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
NAPRO BIOTHERAPEUTICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 84-1187753
(State of incorporation or organization) (IRS Employer
Identification No.)
6304 SPINE ROAD, UNIT A
BOULDER, COLORADO 80301
(Address of principal executive offices) (Zip Code)
If this Form relates to the registration of a class of debt securities
and is to become effective pursuant to General Instruction A.(c)(1),
please check the following box.
If this Form relates to the registration of a class of debt securities
and is to become effective simultaneous with the effectiveness of a
concurrent registration statement under the Securities Act of 1933
pursuant to General Instruction A.(c)(2), please check the following
box.
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
Title of each class to be so registered:
None
Name of each exchange on which each class is to be registered:
None
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
Rights to Purchase Series B Junior Participating Preferred Stock
(Title of Class)
ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
General. On November 8, 1996 the Board of Directors of NaPro
BioTherapeutics, Inc. (the "Company") declared a dividend of one Right
for each outstanding share of the Company's common stock, par value
$.0075 per share (the "Common Stock"). The distribution is payable on
November 26, 1996, to holders of record of Common Stock on that date.
In addition, until the Rights become exercisable as described below
and in certain limited circumstances thereafter, the Company will
issue one Right for each share of Common Stock issued after November
26, 1996. Each Right, when it becomes exercisable, will entitle its
registered holder to purchase from the Company one one-hundredth of a
share (a "Unit") of the Company's Series B Junior Participating
Preferred Stock, par value $.001 ("Preferred Stock") at a price of
$60.00 (the "Purchase Price") subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement" between the Company and American Stock Transfer and
Trust Company, as Rights Agent.
Distribution Date. The Rights will not be exercisable until the
Distribution Date (as defined below). Prior to the Distribution Date,
they will be evidenced by the certificates for Common Stock and will
be transferred with and only with the Common Stock. In general, the
Rights will separate from the Common Stock and "Distribution Date"
will occur upon the earlier of the following: (1) the tenth day after
the first public disclosure that a person or group (an "Acquiring
Person") has acquired beneficial ownership of 20% or more of the
outstanding Common Stock (the "Stock Acquisition Date"), or (ii) the
tenth business day after the commencement of a tender or exchange
offer that, if consummated, would result in one person or group
beneficially owning 20% or more of the outstanding Common Stock. A
person or group will not be an Acquiring Person, however, by acquiring
beneficial ownership of 20% or more of the outstanding shares of
Common Stock pursuant to a Qualifying Offer (as defined below), and no
Distribution Date will occur following the commencement of a tender
offer or exchange offer that is a Qualifying Offer.
A "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined
by at least a majority of the Continuing Directors (as defined below)
who are not officers or employees of the Company and who are not
related (as specified in the Rights Agreement) to the person making
such offer, after receiving advice from one or more investment banking
firms, to be fair to and in the best interests of the Company and its
stockholders.
On the Distribution Date, each Right will become exercisable to
purchase one one hundredth share of Preferred Stock until November 8,
2006 (the "Expiration Date"), except as described below, unless the
Rights are earlier redeemed. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (the
"Rights Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date.
The separate Rights Certificates will thereafter evidence ownership of
the Rights, which will then trade separately from the Common Stock.
Issuance of Preferred Shares. The Preferred Stock will have a
liquidation preference of $1.00 per hundredth of a share. Dividends
on the Preferred Stock will be payable quarterly in an amount for each
one-hundredth of a share of Preferred Stock equal to the greater of
$.01 or the amount per share of any dividend paid on the Company's
Common Stock for such quarter. Unpaid dividends will cumulate. The
Preferred Stock will not be redeemable. Each one-hundredth share of
Preferred Stock will have the same voting rights as one share of
Common Stock.
Pursuant to the Rights Agreement, the purchase price payable, and the
number of Units of Preferred Stock or other securities or property
issuable, upon the exercise of the Rights are subject to adjustment
from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of the
Preferred Stock, (ii) if holders of the Preferred Stock are granted
certain rights or warrants to subscribe for Preferred Stock or
convertible securities at less than the current market price of the
Preferred Stock, or (iii) upon the distribution to the holders of the
Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends), assets or subscription rights or
warrants (other than those referred to above).
The Preferred Stock may be issued in fractions that are integral
multiples of one one-hundredth of a share. No fractional Units will
be issued upon any exercise of Rights, and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Stock on the then-current market price of such shares.
Effects of "Triggering Events." Under certain circumstances, the
Rights will entitle their holders to purchase securities other than
Preferred Stock. If any person becomes an Acquiring Person other than
pursuant to a Qualifying Offer, each holder of a Right (except Rights
that are void as set forth below) will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right. However, Rights
are not exercisable in any event until such time as the Rights are no
longer redeemable by the Company as set forth below.
For example, at an exercise price of $60 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder
to purchase $120 worth of Common Stock (or other consideration, as
noted above) for $60. Assuming that the Common Stock had a per share
value of $30 at such time, the holder of each valid Right would be
entitled to purchase four shares of Common Stock for $60.
"Continuing Directors" includes any member of the Board of Directors
of the Company who was a member of the Board prior to the Stock
Acquisition Date, and any person who is subsequently elected to the
Board if such person is recommended or approved by a majority of the
Continuing Directors, but does not include an Acquiring Person, or an
affiliate or associate of an Acquiring Person, or any representative
of the foregoing entities.
If at any time following the Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction in
which the Common Stock is changed or exchanged or in which the Company
is not the surviving corporation (other than a merger that follows a
Qualifying Offer and satisfies certain other requirements), or (ii)
50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights that are void as
set forth below) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal
to two times the exercise price of the Right. The events set forth in
this paragraph and in the fourth preceding paragraph are referred to
as the "Triggering Events."
Any Rights that are beneficially owned by a person who is or who later
becomes an Acquiring Person (or any affiliate or associate of an
Acquiring Person) or are owned by certain transferees of an Acquiring
Person shall become void from and after the time such person becomes
an Acquiring Person. Thus, any holder of such a Right (including any
subsequent holder) may be unable to exercise the Right after the
occurrence of a Triggering Event.
Redemption. At any time before the earlier of (i) the tenth day
following the Stock Acquisition Date, or (ii) November 8, 2006, the
Board of Directors of the Company may redeem the Rights in whole, but
not in part, for $.01 per Right (the "Redemption Price"). However,
any such redemption may be made only with the concurrence of a
majority of the Continuing Directors if it occurs (i) on or after the
time that any person becomes an Acquiring Person or (ii) on or after
the date of a change (resulting from a proxy or consent solicitation)
in a majority of the directors in office at the commencement of such
solicitation if any person who is a participant in such solicitation
has stated (or if the Board believes) that such person may take action
to become an Acquiring Person or otherwise to cause a Triggering
Event. The redemption period may be extended if it has not yet
expired at the time of the extension.
If the Board of Directors elects to redeem the Rights, the Company
will announce the redemption, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Amendments. At any time before the Distribution Date, the Company
may, without the approval of any holder of the Rights, amend any
provision of the Rights Agreement, except that the Company cannot
change the Redemption Price, the Expiration Date, the Purchase Price
or the number of one-hundredths of a share of Preferred Stock for
which a Right is exercisable. At any time after the Distribution
Date, the Company may amend the Rights Agreement without the approval
of the holders of the Rights to cure any ambiguity, to correct any
defective or inconsistent provision, subject to certain exceptions, to
shorten or lengthen any time period (which may require the concurrence
of a majority of the Continuing Directors) or to change a provision in
any manner the Company deems necessary and that does not adversely
affect the interests of the holders of the Rights. However, the
Company can extend the redemption period only if the Rights are
redeemable at the time of the extension.
