initial Right Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par or stated value, if any, of the
Common Stock issuable upon exercise of the Rights, the Company shall take any
action which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue, as fully paid and nonassessable,
such number of shares of Common Stock at such adjusted Purchase Price.
(k) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
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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 number of shares of Common Stock and other securities of the Company, if
any, issuable upon such exercise on the basis of 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 of Common Stock upon the occurrence of the event requiring
such adjustment.
(l) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be advisable
in order that any (i) consolidation or subdivision of the Common Stock, (ii)
issuance wholly for cash of any shares of Common Stock at less than the
Current Market Price, (iii) issuance wholly for cash of shares of Common Stock
or securities which by their terms are convertible into or exchangeable for
shares of Common Stock, (iv) dividends on the Common Stock payable solely in
Common Stock or (v) issuance of rights, options or warrants referred to
hereinabove in this Section 11, hereafter made by the Company to the holders
of its Common Stock, shall not be taxable to such stockholders.
(m) The Company covenants and agrees that it shall not at any
time after the Distribution Date (i) consolidate with, (ii) merge with or
into, or (iii) sell or transfer, in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries taken as a whole, to any
other Person or Persons (other than any of its subsidiaries in one or more
transactions each of which complies with Section 11(o) hereof) if (A) at the
time or immediately after such consolidation, merger or sale there are any
rights, warrants or other instruments outstanding or agreements or
arrangements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights or (B) prior to,
simultaneously with or immediately after such consolidation, merger or sale,
the stockholders of a Person who constitutes, or would constitute, the
"Principal Party" for the purposes of Section 14(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i) declare or
pay any dividend on the Common Stock payable in Common Stock or (ii) effect a
subdivision, combination or consolidation of the Common Stock (by
reclassification or otherwise then by payment of dividends in Common Stock)
into a greater or lesser number of shares of Common Stock, then in any such
case (i) the number of shares of Common Stock purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the
number of shares of Common Stock so purchasable immediately prior to such
event by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately before such event and the denominator of which
is the number of shares of Common Stock outstanding immediately after such
event, and (ii) each share of Common Stock outstanding immediately after such
event shall be issued with respect to it that number of Rights which each
share of Common Stock outstanding immediately prior to such event has issued
with respect to it. The adjustments provided for in this Section 11(n) shall
be made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
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(o) The Company covenants and agrees that after the Distribution
Date it will not, except as permitted by Section 25 or Section 28 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 substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
SECTION 12. CERTAIN ADJUSTMENTS.
(a) To preserve the actual or potential economic value of the
Rights, if at any time after the date of this Rights Agreement there shall be
any change in the Common Stock, whether by reason of stock dividends, stock
splits, recapitalizations, mergers, consolidations, combinations or exchanges
of securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or stock subscription rights, options or warrants to
holders of the Common Stock or otherwise (other than a distribution of the
Rights or regular quarterly cash dividends or event described in Section 11 or
14), then in such event the Board of Directors of the Company shall make such
appropriate adjustments in the number of shares of Common Stock or other
securities, as applicable issuable upon exercise of each Right, the Purchase
Price and Redemption Price in effect at such time and the number of Rights
outstanding at such time (including the number of Rights or fractional Rights
associated with each share of Common Stock) such that following such
adjustment such event shall not have had the effect of reducing or limiting
the benefits the holders of the Rights would have had absent such event.
(b) All Rights originally issued by the Company subsequent to
any adjustment made to the amount of Common Stock or other securities relating
to a right shall evidence the right to purchase, for the Purchase Price, the
adjusted number and kind of securities purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(c) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Common Stock or number or kind of other
securities issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the terms which were
expressed in the initial Right Certificates issued hereunder.
(d) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
the Common Stock and/or other securities, if any, issuable upon such exercise
over and above the Common Stock and/or other securities, if any, issuable
before giving effect 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 securities upon the
occurrence of the event requiring such adjustment.
SECTION 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11, 12 or 14
hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
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<PAGE>
adjustment, (b) promptly file with the Rights Agent and with each transfer
agent for the Common 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 Common Stock)
in accordance with Section 26 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained.
