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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 (g) OF THE SECURITIES EXCHANGE ACT OF 1934
Pharmacia & Upjohn, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 98-0155411
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(State of incorporation or organization) (IRS Employer
Identification
No.)
The Pharmacia & Upjohn Centre
67 Alma Road
Windsor, Berkshire
SL4 3HD
United Kingdom
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(Address of principal executive offices)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Stock Purchase Rights New York Stock Exchange, Inc.
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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Item 1. Description of Registrant's Securities to be
Registered.
On February 25, 1997, the Board of Directors of Pharmacia & Upjohn,
Inc., a Delaware corporation (the "Company"), declared a dividend payable March
10, 1997 of one right (a "Right") for each outstanding share of common stock,
par value $.01 per share ("Common Stock"), of the Company held of record at the
close of business on March 7, 1997 (the "Record Time"), or issued thereafter and
prior to the Separation Time (as hereinafter defined) and thereafter pursuant to
options and convertible securities outstanding at the Separation Time. The
Rights will be issued pursuant to a Stockholder Protection Rights Agreement,
dated as of March 4, 1997 (the "Rights Agreement"), between the Company and
Harris Trust & Savings Bank, as Rights Agent (the "Rights Agent"). Each Right
entitles its registered holder to purchase from the Company, after the
Separation Time, one one-hundredth of a share of Participating Preferred Stock,
par value $.01 per share ("Participating Preferred Stock"), for $150.00 (the
"Exercise Price"), subject to adjustment.
The Rights will be evidenced by the Common Stock certificates until
the close of business on the earlier of (either, the "Separation Time") (i) the
tenth business day (or such later date as the Board of Directors of the Company
may from time to time fix by resolution adopted prior to the Separation Time
that would otherwise have occurred) after the date on which any Person (as
defined in the Rights Agreement) commences a tender or exchange offer which, if
consummated, would result in such Person's becoming an Acquiring Person (as
defined below) and (ii) the tenth day after the first date (or such earlier or
later date as the Board of Directors of Pharmacia & Upjohn, Inc. may from time
to time fix) (the "Flip-in Date") of public announcement by the Company that any
Person has become an Acquiring Person (the date of such public announcement
being, the "Stock Acquisition Date"); provided that if the foregoing results in
the Separation Time being prior to the Record Time, the Separation Time shall be
the Record Time; and provided further that if a tender or exchange offer
referred to in clause (i) is cancelled, terminated or otherwise withdrawn prior
to the Separation Time without the purchase of any shares of stock pursuant
thereto, such offer shall be deemed never to have been made. An Acquiring
Person is any Person having Beneficial Ownership (as defined in the Rights
Agreement) of 15% or more of the outstanding shares of Common Stock, which term
shall not include (i) the Company, any wholly-owned subsidiary of the Company or
any employee stock ownership or other employee benefit plan of the Company, (ii)
any person who is the Beneficial Owner of 15%
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or more of the outstanding Common Stock as of the date of the Rights Agreement
or who shall become the Beneficial Owner of 15% or more of the outstanding
Common Stock solely as a result of an acquisition of Common Stock by the
Company, until such time as such Person acquires additional Common Stock, other
than through a dividend or stock split, (iii) any Person who becomes the
Beneficial Owner of 15% or more of the outstanding Common Stock without any
plan or intent to seek or affect control of the Company if such Person promptly
divests sufficient securities such that such 15% or greater Beneficial
Ownership ceases or (iv) any Person who Beneficially Owns shares of Common
Stock consisting solely of (A) shares acquired pursuant to the grant or
exercise of an option granted by the Company in connection with an agreement to
merge with, or acquire, the Company entered into prior to a Flip-in Date, (B)
shares owned by such Person and its Affiliates and Associates at the time of
such grant and (C) shares, amounting to less than 1% of the outstanding Common
Stock, acquired by Affiliates and Associates of such Person after the time of
such grant. The Rights Agreement provides that, until the Separation Time, the
Rights will be transferred with and only with the Common Stock. Common Stock
certificates issued after the Record Time but prior to the Separation Time
shall evidence one Right for each share of Common Stock represented thereby and
shall contain a legend incorporating by reference the terms of the Rights
Agreement (as such may be amended from time to time). Notwithstanding the
absence of the aforementioned legend, certificates evidencing shares of Common
Stock outstanding at the Record Time shall also evidence one Right for each
share of Common Stock evidenced thereby. Promptly following the Separation
Time, separate certificates evidencing the Rights ("Rights Certificates") will
be mailed to holders of record of Common Stock at the Separation Time.