Other Considerations. Until a Right is exercised, its holder, as
such, will have no rights as a stockholder of the Company, such as the
right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable
income if the Rights become exercisable upon the occurrence of a
Triggering Event as set forth above.
The Rights have certain anti-takeover effects. They may cause
substantial dilution to a person or group that attempts to acquire the
Company without conditioning the offer on a substantial number of
Rights being acquired. However, as described above, no such event
will occur in connection with a Qualifying Offer. Moreover, the
Rights should not interfere with a merger or other business
combination approved by the Board of Directors of the Company, because
the Board of Directors (under certain circumstances, with the
concurrence of the Continuing Directors) may redeem the Rights for
$.01 per Right as described above.
As of November 11, 1996, there were 12,377,972 shares of Common Stock
outstanding. Each such share outstanding as of November 26, 1996 will
receive one Right. Prior to the Distribution Date, the Company will
issue one Right for each such share of Common Stock issued after
November 26, 1996. One hundred and ninety thousand shares of
Preferred Stock will initially be reserved for issuance upon exercise
of the Rights.
The terms of the Rights are set forth in the Rights Agreement. The
form of Rights Agreement, which includes, as Exhibit A, the form of
Certificate of Designations of the Preferred Stock and, as Exhibit B,
the form of Rights Certificate, is included as Exhibit 1 to this
Registration Statement on Form 8-A and is incorporated herein by
reference. The foregoing description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the
Rights Agreement.
ITEM 2. EXHIBITS.
Exhibit 1. Form of Rights Agreement dated as of November 8, 1996,
between NaPro BioTherapeutics, Inc. and American Stock Transfer and
Trust Company, as Rights Agent.
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
NAPRO BIOTHERAPEUTICS, INC.
By: /s/Sterling K. Ainsworth
Sterling K. Ainsworth
President and Chief
Executive Officer
Date: November 25, 1996
RIGHTS AGREEMENT
DATED AS OF NOVEMBER 8, 1996
BETWEEN
NAPRO BIOTHERAPEUTICS, INC.
AND
AMERICAN STOCK TRANSFER AND TRUST COMPANY
AS RIGHTS AGENT
TABLE OF CONTENTS
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . 7
Section 3. Issuance of Rights Certificates. . . . . . . . . . . . . 7
Section 4. Form of Rights Certificates. . . . . . . . . . . . . . .10
Section 5. Countersignature and Registration. . . . . . . . . . . .11
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. . . . . . . . . . . . . . . . . . . . . . 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8. Cancellation and Destruction of Rights Certificates. . .17
Section 9. Reservation and Availability of Capital Stock. . . . . .17
Section 10. Preferred Stock Record Date. . . . . . . . . . . . . . 20
Section 11. Adjustment of Purchase Price, Number and Kind of Shares
or Number of Rights. . . . . . . . . . . . . . . . . . 21
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. . . . . . . . . . . . . . . . . . . . . . . . .36
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. . . . . . . . . . . . . . . . . . . . . 37
Section 14. Fractional Rights and Fractional Shares. . . . . . . . 41
Section 15. Rights of Action. . . . . . . . . . . . . . . . . . . .43
Section 16. Agreement of Rights Holders. . . . . . . . . . . . . . 43
Section 17. Rights Certificate Holder Not Deemed a Stockholder. . .45
Section 18. Concerning the Rights Agent. . . . . . . . . . . . . . 46
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 20. Duties of Rights Agent. . . . . . . . . . . . . . . . .48
Section 21. Change of Rights Agent. . . . . . . . . . . . . . . . .52
Section 22. Issuance of New Rights Certificates. . . . . . . . . . 53
Section 23. Redemption and Termination. . . . . . . . . . . . . . .54
Section 24. Notice of Certain Events. . . . . . . . . . . . . . . .56
Section 25. Notices. . . . . . . . . . . . . . . . . . . . . . . . 58
Section 26. Supplements and Amendments. . . . . . . . . . . . . . .59
Section 27. Successors. . . . . . . . . . . . . . . . . . . . . . .60
Section 28. Determinations and Actions by the Board of Directors,
etc. . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 29. Benefits of this Agreement. . . . . . . . . . . . . . .61
Section 30. Severability. . . . . . . . . . . . . . . . . . . . . .61
Section 31. Governing Law. . . . . . . . . . . . . . . . . . . . . 62
Section 32. Counterparts. . . . . . . . . . . . . . . . . . . . . .62
Section 33. Descriptive Headings. . . . . . . . . . . . . . . . . .62
Exhibit A Form of Certificate of Designations of Series B Junior
Participating Preferred Stock of NaPro BioTherapeutics,
Inc.. . . . . . . . . . . . . . . . . . . . . . . . . A-1
Exhibit B Form of Rights Certificate. . . . . . . . . . . . . . B-1
Exhibit C Summary of Rights to Purchase Preferred Stock. . . . .C-1
RIGHTS AGREEMENT
This Rights Agreement is entered into as of November 8, 1996, between
NaPro BioTherapeutics, Inc., a Delaware corporation (the "Company"),
and American Stock & Transfer Company (the "Rights Agent").
RECITALS
On November 8, 1996 (the "Declaration Date"), the Board of Directors
of the Company authorized and declared a dividend distribution of one
right for each share of common stock, par value $.0075 per share, of
the Company outstanding at the close of business on November 26, 1996
(the "Record Date"), and has authorized the issuance of one Right
(subject to adjustment pursuant to Section 11(p) of this Agreement)
for each share of common stock of the Company issued between the
Record Date (whether originally issued or from the Company's treasury)
and the Distribution Date. This Agreement sets forth the terms of the
Rights.
The parties agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) Acquiring Person" means any Person that, together with all
Affiliates and Associates of such Person, is the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding, but shall
not include (i) the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan; (ii) any
Person who would otherwise become an Acquiring Person solely as a
result of a reduction in the number of shares of Common Stock
outstanding due to the acquisition of shares of Common Stock by the
Company or a Subsidiary of the Company, unless and until such Person
shall thereafter purchase or otherwise become the Beneficial Owner of
additional shares of Common Stock constituting one percent or more of
the then outstanding shares of Common Stock other than pursuant to a
Qualifying Offer or (iii) any Person who becomes the Beneficial Owner
of 20% or more of the shares of Common Stock then outstanding pursuant
to a Qualifying Offer.
(b) "Act" means the Securities Act of 1933.
(c) "Affiliate" and "Associate" 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 (the "Exchange
Act"), as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities
(i) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of
time) pursuant to any agreement, arrangement or understanding (whether
or not in writing) or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; PROVIDED, however,
that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates
or Associates until such tendered securities are accepted for purchase
or exchange, or (B) securities issuable upon exercise of Rights at any
time prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a
Triggering Event which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date
or pursuant to Section 3(a) or Section 22 hereof (the "Original
Rights") or pursuant to Section 11(i) hereof in connection with an
adjustment made with respect to any Original Rights;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 or any successor regulation of the General Rules and Regulations
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing; PROVIDED,
however, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," any security under this subparagraph (ii) as
a result of an agreement, arrangement or understanding to vote such
security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) that are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of
this paragraph (d)) or disposing of any voting securities of the
Company; PROVIDED, however, that nothing in this paragraph (d) shall
cause a person engaged in business as an underwriter of securities to
be the "Beneficial Owner" of, or to "beneficially own," any securities
acquired through such person's participation in good faith in a firm
commitment underwriting until the expiration of forty days after the
date of such acquisition.