SECTION 14. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, directly or indirectly, (x) the Company
shall consolidate with, or merge with and into, any other Person (other than
the Company or a Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof), and the Company shall not be the
continuing or surviving entity of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company in one or more transactions each of
which complies with Section 11(o) hereof) shall consolidate with, or merge
with and into the Company, and the Company shall be the continuing or
surviving entity of such merger and, in connection with such merger, all or
part of the Common Stock shall be changed into or exchanged for stock or other
securities of any other 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 transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole and
calculated on the basis of the Company's most recent regularly prepared
financial statements) to any other Person or Persons (other than a Subsidiary
of the Company in one or more transactions each of which complies with Section
11(o)hereof), then, and in each such case, appropriate provision shall be made
so that (i) each holder of a Right, except as provided in Section 7(f) 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 and nonassessable
shares of freely tradeable Common Stock of the Principal Party (as hereinafter
defined, including the Company as successor thereto or as the surviving
entity), not subject to any rights of call or first refusal, liens,
encumbrances or other claims, as shall be equal to the result obtained by (A)
multiplying the then current Purchase Price by the number of shares of Common
Stock for which a Right is exercisable immediately prior to the first
occurrence of any event described in Section 14(a)(x), (y) or (z) hereof, and
(B) dividing that product (which, following the first occurrence of any event
referred to in Section 14(a)(x), (y) or (z), shall 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 Common Stock of such Principal Party
on the date of consummation of such consolidation, merger, sale or transfer;
(ii) the Principal Party shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall apply to
such Principal Party and (iv) such Principal Party shall take such steps
(including, but not limited to, the authorization and reservation of a
sufficient number of shares of its Common Stock to permit exercise of all
outstanding Rights in accordance with this Section 14(a)) in connection with
such consummation as may be necessary to assure that the provisions hereof
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<PAGE>
shall thereafter be applicable, as nearly as reasonably may be, in relation to
the shares of its Common Stock thereafter deliverable upon the exercise of the
Rights, provided, that upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of
the Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights, warrants and other
property which holder would have been entitled to receive had he, at the time
of such transaction, owned the shares of Common Stock of the Principal Party
purchasable upon the exercise of a Right, and such Principal Party shall take
such steps (including, but not limited to, reservation of shares of stock) as
may be necessary to permit the subsequent exercise of the Rights in accordance
with the terms hereof for such cash, shares, rights, warrants and other
property and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any event described in Section 14(a)(x),
(y) or (z).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of Section 14(a) hereof: (A) the Person that is the issuer of any
securities into which shares of Common Stock of the Company is converted in
such merger or consolidation, or, if there is more than one such issuer, the
issuer the Common Stock of which has the greatest aggregate market value of
shares outstanding or (B) if no securities are so issued, (x) the Person that
is the other party to the merger, or, if there is more than one such Person,
the Person the Common Stock of which has the greatest aggregate market value
of shares outstanding or (y) if the Person that is the other party to the
merger does not survive the merger, the Person that does survive the merger
(including the corporation if it survives) or (z) the Person resulting from
the consolidation; and
(ii) in the case of any transaction described in clause (z)
of Section 14(a) hereof, the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions or, if each person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest aggregate market value of
shares outstanding; provided, however, that in any such case described in the
foregoing clause (b)(i) or (ii), (A) if the Common Stock of such Person is not
at such time and has not been continuously over the preceding 12-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
(B) if 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 of
shares outstanding, or (C) if such Person is owned, directly or indirectly, by
a joint venture formed by two or more persons that are not owned, directly or
indirectly, by the same person, the rules set forth in (A) and (B) above shall
apply to each of the owners having an interest in the venture as if the Person
owned by the joint venture was a Subsidiary of both or all of such joint
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venturers, and the Principal Party in each such case shall bear the
obligations set forth in this Section 14 in the same ratio as its interest in
such Person bears to the total of such interests.
(c) The Company shall not enter into any transaction of the kind
referred to in this Section 14 if at the time of such transaction there are
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by
the Rights. The Company shall not agree to consummate or consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have
a sufficient number of authorized shares of its Common Stock which have not
been issued or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 14 and unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent
a supplemental agreement so providing, confirming that the requirements of
Sections 14(a) and (b) hereof shall promptly be performed in accordance with
their terms and that such consolidation, merger, sale or transfer of assets
shall not result in a default by the Principal Party under this Agreement as
the same shall have been assumed by the Principal Party pursuant to Sections
14(a) and (b) hereof and further providing that, as soon as practicable after
the date of any consolidation, merger or sale of assets mentioned in Section
14(a), the Principal Party will
(i) prepare and file a registration statement under the
Act, if necessary, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, will use its best efforts
to cause such registration statement to become effective as soon as
practicable after such filing and to remain effective (with a prospectus at
all times meeting the requirements of the Act) until the date of expiration of
the Rights, and similarly comply with applicable state securities laws; and
(ii) use its best efforts, if the Common Stock of the
Principal Party shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common Stock of
the Principal Party shall not be listed on a national securities exchange, to
cause the Rights and the securities purchasable upon exercise of the Rights to
be reported by NASDAQ or such other system then in use; and
(iii) 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 (or any
successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of the Common Stock of the
Principal Party subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 14 shall similarly apply to successive
mergers or consolidations or sales or other transfers. If any event described
in this Section 14 shall occur at any time after the occurrence of a Stock
Acquisition Date, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 14(a) hereof.
