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Total Number of Pages 10
Index to Exhibits at Page 10
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
CONCEPTUS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 97-3170244
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(State of incorporation or organization) (IRS Employer
Identification No.)
1021 Howard Ave., San Carlos, CA 94070
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(g) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
- ------------------- ------------------------------
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
-------------------------------
(Title of Class)
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Item 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
On February 27, 1997, the Board of Directors of Conceptus, Inc. (the
"Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of Common Stock, $0.003 par value (the
"Common Shares"), of the Company. The dividend is payable on March 26,
1997 (the "Record Date") to stockholders of record as of the close of
business on that date. Each Right entitles the registered holder to purchase
from the Company one one-thousandth of a share of Series A Participating
Preferred Stock, $0.003 par value, of the Company (the "Preferred Shares"),
subject to adjustment, at a price of $80.00 per share, subject to
adjustment (the "Purchase Price"). The description and terms of the Rights
are set forth in a Preferred Shares Rights Agreement (the "Rights Agreement")
dated as of February 27, 1997 between the Company and ChaseMellon Shareholder
Services, L.L.C., as the Rights Agent (the "Rights Agent").
The following is a general description only and is subject to the
detailed terms and conditions of the Rights Agreement. A copy of the Rights
Agreement, including the Certificate of Designation, the form of Rights
Certificate and the Summary of Rights to be provided to stockholders of the
Company, is attached as Exhibit 1 to this Registration Statement and is
incorporated herein by reference.
RIGHTS EVIDENCED BY COMMON SHARE CERTIFICATES
The Rights will not be exercisable until the Distribution Date (defined
below). Accordingly, Common Share certificates outstanding on the Record
Date will evidence the Rights related thereto, and Common Share certificates
issued after the Record Date will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), the surrender or transfer of any
certificates for Common Shares, even without notation or a copy of the
Summary of Rights being attached thereto, will also constitute the transfer
of the Rights associated with the Common Shares represented by such
certificate.
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DISTRIBUTION DATE
The Rights will separate from the Common Shares, certificates for the
Rights ("Rights Certificates") will be issued and the Rights will become
exercisable upon the earlier of: (i) the close of business on the tenth day
(or such later date as may be determined by a majority of the Board of
Directors, excluding directors affiliated with the Acquiring Person, as
defined below (the "Continuing Directors")) following a public announcement
that a person or group of affiliated or associated persons has acquired, or
obtained the right to acquire, beneficial ownership of 20% or more of the
outstanding Common Shares (an "Acquiring Person") or (ii) the close of
business on the tenth day (or such later date as may be determined by a
majority of the Continuing Directors) following the commencement of a tender
offer or exchange offer, the consummation of which would result in the
beneficial ownership by a person or group of 20% or more of the outstanding
Common Shares. The earlier of such dates is referred to as the "Distribution
Date."
ISSUANCE OF RIGHTS CERTIFICATES, EXPIRATION OF RIGHTS
As soon as practicable following the Distribution Date, separate Rights
Certificates will be mailed to holders of record of the Common Shares as of
the close of business on the Distribution Date and such separate Rights
Certificates alone will evidence the Rights from and after the Distribution
Date. Unless otherwise determined by the Board of Directors, all Common
Shares issued prior to the Distribution Date will be issued with Rights.
Common Shares issued after the Distribution Date may be issued with Rights if
such shares are issued (i) upon the exercise, conversion or exchange of
securities issued after adoption of the Rights Agreement or (ii) pursuant to
the exercise of stock options or under any employee benefit plan or
arrangement. Except as otherwise determined by the Board of Directors, no
other Common Shares issued after the Distribution Date will be issued with
Rights. In addition, no Common Shares issued after the Distribution Date
will be issued with Rights if such issuance would result in (or create a
significant risk of) (i) material adverse tax consequences to the Company or
the person to whom such Rights Certificate would be issued or (ii) such
options or plans not qualifying for otherwise available special tax
treatment. The Rights will expire on February 26, 2007 (the "Final
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Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company or expire upon
consummation of certain mergers, consolidations or sales of assets, as
described below.
INITIAL EXERCISE OF THE RIGHTS
Following the Distribution Date, and until the occurrence of one of the
subsequent events described below, holders of the Rights will be entitled to
receive, upon exercise and the payment of $80.00 (the "Purchase Price") per
Right, one one-thousandth of a Preferred Share.
EXCHANGE PROVISION
At any time after an Acquiring Person has become such and prior to the
Acquiring Person beneficially owning 20% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by the Acquiring Person or its affiliates), in whole or in
part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
RIGHT TO BUY COMMON SHARES AT HALF PRICE
Unless the Rights are earlier redeemed or exchanged, in the event that
an Acquiring Person becomes such, other than pursuant to a tender offer which
is made for all of the outstanding Common Shares and approved by a majority
of the Continuing Directors after determining that the offer is both adequate
and otherwise in the best interests of the Company and its stockholders (a
"Permitted Offer"), then proper provision will be made so that each holder of
a Right which has not theretofore been exercised (other than Rights
beneficially owned by the Acquiring Person, which will thereafter be void)
will thereafter have the right to receive, upon exercise of a Right, a number
of Common Shares having a then current value equal to two times the Purchase
Price. In the event that the Company does not have a sufficient number of
Common Shares available, or the Board decides that such action is necessary
or appropriate and not contrary to the interests of Rights holders, the
Company may, among other things, instead substitute cash, assets or other
securities for the Common Shares into which the Rights would have otherwise
been exercisable.
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RIGHT TO BUY ACQUIRING COMPANY STOCK AT HALF PRICE
Similarly, unless the Rights are earlier redeemed or exchanged, in the
event that, after the Shares Acquisition Date (as defined below), (i) the
Company consolidates with or merges into another entity, (ii) another entity
consolidates with or merges into the Company or (iii) the Company sells or
otherwise transfers 50% or more of its consolidated assets or earning power,
proper provision must be made so that each holder of a Right which has not
theretofore been exercised (other than Rights beneficially owned by the
Acquiring Person, which will thereafter be void) will thereafter have the right
to receive, upon exercise, a number of shares of common stock of the acquiring
company having a then current value equal to two times the Purchase Price
(unless the transaction satisfies certain conditions and is consummated with a
person who acquired shares pursuant to a Permitted Offer, in which case the
Rights will expire).
ADJUSTMENTS TO PREVENT DILUTION
The Purchase Price payable, the number of Rights and the number of
Preferred Shares, Common Shares or other securities or property issuable upon
exercise of the Rights are subject to adjustment from time to time to prevent
dilution as set forth in the Rights Agreement. With certain exceptions, no
adjustment in the Purchase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
RIGHTS AND PREFERENCES OF THE PREFERRED SHARES
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to an aggregate dividend
of 1,000 times the dividend declared per Common Share. In the event of
liquidation, the holders of the Preferred Shares will be entitled to a
preferential liquidation payment equal to accrued but unpaid dividends plus
the greater of $1,000 per share or 1,000 times the aggregate per share amount
to be distributed to the holders of Common Shares. Each Preferred Share will
have 1,000 votes, voting together with the holders of Common Shares, except
as required by law or the Certificate of Determination of Rights, Preferences
and Privileges of Series A Participating Preferred Stock. In the event of
any merger, consolidation or other transaction in which Common Shares are
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changed or exchanged, each Preferred Share will be entitled to receive 1,000
times the amount received per Common Share. These rights are protected by
customary anti-dilution provisions. Because of the nature of the dividend,
liquidation and voting rights of the Preferred Shares, the value of the one
one-thousandth interest in a Preferred Share purchasable upon exercise of
each Right should approximate the value of one Common Share.
REDEMPTION
At any time prior to the close of business on the earlier of (i) the
tenth day following the date (the "Shares Acquisition Date") of public
announcement that an Acquiring Person has become such or such later date as
may be determined by a majority of the Continuing Directors and publicly
announced by the Company or (ii) the Final Expiration Date of the Rights, the
Company may redeem the Rights in whole, but not in part, at a price of $0.01
per Right ("Redemption Price").
NO STOCKHOLDERS' RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company (other than any rights resulting from
such holder's ownership of Common Shares), including, without limitation, the
right to vote or to receive dividends.
AMENDMENT OF RIGHTS AGREEMENT
The provisions of the Rights Agreement may be supplemented or amended by
the Board of Directors in any manner prior to the Distribution Date without
the approval of Rights holders. After the Distribution Date, the provisions
of the Rights Agreement may be supplemented or amended by the Board in order
to (i) cure any ambiguity, defect or inconsistency, (ii) to make changes
which are deemed necessary or advisable and 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 lengthen (A) the time
period governing redemption shall be made at such time as the Rights are not
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redeemable or (B) any other period unless for the purpose of protecting,
enhancing or clarifying the rights of, and/or benefits to, the holders of
Rights.
