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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
Date of Report (Date of earliest event reported) May 1, 1999
-------------------------------
MINIMED INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 95-4408171
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
12744 San Fernando Road, Sylmar, California 91342
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (818) 362-5958
-----------------------------
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On May 1, 1999, MiniMed Inc. (the "Company") amended its Rights
Agreement, dated as of July 24, 1995 (the "Rights Agreement"), between the
Company and Harris Trust Company of California, as Rights Agent, to (a)
eliminate those provisions that require that certain actions may only be taken
by "Independent Directors" (as defined in the Rights Agreement) and (b) to
change the exercise price of a Right (as defined in the Rights Agreement) from
$65.00 to $250.00. A copy of the Amendment to the Rights Agreement is included
as Exhibit 1 to this Report and incorporated herein by reference. The foregoing
description is qualified in its entirety by reference to that Amendment.
ITEM 7. EXHIBITS.
Exhibit 1 Amendment to Rights Agreement dated as of May 1,
1999, between MiniMed Inc. and Harris Trust Company
of California, as Rights Agent, which includes
amendments to the Form of Right Certificate set forth
as Exhibit B and amendments to the Summary of the
Rights set forth as Exhibit C.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 7, 1999 MINIMED INC.
By: /s/ Eric S Kentor
-------------------------------------------
Name: Eric S. Kentor
Its: Senior Vice President, General Counsel and
Secretary
3
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page*
- ------- ----------- --------------
<S> <C> <C>
1 Amendment to Rights Agreement dated as of
May 1, 1999, between MiniMed Inc. and Harris Trust
Company of California, as Rights Agent, which
includes amendments to the Form of Right
Certificate set forth as Exhibit B and amendments
to the Summary of the Rights set forth as Exhibit C.
</TABLE>
- --------
*Contained only in manually executed version
4
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EXHIBIT 1
AMENDMENT TO RIGHTS AGREEMENT
This Amendment (this "AMENDMENT") to Rights Agreement (the "RIGHTS
AGREEMENT") is effective as of May 1, 1999 by and between MiniMed Inc., a
Delaware corporation (the "CORPORATION") and Harris Trust Company of California,
a trust company organized under the laws of the State of California (the "RIGHTS
AGENT"). Capitalized terms used herein but not defined herein shall have their
defined meanings set forth in the Rights Agreement.
BACKGROUND
A. The Corporation and the Rights Agent entered into the Rights
Agreement effective as of July 24, 1995.
B. The Rights Agreement provides that the Independent Directors
have certain powers to the exclusion of other directors.
C. The Right Agreement provides that the Exercise Price for each
Right is $65.00.
D. The parties wish to (i) amend the terms of the Rights
Agreement to eliminate the concept and powers of the Independent Directors, and
(ii) change the Exercise Price from $65.00 to $250.00.
AGREEMENT
NOW, THEREFORE, the parties hereby agree as follows:
1. The Table of Defined Terms is hereby amended by deleting the
term "Independent Director" therefrom.
2. Section 1(l) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"[This Section intentionally left blank.]"
3. Section 1(p) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"(p) "Redemption Date" shall mean the date of the action of the
Board of Directors directing the Company to redeem the Rights pursuant to
Section 23(a) hereof or exchange the Rights pursuant to Section 24(a) hereof."