Notwithstanding the foregoing, a Person shall be deemed the
"Beneficial Owner" of, or to "beneficially own," securities subject to
the Stockholders Agreement dated June 7, 1993 among D & N Holding
Company, Leonard Shaykin, Sterling Ainsworth, Patricia Pilia, Lawrence
Helson and the Company, as now in effect or as hereafter amended, or
to any successor agreement, only to the extent that such Person would
be considered the Beneficial Owner of such securities if such
agreement were not in effect.
(e) "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.
(f) "Close of business" on a date shall mean 5:00 P.M., New York
City time, on such date; PROVIDED, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next
succeeding Business Day.
(g) "Common Stock" shall mean the common stock, par value $.0075
per share, of the Company (including the Company's Nonvoting Common
Stock), except that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock of such
Person with the greatest voting power, or the equity securities or
other equity interest having power to control or direct the
management, of such Person.
(h) "Continuing Director" shall mean any member of the Board of
Directors of the Company who is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person or a nominee or
representative of any Acquiring Person or any such Affiliate or
Associate and who was a member of the Board of Directors of the
Company before the Stock Acquisition Date, and any successor to a
Continuing Director who is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or nominee or representative of an
Acquiring Person or of any such Affiliate or Associate and who was
recommended for election or elected to succeed the Continuing Director
by a majority of the Continuing Directors then on the Board of
Directors of the Company.
(i) "Distribution Date" shall mean the earlier of the following:
(i) the close of business on the tenth day after the Stock Acquisition
Date (or, if the tenth day after the Stock Acquisition Date occurs
before the Record Date, the close of business on the Record Date), or
(ii) the close of business on the tenth Business Day after the date
that a tender or exchange offer (other than a Qualifying Offer) by any
Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established
by the Company for or pursuant to any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules
and Regulations under the Exchange Act, if upon consummation thereof,
such Person would be the Beneficial Owner of 20% or more of the shares
of Common Stock then outstanding.
(j) "Person" means any individual, firm, corporation, partnership
or other entity.
(k) "Preferred Stock" means shares of the Company's Series B
Junior Participating Preferred Stock, par value $.001 per share and,
to the extent that there are not enough shares authorized to permit
the full exercise of the Rights, any other series of Preferred Stock,
par value $.001 per share, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series B
Junior Participating Preferred Stock.
(l) "Purchase Price" means the exercise price at which a holder of
a Right may purchase one one-hundredth of a share of Preferred Stock
upon exercise of a Right. The Purchase Price shall initially be
$60.00, and shall be subject to adjustment from time to time as
provided in this Agreement.
(m) "Qualifying Offer" means a tender offer or exchange offer for
all outstanding shares of Common Stock at a price and on terms
determined by at least a majority of the members of the Continuing
Directors who are not officers or employees of the Company and who are
not representatives, nominees, Affiliates or Associates of the Person
making such offer, after receiving advice from one or more investment
banking firms, to be (a) at a price that is fair to stockholders
(taking into account all factors that such members of the Board deem
relevant) and (b) otherwise in the best interests of the Company and
its stockholders.
(n) "Section 11(a)(ii) Event" means any event described in Section
11(a)(ii) of this Agreement.
(o) "Section 13 Event" means any event described in clauses (x),
(y) or (z) of Section 13(a) of this Agreement.
(p) "Stock Acquisition Date" means the first date of public
announcement (which, for purposes of this definition, includes,
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(q) "Subsidiary" means, with reference to any Person, any
corporation of which an amount of voting securities sufficient to
elect at least a majority of the directors of such corporation is
beneficially owned, directly or indirectly, by such Person, or
otherwise controlled by such Person.
(r) "Triggering Event" means any Section 11(a)(ii) Event or
Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to
the Distribution Date also be the holders of the Common Stock) in
accordance with the terms of this Agreement, and the Rights Agent
hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it deems necessary or desirable.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to paragraph (b) of this Section 3) by the certificates for
the Common Stock registered in the names of the holders of the Common
Stock (which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and (ii)
the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the
Company). As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail,
to each record holder of 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 in
substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so
held, subject to adjustment as provided herein. If an adjustment in
the number of Rights per share of Common Stock has been made pursuant
to Section 11(p) hereof at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. On and
after the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of the Common Stock
as of the close of business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the
Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration
Date (as defined in Section 7 hereof), the transfer of any
certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the
Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock that are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date and, in certain circumstances
as provided in Section 22 of this Agreement, after the Distribution
Date. Certificates representing such shares of Common Stock shall
also be deemed to be certificates for Rights, and shall bear the
following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between NaPro
BioTherapeutics, Inc. (the "Company") and American Stock Transfer and
Trust Company (the "Rights Agent") dated as of November 8, 1996 (the
"Rights Agreement"), the terms of which are incorporated herein by
this reference and a copy of which is on file at the principal offices
of the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to or
held by any Person who is, was or becomes an Acquiring Person or any
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 such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Common Stock represented by such
certificates shall be evidenced by such certificates alone and
registered holders of Common Stock shall also be the registered
holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates. If
the Company acquires any Common Stock after the Record Date but before
the Distribution Date, any Rights associated with such Common Stock
shall be deemed canceled and retired so that the Company shall not be
entitled to exercise any rights associated with Common Stock that is
no longer outstanding.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have
such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with this Agreement, or as may
be required to comply with any applicable law, rule or regulation,
including any rule or regulation of any stock exchange or other
trading facility on which the Rights may from time to time be listed
or traded, or to conform to usage. Subject to Section 11 and Section
22 of this Agreement, the Rights Certificates, whenever distributed,
shall be dated as of the Record Date and on their face shall entitle
the holders thereof to purchase such number of one-hundredths of a
share of Preferred Stock as shall be set forth therein at the Purchase
Price, but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by a
Person described in Section 7(e) hereof, and any Rights Certificate
issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible)
the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and void
in the circumstances specified in Section 7(e) of such Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so
countersigned. If any officer of the Company who has signed any of
the Rights Certificates ceases to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery
by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the
Company. Any Rights Certificate may be signed on behalf of the
Company by any person who, at the actual date of the execution of such
Rights Certificate, is a proper officer of the Company to sign such
Rights 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 Rights Certificates upon exercise
or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to Sections 4(b), 7(e) and 14 hereof, at any time
after the close of business on the Distribution Date, and at or prior
to the close of business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of one-hundredths of a
share of Preferred Stock (or, following a Triggering Event, Common
Stock, other securities, cash or other assets, as the case may be) as
the Rights Certificate or Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange
any Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or 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 with respect to the transfer of
any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form
of assignment on the reverse side of such Rights Certificate and shall
have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon
the Rights Agent shall, subject to Sections 4(b), 7(e) and 14 hereof,
countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated,
the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except
as otherwise provided herein) in whole or in part at any time after
the Distribution Date upon surrender of the Rights Certificate, with
the form of election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the principal
office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to
the total number of one-hundredths of a share (or other securities,
cash or other assets, as the case may be) as to which such surrendered
Rights are then exercisable, at or prior to the earlier of (i) the
close of business on November 8, 2006 (the "Final Expiration Date") or
(ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the earlier of (i) and (ii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$60.00 and shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof and shall be payable in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights 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 one-hundredth of a share of
Preferred Stock (or other shares, securities, cash or other assets, as
the case may be) to be purchased as set forth below and an amount
equal to any applicable transfer tax, the Rights Agent shall, subject
to Section 20(k) hereof, thereupon promptly (i) (A) requisition from
any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of one-hundredths of a share of
Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B)
if the Company shall have elected to deposit the total number of
shares of Preferred Stock issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary
agent depositary receipts representing such number of one-hundredths
of a share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with
such request, (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, and (iv)
after receipt thereof, deliver such cash, if any, to or upon the order
of the registered holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) hereof) shall be made in cash or by certified bank check or
bank draft payable to the order of the Company. If the Company is
obligated to issue other securities (including Common Stock) of the
Company, to pay cash and/or to distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary
so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when
appropriate.