The Rights will not be exercisable until the Business Day (as
defined in the Rights Agreement) following the Separation Time. The Rights
will expire on the earliest of (i) the Exchange Time (as defined below), (ii)
the close of business on March 7, 2007, and (iii) the date on which the Rights
are redeemed as described below and (iv) upon the merger of the Company into
another corporation pursuant to an agreement entered into prior to a Stock
Acquisition Date (in any such case, the "Expiration Time").
The Exercise Price and the number of Rights outstanding, or in
certain circumstances the securities purchasable upon exercise of the Rights,
are subject to adjustment from time to time to prevent dilution in the event of
a Common Stock dividend on, or a subdivision or a
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combination into a smaller number of shares of, Common Stock, or the issuance
or distribution of any securities or assets in respect of, in lieu of or in
exchange for Common Stock.
In the event that prior to the Expiration Time a Flip-in Date
occurs, the Company shall take such action as shall be necessary to ensure and
provide that each Right (other than Rights Beneficially Owned by the Acquiring
Person or any affiliate or associate thereof, which Rights shall become void)
shall constitute the right to purchase from the Company, upon the exercise
thereof in accordance with the terms of the Rights Agreement, that number of
shares of Common Stock of the Company having an aggregate Market Price (as
defined in the Rights Agreement), on the Stock Acquisition Date that gave rise
to the Flip-in Date, equal to twice the Exercise Price for an amount in cash
equal to the then current Exercise Price. In addition, the Board of Directors
of the Company may, at its option, at any time after a Flip-in Date and prior
to the time that an Acquiring Person becomes the Beneficial Owner of more than
50% of the outstanding shares of Common Stock, elect to exchange all (but not
less than all) the then outstanding Rights (other than Rights Beneficially
Owned by the Acquiring Person or any affiliate or associate thereof, which
Rights become void) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date of the
Separation Time (the "Exchange Ratio"). Immediately upon such action by the
Board of Directors (the "Exchange Time"), the right to exercise the Rights will
terminate and each Right will thereafter represent only the right to receive a
number of shares of Common Stock equal to the Exchange Ratio.
Whenever the company shall become obligated, as described in
the preceding paragraph, to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute therefor shares
of Participating Preferred Stock, at a ratio of one one- hundredth of a share
of Participating Preferred Stock for each share of Common Stock so issuable.
In the event that prior to the Expiration Time the Company
enters into, consummates or permits to occur a transaction or series of
transactions after the time an Acquiring Person has become such in which,
directly or indirectly, (i) the Company shall consolidate or merge or
participate in a binding share exchange with any other Person if, at the time
of the consolidation, merger or share
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exchange or at the time the Company enters into an agreement with respect to
such consolidation, merger or share exchange, the Acquiring Person controls the
Board of Directors of the Company and (A) any term of or arrangement concerning
the treatment of shares of capital stock in such merger, consolidation or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of Common Stock or (B) the Person with
whom such transaction or series of transactions occurs is the Acquiring Person
or an Affiliate or Associate thereof or (ii) the Company shall sell or
otherwise transfer (or one or more of its subsidiaries shall sell or otherwise
transfer) assets (A) aggregating more than 50% of the assets (measured by
either book value or fair market value) or (B) generating more than 50% of the
operating income or cash flow, of the Company and its subsidiaries (taken as a
whole) to any other Person (other than the Company or one or more of its wholly
owned subsidiaries) or to two or more such Persons which are affiliated or
otherwise acting in concert, if, at the time of such sale or transfer of assets
or at the time the Company (or any such subsidiary) enters into an agreement
with respect to such sale or transfer, the Acquiring Person controls the Board
of Directors of the Company (a "Flip-over Transaction or Event"), the Company
shall take such action as shall be necessary to ensure, and shall not enter
into, consummate or permit to occur such Flip-over Transaction or Event until
it shall have entered into a supplemental agreement with the Person engaging
in such Flip-over Transaction or Event or the parent corporation thereof (the
"Flip-over Entity"), for the benefit of the holders of the Rights, providing,
that upon consummation or occurrence of the Flip-over Transaction or Event (i)
each Right shall thereafter constitute the right to purchase from the Flip-over
Entity, upon exercise thereof in accordance with the terms of the Rights
Agreement, that number of shares of common stock of the Flip-over Entity having
an aggregate Market Price on the date of consummation or occurrence of such
Flip-over Trans action or Event equal to twice the Exercise Price for an amount
in cash equal to the then current Exercise Price and (ii) the Flip-over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to the Rights Agreement. For purposes of the
foregoing description, the term "Acquiring Person" shall include any Acquiring
Person and its Affiliates and Associates counted together as a single Person.