CERTAIN ANTI-TAKEOVER EFFECTS
The Rights approved by the Board are designed to protect and maximize
the value of the outstanding equity interests in the Company in the event of
an unsolicited attempt by an acquiror to take over the Company, in a manner
or on terms not approved by the Board of Directors. Takeover attempts
frequently include coercive tactics to deprive a corporation's Board of
Directors and its stockholders of any real opportunity to determine the
destiny of the corporation. The Rights have been declared by the Board in
order to deter such tactics, including a gradual accumulation of shares in
the open market of a 20% or greater position to be followed by a merger or a
partial or two-tier tender offer that does not treat all stockholders
equally. These tactics unfairly pressure stockholders, squeeze them out of
their investment without giving them any real choice and deprive them of the
full value of their shares.
The Rights are not intended to prevent a takeover of the Company and
will not do so. The Rights are not exercisable in the event of a Permitted
Offer, as described above. The Rights may be redeemed by the Company at
$0.01 Right within ten days (or such later date as may be determined by a
majority of the Continuing Directors) after the accumulation of 20% or more
of the Company's outstanding Common Shares by a single acquiror or group.
Accordingly, the Rights should not preclude any merger or business
combination approved by the Board of Directors. Issuance of the Rights does
not in any way weaken the financial strength of the Company or interfere with
its business plans. The issuance of the Rights has no immediate dilutive
effect, will not affect reported earnings per share, should not be taxable to
the Company or to its stockholders and will not change the way in which the
Company's shares are presently traded. The Company's Board of Directors
believes that the Rights represent a sound and reasonable means of addressing
the complex issues of corporate policy created by the current takeover
environment. However, the Rights may have the effect of rendering more
difficult or discouraging an acquisition of the Company deemed undesirable by
the Board of Directors. The Rights may cause substantial dilution to a
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person or group that attempts to acquire the Company on terms or in a manner
not approved by the Company's Board of Directors, except pursuant to an offer
conditioned upon the negation, purchase or redemption of the Rights.
Item 2. EXHIBITS.
1. Preferred Shares Rights Agreement, dated as of February 27, 1997,
between Conceptus, Inc. and ChaseMellon Shareholder Services,
L.L.C., including the Certificate of Designation of Rights,
Preferences and Privileges of Series A Participating Preferred
Stock, the form of Rights Certificate and the Summary of Rights
attached thereto as Exhibits A, B and C, respectively.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
CONCEPTUS, INC.
Date: February 28, 1997 By /s/ KATHRYN A. TUNSTALL
-------------------------------------
President and Chief Executive Officer
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CONCEPTUS, INC.
REGISTRATION STATEMENT ON FORM 8-A
EXHIBIT INDEX
Page Number Under
Exhibit Sequential Numbering
No. Exhibit System
- ------- ------- --------------------
1 Preferred Shares Rights Agreement, dated as of
February 27, 1997, between Conceptus, Inc. and
ChaseMellon Shareholder Services, L.L.C.,
including the Certificate of Designation of
Rights, Preferences and Privileges of Series A
Participating Preferred Stock, the form of Rights
Certificate and the Summary of Rights attached
thereto as Exhibits A, B and C, respectively.
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- -------------------------------------------------------------------------------
CONCEPTUS, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
RIGHTS AGENT
PREFERRED SHARES RIGHTS AGREEMENT
Dated as of February 27, 1997
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TABLE OF CONTENTS
PAGE
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Section 1. CERTAIN DEFINITIONS 1
Section 2. APPOINTMENT OF RIGHTS AGENT. 5
Section 3. ISSUANCE OF RIGHTS CERTIFICATE 5
Section 4. FORM OF RIGHTS CERTIFICATE 7
Section 5. COUNTERSIGNATURE AND REGISTRATION 8
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN
RIGHTS CERTIFICATES 8
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHT 9
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATE 11
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES 11
Section 10. PREFERRED SHARES RECORD DATE 12
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS 12
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES 20
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER 20
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 23
Section 15. RIGHTS OF ACTION 23
Section 16. AGREEMENT OF RIGHTS HOLDERS 24
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER 24
Section 18. CONCERNING THE RIGHTS AGENT 25
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT 25
Section 20. DUTIES OF RIGHTS AGENT 26
Section 21. CHANGE OF RIGHTS AGENT 28
Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES 28
Section 23. REDEMPTION 29
Section 24. EXCHANGE 30
Section 25. NOTICE OF CERTAIN EVENTS 31
Section 26. NOTICES 32
Section 27. SUPPLEMENTS AND AMENDMENTS 32
Section 28. SUCCESSORS 33
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. 33
Section 30. BENEFITS OF THIS AGREEMENT 33
Section 31. SEVERABILITY 33
Section 32. GOVERNING LAW 34
Section 33. COUNTERPARTS 34
Section 34. DESCRIPTIVE HEADINGS 34
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TABLE OF CONTENTS
(continued)
PAGE
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EXHIBITS
Exhibit A Form of Certificate of Designation
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights
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PREFERRED SHARES RIGHTS AGREEMENT
Agreement, dated as of February 27, 1997, between Conceptus, Inc., a
Delaware corporation (the "COMPANY"), and ChaseMellon Shareholder Services,
L.L.C. (the "RIGHTS AGENT").
On February 27, 1997 (the "RIGHTS DIVIDEND DECLARATION DATE"), the
Board of Directors of the Company authorized and declared a dividend of one
Preferred Share purchase right (a "RIGHT") for each Common Share (as
hereinafter defined) of the Company outstanding as of the Close of Business
(as hereinafter defined) on March 26, 1997 (the "RECORD DATE"), each
Right representing the right to purchase one one-thousandth of a share of
Series A Participating Preferred Stock (as such number may be adjusted
pursuant to the provisions of this Agreement), having the rights, preferences
and privileges set forth in the form of Certificate of Designation of Rights,
Preferences and Privileges of Series A Participating Preferred Stock attached
hereto as EXHIBIT A, upon the terms and subject to the conditions herein set
forth, and further authorized and directed the issuance of one Right (as
such number may be adjusted pursuant to the provisions of this Agreement)
with respect to each Common Share that shall become outstanding between the
Record Date and the earlier of the Distribution Date and the Expiration Date
(as such terms are hereinafter defined), and in certain circumstances after
the Distribution Date.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial
Owner of 20% or more of the Common Shares then outstanding, but shall not
include the Company, any Subsidiary of the Company or any employee benefit
plan of the Company or of any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring
Person either (i) as the result of an acquisition of Common Shares by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20% or
more of the Common Shares of the Company then outstanding; PROVIDED, HOWEVER,
that if a Person shall become the Beneficial Owner of 20% or more of the
Common Shares of the Company then outstanding by reason of share purchases by
the Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional Common Shares of the Company, then such
Person shall be deemed to be an Acquiring Person, or (ii) if within eight
days after such Person would otherwise become an Acquiring Person (but for
the operation of this clause (ii)), such Person notifies the Board of
Directors that such Person did so inadvertently and within two days after
such notification, such Person is the Beneficial Owner of less than 20% of
the outstanding Common Shares.
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(b) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities and Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "BENEFICIAL OWNER" of and shall be
deemed to "BENEFICIALLY OWN" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of Section
13(d) of the Exchange Act and Rule 13d-3 thereunder (or any comparable or
successor law or regulation);
(ii) which such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; PROVIDED,
HOWEVER, that a Person shall not be deemed pursuant to this Section
l(c)(ii)(A) the Beneficial Owner of, or to beneficially own, (1) securities
tendered pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or (2) securities which a
Person or any of such Person's Affiliates or Associates may be deemed to have
the right to acquire pursuant to any merger or other acquisition agreement
between the Company and such Person (or one or more of its Affiliates or
Associates) if such agreement has been approved by the Board of Directors of
the Company prior to there being an Acquiring Person; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security under this Section l(c)(ii)(B) if the
agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable rules and regulations of the Exchange Act and (2) is not
also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other
Person (or any Affiliate or Associate thereof) with which such Person or any
of such Person's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) (other than customary agreements
with and between underwriters and selling group members with respect to a
bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section
l(c)(ii)(B)) or disposing of any securities of the Company; PROVIDED,
HOWEVER, that in no case shall an officer or director of the Company be
deemed (x) the Beneficial Owner of any securities beneficially owned by
another officer or director of the Company solely by reason of actions
undertaken by such persons in their capacity as officers or directors of the
Company or (y) the Beneficial Owner of securities held of record by the
trustee of any employee benefit plan of the Company or any Subsidiary of the
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Company for the benefit of any employee of the Company or any Subsidiary of
the Company, other than the officer or director, by reason of any influence
that such officer or director may have over the voting of the securities held
in the plan.