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(d) If the Principal Party which is to be a party to a
transaction referred to in this Section 14 has a provision in any of its
authorized securities or in its Certificate of Incorporation or Bylaws or
other instrument governing its corporate affairs, which provision would have
the effect of (i) causing such Principal Party to issue, in connection with or
as a consequence of, the consummation of the transaction referred to in this
Section 14, shares of Common Stock of such Principal Party at less than the
Current Market Price per share or securities exercisable for, or convertible
into, Common Stock of such Principal Party at less than such then Current
Market Price (other than to holders of Rights pursuant to this Section 14) or
(ii) providing for any special payment, tax or similar provisions in
connection with the issuance of the Common Stock of such Principal Party
pursuant to the provisions of Section 14, then, in such event, the Company
hereby agrees with each holder of Rights that it shall not consummate any such
transaction unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing that the provision in question of such Principal Party shall have
been canceled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in connection
with or as a consequence of, the consummation of the proposed transaction.
SECTION 15. 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 existing or arising subsequent to the
Distribution Date, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the Current Market
Value of a whole Right. For the purposes of this Section 15(a), the Current
Market Value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable. The closing price of the Rights for any
day shall be the last sale price, 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 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 bid and asked prices in the over-the-counter market, as
reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Rights selected by the Board of Directors of the Company. If on
any such date Rights are not quoted by any such organization and no
professional market maker is making such a market in the Rights, the fair
value of the Rights on such date as determined in good faith by the Board of
Directors shall be used.
(b) The Company shall not be required to issue fractional
interests in the shares of Common Stock upon exercise of the Rights or to
distribute certificates which evidence fractional interests in shares of
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Common Stock. In lieu of fractional interests in shares of Common Stock, the
Company shall 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 Common
Stock or other securities of the Company on the date of exercise.
(c) The Company shall not be required to issue fractions of
shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Current Market
Value of one share of Common Stock on the date of exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights subsequent to the
Distribution Date, or any fractional share of Common Stock upon exercise of
Rights (except as provided above).
SECTION 16. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after a Stock Acquisition Date (and, if the Distribution Date has not
then occurred, after the Distribution Date), mandatorily exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that shall have become null and void and nontransferable pursuant to the
provisions of Section 7(f) hereof) for consideration per Right consisting of
one-half of the securities that would be issuable at such time upon the
exercise of one Right in accordance with Section 11(a) (the consideration
issuable per Right pursuant to this Section 16 being the "Exchange
Consideration"). If the Board of Directors elects to exchange all the Rights
for Exchange Consideration pursuant to this Section 16 prior to the physical
distribution of the Rights Certificates, the Company may distribute the
Exchange Consideration in lieu of distributing Right Certificates, in which
case for purposes of this Rights Agreement holders of Rights shall be deemed
to have simultaneously received and surrendered for exchange Rights
Certificates on the date of such distribution. Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person or a Permitted Holder)
which, together with all Affiliates and Associates of such Person, becomes the
beneficial owner of 50% or more of the Common Stock outstanding.
(b) Any action of the Board of Directors of the Company ordering
the exchange of any Rights pursuant to Section 16(a) shall be irrevocable and,
immediately upon the taking of such action and without any further action and
without any notice, the right to exercise any such Right shall terminate and
the only right thereafter of a holder of such Right shall be to receive the
Exchange Consideration in exchange for each such Right held by such holder.
The Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all 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 Rights for the Exchange
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Consideration 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 shall
have become null and void and nontransferable pursuant to the provisions of
Section 7(f)) held by each holder of Rights.
SECTION 17. RIGHTS OF ACTION. All rights of action in respect of this
Rights Agreement, to the extent any such rights exist, 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 the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common
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 Rights 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 Rights Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to, this Rights
Agreement.
SECTION 18. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(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 or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate certificates fully executed;
(c) subject to Sections 6 and 7(g) hereof, the Company and the
Rights Agent may deem and treat the Person in whose name the Right Certificate
(or, prior to the Distribution Date, the associated Common 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 Rights Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority prohibiting or otherwise
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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 19. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of shares of
Common Stock or any interest therein or any other securities of the Company
which may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote for the
election of Directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 26 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions
hereof.
