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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
UROMED CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Massachusetts 04-3104185
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(State of Incorporation of Organization) (I.R.S. Employer
Identification No.)
64 A Street
Needham, Massachusetts 02194
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(Address of principal executive offices) (zip code)
If this Form relates to the registration of If this Form relates to the
a class of debt securities and is effective registration of a class of
upon filing pursuant to General debt securities and is
Instruction A(c)(1) please check the to become effective
following box. / / simultaneously with the
effectiveness of a concurrent
registration statement under
the Securities Act of 1933
pursuant to General
Instruction A(c)(2) please
check the following box. / /
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Each
to be so Registered Class is to be Registered
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None None
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SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Preferred share purchase rights
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(TITLE OF CLASS)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered
As of June 24, 1997, the Board of Directors of UroMed Corporation, a
Massachusetts corporation (the "Company"), declared a dividend distribution
of one preferred share purchase right (a "Right") for each outstanding share
of common stock, no par value per share (the "Common Shares"), of the
Company. The dividend is payable on July 9, 1997 (the "Record Date") to the
stockholders of record on that date. Except as described below, each Right,
when exercisable, entitles the registered holder to purchase from the Company
one one-thousandth of a share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Shares"), of the Company at a
price of $22.00 per one one-thousandth of a Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement") between the Company
and State Street Bank and Trust Company, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights certificates will be
distributed. Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated
persons (an "Acquiring Person", which does not include certain institutional
investors which temporarily exceed the 15% threshold, and which does not
include John G. Simon, the current President and Chief Executive Officer of
the Company, and his associates so long as together they own less than 25% of
the Common Shares) have acquired beneficial ownership of 15% or more of the
outstanding Common Shares (the date of such an announcement being a "Shares
Acquisition Date"), or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person) following the commencement of, or
announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of such outstanding Common Shares (the earliest of such
dates being called the "Distribution Date"), the Rights will be evidenced,
with respect to any of the Common Share certificates outstanding as of the
Record Date, by such Common Share certificate together with a copy of the
Summary of Rights to be distributed to stockholders shortly after July 9,
1997 (the "Summary of Rights").
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the
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Record Date, even without such 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. As soon
as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Rights Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on the Distribution
Date, and the separate Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on July 9, 2007 (the "Final Expiration Date"), unless the Rights
are earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion
price, less than the then current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences
of indebtedness or assets (excluding regular periodic cash dividends paid out
of earnings or retained earnings or dividends payable in Preferred Shares) or
of subscription rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such
case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to a
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 minimum preferential liquidation payment of $10.00 per share
but will be entitled to an aggregate payment of 1,000 times the payment made
per Common Share. Each Preferred Share will have 1,000 votes, voting together
with the Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 1,000 times the amount received per Common Share.
these rights are protected by customary antidilution provisions.
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Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a Preferred
Share purchasable upon exercise of each Right is intended to approximate the
value of one Common Share.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction in
which the Common Shares are exchanged or changed, or 50% or more of the
Company's consolidated assets or earning power are sold (in one transaction
or a series of transactions), proper provision will be made so that each
holder of a Right (other than an Acquiring Person) will thereafter have the
right to receive, upon the exercise thereof at the then current exercise
price of the Right, that number of shares of common stock of the acquiring
company (or, in the event there is more than one acquiring company, the
acquiring company receiving the greatest portion of the assets or earning
power transferred) which at the time of such transaction would have a market
value of two times the exercise price of the Right.
In the event that (i) any person becomes an Acquiring person, (ii) an
Acquiring Person engages in one or more "self-dealing" transactions as set
forth in the Rights Agreement, or (iii) during such time as there is an
Acquiring Person, there shall be a reclassification of securities or a
recapitalization or reorganization of the Company or other transaction or
series of transactions involving the Company which has the effect of
increasing by more that 1% the proportionate share of the outstanding shares
of any class of equity securities of the Company or any of its subsidiaries
beneficially owned by the Acquiring Person, proper provision shall be made so
that each holder of a Right, other than Rights benficially owned by any
Acquiring Person, will thereafter have the right to receive upon exercise
that number of Common Shares having a market value of two times the exercise
price of the Right. Upon occurrence of any of the events described in the
immediately preceding sentence, any Rights that are, or (under certain
circumstances specified in the Rights Agreement) were beneficially owned by
an Acquiring Person shall immediately become null and void. At any time after
the occurrence of any such event and prior to the acquisition by any person
or group of 50% or more of the outstanding Common Shares, the Continuing
Directors (as defined below) may exchange the Rights (other than Rights owned
by an Acquiring Person and certain related persons which have become void),
in whole or in part, at an exchange ratio of one Common Share, or one
one-thousandth of a Preferred Share (or of a share of a class or series of
the Company's preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional preferred Shares will be issued (other than
fractions which are
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integral multiples of one one-thousandth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier of (i) the tenth day after a Shares
Aquisition Date, or (ii) the expiration of the Rights, the Board of Directors
may redeem the Rights in whole, but not in part, at a price of $.001 per
Right (the "Redemption Price"). Under certain circumstances set forth in the
Rights Agreement, such a redemption would require the concurrence of the
Company's "Continuing Directors", that is, any director who is not an
Acquiring Person or an affiliate or associate of an Acquiring Person and who
was in office prior to the date of the Rights Agreement or subsequently
nominated by a majority of the Continuing Directors. Thereafter, the Rights
may only be redeemed by the Continuing Directors in whole, but not in part,
at the Redemption Price, (a) under certain circumstances described in the
Rights Agreement involving a disposition of Common Shares by the Acquiring
Person such that the Acquiring Person's common share ownership is reduced to
10% or less, or (b) if such redemption is incidental to a merger or other
business combination transaction or series of transactions involving the
Company but not involving an Acquiring Person and satisfying certain other
conditions. The redemption of the rights may be made effective at such time
on such basis and with such conditions as the Board of Directors or the
Continuing Directors, as the case may be, in their sole discretion may
establish. Immediately upon any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by
the Board of Directors of the Company prior to the Distribution Date. After
the Distribution Date, the provisions of the Rights Agreement may be amended
by the Board (in certain circumstances, with the concurrence of the
Continuing Directors) in order to cure any ambiguity, to make changes that
do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten or lengthen any time
period under the Rights Agreement; provided, however, that no amendment to
adjust the time period governing redemption shall be made at such time as the
Rights are not redeemable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the
right to vote or to receive dividends.
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A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, which is hereby incorporated herein by reference.