(d) If the registered holder of any Rights Certificate exercises
fewer than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall
be issued by the Rights Agent and delivered to, or upon the order of,
the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to Section
14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate
or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that a majority of the Continuing
Directors has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the avoidance of
this Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights whatsoever
with respect to such Rights, whether under this Agreement or
otherwise. The Company shall use all reasonable efforts to insure
that this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other
Person as a result of its failure to make any determinations with
respect to an Acquiring Person or its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) of such Rights or
Affiliates or Associates thereof as the Company shall reasonably
request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of
its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be
canceled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights
Certificate purchased or acquired by the Company otherwise than upon
the exercise thereof. The Rights Agent shall deliver all canceled
Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the
Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares
of Preferred Stock (and, following the occurrence of a Triggering
Event, out of its authorized and unissued shares of Common Stock
and/or other securities or out of its authorized and issued shares
held in its treasury), the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or
other securities) that, as provided in this Agreement, including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise
in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights
shall be listed on any national securities exchange or authorized for
quotation on the National Association of Securities Dealers, Inc.
Automated Quotation System ("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 authorized
for such quotation or to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of
a Section 11(a)(ii) Event, 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) until the
earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date. The
Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights.
The Company may temporarily suspend, for up to 90 days after the date
set forth in clause (i) of the first sentence of this Section 9(c),
the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating
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. In addition, if the Company shall determine that a
registration statement is required following the Distribution Date,
the Company may temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared
effective so long as the Company uses good faith efforts to that end.
Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction if the requisite
qualification in such jurisdiction has not been obtained, the exercise
thereof is not permitted under applicable law or a registration
statement has not been declared effective.
(d) The Company will take all such action as may be necessary to
ensure that all one-hundredths of a share of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock and/or
other securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and
charges that may be payable in respect of the issuance or delivery of
the Rights Certificates and of any certificates for a number of one-
hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax
payable in respect of any transfer or delivery of Rights Certificates
to a Person other than, or the issuance or delivery of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in
respect of a name other than that of, the registered holder of the
Rights Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights until such
tax shall have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax
is due.
Section 10. PREFERRED STOCK RECORD DATE. Each person in whose name
any certificate for Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record
of such Preferred Stock (or Common Stock and/or other securities, as
the case may be) represented thereby on, and such certificate shall be
dated, the date upon which the Rights Certificate evidencing such
Rights was duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred
Stock (or Common Stock and/or other securities, as the case may be)
transfer books of the Company are closed, such Person shall be deemed
to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided
herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES
OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of
shares covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section
11.
(a)(i) If the Company at any time after the date of this Agreement
(A) declares a dividend on the Preferred Stock payable in shares of
Preferred Stock, (B) subdivides the outstanding Preferred Stock, (C)
combines the outstanding Preferred Stock into a smaller number of
shares, or (D) issues any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) and Section 7(e) hereof, the
number and kind of shares of Preferred Stock or capital stock, as the
case may be, issuable on the record date for such dividend or of the
effective date of such subdivision, combination or reclassification,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment
of the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may be, that,
if such Right had been exercised immediately prior to such date and at
a time when the Preferred Stock transfer books of the Company were
open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification.
(ii) If any Person becomes an Acquiring Person other than pursuant
to a transaction subject to Section 13(a) of this Agreement and the
Distribution Date occurs, then, promptly following the Distribution
Date, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e) hereof) shall thereafter
have the right to receive, upon exercise thereof at the then current
Purchase Price in accordance with this Agreement, in lieu of Preferred
Stock, such number of shares of Common Stock of the Company as shall
equal the result obtained by (x) multiplying the then current Purchase
Price by the number of one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, and (y) dividing that product
(which, following such first occurrence, shall thereafter be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the current market price (determined pursuant to
Section 11(d) hereof) per share of Common Stock on the date of such
first occurrence (such number of shares, the "Adjustment Shares").
(iii) If the number of shares of Common Stock authorized by the
Company's certificate of incorporation but not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights is
not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section 11(a),
the Company shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over (2) the Purchase Price (such excess, the "Spread"), and
(B) with respect to each Right, make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common
Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock that the
Board of Directors of the Company has deemed to have the same value as
shares of Common Stock (such shares of preferred stock, "common stock
equivalents")), (4) debt securities of the Company, (5) other assets,
or (6) any combination of the foregoing, having an aggregate value
equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon the
advice of a nationally recognized investment banking firm selected by
the Board of Directors; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B)
above within 30 days following the later of (x) the first occurrence
of a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Board of Directors of the Company
determines in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise
in full of the Rights, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To
the extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iii), the value of the
Common Stock shall be the current market price (as determined pursuant
to Section 11(d) hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "common stock equivalent"
shall be deemed to have the same value as the Common Stock on such
date.
(b) If the Company fixes a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within forty-five
(45) calendar days after such record date) Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of
Preferred Stock ("equivalent preferred stock")) or securities
convertible into Preferred Stock or equivalent preferred stock at a
price per share of Preferred Stock or per share of equivalent
preferred stock (or having a conversion price per share, if a security
convertible into Preferred Stock or equivalent preferred stock) less
than the current market price (as determined pursuant to Section 11(d)
hereof) per share of Preferred 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 before such
record date by a fraction, the numerator of which is the number of
shares of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock that the aggregate offering price
of the total number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such current market price, and the denominator of which
shall be the number of shares of Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock
and/or equivalent preferred stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered
are initially convertible). If such subscription price may be paid by
delivery of consideration part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the
Rights. Shares of Preferred 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 or
warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price that would then be in effect if such record date
had not been fixed.
(c) If the Company fixes a record date for a distribution to all
holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
surviving or continuing corporation) of evidences of indebtedness,
cash (other than a regular quarterly cash dividend out of the earnings
or retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in
stock other than Preferred Stock) or rights, options or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d) hereof) per
share of Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the denominator
of which shall be such current market price (as determined pursuant to
Section 11(d) hereof) per share of Preferred Stock. Such adjustments
shall be made successively whenever such a record date is fixed, and
if such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price that would have been in effect if
such record date had not been fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "current
market price" per share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of such Common
Stock for the 30 consecutive Trading Days (as defined below)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current market price" per
share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the 10
consecutive Trading Days immediately following such date; PROVIDED,
however, that if the current market price per share of the Common
Stock is determined during a period following the announcement by the
issuer of such Common Stock of (A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights),
or (B) any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the requisite 30 Trading Day or
10 Trading Day period, as set forth above, after the ex-dividend date
for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such
case, the "current market price" shall be properly adjusted to take
into account ex-dividend trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if
the shares of Common Stock are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as
reported by Nasdaq or such other system then in use, or, if on any
such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. 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 of the Company shall be used. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any
national securities exchange, 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 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 for all purposes.
(ii) For the purpose of any computation hereunder, the "current
market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in clause (i) of
this Section 11(d) (other than the last sentence thereof). If the
current market price per share of Preferred Stock cannot be determined
in the manner provided above or if the Preferred Stock is not publicly
held or listed or traded in a manner described in clause (i) of this
Section 11(d), the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 100 (as such
number may be appropriately adjusted for such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current
market price per share of the Common Stock. If neither the Common
Stock nor the Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Preferred Stock shall mean the
fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current market
price" of one-hundredth of a share of Preferred Stock shall equal the
"current market price" of one share of Preferred Stock divided by 100.