SECTION 20. CONCERNING THE RIGHTS AGENT.
(a) In the event that the Rights Agent is not the Company, the
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and disbursements and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
(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 its capacity as Rights
Agent in reliance upon any Right Certificate or certificate for 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, 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 21. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any trust, corporation or other entity into which the Rights
Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any trust, corporation or other entity resulting from any
merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party or any trust, corporation or other entity succeeding to
the corporate trust business of the Rights Agent, shall be the successor to
the Rights Agent under this Rights Agreement without the execution or filing
of any paper or any further action on the part of any of the parties hereto,
provided that such trust, corporation or other entity would be eligible for
appointment as a successor Rights Agent under the provisions of Section 23
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of the Right
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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 Rights 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 Rights Agreement.
SECTION 22. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations expressly set forth in this Rights Agreement and no
implied duties or obligations shall be read into this Rights Agreement against
the Rights Agent. The Rights Agent undertakes the duties and obligations
imposed by this Rights Agreement upon the following terms and conditions, by
all of which the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound;
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
or any Affiliate or Associate thereof and the determination of Current Market
Price) be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the Board,
the President, the Chief Operating Officer or any Vice President and by the
Chief Financial Officer, 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 Rights Agreement in reliance upon
such certificate.
(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 Rights Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
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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 Rights Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including certain of the Rights becoming void
pursuant to Section 7(f) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections 3,
11, 12, 14, 16 or 25 hereof, or the ascertaining of the existence of facts
that would require any such adjustment (except with respect to the exercise of
Rights evidenced by Right Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Common Stock and/or other securities, as the case may be, to be
issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any shares of Common Stock and/or other securities, as the case may
be, 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 Rights 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 Chief Executive Officer, the President, the Chief
Operating Officer, the Chief Financial Officer or any Vice President or the
Treasurer or the Secretary 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 the Rights Agent under this Rights Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Rights 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.
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(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 of transfer without first consulting with the Company.
(l) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage or expense (including reasonable
fees and expenses of counsel) which the Rights Agent may incur resulting from
its actions as Rights Agent pursuant to this Rights Agreement; provided,
however, that the Rights Agent shall not be indemnified or held harmless with
respect to any such loss, liability, damage or expense incurred by the Rights
Agent as a result of, or arising out of, its own negligence, bad faith or
wilful misconduct. In no case shall the Company be liable with respect to any
action, proceeding, suit or claim against the Rights Agent unless the Rights
Agent shall have notified the Company, by letter or by facsimile confirmed by
letter, of the assertion of an action, proceeding, suit or claim against the
Rights Agent, promptly after the Rights Agent shall have notice of any such
assertion of an action, proceeding, suit or claim or have been served with the
summons or other first legal process giving information as to the nature and
basis of the action, proceeding, suit or claim. The Company shall be entitled
to participate at its own expense in the defense of any such action,
proceeding, suit or claim, and, if the Company so elects, the Company shall
assume the defense of any such action, proceeding, suit or claim. In the
event that the Company assumes such defense, the Company shall not thereafter
be liable for the fees and expenses of any additional counsel retained by the
Rights Agent, so long as the Company shall retain counsel satisfactory to the
Rights Agent, in the exercise of its reasonable judgment, to defend such
action, proceeding, suit or claim. The Rights Agent agrees not to settle any
litigation in connection with any action, proceeding, suit or claim with
respect to which it may seek indemnification from the Company without the
prior written consent of the Company.
SECTION 23. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the shares of Common Stock, by registered or certified mail,
and, subsequent to the Distribution Date, 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, by registered or certified mail, and
subsequent to the Distribution Date, 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 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 at the United States, in good standing, having a principal
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office in the United States of America, which is authorized under such laws to
exercise stock transfer or corporate trust powers and is subject to
supervision or examination by federal or state authority. 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 such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and,
subsequent to the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 23, 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 24. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of
the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares of Common Stock and/or other securities, as the case may be,
purchasable under the Right Certificates made in accordance with the
provisions of this Rights Agreement. In addition, if deemed necessary or
appropriate by the Board of Directors of the Company, the Company may issue
Right Certificates representing the appropriate number of Rights in connection
with the issuance or sale of Common Stock following the Distribution Date but
prior to the Expiration Date; provided, however, that (a) no such Right
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the person to whom such
Right Certificate would be issued, and (b) no such Right Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 25. REDEMPTION.