Item 2. Exhibits
1. Rights Agreement, dated as of June 26, 1997, including Exhibits
thereto, between the Company and State Street Bank and Trust Company, as
Rights Agent.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant as duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
UROMED CORPORATION
By: /s/ John G. Simon
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John G. Simon, President and
Chief Executive Officer
DATED: June 30, 1997
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Exhibit 1
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UROMED CORPORATION
and
STATE STREET BANK AND TRUST COMPANY,
as Rights Agent
Rights Agreement
Dated as of June 26, 1997
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions........................................ 1
Section 2. Appointment of Rights Agent................................ 6
Section 3. Issue of Rights Certificates............................... 6
Section 4. Form of Rights Certificates................................ 8
Section 5. Countersignature and Registration.......................... 9
Section 6. Transfer, Split-Up, Combination and Exchange
of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights
Certificates............................................. 10
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.................................. 10
Section 8. Cancellation and Destruction of Rights
Certificates............................................... 12
Section 9. Reservation and Availability of Preferred
Shares..................................................... 13
Section 10. Preferred Shares Record Date............................... 14
Section 11. Adjustment of Purchase Price, Number
and Kind of Shares or Number of Rights..................... 14
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares........................................... 24
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power of the Company.................. 25
Section 14. Additional Covenants....................................... 28
Section 15. Fractional Rights and Fractional Shares.................... 28
Section 16. Rights of Action........................................... 30
Section 17. Agreement of Rights Holders................................ 30
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Section 18. Rights Certificate Holder Not Deemed a
Stockholder................................................ 31
Section 19. Concerning the Rights Agent................................ 31
Section 20. Merger or Consolidation or Change of
Name of Rights Agent....................................... 32
Section 21. Duties of Rights Agent..................................... 32
Section 22. Change of Rights Agent..................................... 34
Section 23. Issuance of New Rights Certificates........................ 35
Section 24. Redemption................................................. 35
Section 25. Exchange................................................... 37
Section 26. Notice of Certain Events................................... 39
Section 27. Notices.................................................... 40
Section 28. Supplements and Amendments................................. 40
Section 29. Determination and Actions by the
Board of Directors, Etc.................................... 41
Section 30. Successors................................................. 42
Section 31. Benefits of this Agreement................................. 42
Section 32. Severability............................................... 42
Section 33. Governing Law.............................................. 42
Section 34. Counterparts............................................... 42
Section 35. Descriptive Headings....................................... 43
Signatures ........................................................... 44
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Exhibit A - Form of Certificate of Vote of Directors Establishing a Series
of a Class of Stock
Exhibit B - Form of Rights Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
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Rights Agreement, dated as of June 26, 1997, between UroMed Corporation,
a Massachusetts corporation (the "Company"), and State Street Bank and Trust
Company, a Massachusetts Trust Company (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend distribution 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 on July 9, 1997 (the "Record Date"),
each Right representing the right to purchase one one-thousandth of a
Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and in addition has authorized and directed the
issuance of one Right 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);
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person, shall be
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of
the Common Shares of the Company then outstanding or who was such a
Beneficial Owner at any time after the date hereof, whether or not such
Person continues to be the Beneficial Owner of 15% or more of the Common
Shares then outstanding, but shall not include any Simon Investor and any
Schedule 13G Investor, the Company, any Subsidiary (as such terms are
hereinafter defined) of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company, or any entity holding securities of the
Company organized, appointed or established by the Company or any Subsidiary
for or pursuant to the terms of any such plan. Notwithstanding the foregoing,
no Person shall become an "Acquiring Person" solely 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 15% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 15% 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".
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(b) "Adjusted Shares" shall have the meaning set forth in Section
11(a).
(c) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement.
(d) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "beneficially own" any securities:
(i) that such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not
in writing) or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own", (A) securities tendered pursuant to
a tender or exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
payment, purchase or exchange, or (B) securities issuable upon exercise
of Rights at any time prior to the occurrence of a Triggering Event, or
(C) securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event if such Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 23 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any Original Rights;
(iii) that such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act), including
without limitation pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", any security under this subparagraph (iii) as a
result of an oral or written agreement, arrangement or understanding to
vote such security if such agreement, arrangement or understanding:
(A) arises solely from a revocable proxy given in response to a
public proxy or consent solicitation made pursuant to, and in accordance
with, the applicable provisions of the General Rules and Regulations
under the
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Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iv) that are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with which
such Person (or any such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (iii) of
this paragraph (d)) or disposing of any voting securities of the Company
or any securities exerciseable for or convertible into voting securities
of the Company;
provided, however, that nothing in this paragraph (d) shall cause a Person
engaged in business as an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own", any securities acquired through such
Person's participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's beneficial ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the
number of such securities not then issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(e) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of the principal
office of the Rights Agent are authorized or obligated by law or executive
order to close.
(f) "Close of Business" on any given date shall mean 5:00 P.M.,
local time in the State of the principal office of the Rights Agent, on such
date; provided, however, that if such date is not a Business Day it shall
mean 5:00 P.M., local time in the State of the principal office of the Rights
Agent, on the next succeeding Business Day.
(g) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, no par value per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the
management, of such other Person or, if such other Person is a Subsidiary of
another Person, of the Person or Persons which ultimately control such
first-mentioned Person and which have issued and outstanding such capital
stock, equity securities or equity interests.
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(h) "Continuing Director" shall mean any director (not including
honorary directors) of the Company who (i) is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person and (ii) either was (A) a
member of the Board of Directors of the Company on the date hereof or (B)
nominated for his or her initial term of office by (x) at least one
Continuing Director and (y) a majority of the Continuing Directors in office
at the time of such nomination.
(i) "Current Value" shall have the meaning set forth in Section
11(a).
(j) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Exchange Ratio" shall have the meaning set forth in Section
25(a).
(m) "Expiration Date" shall have the meaning set forth in Section
7 hereof.
(n) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(o) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, business trust or other entity, and
shall include any successor (by merger or otherwise) of such entity.
(p) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company
having the rights and preferences set forth in the Form of Certificate of
Vote of Directors Establishing a Series of a Class of Stock attached to this
Agreement as Exhibit A.
(q) "Principal Party" shall have the meaning set forth in Section
13 hereof.
(r) "Purchase Price" shall have the meaning set forth in Section
4, subject to Section 11(a) hereof.
(s) "Record Date" shall mean July 9, 1997.
(t) "Redemption Date" shall have the meaning set forth in Section
7 hereof.
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(u) "Redemption Price" shall have the meaning set forth in Section
24 hereof.
(v) "Rights Certificates" shall have the meaning set forth in
Section 3(a) hereof.
(w) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(x) "Section 13 Event" shall mean any event described in clauses
(x), (y) or (z) of Section 13(a) hereof.
(y) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(z) "Schedule 13 Investor" means any Person that (i) acquires
beneficial ownership of 15% or more of the Common Shares of the Company then
outstanding, (ii) is eligible to, and does, report the beneficial ownership
of such Common Shares on Schedule 13G pursuant to the provisions of Rule
13d-1 under the Exchange Act, (iii) within sixty (60) days after acquiring
beneficial ownership of 15% or more of such Common Shares reduces its
beneficial ownership to less than 15% of the outstanding Common Shares and
(iv) at no time acquires beneficial ownership of 20% or more of the
outstanding Common Shares of the Company.
(aa) "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.
(bb) "Simon Investors" means John G. Simon together with his
Associates so long as John G. Simon and his Associates together beneficially
own less than 25% of the outstanding Common Shares of the Company at the
relevant time of determination.
(cc) "Spread" shall have the meaning set forth in Section 11(a)
hereof.
(dd) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person, or which is otherwise controlled by such Person.
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(ee) "Substitution Period" shall have the meaning set forth in
Section 11(a) hereof.
(ff) "Summary of Rights" shall have the meaning set forth in
Section 3(b) hereof.
(gg) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(hh) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) 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 upon ten (10) days' prior
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and in no event be liable for, the acts or omissions of any such
Co-Rights Agent. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agent and any Co-Rights Agents
shall be as the Company shall determine.
Section 3. Issue of Rights Certificates.