4. Section 1(z) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"(z) "15% Stockholder" shall mean any Person that, together with
all Affiliates and Associates of such Person, hereafter acquires Beneficial
Ownership of, in the aggregate, a
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number of Voting Shares of the Company equal to 1% or more of the Voting Shares
then outstanding and thereupon or thereafter Beneficially Owns 15% or more of
the Voting Shares of the Company then outstanding; provided, however, that the
term "15% Stockholder" shall not include: (i) any Person who is the Beneficial
Owner of at least 15% of the outstanding Common Shares both on the date of this
Agreement and at the completion of the Company's initial public offering of
Common Shares, (ii) the Company, any wholly owned Subsidiary of the Company, any
employee benefit plan of the Company or of a Subsidiary of the Company, or any
Person holding Voting Shares for or pursuant to the terms of any such employee
benefit plan; or (iii) any Person if such Person would not otherwise be a 15%
Stockholder but for a reduction in the number of outstanding Voting Shares
resulting from a stock repurchase program or other similar plan of the Company
or from a self tender offer of the Company, which plan or tender offer commenced
on or after the date hereof, provided, however, that the term "15% Stockholder"
shall include such Person from and after the first date upon which (A) such
Person, since the date of the commencement of such plan or tender offer, shall
have acquired Beneficial Ownership of, in the aggregate, a number of Voting
Shares of the Company equal to 1% or more of the Voting Shares of the Company
then outstanding and (B) such Person, together with all Affiliates and
Associates of such Person, shall Beneficially Own 15% or more of the Voting
Shares of the Company then outstanding. In calculating the percentage of the
outstanding Voting Shares that are Beneficially Owned by a Person for purposes
of this subsection (z), Voting Shares that are Beneficially Owned by such Person
shall be deemed outstanding, and Voting Shares that are not Beneficially Owned
by such Person and that are subject to issuance upon the exercise or conversion
of outstanding conversion rights, exchange rights, rights (other than Rights),
warrants or options shall not be deemed outstanding. Any determination made by
the Board of Directors as to whether any Person is or is not a 15% Stockholder
shall be conclusive and binding upon all holders of Rights."
5. Section 3(a) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"(a) "Distribution Date" shall mean the date, after the date
hereof, that is the earliest of (i) the tenth Business Day (or such later day as
shall be designated by the Board of Directors) following the date of the
commencement of, or the first public announcement of the intent of any Person
(other than the Company, any wholly owned Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or any
Person holding Common Shares for or pursuant to the terms of any such employee
benefit plan) to commence, a tender offer or exchange offer, the consummation of
which would cause any Person to become a 15% Stockholder (such tenth Business
Day (or such later date) being referred to as the "Section 3(a)(i) Date"), (ii)
the date of the first Section 11(a)(ii) Event or (iii) the date of the first
Section 13(a) Event."
6. Section 3(h) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"(h) Notwithstanding the foregoing provisions of this Section 3,
the Rights Agent shall not send any Right Certificate to any 15% Stockholder or
any of its Affiliates or Associates or to any Person if the Rights held by such
Person are Beneficially Owned by a 15% Stockholder or any of its Affiliates or
Associates. Any determination made by the Board of Directors as to whether any
Common Shares are or were Beneficially Owned at any time by a
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15% Stockholder or an Affiliate or Associate of a 15% Stockholder shall be
conclusive and binding upon all holders of Rights."
7. Section 7(c) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"(c) The Exercise Price for the exercise of each Right shall
initially be $250.00 and shall be payable in lawful money of the United States
of America in accordance with Section 7(f) hereof. The Exercise Price and the
number of Preferred Shares (or, following the occurrence of a Section 11(a)(ii)
Event or a Section 13(a) Event, Common Shares and/or other securities) to be
acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 7(e), 11 and 13 hereof and the other provisions of
this Agreement."
8. Section 23(a) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"(a) Until the earliest of (i) the first Section 3(a)(i) Date, (ii)
the date of the first Section 11(a)(ii) Event, (iii) the date of the first
Section 13(a) Event or (iv) the Expiration Date, the Board of Directors may, at
its option, direct the Company to redeem all, but not less than all, of the then
outstanding Rights at a redemption price of $.01 per Right, as such redemption
price shall be appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (the "Redemption Price"),
and the Company shall so redeem the Rights."
9. Section 24(a) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"(a) At any time after the 15% Ownership Date and prior to the
first date thereafter upon which a 15% Stockholder, together with all Affiliates
and Associates of such 15% Stockholder, shall be the Beneficial Owner of 50% or
more of the Voting Shares then outstanding, the Board of Directors may, at its
option, direct the Company to exchange all, but not less than all, of the then
outstanding Rights for Common Shares at an exchange ratio per Right equal to a
number of Common Shares that, as of the date of the Board of Directors' action,
has a Current Market Price equal to the difference between the Exercise Price
and the Current Market Price of the shares that would otherwise be issuable upon
exercise of a Right on such date, as such exchange ratio shall be appropriately
adjusted to reflect any stock split, stock dividend, or similar transaction
involving Preferred Shares or Common Shares that occurs after the date hereof
(the "Exchange Ratio"), and the Company shall so exchange the Rights."