(d) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in San Francisco, California are
authorized or obligated by law or executive order to close.
(e) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., San
Francisco, California time, on such date; PROVIDED, HOWEVER, that if such
date is not a Business Day it shall mean 5:00 P.M., San Francisco, California
time, on the next succeeding Business Day.
(f) "COMMON SHARES" when used with reference to the Company shall mean
the shares of Common Stock of the Company, $0.003 par value. "Common Shares"
when used with reference to any Person other than the Company shall mean the
capital stock (or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of another Person, the
Person or Persons which ultimately control such first-mentioned Person.
(g) "CONTINUING DIRECTOR" shall mean (i) any member of the Board of
Directors of the Company, while a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate,
and who was a member of the Board prior to the date of this Agreement, or
(ii) any Person who subsequently becomes a member of the Board, while a
member of the Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an Acquiring Person
or of any such Affiliate or Associate, if such Person's nomination for
election or election to the Board is recommended or approved by a majority of
the Continuing Directors.
(h) "DISTRIBUTION DATE" shall mean the earlier of (i) the Close of
Business on the tenth day (or such later date as may be determined by action
of a majority of Continuing Directors then in office) after the Shares
Acquisition Date (or, if the tenth day after the Shares Acquisition Date
occurs before the Record Date, the Close of Business on the Record Date) or
(ii) the Close of Business on the tenth day (or such later date as may be
determined by action of a majority of Continuing Directors then in office)
after the date that a tender or exchange 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 the
terms of 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, assuming the successful consummation thereof, such Person
would be the Beneficial Owner of 20% or more of the shares of Common Stock
then outstanding.
(i) "EQUIVALENT SHARES" shall mean Preferred Shares and any other class
or series of capital stock of the Company that is entitled to participate in
dividends and other distributions, including distributions upon the
liquidation, dissolution or winding up of the Company, on a proportional
basis with the Common Shares. In calculating the number of any
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class or series of Equivalent Shares for purposes of Section 11 of this
Rights Agreement, the number of shares, or fractions of a share, of such
class or series of capital stock that is entitled to the same dividend or
distribution as a whole Common Share shall be deemed to be one share.
(j) "EXPIRATION DATE" shall mean the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the Redemption Date, (iii) the
time at which the Board of Directors orders the exchange of the Rights as
provided in Section 24 hereof or (iv) the consummation of a transaction
contemplated by Section 13(d) hereof.
(k) "FINAL EXPIRATION DATE" shall mean February 26, 2007.
(1) "PERMITTED OFFER" shall mean a tender offer for all outstanding
Common Shares made in the manner prescribed by Section 14(d) of the Exchange
Act and the rules and regulations promulgated thereunder; PROVIDED, HOWEVER,
that such tender offer occurs at a time when Continuing Directors are in
office and a majority of the Continuing Directors then in office has
determined that the offer is both adequate and otherwise in the best
interests of the Company and its stockholders (taking into account all
factors that such Continuing Directors deem relevant, including without
limitation prices that could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value).
(m) "PERSON" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
(n) "PREFERRED SHARES" shall mean shares of Series A Participating
Preferred Stock of the Company.
(o) "PURCHASE PRICE" shall have the meaning set forth in Section 4(a)
hereof.
(p) "RECORD DATE" shall have the meaning set forth in the recitals at
the beginning of this Agreement.
(q) "REDEMPTION DATE" shall mean the time at which the Board of
Directors of the Company orders redemption of the Rights as provided in
Section 23 hereof.
(r) "REDEMPTION PRICE" shall have the meaning set forth in Section
23(a) hereof.
(s) "RIGHTS DIVIDEND DECLARATION DATE" shall have the meaning set forth
in the recitals at the beginning of this Agreement.
(t) "SECTION 13 EVENT" shall mean any event described in clause (i),
(ii) or (iii) of Section 13(a) hereof.
(u) "SHARES ACQUISITION DATE" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act)
by the Company or an Acquiring Person that an Acquiring Person has become
such; PROVIDED THAT, if such Person is determined not to
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have become an Acquiring Person pursuant to Section l(a)(ii) hereof, then no
Shares Acquisition Date shall be deemed to have occurred.
(v) "SUBSIDIARY" of any Person shall mean any corporation or other
entity of which an amount of voting securities sufficient to elect a majority
of the directors or Persons having similar authority of such corporation or
other entity is beneficially owned, directly or indirectly, by such Person,
or any corporation or other entity otherwise controlled by such Person.
(w) "TOTAL EXERCISE PRICE" shall have the meaning set forth in Section
4(a) hereof.
(x) "TRADING DAY" shall have the meaning set forth in Section 11(d)
hereof.
(y) A "TRIGGERING EVENT" shall be deemed to have occurred upon any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such plan),
together with all Affiliates and Associates of such Person, becoming an
Acquiring Person.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date, (i) the Rights will be evidenced
(subject to the provisions of Sections 3(b) and 3(c) hereof) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Rights Certificates) and not
by separate Rights Certificates and (ii) the right to receive Rights
Certificates will be transferable only in connection with the transfer of
Common Shares. Until the earlier of the Distribution Date or the Expiration
Date, the surrender for transfer of such certificates for Common Shares shall
also constitute the surrender for transfer of the Rights associated with the
Common Shares represented thereby. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, postage-prepaid mail,
to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Rights Certificate, in substantially the form of EXHIBIT B hereto
(a "RIGHTS CERTIFICATE"), evidencing one Right for each Common Share so held,
subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per Common Share has been made pursuant to Section
11(a)(i), Section 11(i) or Section 11(p) hereof, then at the time of
distribution of the Rights 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
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distributed and cash is paid in lieu of any fractional Rights. As of the
Distribution Date, the Rights will be evidenced solely by such Rights
Certificates and may be transferred by the transfer of the Rights
Certificates as permitted hereby, separately and apart from any transfer of
one or more Common Shares, and the holders of such Rights Certificates as
listed in the records of the Company or any transfer agent or registrar for
the Rights shall be the record holders thereof.
(b) On the Record Date or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights in substantially the form of
EXHIBIT C hereto (the "SUMMARY OF RIGHTS"), by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the close of business on
the Record Date, at the address of such holder shown on the records of the
Company.
(c) Unless the Board of Directors by resolution adopted at or before
the time of the issuance (including pursuant to the exercise of rights under
the Company's benefit plans) of any Common Shares specifies to the contrary,
Rights shall be issued in respect of all Common Shares that are issued after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date or, in certain circumstances provided in Section 22 hereof,
after the Distribution Date. Certificates representing such Common Shares
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 a Preferred Shares Rights Agreement between
Conceptus, Inc. and ChaseMellon Shareholder Services, L.L.C. as the Rights
Agent, dated as of February 27, 1997 (the "RIGHTS AGREEMENT"), the
terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of Conceptus, Inc.
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. Conceptus, Inc. will mail to the holder of
this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances 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 Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any
such certificate shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby. In the event that the Company
pur chases or acquires any Common Shares after the Record Date but prior to
the Distribution Date, any Rights associated with such Common Shares shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which are no longer
outstanding.
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Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
Common Shares and of assignment to be printed on the reverse thereof) shall
be substantially in the form of EXHIBIT B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 11 and Section 22 hereof, the Rights Certificates,
whenever distributed, shall be dated as of the Record Date (or in the case of
Rights issued with respect to Common Shares issued by the Company after the
Record Date, as of the date of issuance of such Common Shares) and on their
face shall entitle the holders thereof to purchase such number of
one-thousandths of a Preferred Share as shall be set forth therein at the
price set forth therein (such exercise price per one one-thousandth of a
Preferred Share being hereinafter referred to as the "PURCHASE PRICE" and the
aggregate exercise price of all Preferred Shares issuable upon exercise of
one Right being hereinafter referred to as the "TOTAL EXERCISE PRICE"), but
the number and type of securities purchasable upon the exercise of each Right
and the Purchase Price 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: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board of
Directors of the Company has determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect avoidance of 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 the Rights Agreement.