(a) Until the earliest of:
(i) the close of business on the tenth Business Day after
the Shares Acquisition Date; or
(ii) the tenth Business Day (or such later date as may be
determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person) after the date of the commencement
by any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms
of any such plan) of, or of the first public announcement of the
intention of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company or any entity holding Common Shares for or pursuant to
the terms of any such plan) to commence, a tender or exchange offer the
consummation of which would result in any Person becoming the Beneficial
Owner of Common Shares aggregating 15% or more of the then outstanding
Common Shares (including
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any such date which is after the date of this Agreement and
prior to the issuance of the Rights; the earliest of such
dates being herein referred to as the "Distribution Date"):
(x) no Right may be exercised;
(y) the Rights shall be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall
also be deemed to be certificates for Rights) and not by separate
certificates; and
(z) the Rights (and the right to receive certificates
therefor) will be transferable only in connection with the transfer of
the underlying Common Shares. As soon as practicable after the
Distribution Date, the Company shall prepare and execute, the Rights
Agent shall countersign, and the Company shall send or cause to be sent
(and the Rights Agent shall, if requested, send) by first-class,
insured, postage-prepaid mail, to each record holder of Common Shares as
of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, a certificate for
Rights, in substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each Common Share so held. As
of and after the Distribution Date, the Rights shall be evidenced solely
by such Rights Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company shall send a copy of a Summary of Rights to Purchase Preferred
Shares, in substantially the form of Exhibit C hereto (the "Summary of
Rights"), by first-class, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Record Date, at the address
of such holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date (or earlier redemption, expiration or termination of the
Rights), the Rights shall be evidenced by such certificates for Common Shares
registered in the names of the holders thereof together with a copy of the
Summary of Rights attached thereto and the registered holders of the Common
Shares shall also be the registered holders of the associated Rights. Until
the Distribution Date (or earlier redemption, expiration or termination of
the Rights), the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, even without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate.
(c) Certificates issued for Common Shares (including, without
limitation, certificates issued upon transfer or exchange of Common Shares)
after the Record Date but prior to the earlier of the Distribution Date or
the Expiration Date
<PAGE>
-8-
shall be deemed also to be certificates for Rights and shall have impressed
on, printed on, written on or otherwise affixed to them the following legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between UroMed
Corporation and State Street Bank and Trust Company, dated as of June
26, 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 UroMed Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may expire, or may be evidenced by separate certificates and
no longer be evidenced by this certificate. UroMed Corporation will
mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. As
described in the Rights Agreement, under certain circumstances, Rights
issued to Acquiring Persons (as defined in the Rights Agreement) or
certain related persons and any subsequent holder of such Rights may
become null and void."
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after
the Record Date but prior to the Distribution Date, any Rights associated
with such Common Shares shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights associated with the
Common Shares which are no longer outstanding.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall each be
substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange 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 23 hereof, the Rights Certificates
shall entitle the holders thereof to purchase such number of one
one-thousands of a Preferred Share as shall be set forth therein at the price
per one one-thousandth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-thousands of a Preferred Share and
the Purchase Price shall be subject to adjustment as provided herein.
<PAGE>
-9-
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 23 hereof that represents Rights that the Company knows are
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 oral or
written plan, agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a majority of the Continuing
Directors of the Company then in office determine is part of any oral or
written plan, agreement, arrangement or understanding that has as a primary
purpose or effect the 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 Certificate were issued to a Person who
was or became an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person. Accordingly, this Certificate and the Rights
represented hereby may be or become null and void in the circumstances
specified in Section 7(e) of the Rights Agreement."
The provisions of Section 7(e) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on any such Rights
Certificate.
Section 5. Countersignature and Registration. The Rights Certificates
shall be executed on behalf of the Company by the President, any Executive
Vice President, or the Treasurer of the Company, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Clerk or an Assistant Clerk
of the Company, either manually or by facsimile signature. The Rights
Certificates shall be manually countersigned by the Rights Agent and shall
not be valid for any purpose unless 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
<PAGE>
-10-
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.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office designated for such purpose, books for registration
and transfer of the 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.
Subject to the provisions of Sections 4(b), 7(e) and 15 hereof, at any time
after the close of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any 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 one-thousandths of a Preferred Share 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. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split-up, combination or exchange of Rights
Certificates.
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 shall execute 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 subsection (e), 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
<PAGE>
-11-
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 one-thousandth of a Preferred Share (or such other number
of Preferred Shares or other securities) as to which the Rights are
exercised, at or prior to the earliest of (i) the close of business on July
9, 2007 (the "Final Expiration Date"), (ii) the time at which the Rights are
redeemed as provided in Section 24 hereof (the "Redemption Date"), or (iii)
the time at which such Rights are exchanged as provided in Section 25 hereof
(such earliest time being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $22.00, shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America
in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the appropriate form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the shares to be purchased
and an amount equal to any applicable transfer tax required to be paid by the
holder of such Rights Certificate in accordance with Section 9 hereof in cash
or by certified check, cashier's check or money order or bank draft paid or
payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent) certificates
for the number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests,
or (B) if the Company, in its sole discretion, shall have elected to deposit
the Preferred Shares issuable upon conversion of the Rights hereunder into a
depositary, requisition from the depositary agent depositary receipts
representing such number of one 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 depositary
agent) and the Company shall direct the depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount of
cash, if any, to be paid in lieu of issuance of fractional shares in
accordance with Section 15 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder, and
(iv) when appropriate, after receipt, promptly deliver such cash to or upon
the order of the registered holder of such Rights Certificate. In the event
that the Company is obligated to issue other securities of the Company
pursuant to Section 11(a), the Company shall make all arrangements necessary
so that such other securities are available for distribution by the Rights
Agent, if and when appropriate.
<PAGE>
-12-
(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 duly authorized assigns, subject to the provisions of
Section 15 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or 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 oral or
written plan, agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a majority of the Continuing
Directors of the Company then in office determine is part of any oral or
written plan, agreement, arrangement or understanding that has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and
void without any further action, and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under this Agreement
or otherwise. The Company shall use all reasonable efforts to insure that
the provisions of this Section 7(e) and Section 4(b) are complied with, but
shall have no liability to any holder of Rights Certificates or other Person
as a result of its failure to make any determinations hereunder with respect
to an Acquiring Person or the Affiliates, Associates or transferees of an
Acquiring Person.
(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 the certificate
contained in the form of election to purchase set forth on the reverse side
of the Rights Certificate surrendered for such exercise shall have been
properly completed and duly executed by the registered holder thereof and the
Company shall have been provided with such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of 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 cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and
no Rights Certificates shall be issued in
<PAGE>
-13-
lieu thereof except as expressly permitted by any of the provisions of this
Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any other Rights Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver all cancelled
Rights Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled 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 shall cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares or any Preferred Shares held in its treasury, the number of Preferred
Shares (or other securities) that will be sufficient to permit the exercise
in full of all outstanding Rights in accordance with Section 7 of this
Agreement.
(b) The Company covenants and agrees that it shall take all such
action as may be necessary to ensure that all Preferred Shares or other
securities delivered upon exercise of Rights shall, at the time of delivery
of the certificates for such Preferred Shares or other securities (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(c) The Company further covenants and agrees that it shall pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates or of any Preferred Shares or other securities 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 depositary receipts for the Preferred Shares or other
securities 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 depositary receipts for Preferred Shares or other
securities 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
reasonable satisfaction that no such tax is due.