10. Section 24(b) is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"(b) Immediately upon the action of the Board of Directors
directing the Company to exchange the Rights pursuant to subsection (a) of this
Section 24, or at such time and date thereafter as they may specify, and without
any further action and without any notice, the right to exercise Rights shall
terminate and the only right thereafter of the holder of a Right shall be to
receive a number of Common Shares equal to the Exchange Ratio. Within 10
Business Days after the date of such action, the Company shall give notice of
such exchange to the holders of Rights by mailing such notice to all holders of
Rights at their last addresses as they appear upon
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the registry books of the Rights Agent or, if prior to the Distribution Date, on
the registry books of the transfer agent for the Common Shares. Any notice that
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives such notice, but neither the failure to give any such notice
nor any defect therein shall affect the legality or validity of such exchange.
Each such notice of exchange shall state the method by which the Rights will be
exchanged for Common Shares. Neither the Company nor any of its Affiliates or
Associates may, directly or indirectly, redeem, acquire or purchase for value
any Rights in any manner other than that specifically set forth in Section 23
hereof or in this Section 24, and other than in connection with the purchase of
Common Shares prior to the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event."
11. Section 27 is hereby deleted in its entirety and the following
is inserted in lieu thereof:
"(a) The Board of Directors may, from time to time, without the
approval of any holders of Rights, direct the Company and the Rights Agent to
supplement or amend any provision of this Agreement in any manner, whether or
not such supplement or amendment is adverse to any holder of Rights, and the
Company and the Rights Agent shall so supplement or amend such provision;
provided, however, that from and after the earliest of (i) the date of the first
Section 11(a)(ii) Event, (ii) the date of the first Section 13(a) Event, (iii)
the Redemption Date or (iv) the first Section 3(a)(i) Date, this Agreement shall
not be supplemented or amended in any manner that would materially and adversely
affect any holder of outstanding Rights other than a 15% Stockholder or a
Surviving Person."
12. Exhibit B is hereby deleted in its entirety and Exhibit B
attached hereto and incorporated herein by reference is inserted in lieu
thereof.
13. Exhibit C is hereby deleted in its entirety and Exhibit C
attached hereto and incorporated herein by reference is inserted in lieu
thereof.
14. Except as expressly set forth in this Amendment, all other
terms of the Rights Agreement shall remain in full force and effect.
15. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed entirely within such State.
16. This Amendment 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.
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IN WITNESS WHEREOF, the Corporation and the Rights Agent have executed
this Amendment effective as of the date first above written.
THE CORPORATION:
MINIMED INC.
By: /s/ ERIC S. KENTOR
--------------------------------------
Name: Eric S. Kentor
Title: Senior Vice President, General
Counsel and Secretary
THE RIGHTS AGENT:
HARRIS TRUST COMPANY OF CALIFORNIA
By: /s/ JOHN CASTELLNOS
--------------------------------------
Name: John Castellnos
--------------------------------------
Title: Assistant Vice President
--------------------------------------
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EXHIBIT B
FORM OF
RIGHT CERTIFICATE
Certificate No. R-___ ___ Rights
NOT EXERCISABLE AFTER MAY 23, 2005 OR EARLIER IF REDEEMED OR EXCHANGED.
THE RIGHTS ARE SUBJECT TO REDEMPTION AND EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN
THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY CERTAIN PERSONS OR
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
MINIMED INC.