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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 by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal (if
any) or a facsimile thereof. The Rights Certificates shall be manually
counter signed by the Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have
signed any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and delivery
by the Company, such Rights Certificates, nevertheless, may be countersigned
by the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights Certificates had
not ceased to be such officer of the Company; and any Rights Certificate may
be signed on behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this 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 office designated for such purposes, 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 the provisions of Sections 7(e), 14 and 24 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 Rights Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Rights Certificates, entitling the
registered holder to purchase a like number of one-thousandths of a Preferred
Share (or, following a Triggering Event, other securities, cash or other
assets, as the case may be) as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Rights Certificate or
Rights Certificates shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, split up, combined or exchanged at the office
of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect
to the transfer of any such surrendered 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 7(e), 14 and 24 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
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<PAGE>
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, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will make
and deliver a new Rights Certificate of like tenor to the Rights Agent for
delivery to the registered holder 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 on the reverse side thereof duly executed, to the Rights Agent at
the office of the Rights Agent designated for such purpose, together with
payment of the Purchase Price for each one-thousandth of a Preferred Share as
to which the Rights are exercised, at or prior to the Expiration Date.
(b) The Purchase Price for each one-thousandth of a Preferred Share
issuable pursuant to the exercise of a Right shall initially be $80.00 and
shall be subject to adjustment from time to time as provided in Sections 11
and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the number of one-thousandths of a
Preferred Share (or other securities or property, as the case may be) to be
purchased and an amount equal to any applicable transfer tax required to be
paid by the holder of such Rights Certificate in accordance with Section 9
hereof in cash, or by certified check or cashier's check payable to the order
of the Company, the Rights Agent shall, subject to Section 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the
Preferred Shares (or make available, if the Rights Agent is the transfer
agent for the Preferred Shares) a certificate or certificates for the number
of one-thousandths of a Preferred Share 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 one-thousandths of a Preferred Share issuable upon exercise of the Rights
hereunder with a depository agent, requisition from the depository agent of
depository receipts representing such number of one-thousandths of a
Preferred Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited by the
transfer agent with the depository agent) and the Company hereby directs the
depository agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depository receipts, cause the same to
be delivered to or upon the order of the
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registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt thereof, deliver such cash 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 (including to zero) pursuant to Section 11(a)(iv)
hereof) may be made in cash or by certified check or cashier's check payable
to the order of the Company. In the event that the Company is obligated to
issue other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such Rights
Certificate or to his or her duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Triggering Event or a Section 13 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 (a "POST TRANSFEREE"), (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement or understanding which
has as a primary purpose or effect the avoidance of this Section 7(e) (a
"PRIOR TRANSFEREE") or (iv) any subsequent transferee receiving transferred
Rights from a Post Transferee or a Prior Transferee, either directly or
through one or more intermediate transferees, shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
insure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or to any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of such Acquiring
Person's 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) or
Affiliates or Associates thereof as the Company shall reasonably request.
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Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All
Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will use its best efforts
to cause to be reserved and kept available out of and to the extent of its
authorized and unissued shares of Preferred Stock not reserved for another
purpose (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities), the
number of Preferred Shares (and, following the occurrence of the Triggering
Event, Common Stock and/or other securities) that will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) If the Company shall hereafter list any of its Preferred Shares on
a national securities exchange, then so long as the Preferred Shares (and,
following the occurrence of a Triggering Event, Common Shares and/or other
securities) issuable and deliverable upon exercise of the Rights may be
listed on a national securities exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable
(but only to the extent that it is reasonably likely that the Rights will be
exercised), all shares reserved for such issuance to be listed on such
exchange 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
Triggering Event in which the consideration to be delivered by the Company
upon exercise of the Rights has been determined in accordance with Section
11(a)(iv) hereof, or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Securities Act
of 1933, as amended (the "SECURITIES ACT"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause
such registration statement to become effective as soon as practicable after
such filing and (iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the date of expiration of the Rights.
The Company may temporarily suspend, for a period not to exceed ninety (90)
days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating, and notify
the Rights Agent, that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notification to the Rights
Agent at such time as
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the suspension is no longer in effect. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction, unless the requisite qualification in such jurisdiction shall
have been obtained, or an exemption therefrom shall be available, and until a
registration statement has been declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such Preferred Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the original issuance or delivery of the Rights
Certificates or of any Preferred Shares upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights Certificates to a
person other than, or the issuance or delivery of certificates or depository
receipts for the Preferred Shares in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates or depository receipts
for Preferred Shares upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name
any certificate for a number of one-thousandths of a Preferred Share is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of Preferred Shares 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
multiplied by the number of one-thousandths of a Preferred Share with respect
to which the Rights have been exercised (and any applicable transfer taxes)
was made; PROVIDED, HOWEVER, that if the date of such surrender and payment
is a date upon which the Preferred Shares transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Shares transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a holder of Preferred
Shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number and kind of shares or other
property covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
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(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Common Shares payable in Common
Shares, (B) subdivide the outstanding Common Shares, (C) combine the
outstanding Common Shares (by reverse stock split or otherwise) into a
smaller number of Common Shares, or (D) issue any shares of its capital stock
in a reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such
event, except as otherwise provided in this Section 11(a) and Section 7(e)
hereof: (1) each of the Rights outstanding at the time of the record date for
such dividend or the effective date of such subdivision, combination or
reclassification shall be proportionately adjusted to that number of Rights
(calculated to the nearest one ten-thousandth (1/10,000) of a Right) equal to
a fraction (the "EXCHANGE RATIO"), the numerator of which shall be the total
number of Common Shares or shares of capital stock issued in such
reclassification of the Common Shares outstanding immediately following such
time and the denominator of which shall be the total number of Common Shares
outstanding immediately prior to such time, and the number of Rights that
shall thereafter be issued with respect to each Common Share or share of such
other capital stock that shall become outstanding thereafter prior to the
Distribution Date shall be equal to the total number of outstanding Rights
immediately after such event (as adjusted pursuant to this clause (1))
divided by the total number of outstanding Common Shares or shares of such
other capital stock immediately after such event (subject to further
adjustment pursuant to the provisions of this Agreement); (2) the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification shall be
adjusted so that the Purchase Price thereafter shall equal the result
obtained by dividing the Purchase Price in effect immediately prior to such
time by the Exchange Ratio; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of Preferred Shares or shares
of such other capital stock issuable upon the exercise of each Right shall
remain unchanged immediately after such event, but, in the event of a
reclassification, the kind of shares issuable upon the exercise of each Right
immediately after such reclassification shall be adjusted to be the kind of
shares of such other capital stock issued in such reclassification, rather
than Preferred Shares. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event a Triggering
Event shall have occurred, then promptly following such Triggering Event,
proper provision shall be made so that each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter have the right to receive
for each Right, upon exercise thereof in accordance with the terms of this
Agree ment and payment of the then-current Total Exercise Price, in lieu of a
number of one-thousandths of a Preferred Share, such number of Common Shares
of the Company as shall equal the result obtained by multiplying the
then-current Purchase Price by the then number of one-thousandths of a
Preferred Share for which a Right was exercisable (or would have been
exercisable if the Distribution Date had occurred) immediately prior to the
first occurrence of a Triggering Event, and dividing that product by 50% of
the current per share market price
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(determined pursuant to Section 11(d) hereof) for Common Shares on the date
of occurrence of the Triggering Event (such number of shares being
hereinafter referred to as the "ADJUSTMENT SHARES").
(iii) The right to buy Common Shares of the Company pursuant to
Section 11(a)(ii) hereof shall not arise as a result of any Person becoming
an Acquiring Person through an acquisition of Common Shares pursuant to a
Permitted Offer.
(iv) In lieu of issuing Common Shares in accordance with Section
11(a)(ii) hereof, the Company may, if the Board of Directors determines that
such action is necessary or appropriate and not contrary to the interest of
holders of Rights (and, in the event that the number of Common Shares which
are authorized by the Company's Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights,
or if any necessary regulatory approval for such issuance has not been
obtained by the Company, the Company shall): (A) determine the excess of (1)
the value of the Common Shares issuable upon the exercise of a Right (the
"CURRENT VALUE") over (2) the Purchase Price (such excess, the "SPREAD") and
(B) with respect to each Right, make adequate provision to substitute for
such Common Shares, upon exercise of the Rights, (1) cash, (2) a reduction in
the Purchase Price, (3) other equity securities of the Company (including,
without limitation, shares or units of shares of any series of Preferred
Stock which the Board of Directors of the Company has deemed to have the same
value as Common Shares (such shares or units of shares of Preferred Stock are
herein called "COMMON STOCK EQUIVALENTS")), except to the extent that the
Company has not obtained any necessary stockholder or regulatory approval for
such issuance, (4) debt securities of the Company, except to the extent that
the Company has not obtained any necessary stockholder or regulatory approval
for such issuance, (5) other assets or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the Company based upon
the advice of a nationally recognized investment banking firm selected by the
Board of Directors of the Company; PROVIDED, HOWEVER, if the Company shall
not have made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the first occurrence
of a Triggering 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, Common Shares (to the extent
available), except to the extent that the Company has not obtained any
necessary stockholder or regulatory approval for such issuance, and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Company shall determine in good
faith that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights or that any
necessary regulatory approval for such issuance will be obtained, the thirty
(30) day period set forth above may be extended to the extent necessary, but
not more than ninety (90) days after the Section 11(a)(ii) Trigger Date, in
order that the Company may seek stockholder approval for the authorization of
such additional shares or take action to obtain such regulatory approval
(such period, as it may be extended, the "SUBSTITUTION PERIOD"). To the
extent that the Company determines that some action need be taken pursuant to
the first and/or
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second sentences of this Section 11(a)(iv), 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, to take any action to obtain any required regulatory
approval and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer
in effect. For purposes of this Section 11(a)(iv), the value of the Common
Shares shall be the current per share market price (as determined pursuant to
Section 11(d) hereof) of the Common Shares 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 Shares on such date.