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The Board of Directors of the Company may, at its option, at
any time prior to the close of business on the Flip-in Date, redeem all (but
not less than all) the then outstanding Rights at a price of $.01 per Right
(the "Redemption Price"), as provided in the Rights Agreement. Immediately upon
the action of the Board of Directors of the Company electing to redeem the
Rights, without any further action and without any notice, the right to
exercise the Rights will terminate and each Right will thereafter represent
only the right to receive the Redemption Price in cash for each Right so held.
The holders of Rights will, solely by reason of their
ownership of Rights, have no rights as stockholders of the Company, including,
without limitation, the right to vote or to receive dividends.
The Rights will not prevent a takeover of the Company.
However, the Rights may cause substantial dilution to a person or group that
acquires 15% or more of the Common Stock unless the Rights are first redeemed
by the Board of Directors of the Company. Nevertheless, the Rights should not
interfere with a transaction that is in the best interests of the Company and
its stockholders because the Rights can be redeemed on or prior to the close of
business on the Flip-in Date, before the consummation of such transaction.
As of February 25, 1997 there were 508,854,139 shares of Common
Stock issued (of which 508,673,725 shares were outstanding and 180,414 shares
were held in treasury) and 16,332,124 shares of Common Stock reserved for
issuance pursuant to employee benefit plans and convertible securities. As long
as the Rights are attached to the Common Stock, the Company will issue one
Right with each new share of Common Stock so that all such shares will have
Rights attached.
The Rights Agreement (which includes as Exhibit A the forms of
Rights Certificate and Election to Exercise and as Exhibit B the form of
Certificate of Designation and Terms of the Participating Preferred Stock) is
attached hereto as an exhibit and is incorporated herein by reference. The
foregoing description of the Rights is qualified in its entirety by reference
to the Rights Agreement and such exhibits thereto.
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Item 2. Exhibits.
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
(1) Rights Agreement.
(2) Forms of Rights Certificate and of Election to
Exercise, included in Exhibit A to the Rights Agreement.
(3) Form of Certificate of Designation and Terms of
Participating Preferred Stock, included in Exhibit B
to the Rights Agreement.
</TABLE>
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
PHARMACIA & UPJOHN, INC.
By /s/ Don W. Schmitz
-----------------------
Name: Don W. Schmitz
Title: Vice President
Date: March 4, 1997
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Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Description
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<S> <C>
(1) Rights Agreement.
(2) Forms of Rights Certificate and of Election to
Exercise, included in Exhibit A to the Rights Agreement.
(3) Form of Certificate of Designation and Terms of
Participating Preferred Stock, included in Exhibit B
to the Rights Agreement.
</TABLE>
<PAGE> 1
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
dated as of
March 4, 1997
between
PHARMACIA & UPJOHN, INC.
and
HARRIS TRUST & SAVINGS BANK
as Rights Agent
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Article I
DEFINITIONS
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Article II
THE RIGHTS
Section 2.1 Summary of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.2 Legend on Common Stock
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.3 Exercise of Rights; Separation of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.4 Adjustments to Exercise Price;
Number of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.5 Date on Which Exercise is
Effective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.6 Execution, Authentication, Delivery
and Dating of Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.7 Registration, Registration of
Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.8 Mutilated, Destroyed, Lost and
Stolen Rights Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 2.9 Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.10 Delivery and Cancellation of
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.11 Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Article III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
Section 3.1 Flip-in . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.2 Flip-over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Article IV
THE RIGHTS AGENT
Section 4.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 4.2 Merger or Consolidation or Change
of Name of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 4.3 Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 4.4 Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Article V
MISCELLANEOUS
Section 5.1 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.2 Expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.3 Issuance of New Rights
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.4 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.6 Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 5.7 Holder of Rights Not Deemed a
Stockholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 5.8 Notice of Proposed Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.10 Suspension of Exercisability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.11 Costs of Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.12 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.13 Benefits of this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.14 Determination and Actions by the
Board of Directors, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.15 Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.16 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.17 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.18 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
</TABLE>
EXHIBITS
Exhibit A Form of Rights Certificate
(Together with Form of
Election to Exercise)
Exhibit B Form of Certificate of
Designation and Terms of
Participating Preferred Stock
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time
to time, this "Agreement"), dated as of March 4, 1997, between Pharmacia &
Upjohn, Inc. a Delaware corporation (the "Company"), and Harris Trust & Savings
Bank, an Illinois Corporation, as Rights Agent (the "Rights Agent", which term
shall include any successor Rights Agent hereunder).