This certifies that _____________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms and conditions of a Rights Agreement (the "Rights
Agreement") dated as of ________________, 1995 by and between MiniMed Inc., a
Delaware corporation (the "Company"), and Harris Trust Company of California
(the "Rights Agent"), to purchase from the Company at any time prior to the
earlier of the Redemption Date (as such term is defined in the Rights Agreement)
or 5:00 o'clock p.m., Los Angeles, California time, on May 23, 2005, at the
office or agency of the Rights Agent at Harris Trust Company of California, 601
South Figueroa, 49th Floor, Los Angeles, California 90017, or at the office of
its successor as Rights Agent, one 1/1,000th of a fully paid and nonassessable
share of Series B Junior Participating Cumulative Preferred Stock, par value
$.01 per share, of the Company (a "Preferred Share") or, in certain
circumstances, other securities or other property, at a purchase price of
$250.00 per one 1/1,000th of a Preferred Share (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase, including Certificate, on the reverse side hereof completed and
duly executed, with signature guaranteed. The number of Rights represented by
this Right Certificate and the Exercise Price set forth above are the number of
Rights and the Exercise Price as of July 24, 1995, based upon the Preferred
Shares as constituted on such date. As provided in the Rights Agreement, the
Exercise Price and the number of Preferred Shares or other securities or other
property that may be purchased upon the exercise of the Rights represented by
this Right Certificate are subject to modification and adjustment upon the
occurrence of certain events. The Rights Agreement contains a full description
of the rights, limitations of rights, obligations, duties and immunities of the
Rights Agent, the Company and the holders of Right Certificates. This Right
Certificate is subject to all the terms and conditions of the Rights Agreement,
which terms and conditions are hereby incorporated herein by reference and made
a part hereof. 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 Right Certificate, with or without other Right Certificates, upon
presentation and surrender at the above-mentioned offices of the Rights Agent,
with the Form of Assignment, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed,
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may be exchanged for another Right Certificate or Right Certificates of like
tenor and date representing Rights entitling the holder thereof to purchase a
like aggregate number of Preferred Shares or, in certain circumstances, other
securities or other property, as the Rights represented by the Right Certificate
or Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive, upon the surrender hereof with the Form of Election to
Purchase, including Certificate, on the reverse side hereof completed and duly
executed, with signature guaranteed, another Right Certificate or Right
Certificates for the number of whole Rights not exercised. Subject to the
provisions of the Rights Agreement, the Rights represented by this Right
Certificate may be redeemed by the Company, at its option, at a redemption price
of $.01 per Right or, upon the occurrence of certain events, the Company, at its
option, may exchange such Rights for fully paid and nonassessable shares of
Common Stock, par value .01 per share, of the Company at the exchange ratio set
forth in the Rights Agreement. No fractional securities shall be issued upon the
exercise of any Right or Rights represented hereby (other than fractions of
Preferred Shares that are integral multiples of one 1/1,000th of a Preferred
Share, that may, at the option of the Company, be represented by depositary
receipts), but in lieu thereof, a cash payment shall be made, as provided in the
Rights Agreement. No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or other securities of the Company that may at any time be
issuable on the exercise hereof, nor shall anything contained 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, until the Right or
Rights represented by this Right Certificate shall have been exercised as
provided in the Rights Agreement. This Right Certificate shall not be valid or
obligatory for any purpose until it shall have been countersigned by the Rights
Agent.
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WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal. Dated as of _______________, ____.
MINIMED INC.
By _____________________________ By ________________________________
Name: Name:
Title: Title:
Countersigned:
HARRIS TRUST COMPANY OF CALIFORNIA
By _____________________________
Name:
Title:
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Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer any or all of the Rights
represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
-------------------------------------
-------------------------------------,
(Name, address and social security or other
identifying number of transferee)
__________________ (______) of the Rights represented by this Right Certificate,
together with all right, title and interest in and to said Rights, and hereby
irrevocably constitutes and appoints ___________ attorney to transfer said
Rights on the books of MiniMed Inc. with full power of substitution.
Dated: _____________, ________________________________________
(Signature)
Signature Guaranteed:
Certificate
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this Right
Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement).
Dated: _____________, ________________________________________
(Signature)
Signature Guaranteed:
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Form of Reverse Side of Right Certificate
(continued)
NOTICE
The signatures to the foregoing Assignment and the foregoing Certificate, if
applicable, must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever, and 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. In the event that the foregoing Certificate is not duly
executed, with signature guaranteed, the Company may deem the Rights represented
by this Right Certificate to be Beneficially Owned by a 15% Stockholder or an
Affiliate or Associate of a 15% Stockholder (as such capitalized terms are
defined in the Rights Agreement), and not issue any Right Certificate or Right
Certificates in exchange for this Right Certificate.