(d) If then required by applicable law, the Company shall use its
best efforts to (i) file, as soon as practicable following the Distribution
Date, 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
<PAGE>
-14-
Act and the rules and regulations thereunder) until the earlier of (A) the
date as of which the Rights are no longer exercisable for such securities or
(B) the Expiration Date. The Company will also take such action as may be
appropriate under the securities laws of the various states. The Company may
temporarily suspend the exercisability of the Rights in order to prepare and
file such registration statement. Upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended. The Company shall thereafter issue a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
(e) If at the time the Rights become exercisable, the then
outstanding Common Shares are listed on any national or regional securities
exchange or are quoted on the National Association of Securities Dealers,
Inc. Automated Quotations System ("NASDAQ") or any successor thereto or other
comparable quotation system, the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all Preferred
Shares (and, following the occurrence of a Triggering Event, other
securities) reserved for issuance upon such exercise to be quoted on such
system or listed on such exchange, as the case may be.
Section 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares (or other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the transfer books of
the Company for such Preferred Shares (or other securities) 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 transfer books of the Company for such Preferred Shares (or other
securities) 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
shareholder of the Company with respect to shares for which the Rights shall
be exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and
shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered
by each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
<PAGE>
-15-
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on
the Preferred Shares payable in Preferred Shares,
(B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a
consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and in Section 7(e), the
Purchase Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such
date and at a time when the transfer books of the Company
for the Preferred Shares were open, such holder would have
owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one
Right. If an event occurs which would require an adjustment
under both this Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) Subject to Section 25 of this Agreement, in the event:
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the Shares
Acquisition Date, directly or indirectly:
(1) shall merge into the Company or
otherwise combine with the Company and the Company shall
be the continuing or surviving corporation of such merger
or combination and the Common Shares of the Company or other
equity securities of the Company shall remain outstanding;
(2) shall, in one transaction or a
series of transactions, transfer any assets to the Company or
to any of its Subsidiaries in exchange (in whole or in part)
for Common Shares, for shares of other equity securities of
the Company, or for securities exercisable for or convertible
into shares of equity securities of the Company (Common Shares
or otherwise) or
<PAGE>
-16-
otherwise obtain from the Company, with or without
consideration, any additional shares of such equity securities
or securities exercisable for or convertible into shares of
such equity securities (other than pursuant to a pro rata
distribution to all holders of Common Shares);
(3) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of assets in one transaction or a series of
transactions, to, from or with (as the case may be) the
Company or any of its Subsidiaries, on terms and conditions
less favorable to the Company than the Company would be able
to obtain in arm's-length negotiation with an unaffiliated
third party, other than pursuant to a Section 13 Event;
(4) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or
dispose of assets having an aggregate fair market value of
more than $5,000,000 in one transaction or a series of
transactions, to, from or with (as the case may be) the
Company or any of the Company's Subsidiaries (other than
incidental to the lines of business, if any, engaged in as of
the date hereof between the Company and such Acquiring Person
or Associate or Affiliate), other than pursuant to a Section
13 Event;
(5) shall receive any compensation
from the Company or any of the Company's Subsidiaries other
than compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or its
Subsidiaries') past practices; or
(6) shall receive the benefit,
directly or indirectly (except proportionately as a
stockholder and except if resulting from a requirement of law
or governmental regulation), of any loans (other than in the
ordinary course of business), advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries;
or
(B) any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company
or any of its Subsidiaries or any entity holding securities of the
Company organized, appointed or established by the Company or any of
its Subsidiaries for or pursuant to the terms of any such plan),
<PAGE>
-17-
alone or together with its Affiliates and Associates, shall
become an Acquiring Person; or
(C) during such time as there is an
Acquiring Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization or
reorganization of the Company or other transaction or series of
transactions involving the Company which has the effect, directly or
indirectly, of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the
Company or any of its Subsidiaries beneficially owned by any
Acquiring Person or any Affiliate or Associate thereof;
then, and in each such case, proper provision shall promptly be made so that,
following the Distribution Date, each holder of a Right, except as provided
in Section 7(e) hereof, shall have a right to receive, upon exercise thereof
at a price equal to the then current Purchase Price multiplied by the number
of one one-thousandths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of the Company as shall equal
the result obtained by (x) multiplying the then current Purchase Price by the
number of one one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (which, following such first occurrence,
shall thereafter be referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the then current per share
market price of the Company's Common Shares (determined pursuant to Section
11(d) hereof) on the date of such first occurrence (such number of shares,
the "Adjustment Shares"); provided, however, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that the number of Common Shares that are
authorized by the Company's Restated Articles of Organization, but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company shall:
(A) determine the excess of the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current
Value") over the Purchase Price (such excess, the "Spread"); and
<PAGE>
-18-
(B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price:
(1) cash;
(2) a reduction in the Purchase Price;
(3) Common Shares of the same or a different
class or other equity securities of the Company (including, without
limitation, preferred shares or units of preferred shares that at least
two thirds of the Continuing Directors in office at the time have deemed
(based, among other things, on the dividend and liquidation rights of
such preferred shares) to have substantially the same economic value as
Common Shares (such preferred shares, hereinafter referred to as "common
shares equivalents"));
(4) debt securities of the Company;
(5) other assets, or
(6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate
value has been determined by at least two thirds of the Continuing
Directors in office at the time after considering the advice of a
competent investment banking firm selected by the Board of Directors of
the Company;
provided, however, if the Company shall have not made adequate provision
to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the date on which the Company's right of redemption
pursuant to Section 24(b) 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), 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 Rights, the thirty (30) day period
set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order
that the Company may seek
<PAGE>
-19-
stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights, and
may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. The
Company shall make a public announcement when the exercisability of the
Rights has been temporarily suspended, and again when such suspension is
no longer in effect. For purposes of this Section 11(a)(iii), the value
of the Common Shares shall be the current market price (as determined
pursuant to Section 11(d) hereof) per Common Share on the Section
11(a)(ii) Trigger Date and the value of any "common share equivalent"
shall be deemed to have the same value as the Common Shares on such date.