WITNESSETH:
WHEREAS, the Board of Directors of the Company has (a)
authorized and declared a dividend of one right ("Right") in respect of each
share of Common Stock (as hereinafter defined) held of record as of the close
of business on March 7, 1997 (the "Record Time") and (b) as provided in Section
2.4, authorized the issuance of one Right in respect of each share of Common
Stock issued after the Record Time and prior to the Separation Time (as
hereinafter defined) and, to the extent provided in Section 5.3, each share of
Common Stock issued after the Separation Time;
WHEREAS, subject to the terms and conditions hereof, each
Right entitles the holder thereof, after the Separation Time, to purchase
securities or assets of the Company (or, in certain cases, securities of
certain other
<PAGE> 5
entities) pursuant to the terms and subject to the conditions set forth herein;
and
WHEREAS, the Company desires to appoint the Rights Agent to
act on behalf of the Company, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein;
NOW THEREFORE, in consideration of the premises and the
respective agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 15% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include any Person (i) who
is the Beneficial Owner of 15% or more of the outstanding shares of Common
Stock on the date of this Agreement or who shall become the Beneficial Owner of
15% or more of the outstanding shares of Common Stock solely as a result of an
acquisition by the Company of shares of Common Stock, until such time hereafter
or thereafter as any of such Persons shall become the Beneficial Owner (other
than by means of a
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stock dividend or stock split) of any additional shares of Common Stock, (ii)
who becomes the Beneficial Owner of 15% or more of the outstanding shares of
Common Stock but who acquired Beneficial Ownership of shares of Common Stock
without any plan or intention to seek or affect control of the Company, if such
Person promptly enters into an irrevocable commitment to divest, and thereafter
promptly divests (without exercising or retaining any power, including voting,
with respect to such shares), sufficient shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) so that
such Person ceases to be the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock or (iii) who Beneficially Owns shares of Common Stock
consisting solely of one or more of (A) shares of Common Stock Beneficially
Owned pursuant to the grant or exercise of an option granted to such Person (an
"Option Holder") by the Company in connection with an agreement to merge with,
or acquire, the Company entered into prior to a Flip-in Date, (B) shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) Beneficially Owned by such Option Holder or its Affiliates or
Associates at the time of grant of such option, and (C) shares of Common Stock
(or securities convertible into, exchangeable into or exercisable for Common
Stock) acquired by Affiliates or Associates of such Option Holder after the
time of such
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grant which, in the aggregate, amount to less than 1% of the outstanding shares
of Common Stock. In addition, the Company, any wholly-owned Subsidiary of the
Company and any employee stock ownership or other employee benefit plan of the
Company or a wholly-owned Subsidiary of the Company shall not be an Acquiring
Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Exchange Act, as such Rule is in
effect on the date of this Agreement.