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Form of Reverse Side of Right Certificate
(continued)
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise any or all of the Rights
represented by this Right Certificate)
To MiniMed Inc.:
The undersigned hereby irrevocably elects to exercise ____________________
(________) of the Rights represented by this Right Certificate to purchase the
following:
(Check one of the following boxes)
the Preferred Shares or other securities or property issuable upon the
exercise of said number of Rights pursuant to Section 7(c) of the
Rights Agreement.
the shares of the Common Stock, par value $.01 per share, of the
Company, or other securities or property issuable upon the exercise of
said number of Rights pursuant to Section 11(a)(ii) of the Rights
Agreement.
the securities issuable upon the exercise of said number of Rights
pursuant to Section 13(a) of the Rights Agreement.
The undersigned hereby requests that any such property and a certificate for any
such securities be issued in the name of and delivered to:
----------------------------------------
----------------------------------------
(Name, address and social security or other
identifying number of issuee)
The undersigned hereby further requests that if said number of Rights shall not
be all the Rights represented by this Right Certificate, a new Right Certificate
for the remaining balance of such Rights be issued in the name of and delivered
to:
----------------------------------------
----------------------------------------
(Name, address and social security or other
identifying number of issuee)
Dated: _____________, ________________________________________
(Signature)
Signature Guaranteed:
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Form of Reverse Side of Right Certificate
(continued)
FORM OF ELECTION TO PURCHASE
Certificate
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this Right
Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement).
Dated: __________, ___ _______________________________________
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the foregoing Certificate, if
applicable, must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever, and 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.
In the event that the foregoing Certificate is not duly executed, with signature
guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement), and not issue any property or certificate for securities upon
the exercise of this Right Certificate or issue any new Right Certificate for
any remaining balance of unexercised Rights represented by this Right
Certificate.
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EXHIBIT C
SUMMARY OF THE RIGHTS
On May 23, 1995 the Board of Directors of MiniMed Inc. (the "Company")
authorized adoption of a stockholder rights plan pursuant to which there will be
attached to each share of common stock, par value $.01 per share, of the Company
(the "Common Shares") one preferred stock purchase right (a "Right"). The Rights
will be issued as a dividend on the Common Shares outstanding as of the close of
business on the date of the Rights Agreement (as defined below) (the "Record
Date"). The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of a Rights Agreement (the "Rights Agreement") by and between the
Company and Harris Trust Company of California as Rights Agent (the "Rights
Agent").
1. COMMON SHARE CERTIFICATES REPRESENTING RIGHTS
Until the Distribution Date (as defined in Section 2 below), (a) the Rights
shall not be exercisable, (b) the Rights shall be attached to and trade only
together with the Common Shares and (c) the stock certificates representing
Common Shares shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior to the
Distribution Date shall contain a notation incorporating the Rights Agreement by
reference.
2. DISTRIBUTION DATE
The "Distribution Date" is the earliest of (a) the tenth business day following
the date of the first public announcement that any person (other than the
Company or certain related entities, and with certain additional exceptions) has
become the beneficial owner of 15% or more of the then outstanding Common Shares
(such person is a "15% Stockholder" and the date of such public announcement is
the "15% Ownership Date"), (b) the tenth business day (or such later day as
shall be designated by the Board of Directors) following the date of the
commencement of, or the announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would cause any person to become a 15%
Stockholder or (c) the first date, on or after the 15% Ownership Date, upon
which the Company is acquired in a merger or other business combination in which
the Company is not the surviving corporation or in which the outstanding Common
Shares are changed into or exchanged for stock or assets of another person, or
upon which 50% or more of the Company's consolidated assets or earning power are
sold (other than in transactions in the ordinary course of business). In
calculating the percentage of outstanding Common Shares that are beneficially
owned by any person, such person shall be deemed to beneficially own any Common
Shares issuable upon the exercise, exchange or conversion of any options,
warrants or other securities beneficially owned by such person; provided,
however, that such Common Shares issuable upon such exercise shall not be deemed
outstanding for the purpose of calculating the percentage of Common Shares that
are beneficially owned by any other person. Notwithstanding the foregoing, if
any person becomes the beneficial owner of at least 15% of the then outstanding
Common Shares as a result of any increase in the number of Common Shares
issuable upon the exercise, exchange or conversion of outstanding securities, or
any decrease in the number of outstanding Common Shares resulting from any stock
repurchase plan or self tender offer of the Company, then such
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person shall not be deemed a "15% Stockholder" until such person thereafter
acquires beneficial ownership of, in the aggregate, a number of additional
Common Shares equal to 1% or more of the then outstanding Common Shares.