(b) If the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same or more
favorable rights, privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred Share or
equivalent preferred share (or having a conversion price per share, if a
security convertible into Preferred Shares or equivalent preferred shares)
less than the then current per share market price of the Preferred Shares (as
defined in Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered
for subscription or purchase (or into which the convertible securities so to
be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. In case such subscription price may be
paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good
<PAGE>
-20-
faith by the Board of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Preferred Shares owned
by or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash or assets (other than a regular quarterly cash dividend or
a dividend payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the Purchase Price to
be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the then current per share market price of
the Preferred Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent)
of the portion of the assets, cash or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company to
be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
hereof, the "current per share market price" of any security
(a "Security" for the purpose of this Section 11(d)(i)) on
any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however,
that in the event that the current per share market price of
the Security is determined during a period following the
announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares
of such Security or securities convertible into such shares,
or (B) any subdivision, combination or reclassification of
such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such
case, the current per share market
<PAGE>
-21-
price shall be appropriately adjusted to reflect the current market
price per share equivalent of such Security. The closing price for each
day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or admitted
to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then
in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Security
selected by the Board of Directors of the Company. 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.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to be
the current per share market price of the Common Shares as determined
pursuant to Section 11(d)(i) (appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the
date hereof), multiplied by one thousand. If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other share
or security as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall
<PAGE>
-22-
be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in Section 11(a) through (c),
(e), (h) through (k) and (m) and the provisions of Sections 7, 9, 10, 13, 14
and 15 with respect to the Preferred Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandth
of a Preferred Share purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of one one-thousandths of a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-thousandths of a share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such adjustment
of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-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 one ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This
<PAGE>
-23-
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 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 15 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
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 one one-thousandth of the then par value,
if any, of the Preferred Shares 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
fully paid and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Preferred Shares and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder
a due bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price,
in addition
<PAGE>
-24-
to those adjustments expressly required by this Section 11, as and to the
extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market
price, issuance wholly for cash of Preferred Shares or securities which by
their terms are convertible into or exchangeable for Preferred Shares, stock
dividends or issuance of rights, options or warrants referred to hereinabove
in this Section 11, hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution Date (i) declare a dividend on the outstanding
Common Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, (iii) combine the outstanding Common Shares into a smaller number of
shares or (iv) issue any of its shares of capital stock in a reclassification
of the outstanding Common Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is the
continuing or surviving entity), then in any such case, (A) the number of
Rights associated with each Common Share or other such shares then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights
thereafter associated with each Common Share or other such shares following
any such event shall equal the result obtained by multiplying the number of
Rights associated with each Common Share immediately prior to such event by a
fraction the numerator of which shall be the total number of Common Shares
outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of Common Shares outstanding
immediately following the occurrence of such event, and (B) each Common Share
outstanding immediately after such event shall have issued with respect to it
that number of Rights (which may be represented by the certificate
representing the underlying Common Shares in accordance with Section 3) which
each Common Share outstanding immediately prior to such event had issued with
respect to it. The adjustments provided for in this Section 11(n) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or reclassification is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Rights Certificate (or, if
prior to the Distribution Date, to each holder of a certificate representing
Common Shares) in accordance with Section 27 hereof. The Rights Agent may
rely on such certificate without further inquiry and may assume that no
<PAGE>
-25-
such adjustment has been made unless and until it shall have received such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power of the Company.
(a) In the event that, following the Shares Acquisition Date,
directly or indirectly:
(x) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) hereof), and the Company
shall not be the continuing or surviving corporation of such
consolidation or merger;
(y) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 14(b) 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 merger and, in
connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property; or
(z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any Person (other than to the Company or one or more of
its Subsidiaries in one or more transactions, each of which complies
with Section 14(b) hereof), then, and in each such case, proper
provision shall be made so that:
(i) following the Distribution Date, each holder of a Right,
subject to Section 7(e), shall have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance with
the terms of this Agreement, such number of freely tradeable Common
Shares of the Principal Party (as hereinafter defined), free and clear
of liens, rights of call or first refusal, encumbrances 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 one-thousandths of a Preferred Share for which a Right is
exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13
<PAGE>
26
Event, multiplying the number of such shares for which a
Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase
Price in effect immediately prior to such first occurrence);
and
(2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by 50% of
the current per share market price of the Common Shares of such
Principal Party (determined pursuant to Section 11(d) hereof) on the
date of consummation of such Section 13 Event;
(ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer,
all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply to such Principal Party; and
(iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of its Common
Shares in accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the exercise
of the Rights.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of
the first sentence of paragraph (a) of this Section 13, the Person that
is the issuer of any securities into which Common Shares of the Company
are converted in such merger of consolidation, and if no securities are
so issued, the Person that is the other party to the merger or
consolidation (including, if applicable, the Company, if it is the
surviving corporation); and
(ii) in the case of any transaction described in (z) of the
first sentence of paragraph (a) of this Section 13, the Person that is
the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
<PAGE>
27
provided, however, that in any such case (1) if the Common Shares of
such Person are not at such time and have not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange
Act, and such Person is a direct or indirect Subsidiary or Affiliate of
another Person, "Principal Party" shall refer to such other Person; (2)
in case such Person is a Subsidiary, directly or indirectly, or
Affiliate of more than one Person, the Common Shares of two or more of
which are and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Shares having the
greatest aggregate market value; and (3) in case such Person is owned,
directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the
rules set forth in (l) and (2) above shall apply to each of the chains
of ownership having an interest in such joint venture as if such party
were a "Subsidiary" of both or all of such joint venturers and the
Principal Parties in each such chain shall bear the obligations set
forth in this Section l3 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation,
merger, sale or transfer 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 each Principal Party and
each other Person who may become a Principal Party as a result of such
consolidation, merger, sale or transfer shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further providing that, as
soon as practicable after the date of any Section 13 Event, the Principal
Party at its own expense shall:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities purchasable
upon the exercise of the Rights on an appropriate form, will use its
best efforts to cause such registration statement to become effective as
soon as practicable after such filing and will 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;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
securities laws of such jurisdictions as may be necessary or appropriate;
(iii) 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
<PAGE>
28
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all material respects with the requirements for registration
on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. If a Section 13 Event shall
occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable solely in the manner described in paragraph (a) of this Section
13.
Section 14. Additional Covenants.
(a) The Company covenants and agrees that it shall not at any time
after the Distribution Date (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer to, in one or more transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries taken as a whole, any other Person if at the time of or
after such consolidation, merger or sale there are any charter or by-law
provisions or any rights, warrants or other instruments outstanding or any
other action taken which would diminish or otherwise eliminate the benefits
intended to be afforded by the Rights. The Company shall not consummate any
such consolidation, merger or sale unless prior thereto the Company and such
other Person shall have executed and delivered to the Rights Agent a
supplemental agreement evidencing compliance with this subsection.
(b) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 24, Section 25 or Section
28 hereof, take any action if at the time such action is taken it is
reasonably foreseeable that such action will substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
Section 15. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section 11(n),
or to distribute Rights Certificates which 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
15(a), the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in
<PAGE>
29
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Rights are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market maker
is making a market in the Rights, the fair value of the Rights on such date
as determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions which are integral multiples of one one-thousandth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided, that such
agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral
multiples of one one-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 one Preferred Share. For the purposes of this
Section 15(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) Following the occurrence of one of the transactions or events
specified in Section 11 giving rise to the right to receive Common Shares
upon the exercise of a Right, the Company shall not be required to issue
fractions of Common Shares upon exercise of the Rights or to distribute
certificates which evidence fractional Common Shares. In lieu of fractional
Common Shares, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of a
Common Share. For purposes of this Section 15(c), the
<PAGE>
30
current market value shall be determined in the manner set forth in Section
11(d) hereof for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 16. Rights of Action. Excepting the rights of action given to
the Rights Agent under Section 19 hereof, all rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of
the Common Shares); and any registered holder of any Rights Certificate (or,
prior to the Distribution Date, of the Common Shares), subject to Section
7(e), 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 own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and 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 17. 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 principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
(c) subject to Section 6 and Section 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
<PAGE>
31
the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or a beneficial interest in a Right or other Person as a
result of its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or other
order, decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any
governmental authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as soon
as possible.
Section 18. 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 26 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.
Section 19. Concerning the Rights Agent. 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 gross 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 arising therefrom, directly or indirectly.
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
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32
for Preferred Shares or other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
Section 20. Merger or Consolidation or Change of Name of Rights Agent.
Any corporation into which the Rights Agent or any successor Rights Agent may
be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part
of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 22 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement any of the Rights
Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor 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.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
Section 21. 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 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.