(a) The Company may, by resolution of the Board of Directors
(which resolution shall, if adopted following the Stock Acquisition Date, 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), at its option, at any time prior to the earlier to
occur of (i) the close of business on the tenth day following the Stock
Acquisition Date, and (ii) the close of business on the Final Expiration Date,
elect to redeem all but not less than all of the then outstanding Rights at a
redemption price of $.001 per Right (the date of such redemption being the
"Redemption Date"), 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").
The Company may, at its option, pay the Redemption Price in cash or 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.
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(b) If, following the occurrence of a Stock Acquisition Date and
prior to the Distribution Date, (i) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of Common Stock
of the Company in one transaction, or a series of transactions (not directly
or indirectly involving the Company or any of its Subsidiaries), which did not
result in an event described in Section 14 hereof, such that such Person is
thereafter a Beneficial Owner of less than 15% (or (a) in the case of a
Permitted Holder, the percentage the Permitted Holder may hold without ceasing
to be a Permitted Holder, and (b) in the case of an Adverse Person, the
percentage such Person may hold as determined by the Board of Directors, which
in no event may the Board of Directors require to be less than 10% of the
shares of Common Stock then outstanding, so that the Board of Directors no
longer declares such Person to be an Adverse Person) of the outstanding
Common Stock of the Company, (ii) there are no other Persons, immediately
following the occurrence of the event described in clause (i), who are
Acquiring Persons, and (iii) the Board of Directors of the Company (with the
concurrence of a majority of the Continuing Directors) shall so approve, then
the Company's right of redemption provided in subparagraph (a) of this Section
25 shall be reinstated and thereafter all outstanding Rights shall again be
subject to the provisions of this Section 25. Notwithstanding anything to the
contrary contained in this Rights Agreement, the Rights shall not be
exercisable after the first occurrence of a Stock Acquisition Date until such
time as the Company's right of redemption hereunder has expired.
(c) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if such redemption is subject to
conditions, immediately upon satisfaction of such conditions), evidence of
which shall have been filed with the Rights Agent, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly (but, in any event, within
ten 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 Rights
Agent and 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 for
value any Rights at any time in any manner other than as specifically set
forth in this Section 25, and other than in connection with the purchase,
acquisition or redemption of Common Stock prior to the Distribution Date.
SECTION 26. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in securities of the
Company of any class to the holders of its shares of Common Stock or to make
any other distribution to the holders of shares of Common Stock (other than a
regular periodic cash dividend), or (ii) to offer to the holders of its shares
of Common Stock rights, options or warrants to subscribe for or to purchase
any additional shares of Common Stock or securities convertible into shares of
Common Stock, or (iii) to effect any reclassification of its shares of Common
Stock (other than a reclassification involving only the subdivision of
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outstanding shares of Common Stock), or (iv) to effect any consolidation or
merger into or with any other Person, 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 transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
case, (i) the Company shall give to each holder of a Right, to the extent
feasible and in accordance with Section 26, a notice of such proposed action,
which notice shall specify the proposed event and the consequences of the
event to the holders of Rights under Section 11(a), Section 12 or Section 14
hereof, as the case may be, and, upon consummating such transaction, shall
similarly give notice thereof to each holder of Rights at least 20 days prior
to the record date for determining holders of Common Stock for purposes of
such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of Common Stock, whichever shall be the earlier. The
failure to give notice required by this Section 26 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) Notwithstanding anything in this Rights Agreement to the
contrary, prior to the Distribution Date a filing by the Company with the
Securities and Exchange Commission shall constitute sufficient notice to the
holders of securities of the Company, including the Rights, for purposes of
this Rights Agreement and no other notice need be given.
SECTION 27. NOTICES. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agents or by the holder of any
Right Certificate (or, prior to the Distribution Date, of the Common Stock) to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address if filed in writing
with the Rights Agent) as follows:
Biopool International, Inc.