(e) Notwithstanding anything in this Agreement to the contrary, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent in the Purchase Price; PROVIDED, however, that any adjustments
that by reason of this Section 11(e) are not required to be made shall
be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share of Common
Stock or other share or millionth of a share of Preferred Stock, as
the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the
transaction that mandates such adjustment, or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised becomes entitled to receive any shares of capital stock
other than Preferred Stock, the number of such other shares 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 Preferred Stock contained in Sections 11(a), (b), (c),
(e), (g), (h), (i), (j), (k) and (m), and Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the Company after any
adjustment of the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one-hundredths
of a share of Preferred Stock purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one-hundredths of a share of Preferred
Stock (calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of one-hundredths of a share covered by a
Right immediately prior to this adjustment, by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase Price,
and (ii) dividing the product so obtained by the Purchase Price in
effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest ten-thousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Rights Certificates
have been issued, shall be at least eleven (11) days later than the
date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to
be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Rights Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one-hundredths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per
one-hundredth of a share and the number of one-hundredths of a share
that were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated value, if any, of
the number of one-hundredths of a share of Preferred Stock issuable
upon exercise of the Rights, the Company shall take any corporate
action that may, in the opinion of its counsel, be necessary for the
Company validly to issue fully paid and nonassessable such number of
one-hundredths of a share of Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of one-hundredths of a
share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number
of one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company 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 in their good faith judgment the
Board of Directors of the Company shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock
at less than the current market price, (iii) issuance wholly for cash
of shares of Preferred Stock or securities that by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv)
stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with or merge with
or into any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof), or (ii) sell or
transfer (or permit any Subsidiary to 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 the Company and/or any of its Subsidiaries in one
or more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that
would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such
action will diminish substantially or eliminate the benefits intended
to be afforded by the Rights.
(p) Notwithstanding anything in this Agreement to the contrary, if
the Company at any time after the Declaration Date and before the
Distribution Date (i) declares a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivides the
outstanding shares of Common Stock, or (iii) combines the outstanding
shares of Common Stock into a smaller number of shares, the number of
Rights associated with each share of Common Stock then outstanding, or
issued or delivered thereafter but prior to the Distribution Date,
shall be proportionately adjusted so that the number of Rights
associated with each share of Common Stock following any such event
shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such
event by a fraction, the numerator of which shall be the total number
of shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or
Section 13 hereof (other than adjustments occurring prior to the
Distribution Date), the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the
facts accounting for such adjustment, (b) promptly file with the
Rights Agent, and with each transfer agent for the Preferred Stock and
the Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate in accordance
with Section 25 hereof. Promptly after the Distribution Date, the
Company shall comply with the foregoing for any adjustment that
occurred prior to the Distribution Date. The Rights Agent shall be
fully protected in relying on any certificate delivered by the Company
pursuant to this Section 12 and on any adjustment therein contained.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) If, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge into, any
other Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof), and the Company shall not be
the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of
the outstanding shares of 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)
to any Person or Persons (other than the Company or any Subsidiary of
the Company in one or more transactions each of which complies with
Section 11(o) hereof), then, and in each such case (except as
contemplated by Section 13(d) hereof), proper provision shall be made
so that: (i) each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of validly authorized and
issued, fully paid, non-assessable and freely tradeable shares of
Common Stock of the Principal Party (as defined below), not subject to
any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the number of one-hundredths of a
share of Preferred Stock for which a Right is exercisable immediately
prior to the first occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such one-hundredths of a
share for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event) by the Purchase Price in
effect immediately prior to such first occurrence, and dividing that
product (which, following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each Right and for
all purposes of this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation of
such Section 13 Event; (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all
the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following
the first occurrence of a Section 13 Event; (iv) such Principal Party
shall take such steps (including, but not limited to, the reservation
of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights; and (v)
Section 11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), the Person that is the issuer
of any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, and if no securities are so
issued, the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that receives the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions;
Provided, however, that in any such case, (1) if the Common Stock of
such Person is not at such time or has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and
(2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are
and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that have
not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for
the terms set forth in paragraphs (a) and (b) of this Section 13 and
further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of
this Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
This Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. If a Section 13 Event
occurs at any time after the occurrence of a Section 11(a)(ii) Event,
the Rights that have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a), subject
to Section 7(e).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not apply to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated
with a Person or Persons who acquired shares of Common Stock pursuant
to a Qualifying Offer (or a wholly owned subsidiary of any such Person
or Persons), (ii) the price per share of Common Stock offered in such
transaction is not less than the highest price paid per share pursuant
to the Qualifying Offer and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to
such transaction is the same as the form of consideration paid
pursuant to the Qualifying Offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section
11(p) hereof, or to distribute Rights Certificates that evidence
fractional Rights. After the Distribution Date, in lieu of such
fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For purposes
of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall
be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or if
the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if
on any such date the Rights are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by
the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights, the fair value of the
Rights on such date shall be as determined in good faith by the Board
of Directors of the Company.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than integral multiples of one-hundredths of
a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Preferred
Stock (other than integral multiples of one-hundredths of a share).
In lieu of fractional shares of Preferred Stock that are not integral
multiples of one-hundredths of a share, the Company may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one-hundredths of a share of
Preferred Stock. For purposes of this Section 14(b), the current
market value of one-hundredths of a share of Preferred Stock shall be
one-hundredth of the closing price of a share of Preferred Stock (as
determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock
upon exercise of the Rights or to distribute certificates that
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. For purposes of this
Section 14(c), the current market value of one share of Common Stock
shall be the closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by
this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement are vested in the respective registered holders of the
Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Stock). Any registered holder of any
Rights 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 Rights Certificate (or, prior to the Distribution Date, of
the Common Stock), may, on 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 Rights Certificate in
the manner provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or
threatened violations of this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name a
Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Rights Certificates or the associated
Common Stock certificate made by anyone other than the Company or the
Rights Agent) for all purposes, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must
use its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the
number of one-hundredths of a share of Preferred Stock or any other
securities of the Company that may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights
of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive
dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, suit, action, proceeding or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights
Agent, for any action taken or suffered by the Rights Agent in
connection with the acceptance and administration of this Agreement
and the exercise and performance of its duties hereunder, including
the costs and expenses of defending against and appealing any claim of
liability arising therefrom, directly or indirectly.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted
by it in connection with its acceptance and administration of this
Agreement or the exercise and performance of its duties hereunder in
reliance upon any Rights Certificate or certificate for Preferred
Stock, 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,
instruction or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the
advice of counsel as set forth in Section 21 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which
the Rights Agent or any successor Rights Agent shall be a party, or
any corporation succeeding to the corporate trust or stockholder
services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation
would be eligible for appointment as a successor Rights Agent under
the provisions of Section 22 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver
such Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either
in the name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates
so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent shall have only
the duties and obligations expressly set forth in this Agreement.
There shall be no implied duties or obligations of the Rights Agent.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it
(who may be legal counsel for the Company), and the advice of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such advice.
(b) Whenever in the administration, exercise and performance of
its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination
of "current market price") be proved or established by the Company
prior to taking, suffering or omitting any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the
Board, any Vice Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and any such certificate shall be full
authorization and protection to the Rights Agent for any action taken,
suffered or omitted in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall not be liable or responsible hereunder
to the Company except for its own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable or responsible for or by
reason of any of the representations, warranties, statements of fact
or recitals contained in this Agreement or in the Rights Certificates
(except as to the fact that it has countersigned the Rights
Certificates) or be required to verify the same, but all such
representations, warranties, statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability or
responsibility in respect of the legality, validity or enforceability
of this Agreement or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the legality,
validity, enforceability or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be liable or
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor shall it
be liable or responsible for any adjustment including, without
limitation, as required under the provisions of Section 11 or 13
hereof (including any adjustment which results in the Rights becoming
void) or liable or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise
of Rights evidenced by Rights Certificates after receipt of a notice
or certificate pursuant to Section 12 describing 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
Preferred Stock or other securities to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of
Preferred Stock or other securities will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out
or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions or directions with respect to the administration of this
Agreement and the execution and performance of its duties hereunder
and certificates delivered pursuant to any provision hereof from the
Chairman of the Board, the Chief Executive Officer, the President, any
Vice President, the Secretary, any Assistant Secretary, the Treasurer
or any Assistant Treasurer of the Company, and is authorized to apply
to such officers for advice or instructions in connection with its
duties, and it shall not be liable or responsible for any action
taken, suffered or omitted to be taken by it in good faith in
accordance with instructions of any such officer or for any delay in
acting while waiting for such instructions.