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33
(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) 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 President, any
Executive Vice President, any Vice President, the Treasurer or the Clerk 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 gross negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
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 adjustment required
under the provisions of Section 11 or Section 13 hereof or for the manner,
method or amount of any adjustment or the ascertaining of the existence of
facts that would require any such adjustment (except with respect to the
exercise of Rights evidenced by Rights Certificates after receipt of a
certificate furnished pursuant to Section 12 describing any such adjustment);
nor shall it be responsible for any determination by the Board of Directors
of the Company of the current market value of the Rights or Preferred Shares
or Common Shares; 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 or other securities to be issued pursuant to this Agreement
or any Rights Certificate or as to whether any Preferred Shares or other
securities will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may reasonably
be required by
<PAGE>
34
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 President, any Executive Vice President, any Vice President, the
Clerk or the Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered 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 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.
Section 22. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail at the expense of the Company.
<PAGE>
35
The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares
and Preferred 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 30 days after giving notice
of such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the holder
of a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then 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 a corporation organized
and doing business under the laws of the United States or any state of the
United States so long as such corporation is in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver
and transfer to the successor Rights Agent any property at the time held by
it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and
Preferred 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 22, 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 23. 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.
Section 24. Redemption.
(a) The Rights may be redeemed by action of the Board of Directors
pursuant to paragraph (b) of this Section 24 or by action of the Continuing
<PAGE>
36
Directors pursuant to paragraph (c) of this Section 24, and shall not be
redeemed in any other manner, except as provided by Section 32.
(b) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of (x) the close of business on the tenth day
following a Shares Acquisition Date, or (y) 5:00 p.m., Boston local time, on
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"); provided, however, if the Board of
Directors of the Company authorizes redemption of the Rights in either of the
circumstances set forth in clauses (i) and (ii) of this proviso, then there
must be Continuing Directors then in office and such authorization shall
require the concurrence of at least two-thirds of such Continuing Directors:
(i) such authorization occurs on or after the time a Person becomes an
Acquiring Person or (ii) such authorization occurs on or after the date of a
change (resulting from one or more proxy or consent solicitations) in a
majority of the directors in office at the commencement of such solicitations
if any Person who is a participant in such solicitations has stated (or, if
upon the commencement of such solicitations, a majority of the Board of
Directors of the Company has determined in good faith) that such Person (or
any of its Affiliates or Associates) intends to take, or may consider taking,
any action that would result in such Person becoming an Acquiring Person or
that would cause the occurrence of a Triggering Event. The redemption of the
Rights by the Board of Directors may be made effective at such time on such
basis and with such conditions as the Board of Directors in its sole
discretion may establish.
(c) In addition to the right of redemption reserved in Section
24(b), the Continuing Directors then in office may redeem all but not less
than all of the then outstanding Rights at the Redemption Price following the
occurrence of a Shares Acquisition Date but prior to any event described in
Section 11(a)(ii)(A) or (C) or Section 13(a), at their option, upon the
affirmative vote or written consent of not less than two-thirds of such
Continuing Directors:
(i) if:
(A) an Acquiring Person shall have transferred or otherwise
disposed of a number of Common Shares in one transaction or series of
transactions, not directly or indirectly involving the Company or any of
its Subsidiaries, which did not result in the occurrence of a Triggering
Event, or the Company (with the approval of at least two-thirds of
Continuing Directors) shall have issued additional equity securities, in
either instance such that such Person is thereafter a Beneficial Owner
of less than 10% of the outstanding Common Shares; and
<PAGE>
37
(B) there is no other Acquiring Person immediately following
the occurrence of the event described in clause (A); or
(ii) in connection with any Section 13(a) Event in which all
holders of Common Shares are treated alike and not involving (other than
as a holder of Common Shares being treated like all other such holders)
an Acquiring Person or an Affiliate or Associate of an Acquiring Person
or any other Person in which such Acquiring Person, Affiliate or
Associate has any interest, or any other Person acting directly or
indirectly on behalf of or in association with any Acquiring Person,
Affiliate or Associate.
Any redemption of the Rights by the Continuing Directors may
be made effective at such time, on such basis and with such
conditions as the Continuing Directors in their sole
discretion may establish.
(d) Immediately upon the action of the Board of Directors or the
Continuing Directors, as the case may be, of the Company ordering the
redemption of the Rights pursuant to paragraph (b) or paragraph (c) of this
Section 24, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption; provided, however,
that the failure to give, or any defect in, any such notice shall not affect
the validity of such redemption. Within 10 days after such action ordering
the redemption of the Rights pursuant to paragraph (b) or (c), as the case
may be, the Company shall mail a notice of redemption to all the holders of
the then outstanding Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made. The
Company may, at its option, pay the Redemption Price in cash, Common Shares
(based on the current per share market price of the Common Shares as of the
time of redemption) or any other form of consideration deemed appropriate by
the Board of Directors. Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company's
right of redemption under Section 24(b) has expired.
Section 25. Exchange.
(a) The Continuing Directors then in office may, at their option,
upon the affirmative vote or written consent of not less than two-thirds of
such Continuing Directors, at any time after the occurrence of a Section
11(a)(ii) Event,
<PAGE>
38
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 "Exchange Ratio").
Notwithstanding the foregoing, the Continuing 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 Continuing Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 25 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company promptly
shall mail a notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such
notice of exchange will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 25, the Company, at
its option, may substitute Preferred Shares (or equivalent preferred shares,
as such term is defined in Section 11(b) hereof) for Common Shares
exchangeable for Rights, at the initial rate of one one-thousandth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares
or Preferred Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
25, the Company
<PAGE>
39
shall take all such action as may be necessary to authorize additional Common
Shares or Preferred Shares for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the 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 market value of a whole Common Share.
For the purposes of this paragraph (e), the current market value of a whole
Common Share shall be the closing price of a Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 25.
Section 26. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to
the holders of its Preferred Shares or to make any other distribution to the
holders of its Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding-up of the Company, or (vi) to declare
or pay any dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Rights
Certificate, in accordance with Section 27 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding-up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any
such date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 20 days prior to the
record date for determining holders of the Preferred Shares for purposes of
such action, and in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares, whichever shall be the earlier.
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40
(b) In case any Section 11(a)(ii) Event shall occur, (i) the
Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, in accordance with Section 27 hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred
Shares shall be deemed thereafter to refer to Common Shares or, if
appropriate, other securities.
Section 27. 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:
UroMed Corporation
64 A Street
Needham, MA 02194
Attention: President
Subject to the provisions of Section 22 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:
State Street Bank and Trust Company
c/o Boston EquiServe Limited Partnership
150 Royall Street
Canton, MA 02021
Attention: Jennifer Brown
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate or
certificate representing Common Shares 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 28. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 28, the Company and
the Rights Agent shall, if the Company so directs, supplement or amend any
provision of this Agreement without the approval of any holders of
certificates representing Common Shares. From and after the Distribution
Date and subject to the penultimate sentence of this Section 28, the Company
and the Rights Agent shall, if the Company
<PAGE>
41
so directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective
or inconsistent with any other provisions herein, (iii) to shorten or
lengthen any time period hereunder (which lengthening or shortening,
following the first occurrence of an event set forth in clauses (i) or (ii)
of the proviso to Section 24(b) hereof, shall be effective only if there are
Continuing Directors and shall require the concurrence of at least two-thirds
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
Certificates (other than an Acquiring Person or any 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 (other than an Acquiring Person
or any Affiliate or Associate of an Acquiring Person). Upon the delivery of
a certificate from an appropriate officer of the Company which states that
the proposed supplement or amendment is in compliance with the terms of this
Section 28, the Rights Agent shall execute such supplement or amendment
unless the Right Agent shall have determined in good faith that such
supplement or amendment would adversely affect its interests under this
Agreement. Notwithstanding anything contained in this Agreement to the
contrary, no supplement or amendment shall be made that changes the
Redemption Price, the Final Expiration Date, the Purchase Price or the number
of one-thousandths of a Preferred Share for which a Right is exercisable.