6025 Nicolle Street
Ventura, California 93003
Attention: Chief Executive Officer
Subject to the provisions of Section 23 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by
the holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Company
6201 15th Avenue, Third Floor
Brooklyn, New York 11219
Attn.: Corporate Trust Department
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate (or,
prior to the Distribution Date, to the holder of any certificate representing
Common Stock) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
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SECTION 28. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution Date,
the Company may and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Rights Agreement (including, without
limitation, the date on which the Distribution Date shall occur, the
definition of Acquiring Person or Adverse Person, the time during which the
Rights may be redeemed or any provision of the Certificate of Designation)
without the approval of any holders of certificates representing shares of
Common Stock. From and after the Distribution Date and subject to the
penultimate sentence of this Section 28, the Company and the Rights Agent
shall, if the Company so directs, supplement or amend this Rights Agreement
without the approval of any holders of Rights Certificates in order (a) to
cure any ambiguity, (b) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions
herein, (c) to shorten or lengthen any time period hereunder (which shortening
or lengthening shall be effective only if there are Continuing Directors then
in office and shall require the concurrence of a majority of such Continuing
Directors if such supplement or amendment occurs at or after the time a Person
becomes an Acquiring Person) or (d) to change or supplement the provisions
hereof in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificate (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); provided, however, that this Rights Agreement may not be
supplemented or amended to lengthen, pursuant to clause (c) of this sentence,
(i) a time period relating to when the Rights may be redeemed at such time as
the Rights are not then redeemable or (ii) any other time period unless such
lengthening is for the purposes of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. 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 28, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common Stock.
SECTION 29. SUCCESSORS. All the covenants and provisions of this Rights
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 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Rights Agreement, 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. Except as explicitly otherwise
provided herein, the Board of Directors of the Company shall have the
exclusive power and authority to administer this Rights Agreement and to
exercise all rights and powers specifically granted to the Board of Directors
or to the Company, or as may be necessary or advisable in the administration
of this Rights Agreement, including without limitation, the right and power to
(a) interpret the provisions of this Rights Agreement and (b) make all
determinations deemed necessary or advisable for the administration of this
Rights Agreement (including a determination to redeem or not redeem the Rights
or to amend the Rights Agreement and a determination of whether there is an
Acquiring Person). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (ii) below, all omissions
with respect to the foregoing) which are done or made by the Board of
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Directors in good faith, shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties,
and (ii) not subject the Board of Directors to any liability to the holders of
the Rights.
SECTION 31. BENEFITS OF THIS RIGHTS AGREEMENT. Nothing in this Rights
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior
to the Distribution Date, the Common Stock) any legal or equitable right,
remedy or claim under this Rights Agreement; but this Rights Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
SECTION 32. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
SECTION 33. GOVERNING LAW. This Rights Agreement, each right 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 34. COUNTERPARTS; EFFECTIVENESS. This Rights 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 one and the same instrument. This Rights Agreement shall
be effective as of the close of business on the date hereof.
SECTION 35. DESCRIPTIVE HEADINGS. The captions herein are included for
convenience of reference only, do not constitute a part of this Rights
Agreement and shall be ignored in the construction and interpretation hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement
to be duly executed, all as of the date and year first above written.
Attest: BIOPOOL INTERNATIONAL, INC.
By:___________________________ By:____________________________
Name: Name:
Title: Secretary Title: Chief Executive Officer
Attest: AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Rights Agent
By:___________________________ By:____________________________
Authorized Representative
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Exhibit A
FORM OF RIGHTS CERTIFICATE
Certificate No. R- ____________ Rights
NOT EXERCISABLE AFTER JUNE 12, 2008 OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID AND NON-
TRANSFERABLE.
RIGHT CERTIFICATE
BIOPOOL INTERNATIONAL, INC.
This certifies that __________________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of June 12, 1998 (the "Rights
Agreement") between Biopool International, Inc., a Delaware corporation (the
"Company"), and American Stock Transfer & Trust Company as Rights Agent (the
"Rights Agent"), unless the rights evidenced hereby shall have been previously
redeemed by the Company, 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. New York time on June 12, 2008, at the principal office or
offices of the Rights Agent designated for such purpose, or at the office of
its successor as Rights Agent or its successors as Rights Agent, one fully
paid and non-assessable share of Common Stock, par value $0.001 per share (the
"Common Stock") of the Company, at a cash purchase price of $6.50 per one
share of Common Stock, as the same may from time to time be adjusted in
accordance with the Rights Agreement (the "Purchase Price"), upon presentation
and surrender of this Right Certificate with the form of election to purchase
and the related certificate duly executed. The number of Rights evidenced by
this Right Certificate (and the number of fractional shares of Common Stock
which may be purchased upon exercise thereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of
__________ __, 19__ based on the shares of Common Stock as constituted at such
date.
As provided in the Rights Agreement, the Purchase Price and the number of
shares of Common Stock 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, and in certain circumstances may be
exercised to purchase securities other than shares of Common Stock or
securities of issuers other than the Company.