Furthermore, any person who is the beneficial owner of at least 15% of the
outstanding Common Shares (1) on the date of the Rights Agreement and (2) at the
completion of the Company's initial public offering of Common Shares shall not
be deemed a "15% Stockholder." Finally, in determining whether a person is a
"15% Stockholder," Common Shares held by such person as an underwriter for a
public offering by the Company or as placement agent for a private offering by
the Company shall not be deemed to be beneficially owned by such person. Upon
the close of business on the Distribution Date, the Rights shall separate from
the Common Shares, Right certificates shall be issued and the Rights shall
become exercisable to purchase Preferred Shares as described in Section 5 below.
3. ISSUANCE OF RIGHT CERTIFICATES
As soon as practicable following the Distribution Date, separate certificates
representing only Rights shall be mailed to the holders of record of Common
Shares as of the close of business on the Distribution Date, and such separate
Right certificates alone shall represent such Rights from and after the
Distribution Date.
4. EXPIRATION OF RIGHTS
The Rights shall expire on May 23, 2005 unless earlier redeemed or exchanged,
unless the Distribution Date has previously occurred and the Rights have
separated from the Common Shares, in which case the Rights will remain
outstanding for ten years.
5. EXERCISE OF RIGHTS
Unless the Rights have expired or been redeemed or exchanged, they may be
exercised, at the option of the holders, pursuant to paragraphs (a), (b) or (c)
below. No Right may be exercised more than once or pursuant to more than one of
such paragraphs. From and after the first event of the type described in
paragraphs (b) or (c) below, each Right that is beneficially owned by a 15%
Stockholder or that was attached to a Common Share that is subject to an option
beneficially owned by a 15% Stockholder shall be void. (a) Right to Purchase
Preferred Shares. From and after the close of business on the Distribution Date,
each Right (other than a Right that has become void) shall be exercisable to
purchase one one-thousandth of a share of Series B Junior Participating
Cumulative Preferred Stock, par value $.01 per share, of the Company (the
"Preferred Shares"), at an exercise price of $250.00 (the "Exercise Price").
Prior to the Distribution Date, the Company may substitute for all or any
portion of the Preferred Shares that would otherwise be issuable upon exercise
of the Rights, cash, assets or other securities having the same aggregate value
as such Preferred Shares. The Preferred Shares are nonredeemable and, unless
otherwise provided in connection with the creation of a subsequent series of
preferred stock, are subordinate to any other series of the Company's preferred
stock, whether issued before or after the issuance of the Preferred Shares. The
Preferred Shares may not be issued except upon exercise of Rights. The holder of
one whole Preferred Share is entitled to receive when, as and if declared, the
greater of (i) cash and non-cash dividends in an amount equal to 1,000 times the
dividends declared on each Common Share or (ii) a preferential annual dividend
of $1.00 per Preferred Share ($.001 per one one-thousandth of a Preferred
Share). In the event of liquidation, the holders of Preferred Shares shall be
entitled to receive a liquidation payment in an amount equal to the greater of
(1) $1.00 per Preferred
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Share ($.001 per one one-thousandth of a Preferred Share), plus all accrued and
unpaid dividends and distributions on the Preferred Shares, or (2) an amount
equal to 1,000 times the aggregate amount to be distributed per Common Share.
Each Preferred Share has 1,000 votes, voting together with the Common Shares. In
the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, the holder of a Preferred Share shall be entitled to
receive 1,000 times the amount received per Common Share. The rights of the
Preferred Shares as to dividends, voting and liquidation preferences are
protected by antidilution provisions. It is anticipated that the value of one
one-thousandth of a Preferred Share should approximate the value of one Common
Share.
(b) Right to Purchase Common Shares of the Company. From and after
the close of business on the tenth business day following the 15% Ownership
Date, each Right (other than a Right that has become void) shall be exercisable
to purchase, at the Exercise Price (initially $250.00), Common Shares with a
market value equal to two times the Exercise Price. If the Company does not have
sufficient Common Shares available for all Rights to be exercised, the Company
shall substitute for all or any portion of the Common Shares that would
otherwise be issuable upon the exercise of the Rights, cash, assets or other
securities having the same aggregate value as such Common Shares.