(b) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the issuance of rights, options or warrants
to all holders of Common Shares or of any class or series of Equivalent
Shares entitling such holders (for a period expiring within forty-five (45)
calendar days after such record date) to subscribe for or purchase Common
Shares or Equivalent Shares or securities convertible into Common Shares or
Equivalent Shares at a price per share (or having a conversion price per
share, if a security convertible into Common Shares or Equivalent Shares)
less than the then current per share market price of the Common Shares or
Equivalent Shares (as defined in Section 11(d)) on such record date, then, in
each such case, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of Common Shares and Equivalent Shares (if any) outstanding on such
record date, plus the number of Common Shares or Equivalent Shares, as the
case may be, which the aggregate offering price of the total number of Common
Shares or Equivalent Shares, as the case may be, 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 Common Shares and Equivalent Shares (if any)
outstanding on such record date, plus the number of additional Common Shares
or Equivalent Shares, as the case may be, to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose deter mination 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. Common Shares and Equivalent Shares
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed, and in the event
that such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall, at any time after the date of this
Agreement, fix a record date for the making of a distribution to all holders
of the Common Shares or of any class or series of Equivalent Shares
(including any such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation) of
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evidences of indebt edness or assets (other than a regular quarterly cash
dividend, if any, or a dividend payable in Common Shares) or subscription
rights, options or warrants (excluding those referred to in Section 11(b)),
then, in each such case, 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) of a Common Share or an Equivalent Share 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 Common Share or Equivalent Share, as the case may be, and the
denominator of which shall be such current market price (as determined
pursuant to Section 11(d) hereof) of a Common Share or Equivalent Share on
such record date. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution is not so
made, the Purchase Price shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iv) hereof, the "CURRENT PER
SHARE MARKET PRICE" of any security (a "SECURITY" for the purpose of this
Section 11(d)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iv)
hereof, the "current per share market price" of any Security on any date
shall be deemed to be the average of the daily closing prices per share of
such Security for the ten (10) consecutive Trading Days immediately prior to
such date; PROVIDED, HOWEVER, that in the event that the current per share
market price of the Security is determined during a period following the
announcement by the issuer of such Security of (i) a dividend or distribution
on such Security payable in shares of such Security or securities convertible
into such shares or (ii) any subdivision, combination or reclassification of
such Security, and prior to the expiration of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the current per
share market price shall be appropriately adjusted to reflect the current
market price per share equivalent of such Security. The closing price for
each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed
or admitted to trading on any national securities exchange, the last sale
price or, if such last sale price is not reported, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of
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the Company. If on any such date no market maker is making a market in the
Common Shares, 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 Security is listed or admitted to trading is open for
the transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day. If the Common
Shares are not publicly held or so listed or traded, "current per share
market price" shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; PROVIDED, HOWEVER,
that any adjustments which by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a Common Share or other
share or one hundred-thousandth of a Preferred Share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three (3) years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right and if required, the Purchase Price thereof, shall be subject to adjust
ment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares contained in
Sections 11(a), (b), (c), (e), (h), (i), (j), (k), (1) and (m), and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b), 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 Preferred Shares
(calculated to the nearest one hundred-thousandth of a share) obtained by (i)
multiplying (x) the number of Preferred Shares 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.
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(i) The Company may elect on or after the date of any adjustment of the
Purchase Price as a result of the calculations made in Section 11(b) to
adjust the number of Rights, in substitution for any adjustment in the number
of Preferred Shares purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one-thousandths of a Preferred Share for which
a Right was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest 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 ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 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 Preferred Shares issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per one one-thousandth of a Preferred Share and the number
of one-thousandths of a Preferred Share which were expressed in the initial
Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the par or stated value, if any, of the number of
one-thousandths of a Preferred Share issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
as fully paid and nonassessable shares such number of one-thousandths of a
Preferred Share at such adjusted Purchase Price.
(1) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the number of one-thousandths of a Preferred Share and other capital stock
or securities of the Company, if any,
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issuable upon such exercise over and above the number of one-thousandths of a
Preferred Share 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)
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, prior
to the Distribution Date, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred or Common Shares, (ii) issuance
wholly for cash of any Preferred or Common Shares at less than the current
market price, (iii) issuance wholly for cash of Preferred or Common Shares or
securities which by their terms are convertible into or exchangeable for
Preferred or Common Shares, (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 or Common Shares shall not be taxable to
such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, effect or permit to occur any Triggering Event
or Section 13 Event, if (i) at the time or immediately after such Triggering
Event or Section 13 Event there are any rights, warrants or other instruments
or securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights or (ii) prior to, simultaneously with or immediately after such
Section 13 Event, the stockholders of the Person who constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(b) 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 Sections 23, 24 or 27 hereof, take (or
permit to be taken) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares (by reverse stock split or otherwise) into a smaller number
of Preferred Shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such reclassification
in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), then, in each such event, except as
otherwise provided in this Section 11 and Section 7(e) hereof: (1) each of
the Rights outstanding at the time of the record date for such dividend or
the effective date of such subdivision, combination or reclassification shall
be proportionately adjusted to that number of Rights (calculated to the
nearest one ten-thousandth (1/10,000) of a Right) equal to a fraction (the
"EXCHANGE FRACTION"), the numerator of which shall be the total number of
Preferred Shares or shares of capital stock issued in such reclassification
of the Preferred Shares outstanding immediately following such time and the
deno minator of which shall be the total number of Preferred Shares
outstanding immediately prior to such time, and the number of Rights that
shall
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thereafter be issued with respect to each Common Share or share of other
capital stock that shall be issued in a reclassification of the Common Shares
prior to the Distribution Date shall be equal to the total number of
outstanding Rights immediately after such event (as adjusted pursuant to this
clause (1)) divided by the total number of outstanding Common Shares or
shares of such other capital stock immediately after such event (subject to
further adjustment pursuant to the provisions of this Agreement); (2) the
Purchase Price in effect at the time of the record date for such dividend or
of the effective date of such subdivision, combination or reclassification
shall be adjusted so that the Purchase Price thereafter shall equal the
result obtained by dividing the Purchase Price in effect immediately prior to
such time by the Exchange Fraction; PROVIDED, HOWEVER, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of one-thousandths of a
Preferred Share or share of such other capital stock issuable upon the
exercise of each Right shall remain unchanged immediately after such event,
but, in the event of a reclassification, the kind of shares issuable upon the
exercise of each Right immediately after such reclassification shall be
adjusted to be the kind of shares of such other capital stock issued in such
reclassification, rather than Preferred Shares.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 26
hereof. Notwithstanding the foregoing sentence, the failure of the Company
to make such certification or give such notice shall not affect the validity
of such adjustment or the force or effect of the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment contained therein and shall not be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Shares Acquisition Date, directly
or indirectly:
(i) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction the
principal purpose of which is to change the state of incorporation of the
Company or that complies with Section 11(o) hereof);
(ii) any Person (other than a Subsidiary of the Company in a transaction
that complies with Section 11(o) hereof) shall consolidate with the Company,
or merge with and into the Company and the Company shall be the continuing or
surviving corporation of such consolidation or merger; or
(iii) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power
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aggregating 50% or more 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 or one or more of its wholly owned Subsidiaries in one or more
transactions, each of which complies with Section 11(o) hereof),
then, and in each such case, proper provision shall be made so that
(A) each holder of a Right (except as otherwise provided herein) shall
thereafter have the right to receive, upon the exercise thereof in accordance
with the terms of this Agreement, such number of validly authorized and
issued, fully paid and nonassessable Common Shares of the Principal Party (as
hereinafter defined), free of 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-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Triggering Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of such one-thousandths of a Preferred Share
for which a Right was exercisable immediately prior to the first occurrence
of a Triggering Event by the Purchase Price in effect immediately prior to
such first occurrence) and (2) dividing that product (which, following the
first occurrence of a Section 13 Event, shall be referred to as the "TOTAL
EXERCISE PRICE" for each Right and for all purposes of this Agreement) by 50%
of the current per share market price (determined pursuant to Section 11(d)
hereof) of the Common Shares of such Principal Party on the date of
consummation of such Section 13 Event;
(B) 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;
(C) 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;
(D) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common Shares) 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 Common Shares thereafter
deliverable upon the exercise of the Rights.