If the Rights evidenced by this Rights Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
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Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities thereunder
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
office of the Company and the Rights Agent and are available free of charge
upon written request mailed to the Company at:
Biopool International, Inc.
6025 Nicolle Street
Ventura, California 93003
Attention: President
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Common 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 Board of Directors at a
redemption price of $.001 per Right (payable in cash or other consideration)
appropriately adjusted as provided in the Rights Agreement at any time prior
to the earlier to occur of (i) 10 days after a Stock Acquisition Date (as
defined in the Rights Agreement), and (ii) the Final Expiration Date.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment will
be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Common
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 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.
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This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company.
Dated as of ______________, ____ BIOPOOL INTERNATIONAL, INC.
______________________________ By____________________________
Name: Name:
Secretary Title:
Countersigned:
American Stock Transfer & Trust Company
______________________________
as Rights Agent
By____________________________
Authorized Officer
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[On Reverse Side of Rights Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: BIOPOOL INTERNATIONAL, INC.
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase one share of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other Person which may be issuable upon the exercise of the
Rights) and requests that certificates for such securities be issued in the
name of and delivered to:
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 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)
_________________________________________________________________
OPTIONAL ELECTION TO EXERCISE WITHOUT PAYMENT OF CASH:
With respect to the exercise of ______________ of the Rights specified above,
the undersigned hereby elects to exercise such Rights without payment of cash
and to receive a number of shares of Common Stock or other securities having a
value (as determined pursuant to the Rights Agreement) equal to the difference
between (i) the value of the Common Stock or other securities that would have
been issuable upon exercise thereof upon payment of the Purchase Price as
provided in the Rights Agreement, and (ii) the amount of such Purchase Price.
Dated: ____________________, ____
______________________________
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
1. the Rights evidenced by this Right Certificate ____are ____are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or an Affiliate or Associate of any such Acquiring Person (as such terms are
defined in the Rights Agreement);
2. after due inquiry and to the best knowledge of the undersigned, it
____did ____did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ______________, ____ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate 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.
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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 Biopool International, Inc., with full power of
substitution.
Dated: ____________________, ____
______________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
1. the Rights evidenced by this Right Certificate ____are ____are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined in the Rights Agreement);
2. after due inquiry and to the best knowledge of the undersigned, it
____did ____did not acquire the Rights evidenced by this Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Dated: ______________, ____ ______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate 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.
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Exhibit B
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
Distribution of Poison Pill Rights: Effective June 3, 1998, the Board of
Directors of Biopool International, Inc., a Delaware corporation (the
"Company") authorized and declared a dividend of one right (a "Right") for
each issued and outstanding share of the Common Stock, par value $0.01 per
share (the "Common Stock") of the Company. The dividend is payable to the
stockholders of record June 18, 1998 (the "Record Date"). All Rights are
issued pursuant to, and will be subject to the terms and conditions of, the
Rights Agreement between the Company and American Stock Transfer & Trust
Company as Rights Agent dated as of June 12, 1998. The following is a brief
summary of the terms of the Rights.
Each Right, when exercisable, will entitle the registered holder thereof to
purchase from the Company one share of the Common Stock of the Company at a
Purchase Price of $6.50 per share of Common Stock (the "Purchase Price"),
subject to certain adjustments.
Exercise of Poison Pill Rights: The Rights will initially be represented
by the certificates evidencing the Common Stock and will not be exercisable,
or transferable apart from the Common Stock, until the earliest to occur of
(i) the tenth day after the acquisition by a person or group of affiliated or
associated persons (other than an Exempt Person or, in certain cases, a
Permitted Holder) of beneficial ownership of 15% or more of the outstanding
Common Stock; provided, that if within said ten-day period the Acquiring
Person reduces his beneficial ownership to less than 15%, then he shall be
deemed not to be an Acquiring Person and the Stock Acquisition Date (as
defined below) shall be deemed not to have occurred; (ii) the tenth day after
the commencement of a tender or exchange offer the consummation of which would
result in the beneficial ownership by a person or group of affiliated or
associated persons of 15% or more of the outstanding Common Stock; provided,
that if within said ten day period the person withdraws the tender or exchange
offer, then such offer shall be deemed not to have been made; (iii) the tenth
day after the date of filing of a registration statement for any such exchange
offer under the Securities Act of 1933, as amended, and (iv) the tenth day
after the date on which the Board of Directors of the Company (the "Board")
declares any person or group of affiliated or associated persons which
beneficially owns 10% or more of the outstanding Common Stock to be an
"Adverse Person" (as described below) (the earliest of these dates is referred
to as the "Distribution Date"). Under the Rights Agreement, any person or
group described in items (i) or (iv) above is referred to as an "Acquiring
Person," and the date upon which a person or group first becomes an Acquiring
Person is referred to as the "Stock Acquisition Date."