Prior to the Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common Shares.
Section 29. Determination 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 or
any other securities of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(l)(i) of the
General Rules and Regulations under the Exchange Act as in effect on the date
of this Agreement. Except for those powers specifically granted in this
Agreement to the Continuing Directors, the Board of Directors of the Company
shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board, or the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i)
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations,
<PAGE>
42
interpretations and determinations and any actions, calculations,
interpretations and determinations by the Continuing Directors with respect
to the powers granted to them under this Agreement (including, for purposes
of clause (y) below, all omissions with respect to the foregoing) which are
done or made by the Board or by the Continuing Directors, as the case may be,
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 any Director to any liability to the holders
of the Rights Certificates.
Section 30. 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 31. 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, of 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, of the Common Shares).
Section 32. 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 24(b) hereof shall be reinstated and shall
not expire until the close of business on the tenth day following the date of
such determination by the Board of Directors.
Section 33. Governing Law. This Agreement and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
Commonwealth of Massachusetts and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts
to be made and performed entirely within such State.
Section 34. Counterparts. 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.
<PAGE>
43
Section 35. 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.
[Signature pages follow.]
<PAGE>
44
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, as an instrument under seal, all as of the day
and year first above written.
UROMED CORPORATION
Attest:
By: /s/ Donald-Bruce Abrams By: /s/ John G. Simon
----------------------- ------------------------
Donald-Bruce Abrams John G. Simon
Title: Clerk Chairman, President and
Chief Executive Officer
STATE STREET BANK AND TRUST
COMPANY
Attest:
By: /s/ Jennifer Brown By: /s/ David A. Saporito
------------------- -----------------------
Jennifer Brown David A. Saporito
Title: Sr. Client Administrator Title: Managing Director
<PAGE>
Exhibit A to
Rights Agreement
Preferences, Voting Powers and Qualifications and Special or Relative
Rights or Privileges of the Series A Junior Participating Preferred Stock.
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 100,000. Such number of shares may be increased or decreased by
vote of the Board of Directors; provided, that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of Common Stock,
no par value per share (the "Common Stock"), of the Corporation, and of any
other junior stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March, June,
September and December in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) 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 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 Preferred Stock. In the event the
Corporation shall at any time (i) declare a dividend on the Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding shares of
Common Stock, (iii) combine the outstanding shares of Common Stock into a
smaller number of shares or (iv) issue any of its shares of capital stock
in a reclassification of the outstanding shares of Common Stock (including
any such reclassification in connection with a consolidation or merger in
which the Corporation is the continuing or surviving entity), then in each
such case the amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to
<PAGE>
-2-
such event under clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section immediately
after it declares a dividend or distribution on the Common Stock (other
than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares, unless the date of issue
of such shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue
from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A 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 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 Preferred Stock entitled to receive payment
of a dividend or distribution declared thereon, which record date shall be
not more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A 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 (i) declare a
dividend on the Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding shares of Common Stock, (iii) combine the
outstanding shares of Common Stock into a
<PAGE>
-3-
smaller number of shares or (iv) issue any of its shares of capital
stock in a reclassification of the outstanding shares of Common Stock
(including any such reclassification in connection with a consolidation
or merger in which the Corporation is the continuing or surviving
entity), then in each such case the number of votes per share to which
holders of shares of Series A Preferred Stock were entitled immediately
prior to such event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of Vote
of Directors establishing a series of Preferred Stock or any similar stock,
or by law, the holders of shares of Series A Preferred Stock and the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders
of Series A 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) Whenever quarterly dividends or other dividends or distributions
payable on the Series A 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 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 Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A 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;
<PAGE>
-4-
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock ranking
on a parity with the Series A 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.
(B) The Corporation shall not permit any subsidiary of the Corporation to
purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Corporation's Restated Articles of Organization or in any other Certificate of
Vote of Directors establishing a series of Preferred Stock or any similar stock
or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made
(1) to the holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock shall
have received $10.00 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment; provided that the holders of shares of Series A Preferred Stock
shall be entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on
<PAGE>
-5-
the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Corporation shall
at any time (i) declare a dividend on the Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, (iii)
combine the outstanding shares of Common Stock into a smaller number of
shares or (iv) issue any of its shares of capital stock in a reclassification
of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving entity), then in each such case
the aggregate amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the proviso in clause (1)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
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 each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 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 (i) declare a dividend on the
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, (iii) combine the outstanding shares of Common Stock
into a smaller number of shares or (iv) issue any of its shares of capital stock
in a reclassification of the outstanding shares of Common Stock (including any
such reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving entity), 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 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 Preferred Stock shall
not be redeemable.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all other
series of the Corporation's preferred stock, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment. The Restated Articles of Organization, as amended,
of
<PAGE>
-6-
the Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class; it being understood that
nothing in this Section 10 shall be deemed to restrict the Corporation from
designating additional shares of Series A Preferred Stock if the Board of
Directors determines that it is necessary to do so in order to achieve the
purposes of the Rights Agreement, dated June 26, 1997 between the Corporation
and State Street Bank and Trust Company, as Rights Agent.
Section 11. Fractional Shares. Series A 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 Preferred Stock.
<PAGE>
Exhibit B to
Rights Agreement
Form of Rights Certificate
Certificate No. R ________ ______ Rights
NOT EXERCISABLE AFTER JULY 9, 2007 OR AFTER EARLIER REDEMPTION OR EXCHANGE BY
THE COMPANY. THE RIGHTS ARE SUBJECT, AT THE OPTION OF THE COMPANY, TO
REDEMPTION AT $.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE WERE ISSUED TO A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON.
ACCORDINGLY, THIS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE OR BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS
AGREEMENT.] (1)/
Rights Certificate
UROMED CORPORATION
This certifies that _________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of June 26, 1997 (the "Rights Agreement"), between UroMed
Corporation, a Massachusetts corporation (the "Company"), and State Street Bank
and Trust Company (the "Rights Agent"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., Boston time, on July 9, 2007 at the office of the
(1)/ The portion of the legend in brackets shall be inserted only if applicable.
<PAGE>
-2-
Rights Agent designated for such purpose, or at the office of its successor
as Rights Agent designated for such purpose, one one-thousandth of a fully
paid nonassessable share of Series A Junior Participating Preferred Stock,
par value $.01 per share (the "Preferred Shares"), of the Company, at a
purchase price of $22.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one one-thousandths
of a Preferred Share which may be purchased upon exercise hereof) set forth
above, and the Purchase Price set forth above, are the number and Purchase
Price as of July 9, 2007, based on the Preferred Shares as constituted at
such date. As provided in the Rights Agreement, the Purchase Price and the
number of one one-thousandths of a Preferred Share which may be 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. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares 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.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.001 per Right or (ii) may be exchanged in whole or in part
by the Company at its option for Preferred Shares or shares of the Company's
Common Stock, no par value per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this 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
<PAGE>
-3-
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.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _____________, 19__.