"Agreement" shall have the meaning set forth in the preamble.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities as to
which such Person or any of such Person's Affiliates or Associates is or may be
deemed to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Exchange Act, as such Rules are in effect on the date of this Agreement, as
well as any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become Beneficial Owner (whether such
right is exercisable immediately or only after the passage of time or the
occurrence of conditions) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise;
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<PAGE> 8
provided, however, that a Person shall not be deemed the "Beneficial Owner", or
to have "Beneficial Ownership" of, or to "Beneficially Own", any security (i)
solely because such security has been tendered pursuant to a tender or exchange
offer made by such Person or any of such Person's Affiliates or Associates
until such tendered security is accepted for payment or exchange or (ii) solely
because such Person or any of such Person's Affiliates or Associates has or
shares the power to vote or direct the voting of such security pursuant to a
revocable proxy given in response to a public proxy or consent solicitation
made to more than ten holders of shares of a class of stock of the Company
registered under Section 12 of the Exchange Act and pursuant to, and in
accordance with, the applicable rules and regulations under the Exchange Act,
except if such power (or the arrangements relating thereto) is then reportable
under Item 6 of Schedule 13D under the Exchange Act (or any similar provision
of a comparable or successor report). For purposes of this Agreement, in
determining the percentage of the outstanding shares of Common Stock with
respect to which a Person is the Beneficial Owner, all shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in
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<PAGE> 9
The City of New York are generally authorized or obligated by law or executive
order to close.
"Close of business" on any given date shall mean 5:00 p.m. New
York City time on such date or, if such date is not a Business Day, 5:00 p.m.
New York City time on the next succeeding Business Day.
"Common Stock" shall mean the shares of Common Stock, par
value $.01 per share, of the Company.
"Company" shall have the meaning set forth in the preamble.
"Election to Exercise" shall have the meaning set forth in
Section 2.3(d) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Ratio" shall have the meaning set forth in Section
3.1(c) hereof.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at
which a holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $150.00.
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<PAGE> 10
"Expansion Factor" shall have the meaning set forth in Section
2.4(a) hereof.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the close of business on the tenth
anniversary of the Record Time and (iv) immediately prior to the effective time
of a consolidation, merger or share exchange of the Company (A) into another
corporation or (B) with another corporation in which the Company is the
surviving corporation but Common Stock is converted into cash and/or securities
of another corporation, in either case pursuant to an agreement entered into by
the Company prior to a Stock Acquisition Date.
"Flip-in Date" shall mean the tenth business day after any
Stock Acquisition Date or such earlier or later date as the Board of Directors
of the Company may from time to time fix by resolution adopted prior to the
Flip-in Date that would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean
(i) in the case of a Flip-over Transaction or Event described in clause (i) of
the definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (ii)
in the case of a Flip-over Transaction or Event referred to in clause (ii) of
the definition thereof, the Person receiving the greatest
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<PAGE> 11
portion of the (A) assets or (B) operating income or cash flow being
transferred in such Flip-over Transaction or Event, provided in all cases if
such Person is a subsidiary of a corporation, the parent corporation shall be
the Flip-Over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the business
and affairs) of the Flip-Over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions after a Flip-in Date in which, directly or indirectly,
(i) the Company shall consolidate or merge or participate in a share exchange
with any other Person if, at the time of the consolidation, merger or share
exchange or at the time the Company enters into any agreement with respect to
any such consolidation, merger or share exchange, the Acquiring Person Controls
the Board of Directors of the Company and either (A) any term of or arrangement
concerning the treatment of shares of capital stock in such consolidation,
merger or share exchange relating to the Acquiring Person is not identical to
the terms and arrangements relating to other holders of the Common Stock or (B)
the Person with whom the transaction or series of transactions occurs is the
Acquiring Person or an Affiliate or Associate of the Acquiring Person (ii) the
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Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) assets (A) aggregating more than 50% of the
assets (measured by either book value or fair market value) or (B) generating
more than 50% of the operating income or cash flow, of the Company and its
Subsidiaries (taken as a whole) to any Person (other than the Company or one or
more of its wholly owned Subsidiaries) or to two or more such Persons which are
Affiliates or Associates or otherwise acting in concert, if, at the time of the
entry by the Company (or any such Subsidiary) into an agreement with respect to
such sale or transfer of assets, the Acquiring Person Controls the Board of
Directors of the Company. An Acquiring Person shall be deemed to Control the
Company's Board of Directors when, following a Flip-in Date, the persons who
were directors of the Company (or persons nominated and/or appointed as
directors by vote of a majority of such persons) before the Stock Acquisition
Date shall cease to constitute a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date;
provided, however, that if an event of a type analogous to any of the events
described in Section 2.4 hereof shall have
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<PAGE> 13
caused the closing prices used to determine the Market Price on any Trading
Days during such period of 20 Trading Days not to be fully comparable with the
closing price on such date, each such closing price so used shall be
appropriately adjusted in order to make it fully comparable with the closing
price on such date. The closing price per share of any securities on any date
shall be the last reported sale price, regular way, or, in case no such sale
takes place or is quoted on such date, the average of the closing bid and asked
prices, regular way, for each share of such securities, 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, Inc. or, if the securities are not listed or admitted to trading on
the New York Stock Exchange, Inc., as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the securities are listed or admitted to
trading or, if the securities are not listed or admitted to trading on any
national securities exchange, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or such other system then
in use, or, if on any such date the securities are not listed or admitted to
trading on any national securities exchange or quoted by any such organization,
the average of the closing bid and asked prices as furnished by
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<PAGE> 14
a professional market maker making a market in the securities selected by the
Board of Directors of the Company; provided, however, that if on any such date
the securities are not listed or admitted to trading on a national securities
exchange or traded in the over-the-counter market, the closing price per share
of such securities on such date shall mean the fair value per share of
securities on such date as determined in good faith by the Board of Directors
of the Company, after consultation with a nationally recognized investment
banking firm, and set forth in a certificate delivered to the Rights Agent.