(b) "PRINCIPAL PARTY" shall mean, in the case of any transaction
described in clause (i), (ii) or (iii) of Section 13(a), the Person referred
to therein or such Person's successor, including, if applicable, the Company,
if it is the surviving corporation), PROVIDED, HOWEVER, that in any such
case, (i) if such Person is a direct or indirect Subsidiary of another
Person, "Principal Party" shall refer to such other Person and (ii) in case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
"Principal Party" shall refer to whichever of such Persons is the issuer of
the Common Shares having the greatest aggregate value, and PROVIDED, FURTHER,
that for purposes of transactions described in clause (iii) hereof,
"Principal Party" shall refer to that
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Person receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions.
(c) If, for any reason, the Rights cannot be exercised for Common
Shares of such Principal Party as provided in Section 13(a), then each holder
of Rights shall have the right to exchange its Rights for cash from such
Principal Party in an amount equal to the number of Common Shares that it
would otherwise be entitled to purchase times 50% of the current per share
market price, as determined pursuant to Section 11(d) hereof, of such Common
Shares of such Principal Party. If, for any reason, the foregoing
formulation cannot be applied to determine the cash amount into which the
Rights are exchangeable, then the Board of Directors, based upon the advice
of one or more nationally recognized investment banking firms, and based upon
the total value of the Company, shall determine such amount reasonably and
with good faith to the holders of Rights. Any such determination shall be
final and binding on the Rights Agent.
(d) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in clauses (i) and (ii)
of Section 13(a) if: (i) such transaction is consummated with a Person or
Persons who acquired Common Shares pursuant to a Permitted Offer (or a
wholly-owned Subsidiary of any such Person or Persons); (ii) the price per
share of Common Shares offered in such transaction is not less than the price
per share of Common Shares paid to all holders of Common Shares whose shares
were purchased pursuant to such Permitted Offer; and (iii) the form of
consideration being offered to the remaining holders of Common Shares
pursuant to such transaction is the same form as the form of consideration
paid pursuant to such Permitted Offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder shall
expire.
(e) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized Common Shares
that have not been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless prior
thereto the Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement confirming that such Principal Party
shall, upon consummation of such Section 13 Event, assume this Agreement in
accordance with Sections 13(a) and (b) hereof, that all rights of first
refusal or preemptive rights in respect of the issuance of Common Shares of
such Principal Party upon exercise of outstanding Rights have been waived,
that there are no rights, warrants, instruments or securities outstanding or
any agreements or arrange ments which, as a result of the consummation of
such transaction, would eliminate or substantially diminish the benefits
intended to be afforded by the Rights and that such transaction shall not
result in a default by such Principal Party under this Agreement, and further
providing that, as soon as practicable after the date of such Section 13
Event, such Principal Party will:
(i) prepare and file a registration statement under the Securities Act
with respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing and use its best efforts to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date, and similarly comply with
applicable state securities laws;
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(ii) use its best efforts to list (or continue the listing of) the
Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical financial statements
for such Principal Party which comply in all respects with the requirements
for registration on Form 10 (or any successor form) under the Exchange Act.
In the event that at any time after the occurrence of a Triggering Event
some or all of the Rights shall not have been exercised at the time of a
transaction described in this Section 13, the Rights which have not
theretofore been exercised shall thereafter be exercisable in the manner
described in Section 13(a) (without taking into account any prior adjustment
required by Section 11(a)(ii)).
(f) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates that evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders of
the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
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, as determined pursuant
to the second sentence of Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions that are integral multiples of one one-thousandth of a
Preferred Share). In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth of a Preferred Share, the Company
shall pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a Common Share. For purposes of this
Section 14(b), the current market value of a Common Share shall be the
closing price of a Common Share (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading Day immediately prior to
the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his or her right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Rights Certificates (and, prior to the Distribution Date, the
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registered holders of the Common Shares); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his or her own behalf and for his or her 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 or her
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 will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this 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 the Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the 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; and
(c) subject to Sections 6(a) and 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
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 Preferred Shares or
any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained
herein or in any 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 25 hereof), or
to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
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Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Agreement in reliance upon any
Rights Certificate or certificate for the Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice
of counsel as set forth in Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
shareholder services business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties hereto; PROVIDED, HOWEVER, that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the 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 Rights Agent 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
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the 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
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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 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 (who may be legal
counsel for the Company), and the opinion or advice of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion or advice.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current per share market price") be proved or established
by the Company prior to taking or suffering any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Chief Financial
Officer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own negligence, bad faith or willful misconduct;
provided, however, that the Rights Agent shall not be liable for special,
indirect, incidental or consequential loss or damage.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify
the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any change in the exercisability
of the Rights or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 or
24, or the ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights evidenced
by Rights Certificates after receipt by the Rights Agent of a certificate
furnished pursuant to Section 12 describing such change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares to be
issued pursuant to this Agreement or any Rights Certificate or as to whether
any Preferred Shares will, when issued, be validly authorized and issued,
fully paid and nonassessable.
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(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chief Executive Officer, the President, any Vice President, the
Chief Financial Officer, the Secretary or any Assistant Secretary of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken
or suffered by it in good faith in accordance with instructions of any such
officer or for any delay in acting while waiting for those instructions. Any
application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action
proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for
any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in
such application (which date shall not be less than five (5) Business Days
after the date any officer of the Company actually receives such application,
unless any such officer shall have consented in writing to an earlier date)
unless, prior to taking any such action (or the effective date in the case of
an omission), the Rights Agent shall have received written instructions in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been completed or indicates an affirmative response
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to clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the Company
and to each transfer agent of the Preferred Shares and the Common Shares 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 thirty (30) days' notice in writing, mailed to
the Rights Agent or successor Rights Agent, as the case may be, and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his or her Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be either (a) a
corporation organized and doing business under the laws of the United States
or of any state of the United States, in good standing, which is authorized
under such laws to exercise corporate trust or stockholder services powers
and is subject to supervision or examination by federal or state authority
and which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $50 million or (b) an affliate of such a
corporation. 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 Preferred Shares and the Common Shares, and mail a
notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or validity of
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW 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 the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following
the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to Common Shares so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement or upon the exercise, conversion or exchange of the convertible
subordinated debentures of the Company outstanding at the date hereof or upon
the exercise, conversion or exchange of securities hereinafter issued by
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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 and this sentence shall be null and void AB INITIO if, and to
the extent that, such issuance or this sentence would create a significant
risk of or result in material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued or would create a
significant risk of or result in such options' or employee plans' or
arrangements' failing to qualify for otherwise available special tax
treatment and (ii) no such 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.
(a) The Company may, at its option and with the approval of the Board
of Directors, at any time prior to the Close of Business on the earlier of
(i) the tenth day following the Shares Acquisition Date or such later date as
may be determined by action of a majority of Continuing Directors then in
office and publicly announced by the Company 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, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being herein referred to as the "Redemption
Price") and the Company may, at its option, pay the Redemption Price either
in Common Shares (based on the current per share market price thereof (as
determined pursuant to Section 11(d) hereof) at the time of redemption) or
cash; PROVIDED, HOWEVER, if the Board of Directors of the Company authorizes
redemption of the Rights on or after the time a Person becomes an Acquiring
Person, then there must be Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such Continuing
Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have
been filed with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price. Within ten (10) days after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights
by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase for value any Rights at any
time in any manner other than that specifically set forth in this Section 23
or in Section 24 hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
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Section 24. EXCHANGE.