(h) The Rights Agent and any affiliate, 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 the Rights Agent were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent
or any such affiliate, stockholder, director, officer or employee from
acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent
shall not be liable or responsible for any act, omission, default,
neglect or misconduct of any such attorneys or agents or for any loss
or damages to the Company or to the holders of the Rights resulting
from any such act, omission, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued
employment thereof. The Rights Agent shall not be under any duty or
responsibility to insure compliance with any applicable federal or
state securities laws in connection with the issuance, transfer or
exchange of the Rights Certificates.
(j) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or
exchange, the Certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with
respect to such requested exercise, transfer, split up, combination or
exchange without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties
under this Agreement upon 30 days' notice in writing mailed to the
Company, and to each transfer agent of the Common Stock and Preferred
Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Stock and
Preferred Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent
shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If
the Company shall fail to make such appointment within thirty (30)
days after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United
States or of the State of Colorado, in good standing, having a
principal office in the State of Colorado, which is authorized under
such laws to exercise corporate trust powers and is subject to
supervision or examination by federal or state authority and which has
at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company
shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock,
and mail a notice thereof in writing to the registered holders of the
Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent
or the appointment of the successor Rights Agent, as the case may be.
Section 21. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price
and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance
with this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and
prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or warrants or under any
employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereafter issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights 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 Rights
Certificate would be issued, and (ii) no such Rights Certificate shall
be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option, at
any time before the earlier of (i) the close of business on the tenth
day following the Stock Acquisition Date (or, if the Stock Acquisition
Date occurs before the Record Date, the close of business on the tenth
day after the Record Date), or (ii) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be 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"). Notwithstanding
the foregoing, if the Board of Directors of the Company authorizes
redemption of the Rights in either of the circumstances set forth in
clauses (i) or (ii) below, then there must be Continuing Directors
then in office and such authorization shall require the concurrence of
a majority of such Continuing Directors: (i) such authorization
occurs on or after the time a Person becomes an Acquiring Person, or
(ii) such authorization occurs on or after the date of a change
(resulting from a proxy or consent solicitation) in a majority of the
directors in office at the commencement of such solicitation if any
Person who is a participant in such solicitation has stated (or, if
upon the commencement of such solicitation, a majority of the Board of
Directors of the Company has determined in good faith) that such
Person (or any of its Affiliates or Associates) intends to take, or
may consider taking, any action that would result in such Person
becoming an Acquiring Person or that would cause the occurrence of a
Triggering Event. Notwithstanding anything in this Agreement to the
contrary, the Rights shall not be exercisable at any time when the
Company may redeem them pursuant to this Section 23. The Company may,
at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the "current market price" as defined in Section
11(d)(i) hereof, of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of
Directors.
(b) At such time as specified in the resolution of the Board of
Directors ordering redemption of the Rights (or at such time as is
determined by a committee of the Board of Directors authorized by the
Board of Directors to specify such time at the time of the Board's
adoption of such resolution or immediately upon such action of the
Board of Directors if the Board does not specify a date or so empower
a committee) 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 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 each holder's last address as it appears 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 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. Any failure to give or inadequacy of such notice shall not
affect the validity of the redemption. The Redemption Price shall be
payable to those Persons who are record holders of the Rights at the
close of business on a date determined by the Board of Directors,
which date shall be at least eleven days after the Board of Directors
orders redemption of the Rights.
Section 24. 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 stock of any
class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of
Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification
of its Preferred Stock (other than a reclassification involving only
the subdivision of outstanding shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof), 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 (other than the Company and/or any of its Subsidiaries in one
or more transactions each of which complies with Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding up
of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at
least 20 days prior to the record date for determining holders of the
shares of Preferred 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 the shares of Preferred Stock, whichever shall be the
earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as
soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under
Section 11(a)(ii) hereof, and (ii) all references in the preceding
paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate, other securities.
Section 25. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if and when
sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
NaPro BioTherapeutics, Inc.
6304 Spine Road, Unit A
Boulder, Colorado 80301
Attn: Secretary
Subject to Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if and when sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company)
as follows:
American Stock Transfer and Trust Company
40 Wall Street
New York, New York 10005
Attn: Administration Department
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights
Certificate (or, if before the Distribution Date, to the holder of
certificates representing shares of Common Stock) shall be
sufficiently given or made if and when sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date and subject to the penultimate sentence of this Section 26, the
Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement 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 26, the Company and the Rights
Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights in order (i)
to cure any ambiguity, (ii) to correct or supplement any provision
contained herein that may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period
hereunder (which lengthening or shortening, following the first
occurrence of an event set forth in clauses (i) or (ii) of the first
provision to Section 23(a) hereof, shall be effective only if there
are Continuing Directors and shall require the concurrence of a
majority of such Continuing Directors), or (iv) to change or
supplement the provisions hereunder in any manner that the Company
deems necessary or desirable and that does not adversely affect the
interests of the holders of Rights Certificates; PROVIDED, this
Agreement may not be supplemented or amended to lengthen, pursuant to
clause (iii) of this sentence, (A) a time period relating to when the
Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an appropriate officer of the Company stating that
the proposed supplement or amendment is in compliance with this
Section 26, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment shall be made that changes the
Redemption Price, the Final Expiration Date, the Purchase Price or the
number of one-hundredths of a share of Preferred Stock for which a
Right is exercisable. 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 27. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,0
etc. For all purposes of this 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 as in effect on the date of this Agreement. The Board of
Directors of the Company (with, where specifically provided for
herein, the concurrence of the Continuing Directors) shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board
(with, where specifically provided for herein, the concurrence of the
Continuing Directors) or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret this Agreement, and
(ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem
or not redeem the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board (with, where
specifically provided for herein, the concurrence of the Continuing
Directors) in good faith, shall (x) be final, conclusive and binding
on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board or the Continuing
Directors to any liability to the holders of the Rights.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of the Common
Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 30 . SEVERABILITY. If any term of this Agreement is held by
a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or
invalidated; PROVIDED, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable, and the Board of Directors of the Company determines in
its good faith judgment that severing the invalid language from this
Agreement would materially adversely affect the purpose or effect of
this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business
on the tenth day following the date of such determination by the Board
of Directors.
Section 31. GOVERNING LAW. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract
made under Delaware law and for all purposes shall be governed by and
construed in accordance with Delaware law applicable to contracts made
and to be performed entirely within such state.
Section 32 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each which shall be an original, and all of which
shall together constitute a single instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
Sections of this Agreement are inserted for convenience only and shall
not affect the meaning of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
Attest: NAPRO BIOTHERAPEUTICS, INC.
By: /s/Patricia A. Pilia, Ph.D. By: /s/Sterling K. Ainsworth
Name: Patricia A. Pilia, Ph.D. Name: Sterling K. Ainsworth
Title: Secretary Title: President and Chief
Executive Officer
AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By:
Name:
Title:
EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATIONS
OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF NAPRO BIOTHERAPEUTICS, INC.