"Option Holder" shall have the meaning set forth in the
definition of Acquiring Person.
"Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the Exchange Act,
as such Rule is in effect on the date of this Agreement), corporation or other
entity.
"Preferred Stock" shall mean the series of Participating
Preferred Stock, par value $.01 per share, of the Company created by a
Certificate of Designation and Terms in substantially the form set forth in
Exhibit B hereto appropriately completed.
"Record Time" shall have the meaning set forth in the
Recitals.
"Redemption Price" shall mean an amount equal to one cent,
$0.01.
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<PAGE> 15
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1 hereof.
"Right" shall have the meaning set forth in the Recitals.
"Rights Agent" shall have the meaning set forth in the
Preamble.
"Rights Certificate" shall have the meaning set forth in
Section 2.3(c) hereof.
"Rights Register" shall have the meaning set forth in Section
2.7(a) hereof.
"Separation Time" shall mean the close of business on the
earlier of (i) the tenth business day (or such later date as the Board of
Directors of the Company may from time to time fix by resolution adopted prior
to the Separation Time that would otherwise have occurred) after the date on
which any Person commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person and (ii) the Flip-in
Date; provided, that if the foregoing results in the Separation Time being
prior to the Record Time, the Separation Time shall be the Record Time and
provided further, that if any tender or exchange offer referred to in clause
(i) of this paragraph is cancelled, terminated or otherwise withdrawn prior to
the Separation Time without the purchase of any shares of Common
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<PAGE> 16
Stock pursuant thereto, such offer shall be deemed, for purposes of this
paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) or by an Acquiring Person (including
by means of filing a Schedule 13D or Schedule 13G under the Securities Exchange
Act of 1934 (or any comparable or successor report or schedule) or an amendment
thereto) that a Person has become an Acquiring Person.
"Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the equity interest is Beneficially Owned,
directly or indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day.
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ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the
Record Time, the Company will mail a letter summarizing the terms of the Rights
to each holder of record of Common Stock as of the Record Time, at such
holder's address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for
the Common Stock issued after the Record Time but prior to the Separation Time
shall evidence one Right for each share of Common Stock represented thereby and
shall have impressed on, printed on, written on or otherwise affixed to them
the following legend:
Until the Separation Time (as defined in the Rights Agreement
referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in a
Rights Agreement, dated as of March 4, 1997 (as such may be
amended from time to time, the "Rights Agreement"), between
Pharmacia & Upjohn, Inc. (the "Company") and Harris Trust &
Savings Bank, as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may become exercisable for
securities or assets of the Company or securities of another
entity, may be exchanged for shares of Common Stock or other
securities or assets of the Company, may expire, may become
void (if they are "Beneficially Owned" by an "Acquiring
Person" or an Affiliate or Associate thereof, as such terms
are defined in the Rights Agreement, or by any transferee of
any of the foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this
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<PAGE> 18
certificate. The Company will mail or arrange for the mailing
of a copy of the Rights Agreement to the holder of this
certificate without charge after the receipt of a written
request therefor.
Certificates representing shares of Common Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share of
Common Stock evidenced thereby notwithstanding the absence of the foregoing
legend.