(a) Subject to applicable laws, rules and regulations, and subject to
subsection (c) below, the Company may, at its option, by majority vote of the
Board of Directors and a majority vote of the Continuing Directors, at any
time after the occurrence of a Triggering Event, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for
Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "RATIO OF EXCHANGE"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the terms
of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of 50% or more of the Common Shares then
outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number
of such Rights held by such holder multiplied by the Ratio of Exchange. The
Company shall give public notice of any such exchange; PROVIDED, HOWEVER,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange
of Rights as contemplated in accordance with Section 24(a), the Company shall
either take such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights or alternatively, at the
option of a majority of the Board of Directors, with respect to each Right
(i) pay cash in an amount equal to the Current Value (as hereinafter
defined), in lieu of issuing Common Shares in exchange therefor, or (ii)
issue debt or equity securities or a combination thereof, having a value
equal to the Current Value, in lieu of issuing common Shares in exchange for
each such Right, where the value of such securities shall be determined by a
nationally recognized investment banking firm selected by the Board of
Directors by majority vote of the Board of Directors, or (iii) deliver any
combination of cash, property, Common Shares and/or other securities having a
value equal to the Current Value in exchange for each Right. For purposes of
this Section 24(c) only, the Current Value shall mean the product of the
current per share market price of Common Shares (determined pursuant to
Section 11(d) on the date of the occurrence of the event described
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above in subparagraph (a)) multiplied by the number of Common Shares for
which the Right otherwise would be exchangeable if there were sufficient
shares available. To the extent that the Company determines that some action
need be taken pursuant to clauses (i), (ii) or (iii) of this Section 24(c),
the Board of Directors may temporarily suspend the exercisability of the
Rights for a period of up to sixty (60) days following the date on which the
event described in Section 24(a) shall have occurred, in order to seek any
authorization of additional Common Shares and/or to decide the appropriate
form of distribution to be made pursuant to the above provision and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily suspended.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates that evidence fractional Common Shares.
In lieu of such fractional Common Shares, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash equal
to the same fraction of the current per share market value of a whole Common
Share (as determined pursuant to the second sentence of Section 11(d) hereof).
(e) The Company may, at its option, by majority vote of the Board of
Directors, at any time before any Person has become an Acquiring Person,
exchange all or part of the then outstanding Rights for rights of
substantially equivalent value, as determined reasonably and with good faith
by the Board of Directors, based upon the advice of one or more nationally
recognized investment banking firms.
(f) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (e) of this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of rights in exchange therefor as has
been determined by the Board of Directors in accordance with subsection (e)
above. The Company shall give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the transfer agent for the Common
Shares of the Company. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Rights will be effected.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose to effect or permit to occur any
Section 13 Event, the Company shall give notice thereof to each holder of
Rights in accordance with Section 26 hereof at least twenty (20) days prior
to occurrence of such Section 13 Event.
(b) In case any Triggering Event or Section 13 Event shall occur, then,
in any such case, the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, in accordance with Section 26 hereof, a
notice of the occurrence of such event, which
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shall specify the event and the consequences of the event to holders of
Rights under Sections 11(a)(ii) and 13 hereof.
Section 26. NOTICES. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent) as follows:
Conceptus, Inc.
1021 Howard Avenue
San Carlos, CA 94070
Attention: President
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.C.
50 California Street, 10th Floor
San Francisco, CA 94111
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Rights Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on
the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the Distribution
Date, the Company may supplement or amend this Agreement in any respect
without the approval of any holders of Rights and the Rights Agent shall, if
the Company so directs, execute such supplement or amendment. From and after
the Distribution Date, the Company and the Rights Agent may from time to time
supplement or amend this Agreement without the approval of any holders of
Rights in order to (i) cure any ambiguity, (ii) correct or supplement any
provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) shorten or lengthen any time period hereunder
(which lengthening or shortening, following the first occurrence of an event
set forth in clauses (i) and (ii) of the proviso 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 may
deem necessary or desirable and that shall not adversely affect the interests
of the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); 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
that states that the proposed supplement or amendment is in
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compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of
which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company (and, where
specifically provided for herein, the Continuing Directors) shall have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board, or the Company (or,
where specifically provided for herein, the Continuing Directors), or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of
this Agreement and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a determination to redeem
or not redeem the Rights or to amend the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board (or, where specifically provided for herein, by the
Continuing Directors) in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights
Certificates and all other parties and (y) not subject the Board or the
Continuing Directors to any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, the Common Shares).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be
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<PAGE>
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 32. GOVERNING LAW. This Agreement and each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
Section 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Preferred Shares
Rights Agreement to be duly executed as of the day and year first above
written.
CONCEPTUS, INC.
By: /s/ Kathryn A. Tunstall
-------------------------------------
Name: Kathryn A. Tunstall
Title: President and Chief Executive
Officer
CHASEMELLON SHAREHOLDER SERVICES, L.L.C
By: /s/ Joseph W. Thatcher
-------------------------------------
Name: Joseph W. Thatcher
-----------------------------------
Title: Assistant Vice President
----------------------------------
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<PAGE>
EXHIBIT A
CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
AND PRIVILEGES OF
SERIES A PARTICIPATING PREFERRED STOCK
OF
CONCEPTUS, INC.
Pursuant to Section 151 of the General Corporation Law of the State of
Delaware
We, Kathryn A. Tunstall and Michael W. Hall, the President and the
Secretary, respectively, of Conceptus, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware, in
accordance with the provisions of Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the said Corporation, the said Board of
Directors on February 27, 1997 adopted the following resolution creating a
series of shares of Preferred Stock designated as Series A Participating
Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of the corporation by the Certificate of Incorporation, the Board
of Directors does hereby provide for the issue of a series of Preferred
Stock, $0.003 par value, of the Corporation, to be designated ""SERIES A
PARTICIPATING PREFERRED STOCK", initially consisting of thirty thousand
(30,000) shares and to the extent that the designations, powers, preferences
and relative and other special rights and the qualifications, limitations and
restrictions of the Series A Participating Preferred Stock are not stated and
expressed in the Certificate of Incorporation, does hereby fix and herein
state and express such designations, powers, preferences and relative and
other special rights and the qualifications, limitations and restrictions
thereof, as follows (all terms used herein which are defined in the
Certificate of Incorporation shall be deemed to have the meanings provided
therein):
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Participating Preferred Stock", par value $0.003
per share, and the number of shares constituting such series shall be thirty
thousand (30,000).
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior right of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Participating Preferred Stock with respect to dividends,
the holders of shares of Series A Participating
<PAGE>
Preferred Stock shall be entitled to receive when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the last 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 A Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount
of all cash dividends, and 1,000 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other than
a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock 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 A Participating Preferred Stock. In
the event the Corporation shall at any time after February 27, 1997 (the
"RIGHTS DECLARATION DATE") (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of shares of Series A
Participating Preferred Stock were entitled immediately prior to such event
under the preceding sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Participating Preferred 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).
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Participating Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Participating Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of
holders of shares of Series A Participating Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid
dividends shall not bear interest. Dividends paid on the shares of Series A
Participating Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Participating Preferred 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.
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<PAGE>
Section 3. VOTING RIGHTS. The holders of shares of Series A
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Participating Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the stockholders
of the Corporation. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the number of votes per share to which holders of shares of
Series A Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Participating Preferred 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) Except as required by law, holders of Series A Participating
Preferred Stock shall have no special voting rights and their consent shall
not be required (except to the extent they are entitled to vote with holders
of Common Stock as set forth herein) for taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) The Corporation shall not declare any dividend on, make any
distribution on, or redeem or purchase or otherwise acquire for consideration
any shares of Common Stock after the first issuance of a share or fraction of
a share of Series A Participating Preferred Stock unless concurrently
therewith it shall declare a dividend on the Series A Participating Preferred
Stock as required by Section 2 hereof.
(B) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Participating Preferred Stock as provided in Section
2 are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Participating
Preferred Stock outstanding shall 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 A Participating Preferred Stock;
(ii) declare or pay dividends on, 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 Series A Participating Preferred
Stock, except dividends paid ratably on the
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<PAGE>
Series A Participating Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of
any stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Participating Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Participating
Preferred Stock;
(iv) purchase or otherwise acquire for consideration any shares of Series
A Participating Preferred Stock, or any shares of stock ranking on a parity
with the Series A Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(C) 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. REACQUIRED SHARES. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock 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 A Participating
Preferred Stock unless, prior thereto, the holders of shares of Series A
Participating Preferred Stock shall have received an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment, plus an amount equal to the greater of (1) $1,000
per share, provided that in the event the Corporation does not have
sufficient assets, after payment of its liabilities and distribution to
holders of Preferred Stock ranking prior to the Series A Participating
Preferred Stock, available to permit payment in full of the $1,000 per share
amount, the amount required to be paid under this Section 6(A)(1) shall,
subject to Section 6(B) hereof, equal the value of the amount of available
assets divided by the number of outstanding shares of Series A Participating
Preferred Stock or (2) subject to the provisions for adjustment hereinafter
set forth, 1,000 times the aggregate per share amount to be
-4-
<PAGE>
distributed to the holders of Common Stock (the greater of (1) or (2), the
"Series A Liquidation Preference"). In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which holders of
shares of Series A Participating Preferred Stock were entitled immediately
prior to such event under clause (2) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock that were outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other series of Preferred Stock, if
any, which rank on a parity with the Series A Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation preferences.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series A Participating Preferred Stock shall at the same time
be similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of Series
A Participating Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. NO REDEMPTION. The shares of Series A Participating
Preferred Stock shall not be redeemable.