Pursuant to Section 151 of the Delaware General Corporation Law, the
undersigned President and Secretary of NaPro BioTherapeutics, Inc.,
certify that the Board of Directors of NaPro BioTherapeutics, Inc.,
adopted the following resolution at a meeting duly called and held on
November 8, 1996:
"BE IT RESOLVED, that pursuant to the authority expressly granted by
the provisions of the Amended and Restated Certificate of
Incorporation of the Corporation, the Board of Directors hereby
creates and authorizes the issuance of a series of preferred stock,
par value $.001 per share of the Corporation, and hereby fixes the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional and other special rights of the
shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series (the
"Series B Stock") shall be designated as "Series B Junior
Participating Preferred Stock" and the number of shares constituting
such series shall be 190,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
series of Preferred Stock ranking prior and superior to the Series B
Stock with respect to dividends, the holders of Series B Stock shall
be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for such purpose, quarterly
dividends payable in cash on the first day of March, June, September,
and December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Stock, in an amount per share (rounded
to the nearest cent) equal to the greater of (a) $1.00 or (b) the
product of the Adjustment Number (defined below) multiplied by the
aggregate per share amount of all cash dividends, and the Adjustment
Number multiplied by the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend
payable in shares of common stock or a subdivision of the outstanding
shares of common stock (by reclassification or otherwise), declared on
the common stock, par value $.0075 per share, of the Corporation (the
"Common Stock") since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series B Stock. As used herein, the "Adjustment Number" shall
initially be 100, but if the Corporation at any time after November
8, 1996 (the "Declaration Date") (i) declares any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivides the
outstanding Common Stock, or (iii) combines the outstanding Common
Stock into a smaller number of shares, then in each such case the
Adjustment Number immediately after such event shall equal the
Adjustment Number immediately before such event multiplied by a
fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately before such event.
(B) The Corporation shall declare a dividend or distribution on
the Series B Stock as provided in paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided
that, if the total dividends declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date is less than $.01 per
share, a dividend equal $1.00 per share on the Series B Stock, minus
an amount per share equal to the dividends already paid on the Series
B Stock during such period, shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless
the date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the Series B Stock in an amount less than
the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors
may fix a record date for the determination of holders of shares of
Series B Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than
30 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of the Series B Stock shall
have the following voting rights:
(A) Each share of Series B Stock shall entitle the holder thereof
to a number of votes equal to the Adjustment Number on each matter
submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein or by law, the holders of
Series B Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) If at the time of any annual meeting of stockholders for the
election of directors a default in preference dividends on the shares
of the Series B Stock shall exist, the number of directors
constituting the Board of Directors shall be increased by two, and the
holders of Series B Stock (whether or not the holders of the Series B
Preferred Stock would be entitled to vote for the election of
Directors if such default in preference dividends did not exist),
shall have the right at such meeting, voting together as a single
class, to the exclusion of the holders of Common Stock, to elect two
directors of the Company to fill such newly created directorships.
Such right shall continue until there are no dividends in arrears upon
the Series B Stock. Each director elected by the holders of shares of
Series B Stock (herein called a "Preferred Director") shall continue
to serve as such director for the full term for which he shall have
been elected, notwithstanding that prior to the end of such term a
default in preference dividends shall cease to exist. Any Preferred
Director may be removed by, and shall not be removed except by, the
vote of the holders of record of the outstanding shares of Series B
Stock, voting together as a single class, at a meeting of the
stockholders, or of the holders of shares of Series B Stock, called
for that purpose. So long as a default in any preference dividends on
the Series B Stock shall exist, (i) any vacancy in the office of a
Preferred Director may be filled (except as provided in the following
clause (ii)) by an instrument in writing signed by the remaining
Preferred Director and filed with the corporation and (ii) in the case
of the removal of any Preferred Director, the vacancy may be filled by
the vote of the holders of the outstanding shares of Series B Stock,
voting together as a single class, at the same meeting at which such
removal shall be voted. Each director appointed as aforesaid by the
remaining Preferred Director shall be deemed, for all purposes hereof,
to be a Preferred Director. Whenever the term of office of the
Preferred Directors shall end and a default in preference dividends
shall no longer exist, the number of Directors constituting the Board
of Directors of the Corporation shall be reduced by two. For the
purposes hereof, a "default in preference dividends on the Series B
Stock" shall be deemed to have occurred whenever the amount of accrued
dividends upon the Series B Stock shall be equivalent to six full
quarter-yearly dividends or more, and, having so occurred such default
shall be deemed to exist thereafter until, but only until, all accrued
dividends on all shares of Series B Stock shall have been paid, or
declared and set aside for payment, to the end of the last preceding
quarterly dividend.
(D) Except as set forth herein, holders of Series B Stock shall
have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series B
Stock outstanding have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Stock;
(ii) declare or pay dividends or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B Stock,
except dividends paid ratably on the Series B Stock and all such
parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B Stock,
provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series B Stock;
(iv) purchase or otherwise acquire for consideration any shares of
Series B Stock except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could, under
paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Re-acquired Shares. Any shares of Series B Stock
purchased or otherwise acquired by the Corporation in any manner shall
be retired and canceled promptly after such acquisition. All such
shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the
holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B Stock
unless, prior thereto, the holders of Series B Stock have received,
for each such share, a number of dollars equal to the Adjustment
Number, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment (the "Series B Liquidation Preference"). Following the
payment of the full amount of the Series B Liquidation Preference, no
additional distributions shall be made to the holders of Series B
Stock unless, prior thereto, the holders of Common Stock shall have
received an amount per share (the "Common Adjustment") equal to the
quotient obtained by dividing (i) the Series B Liquidation Preference
by (ii) the Adjustment Number. Following the payment of the full
amount of the Series B Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series B Stock and
Common Stock, respectively, holders of Series B Stock and holders of
Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed to them in the ratio of the
Adjustment Number to one with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) If there are not sufficient assets available to permit payment
in full of the Series B Liquidation Preference and the liquidation
preferences of all other series of preferred stock, if any, that rank
on a parity with the Series B Stock, then such remaining assets shall
be distributed ratably to the holders of such parity shares in
proportion to their respective liquidation preferences. If thereafter
there are not sufficient assets available to permit payment in full of
the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock (subject to the rights of any
Preferred Stock other than the Series B Stock).
Section 7. Consolidation, Merger, etc. If the Corporation enters
into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then in
each such case the Series B Stock shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment
Number multiplied by the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into
which or for which each share of Common Stock is changed or exchanged.
Section 8. No Redemption. The Series B Stock shall not be
redeemable.
Section 9. Ranking. The Series B Stock shall rank junior to all
other series of the Corporation's Preferred Stock as to the payment of
dividends and the distribution of assets, unless the terms of any such
series provide otherwise.
Section 10. Amendment. Whenever any Series B Stock is
outstanding, the Certificate of Incorporation of the Corporation shall
not be amended in any manner that would materially adversely affect
the powers, preferences or special rights of the Series B Stock
without the affirmative vote of the holders of a majority of the
outstanding shares of Series B Stock, voting separately as a class.
Section 11. Fractional Shares. Series B Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all
other rights of holders of Series B Stock.
NAPRO BIOTHERAPEUTICS, INC.
By: /s/Sterling K. Ainsworth
Name: Sterling K. Ainsworth
Title: President and Chief
Executive Officer
By: /s/Patricia A. Pilia, Ph.D.
Name: Patricia A. Pilia, Ph.D.
Title: Secretary
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R-________ ________ Rights
EXPIRES ON NOVEMBER 8, 2006 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF SUCH AGREEMENT.]