An "Adverse Person" is any person or group of affiliated or associated
persons (other than an Exempt Person and a Permitted Holder) beneficially
owning 10% or more of the outstanding Common Stock, if the Board determines
(i) that the person or group is holding the shares of Common Stock in order to
cause the Company to repurchase their Common Stock or to take any other
actions intended to provide them with short-term financial gain, in
circumstances where the Board determines that the actions to be taken are not
in the best long-term interests of the Company or its stockholders, or (ii)
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that beneficial ownership of the Common Stock by the person or group is
causing or reasonably likely to cause a material adverse impact on the
business or prospects of the Company.
An "Exempt Person" is defined as the Company, a subsidiary of the Company,
an employee benefit plan of the Company, or any of its subsidiaries.
A "Permitted Holder" shall mean a Person who acquires beneficial ownership
of the Common Stock of the Company pursuant to a Permitted Acquisition;
provided, however, a Permitted Holder shall remain a Permitted Holder so long
as the aggregate beneficial ownership of Common Stock held by such Person does
not exceed that number of shares of Common Stock held by such Person
immediately following the Permitted Acquisition pursuant to which such Person
became a Permitted Holder (reduced by the number of shares of Common Stock
from time to time disposed of by such Person) plus a number of additional
shares of Common Stock equal to 1% of the then outstanding shares of Common
Stock of the Company; provided, however, any shares of Common Stock issued or
issuable to a Permitted Holder pursuant to employee benefit plans maintained
by the Company for the benefit of its employees, directors and consultants
shall be disregarded and not counted for purposes of calculating the
limitations imposed by the immediately preceding sentence.
"Permitted Acquisition" shall mean an acquisition of shares of Common Stock
by a Person in a transaction or series of transactions which has been
previously approved by a majority of the Board of Directors with the
concurrence of a majority of the Continuing Directors.
The Rights (unless sooner redeemed) will first become exercisable on the
Distribution Date, at which time the Company will distribute separate Right
Certificates representing the Rights to its then current stockholders, and it
is expected that the Rights could then begin trading separately from the
Common Stock. The Rights will expire on June 12, 2008 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company.
Anti-Takeover Provisions: Following the Stock Acquisition Date, the Rights
would give holders (other than the Acquiring Person, its affiliates and
transferees) the right to purchase from the Company, for the Purchase Price,
that number of shares of Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a market value of twice
the Purchase Price of the Right. Notwithstanding any of the foregoing,
following the Stock Acquisition Date, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void.
Further, in a merger, consolidation or sale or transfer of 50% or more of
the consolidated assets or earning power of the Company, each Right will be
converted into the right to purchase, for the Purchase Price, that number of
shares of common stock of the surviving entity or (in certain circumstances)
its parent corporation, which at the time of such transaction will have a
market value of twice the Purchase Price of the Right.
Following the Distribution Date, exercisable Rights may be exercised, at
the option of the holder thereof, without the payment of the Purchase Price in
cash. In any such case, the number of securities which such person would
otherwise be entitled to receive upon the exercise of such Rights will be
reduced by the amount of the Purchase Price.
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Redemption of Rights: At any time prior to that date which is ten days
following the Stock Acquisition Date, the Board may redeem the outstanding
Rights at a price of $.001 per Right. If during said ten-day period the
Acquiring Person reduces his beneficial ownership to less than 15%, the Rights
will again be redeemable. Subsequent to ten days following the Stock
Acquisition Date, the Rights are not redeemable.
Voting or Dividend Rights: Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
Effect of Rights: The Rights have certain anti-takeover effects. The
Rights may cause substantial dilution to a person or group that attempts to
acquire the Company on terms not approved by the Board of Directors of the
Company. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors prior to the time that holders
of the Rights become entitled to exercise their Rights for Common Stock (or
common stock of the surviving entity in a merger with the Company), since
until that time the Rights may be redeemed by the Board of Directors of the
Company at $.001 per Right.
Amendment: Any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board in order to cure any ambiguity, to make changes which do not
adversely affect the interests of holders of Rights 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.
Rights Agreement: A copy of the Rights Agreement is being filed with the
Securities and Exchange Commission as an Exhibit to a Registration Statement
on Form 8-A dated on or about June 26, 1998. A copy of the Rights Agreement
is available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by reference.
53