ATTEST: UROMED CORPORATION
By:
- ---------------------------- ---------------------------------
Countersigned:
[ ]
By:
-------------------------------------
Authorized Signature
<PAGE>
-4-
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 within 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., or a commercial bank or trust company having an office or
correspondent in the United States.
- --------------------------------------------------------------------------------
Assignment Certification
The undersigned hereby certifies by checking the appropriate boxes that:
(l) The Rights evidenced by this Rights Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such Acquiring Person
(as such terms are defined pursuant to the Rate Agreement);
<PAGE>
-5-
Form of Reverse Side of Rights Certificate -- continued
(2) After due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , 19
------------------------ ----- ---------------------------------
Signature
- ------------------------------------------------------------------------------
- --------------------------------
Notice
The signatures to the foregoing Assignment and Certification must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
- --------------------------------------------------------------------------------
- --------------------------------
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate.)
To UROMED CORPORATION
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Rights Certificate to purchase the Preferred Shares (or such
other securities of the Company or of any other person) issuable upon the
exercise of such Rights and requests that certificates for such shares be issued
in the name of:
Please insert social security
or other identifying number: __________________________
- -----------------------------------------------------------------------
(Please print name and address)
__________________________________________________________________________
If the above number of Rights shall not be all the Rights evidenced by this
Rights Certificate, then a new Rights Certificate for the balance remaining of
such Rights shall be registered and returned to the undersigned, unless the
undersigned requests that the Rights Certificate for the balance be registered
in the name of and delivered to:
<PAGE>
-6-
Form of Reverse Side of Rights Certificate -- continued
Please insert social security
or other identifying number: ________________________
__________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
Dated: , 19
--------------------- ----- -------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
- --------------------------------------------------------------------------------
Election Certification
The undersigned hereby certifies by checking the appropriate boxes that:
(l) The Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised, sold, assigned or transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) After due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: , l9
----------------------- ----- --------------------------------
Signature
- --------------------------------------------------------------------------------
<PAGE>
-7-
Form of Reverse Side of Rights Certificate -- continued
NOTICE
The signatures in the foregoing Election to Purchase and Certification 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.
In the event the certification set forth above in the Assignment or the
Election to Purchase, as the case may be, is not completed, the Company and the
Rights Agent will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.
<PAGE>
Exhibit C
to Rights Agreement
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
As of June 24, 1997, the Board of Directors of UroMed Corporation, a
Massachusetts corporation (the "Company"), declared a dividend distribution of
one preferred share purchase right (a "Right") for each outstanding share of
common stock, no par value per share (the "Common Shares"), of the Company. The
dividend is payable on July 9, 1997 (the "Record Date") to the stockholders of
record on that date. Except as described below, each Right, when exercisable,
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock, par value $.01 per
share (the "Preferred Shares"), of the Company at a price of $22.00 per one
one-thousandth of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and State Street Bank and
Trust Company, as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights certificates will be
distributed. Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person", which does not include certain institutional investors
which exceed temporarily the 15% threshold, and which does not include John G.
Simon, the current President and Chief Executive Officer of the Company, and his
associates so long as together they own less than 25% of the Common Shares) have
acquired beneficial ownership of 15% or more of the outstanding Common Shares
(the date of such an announcement being a "Shares Acquisition Date"), or (ii) 10
business days (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of such outstanding Common Shares
(the earliest of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share
<PAGE>
-2-
certificates outstanding as of the Record Date, by such Common Share
certificate together with a copy of this Summary of Rights.
The Rights Agreement provides that, until the Distribution Date, the Rights
will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and the separate Rights Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on July 9, 2007 (the "Final Expiration Date"), unless the Rights are
earlier redeemed by the Company, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
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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 minimum
preferential liquidation payment of $1,000 per share but will be entitled to an
aggregate payment of 1,000 times the payment made per Common Share. Each
Preferred Share will have 1,000 votes, voting together with the Common Shares.
Finally, in the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled to receive
1,000 times the amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right is intended to approximate the value of
one Common Share.
In the event that, after the first date of public announcement by the
Company or an Acquiring Person that an Acquiring Person has become such, the
Company is involved in a merger or other business combination transaction in
which the Common Shares are exchanged or changed, or 50% or more of the
Company's consolidated assets or earning power are sold (in one transaction or a
series of transactions), proper provision will be made so that each holder of a
Right (other than an Acquiring Person) will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring company (or, in
the event there is more than one acquiring company, the acquiring company
receiving the greatest portion of the assets or earning power transferred) which
at the time of such transaction would have a market value of two times the
exercise price of the Right.
In the event that (i) any person becomes an Acquiring Person, (ii) an
Acquiring Person engages in one or more "self-dealing" transactions as set forth
in the Rights Agreement, or (iii) during such time as there is an Acquiring
Person, there shall be a reclassification of securities or a recapitalization or
reorganization of the Company or other transaction or series of transactions
involving the Company which has the effect of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its subsidiaries beneficially owned by the Acquiring
Person, proper provision shall be made so that each holder of a Right, other
than Rights beneficially owned by any Acquiring Person, will thereafter have the
right to receive upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right. Upon occurrence of any of
the events described in the immediately preceding sentence, any Rights that are,
or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person shall immediately become null and
void. At any time after the occurrence of any such event and prior to the
acquisition by any person or group of 50% or more of the outstanding
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Common Shares, the Continuing Directors (as defined below) may exchange the
Rights (other than Rights owned by an Acquiring Person and certain related
persons which have become void), in whole or in part, at an exchange ratio of
one Common Share, or one one-thousandth of a Preferred Share (or of a share
of a class or series of the Company's preferred stock having equivalent
rights, preferences and privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the earlier of (i) the tenth day after a Shares
Acquisition Date, or (ii) the expiration of the Rights, the Board of Directors
may redeem the Rights in whole, but not in part, at a price of $.001 per Right
(the "Redemption Price"). Under certain circumstances set forth in the Rights
Agreement, such a redemption would require the concurrence of the Company's
"Continuing Directors", that is, any director who is not an Acquiring Person or
an affiliate or associate of an Acquiring Person and who was in office prior to
the date of the Rights Agreement or subsequently nominated by a majority of the
Continuing Directors. Thereafter, the Rights may only be redeemed by the
Continuing Directors in whole, but not in part, at the Redemption Price,
(a) under certain circumstances described in the Rights Agreement involving a
disposition of Common Shares by the Acquiring Person such that the Acquiring
Person's common share ownership is reduced to 10% or less, or (b) if such
redemption is incidental to a merger or other business combination transaction
or series of transactions involving the Company but not involving an Acquiring
Person and satisfying certain other conditions. The redemption of the rights
may be made effective at such time on such basis and with such conditions as the
Board of Directors or the Continuing Directors, as the case may be, in their
sole discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the Distribution Date. After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board (in certain circumstances, with the concurrence of the Continuing
Directors) in order to cure any ambiguity, to make changes that do not adversely
affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no
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amendment to adjust the time period governing redemption shall be made at
such time as the Rights are not redeemable.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
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