Rights Certificate
NAPRO BIOTHERAPEUTICS, 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 of the Rights
Agreement dated as of November 8, 1996 (the "Rights Agreement")
between NaPro BioTherapeutics, Inc. (the "Company"), and American
Stock Transfer and Trust Company (the "Rights Agent"), to purchase
from the Company at any time prior to 5:00 P.M. (New York City time)
on November 8, 2006, at the office or offices of the Rights Agent
designated for such purpose, or its successor as Rights Agent, one-
hundredths of a fully paid, non-assessable share of Series B Junior
Participating Preferred Stock (the "Preferred Stock") of the Company,
at a purchase price of $60.00 per one-hundredths of a share (the
"Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares that may be purchased
upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of
Distribution Date (as defined in the Rights Agreement), based on the
Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as defined in the
Rights Agreement), if the Rights evidenced by this Rights Certificate
are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate
or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such transfer,
became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and after
the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities that may be
purchased upon exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the
occurrence of certain events.
This Rights Certificate is subject to the terms of the Rights
Agreement, which terms are hereby incorporated herein by reference and
made a part hereof and to which Rights Agreement reference is made for
a full description of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Company and
the holders of the Rights Certificates, which limitations of rights
include the temporary suspension of the exercisability of such Rights
under the circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights
Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of
one-hundredths of a share of Preferred Stock as the Rights evidenced
by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate is
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of
the close of business on (i) the tenth day following the Stock
Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement), and (ii) the Final Expiration Date. Under certain
circumstances set forth in the Rights Agreement, the decision to
redeem shall require the concurrence of a majority of the Continuing
Directors (as defined in the Rights Agreement).
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than integral
multiples of one one-hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company issuable
upon the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid for any purpose unless
countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of .
ATTEST: NAPRO BIOTHERAPEUTICS, INC.
By:
Countersigned:
AMERICAN STOCK TRANSFER
AND TRUST COMPANY
By:
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder
to transfer the Rights Certificate.)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
_____________________________________________________________
_____________________________________________________________
(Please print name and address of transferee)
_____________________________________________________________
this Rights Certificate, together with all right, title and interest
therein and does hereby irrevocably constitute and appoint
Attorney, to transfer the within Rights Certificate on the
books of the within-named Company, with full power of substitution.
Dated:_________________
_________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [] is [] is 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
Rights Certificate from any Person who is, was or subsequently became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated:____________________ ________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular.
<PAGE>
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: NaPro BioTherapeutics, Inc.:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the shares
of Preferred Stock issuable upon the exercise of the Rights (or such
other securities of the Company or of any other person that may be
issuable upon the exercise of the Rights) and requests that
certificates for such shares 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
Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
<PAGE>
Please insert social security
or other identifying number
_______________________________
(Please print name and address)
__________________________________________________________
__________________________________________________________
__________________________________________________________
Dated:___________________
________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [] are [] are
not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [] did [] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became
an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated:_____________________________
_________________________________
Signature
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 Rights
Certificate in every particular. DO NOT DESTROY. ATTACH TO YOUR NAPRO
BIOTHERAPEUTICS, INC. STOCK CERTIFICATE.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On November 8, 1996, the Board of Directors of NaPro BioTherapeutics,
Inc. (the "Company"), declared a dividend distribution of one Right
for each outstanding share of the Company's Common Stock to
stockholders of record at the close of business on November 26, 1996.
Each Right entitles the registered holder to purchase from the Company
a unit consisting of one one-hundredth of a share (a "Unit") of Series
B Junior Participating Preferred Stock, par value $.001 per share (the
"Preferred Stock"), at a Purchase Price of $60.00 per Unit, subject to
adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and
American Stock Transfer and Trust Company, as Rights Agent.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Rights Certificates will be distributed. In general, the Rights will
separate from the Common Stock and a "Distribution Date" will occur
upon the earlier of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date"), or (ii) 10 business days following the
commencement of a tender offer or exchange offer that would result in
a person or group beneficially owning 20% or more of such outstanding
shares of Common Stock. Until the Distribution Date, (i) the Rights
will be evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates, (ii)
new Common Stock certificates issued after November 26, 1996, will
contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate. Notwithstanding the
foregoing, a person or group will not be an Acquiring Person by
acquiring beneficial ownership of 20% or more of the outstanding
shares of Common Stock pursuant to a Qualifying Offer (as defined
below), and no Distribution Date will occur following the commencement
of a tender offer or exchange offer that is a Qualifying Offer.
A "Qualifying Offer" means a tender offer or exchange offer for all
outstanding shares of Common Stock at a price and on terms determined
by at least a majority of the Continuing Directors (as defined below)
who are not officers or employees of the Company and who are not
related (as specified in the Rights Agreement) to the Person making
such offer, after receiving advice from one or more investment banking
firms, to be fair to and in the best interests of the Company and its
stockholders.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 8, 2006, unless earlier
redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights
Certificates will be mailed to holders of record of the Common Stock
as of the close of business on the Distribution Date and, thereafter,
the separate Rights Certificates alone will represent the Rights.
Except as otherwise determined by the Board of Directors, only shares
of Common Stock issued prior to the Distribution Date will be issued
with Rights.
If, at any time after the Distribution Date, any person becomes an
Acquiring Person each holder of a Right will thereafter have the right
to receive, upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right. Notwithstanding
any of the foregoing, 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. However, Rights
are not exercisable in any event until such time as the Rights are no
longer redeemable by the Company as set forth below.
For example, at an exercise price of $60 per Right, each Right not
owned by an Acquiring Person (or by certain related parties) following
an event set forth in the second preceding paragraph would entitle its
holder to purchase $120 worth of Common Stock (or other consideration,
as noted above) for $60. Assuming that the Common Stock had a per
share value of $30 such time, the holder of each valid Right would be
entitled to purchase four shares of Common Stock for $60.
If at any time following the Stock Acquisition Date (i) the Company is
acquired in a merger or other business combination transaction in
which the Common Stock is changed or exchanged or in which the Company
is not the surviving corporation (other than a merger that follows a
Qualifying Offer and satisfies certain other requirements), or (ii)
50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights that have been
previously voided as set forth above) shall thereafter have the right
to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the Right.
The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of Preferred Stock
or other securities or property issuable, upon exercise of the Rights
are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) if holders of the
Preferred Stock are granted certain rights or warrants to subscribe
for Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price
of the Preferred Stock on the last trading date prior to the date of
exercise.
At any time until ten days following the Stock Acquisition Date, the
Company may redeem the Rights in whole, but not in part, at a price of
$.01 per Right. Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a
majority of the Continuing Directors. Immediately upon the action of
the Board of Directors ordering redemption of the Rights or at such
other time as may be specified by the Board when it orders redemption,
with, where required, the concurrence of the Continuing Directors, the
Rights will terminate and the only right of the holders of Rights will
be to receive the $.01 redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board prior to the
Stock Acquisition Date, and any person who is subsequently elected to
the Board if such person is recommended or approved by a majority of
the Continuing Directors, but shall not include an Acquiring Person,
or an affiliate or associate of an Acquiring Person, or any
representative of the foregoing entities.
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. While the distribution of
the Rights will not be taxable to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable
income if the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring
company as set forth above.
Other than those provisions relating to the principal economic terms
of the Rights, any of the provisions of the Rights Agreement may be
amended by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the Rights Agreement
may be amended by the Board (in certain circumstances, with the
concurrence of the Continuing Directors) in order to cure any
ambiguity, to make changes that do not adversely affect the interests
of holders of Rights (excluding the interests of any Acquiring
Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time
period governing redemption shall be made at a time when the Rights
are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form
8-A, dated November 25, 1996. 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.