Section 9. RANKING. The Series A Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as
to the payment of dividends and the distribution of assets, unless the terms
of any such series shall provide otherwise.
Section 10. AMENDMENT. The Certificate of Incorporation of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preference or special rights of the Series A
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding
shares of Series A Participating Preferred Stock, voting separately as a
class.
-5-
<PAGE>
Section 11. FRACTIONAL SHARES. Series A Participating Preferred
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 A Participating Preferred Stock.''
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this ____ day
of ______________, _____.
________________________________________
President
ATTEST:
_______________________________
Secretary
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<PAGE>
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- ______ Rights
NOT EXERCISABLE AFTER FEBRUARY 26, 2007, OR EARLIER IF
TERMINATED 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 OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE 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 RIGHTS AGREEMENT.]*
RIGHTS CERTIFICATE
This certifies that ________________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Preferred Shares Rights Agreement, dated as of February 27, 1997 (the
"RIGHTS AGREEMENT"), between Conceptus, Inc., a Delaware corporation (the
"COMPANY"), and ChaseMellon Shareholder Services, L.L.C. (the "RIGHTS AGENT"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to 5:00 P.M., San Francisco,
California time, on February 26, 2007, at the office of the Rights Agent
designated for such purpose, or at the office of its successor as Rights Agent,
one one-thousandth (1/1,000) of a fully paid non-assessable share of Series A
Participating Preferred Stock (the "PREFERRED SHARES"), of the Company, at a
purchase price of $80.00 per one-thousandth of a Preferred 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
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, are the number and Purchase Price as of _____________,
____, based on the Preferred Shares as constituted at such date. As provided
in the Rights Agreement, the Purchase Price and the number and kind of
Preferred Shares or other securities which may be
______________________________
*The portion of the legend in bracket shall be inserted only if applicable
and shall replace the preceding sentence.
<PAGE>
purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in
the Rights Agreement. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned office of
the Rights Agent.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company, at its option,
at a redemption price of $.01 per Right or (ii) may be exchanged by the
Company in whole or in part for Common Shares, substantially equivalent
rights or other consideration as determined by the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may
be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate amount of securities as the Rights evidenced by the Rights
Certificate or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised 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.
No fractional portion less than integral multiples of one one-thousandth
of a Preferred Share will be issued upon the exercise of any Right or Rights
evidenced hereby but in lieu thereof a cash payment will be made, as provided
in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such,
any of the rights of a 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 or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
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<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _______________ , 19__.
ATTEST: CONCEPTUS, INC.
___________________________ By:_____________________________________
Secretary President
Countersigned:
ChaseMellon Shareholder Services, L.L.C.
____________________________
as Rights Agent
By:_________________________
Authorized Signature
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<PAGE>
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificate)
FOR VALUE RECEIVED______________________________________________hereby sells,
assigns and transfers unto___________________________________________________
(Please print name and address of transferee)
_____________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
Attorney, to transfer the Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated:___________________________, 19__
________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or any other member of a medallion
signature guarantee program approved by the Securities Transfer Association.
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<PAGE>
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 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 any such Person.
Dated:________________________, _____
________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or any other member of a medallion
signature guarantee program approved by the Securities Transfer Association.
-5-
<PAGE>
Form of Reverse Side of Rights Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Rights Certificate)
To:___________________________________
The undersigned hereby irrevocably elects to exercise Rights represented
by this Rights Certificate to purchase the number of one-thousandths of a
Preferred Share issuable upon the exercise of such Rights and requests that
certificates for such number of one-thousandths of a Preferred Share be
issued in the name of:
Please insert social security or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance shall be registered in
the name of and delivered to:
Please insert social security or other identifying number
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated:_____________________________, ______
________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or any other member of a medallion
signature guarantee program approved by the Securities Transfer Association.
-6-
<PAGE>
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such 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 any such Person.
Dated:_____________________________, _____
________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or any other member of a medallion
signature guarantee program approved by the Securities Transfer Association.
-7-
<PAGE>
Form of Reverse Side of Rights Certificate -- continued
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
-8-
<PAGE>
EXHIBIT C
CONCEPTUS, INC.
STOCKHOLDER RIGHTS PLAN
SUMMARY OF RIGHTS
DISTRIBUTION AND The Board of Directors has declared a dividend of one
TRANSFER OF RIGHTS; Right for each share of Common Stock of Conceptus, Inc.
RIGHTS CERTIFICATE: (the "COMPANY") outstanding. Prior to the Distribution
Date referred to below, the Rights will be evidenced by
and trade with the certificates for the Common Stock.
After the Distribution Date, the Company will mail
Rights certificates to the Company's stockholders and
the Rights will become transferable apart from the
Common Stock.
DISTRIBUTION DATE: Rights will separate from the Common Stock and become
exercisable following the tenth day (or such later date
as may be determined by a majority of the Directors not
affiliated with the acquiring person or group (the
"CONTINUING DIRECTORS")) after a person or group
(a) acquires beneficial ownership of 20% or more of the
Company's Common Stock, or (b) announces a tender or
exchange offer, the consummation of which would result
in ownership by a person or group of 20% or more of the
Company's Common Stock.
PREFERRED STOCK After the Distribution Date, each Right will entitle the
PURCHASABLE UPON holder to purchase, for $80.00, a fraction of a share of
EXERCISE OF RIGHTS: the Company's Preferred Stock with economic terms
similar to that of one share of the Company's Common
Stock.
FLIP-IN: If an acquiror (an "ACQUIRING PERSON") obtains 20% or
more of the Company's Common Stock (other than pursuant
to a tender offer deemed fair by the Board of Directors
(a "PERMITTED OFFER")), THEN each Right (other than
Rights owned by an Acquiring Person or its affiliates)
will entitle the holder thereof to purchase, for the
exercise price, a number of shares of the Company's
Common Stock having a then current market value of twice
the exercise price.
<PAGE>
FLIP-OVER: If, after the Shares Acquisition Date (defined below),
(a) the Company merges into another entity, (b) an
acquiring entity merges into the Company or (c) the
Company sells more than 50% of the Company's assets or
earning power, THEN each Right (other than Rights owned
by an Acquiring Person or its affiliates) will entitle
the holder thereof to purchase, for the exercise price,
a number of shares of Common Stock of the person
engaging in the transaction having a then current market
value of twice the exercise price (unless the
transaction satisfies certain conditions and is
consummated with a person who acquired shares pursuant
to a Permitted Offer, in which case the Rights will
expire).
EXCHANGE PROVISION: At any time after an event triggering the flip-in or
flip-over rights and prior to the acquisition by the
Acquiring Person of 50% or more of the outstanding
Common Stock, the Board of Directors of the Company
may exchange the Rights (other than Rights owned by
the Acquiring Person or its affiliates), in whole
or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
REDEMPTION OF Rights will be redeemable at the Company's option for
THE RIGHTS: $0.01 per Right at any time on or prior to the tenth day
(or such later date as may be determined by a majority
of the Continuing Directors) after public announcement
that a person has acquired beneficial ownership of 20%
or more of the Company's Common Stock (the "SHARES
ACQUISITION DATE").
EXPIRATION OF The Rights expire on the earliest of (a) February 26,
THE RIGHTS: 2007, (b) exchange or redemption of the Rights as
described above or (c) consummation of a merger or
consolidation or sale of assets resulting in expiration
of the Rights as described above.
AMENDMENT OF TERMS The terms of the Rights and the Rights Agreement may be
OF RIGHTS: amended in any respect without the consent of the Rights
holders on or prior to the Distribution Date;
thereafter, the terms of the Rights and the Rights
Agreement may be amended without the consent of the
Rights holders in order to cure any ambiguities or
to make changes which do not adversely affect the
interests of Rights holders (other than the Acquiring
Person).
VOTING RIGHTS: Rights will not have any voting rights.
<PAGE>
ANTI-DILUTION Rights will have the benefit of certain customary anti-
PROVISIONS: dilution provisions.
TAXES: The Rights distribution should not be taxable for
federal income tax purposes. However, following an
event which renders the Rights exercisable or upon
redemption of the Rights, stockholders may recognize
taxable income.
The foregoing is a summary of certain principal terms of the Stockholder
Rights Plan only and is qualified in its entirety by reference to the
detailed terms of the Rights Agreement dated as of February 27, 1997, between
the Company and the Rights Agent.