(c) Right to Purchase Common Stock of a Successor Corporation. If,
on or after the 15% Ownership Date, (i) the Company is acquired in a merger or
other business combination in which the Company is not the surviving
corporation, (ii) the Company is the surviving corporation in a merger or other
business combination in which all or part of the outstanding Common Shares are
changed into or exchanged for stock or assets of another person or (iii) 50% or
more of the Company's consolidated assets or earning power are sold (other than
in transactions in the ordinary course of business), then each Right (other than
a Right that has become void) shall thereafter be exercisable to purchase, at
the Exercise Price (initially $250.00), shares of common stock of the surviving
corporation or purchaser, respectively, with an aggregate market value equal to
two times the Exercise Price.
6. ADJUSTMENTS TO PREVENT DILUTION
The Exercise Price, the number of outstanding Rights and the number of Preferred
Shares or Common Shares issuable upon exercise of the Rights are subject to
adjustment from time to time as set forth in the Rights Agreement in order to
prevent dilution.
7. CASH PAID INSTEAD OF ISSUING FRACTIONAL SECURITIES
With certain exceptions, no adjustment in the Exercise Price shall be required
until cumulative adjustments require an adjustment of at least 1%. No fractional
securities shall be issued upon exercise of a Right (other than fractions of
Preferred Shares that are integral multiples of one one-thousandth of a
Preferred Share and that may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash shall be made
based on the market price of such securities on the last trading date prior to
the date of exercise.
8. REDEMPTION
At any time prior to the earlier of (a) the tenth business day (or such later
day as shall be designated by the Board of Directors) following the date of the
commencement of, or the announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would cause any person to become a 15%
Stockholder or (b) the first event of the type giving rise to exercise rights
under Section 5(c) above, the Board of Directors may, at its option,
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call the Rights for redemption in whole, but not in part, at a price of $.01
per Right (the "Redemption Price"), and the Company shall so redeem the Rights.
Immediately upon the calling of the Rights for redemption (the date of such
action is the "Redemption Date"), the right to exercise Rights shall terminate
and the only right of the holders of Rights thereafter shall be to receive the
Redemption Price.
9. EXCHANGE
At any time after the 15% Ownership Date and prior to the first date thereafter
upon which a 15% Stockholder shall be the beneficial owner of 50% or more of the
outstanding Common Shares, the Board of Directors may, at its option, direct the
Company to exchange all, but not less than all, of the then outstanding Rights
for Common Shares at an exchange ratio per Right equal to a number of Common
Shares that, as of the date of the Board of Directors' action, has a current
market price equal to the difference between the Exercise Price and the current
market price of the shares that would otherwise be issuable upon exercise of a
Right on such date (the "Exchange Ratio"), and the Company shall so exchange the
Rights. Immediately upon such action by the Board of Directors, the right to
exercise Rights shall terminate and the only right of the holders of Rights
thereafter shall be to receive a number of Common Shares equal to the Exchange
Ratio.
10. NO STOCKHOLDER RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, shall have no rights as
a stockholder of the Company (other than rights resulting from such holder's
ownership of Common Shares), including, without limitation, the right to vote or
to receive dividends.
11. AMENDMENT OF RIGHTS AGREEMENT
The Board of Directors may, from time to time, without the approval of any
holder of Rights, direct the Company and the Rights Agent to supplement or amend
any provision of the Rights Agreement in any manner, whether or not such
supplement or amendment is adverse to any holder of Rights, and the Company and
the Rights Agent shall so supplement or amend such provision; provided, however,
that from and after the earliest of (a) the tenth business day (or such later
day as shall be designated by the Board of Directors) following the date of the
commencement of, or the announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would cause any person to become a 15%
Stockholder, (b) the 15% Ownership Date, (c) the first event of the type giving
rise to exercise rights under Section 5(c) above, or (d) the Redemption Date,
the Rights Agreement shall not be supplemented or amended in any manner that
would materially and adversely affect any holder of outstanding Rights other
than a 15% Stockholder.
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