2.3 Exercise of Rights; Separation of Rights. (a)
Subject to Sections 3.1, 5.1 and 5.10 and subject to adjustment as herein set
forth, each Right will entitle the holder thereof, after the Separation Time
and prior to the Expiration Time, to purchase, for the Exercise Price, one
one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (together, in the case of certificates issued prior to
the Record Time, with the letter mailed to the record holder thereof pursuant
to Section 2.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share.
(c) Subject to the terms and conditions hereof, after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of shares of Common Stock.
Promptly following
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<PAGE> 19
the Separation Time, the Rights Agent will mail to each holder of record of
Common Stock as of the Separation Time (other than any Person whose Rights have
become void pursuant to Section 3.1(b)), at such holder's address as shown by
the records of the Company (the Company hereby agreeing to furnish copies of
such records to the Rights Agent for this purpose), (x) a certificate (a
"Rights Certificate") in substantially the form of Exhibit A hereto
appropriately completed, representing the number of Rights held by such holder
at the Separation Time and having 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 law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from time to
time be listed or traded, or to conform to usage, and (y) a disclosure
statement describing the Rights.
(d) Subject to the terms and conditions hereof, Rights
may be exercised on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached
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<PAGE> 20
to the Rights Certificate duly completed, accompanied by payment in cash, or by
certified or official bank check or money order payable to the order of the
Company, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
which may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
shares or depositary receipts (or both) in a name other than that of the holder
of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an
Election to Exercise accompanied by payment as set forth in Section 2.3(d), and
subject to the terms and conditions hereof, the Rights Agent will thereupon
promptly (i)(A) requisition from a transfer agent stock certificates evidencing
such number of shares or other securities to be purchased (the Company hereby
irrevocably authorizing its transfer agents to comply with all such
requisitions) and (B) if the Company elects pursuant to Section 5.5 not to
issue certificates representing fractional shares, requisition from the
depositary selected by the Company depositary receipts representing the
fractional shares to be purchased or requisition from the Company the amount of
cash to be paid in lieu of fractional shares in accordance with Section 5.5 and
(ii) after receipt of such certificates, depositary receipts and/or cash,
deliver the same to or upon
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<PAGE> 21
the order of the registered holder of such Rights Certificate, registered (in
the case of certificates or depositary receipts) in such name or names as may
be designated by such holder.
(f) In case the holder of any Rights shall exercise less
than all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i)
take all such action as may be necessary to ensure that all shares delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Exchange Act, and the rules
and regulations thereunder, and any other applicable law, rule or regulation,
in connection with the issuance of any shares upon exercise of Rights; and
(iii) pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the original issuance or delivery of
the Rights Certificates or of any shares issued upon the exercise of Rights,
provided, that
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<PAGE> 22
the Company shall not be required to pay any transfer tax or charge which may
be payable in respect of any transfer involved in the transfer or delivery of
Rights Certificates or the issuance or delivery of certificates for shares in a
name other than that of the holder of the Rights being transferred or
exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a)
In the event the Company shall at any time after the Record Time and prior to
the Separation Time (i) declare or pay a dividend on Common Stock payable in
Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the
Exercise Price in effect immediately prior to such adjustment divided by the
number of shares of Common Stock (the "Expansion Factor") that a holder of one
share of Common Stock immediately prior to such dividend, subdivision or
combination would hold thereafter as a result thereof and (y) each Right held
prior to such adjustment will become that number of Rights equal to the
Expansion Factor, and the adjusted number of Rights will be deemed to be
distributed among the shares of Common Stock with respect to which the original
Rights were associated (if they remain outstanding) and the shares issued in
respect of such dividend, subdivision or combination, so that each such share
of Common Stock will
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<PAGE> 23
have exactly one Right associated with it. Each adjustment made pursuant to
this paragraph shall be made as of the payment or effective date for the
applicable dividend, subdivision or combination.
In the event the Company shall at any time after the Record
Time and prior to the Separation Time issue any shares of Common Stock
otherwise than in a transaction referred to in the preceding paragraph, each
such share of Common Stock so issued shall automatically have one new Right
associated with it, which Right shall be evidenced by the certificate
representing such share. To the extent provided in Section 5.3, Rights shall
be issued by the Company in respect of shares of Common Stock that are issued
or sold by the Company after the Separation Time.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in
Common Stock) whether by dividend, in a reclassification or recapitalization
(including any such transaction involving a merger, consolidation or share
exchange), or otherwise, the Company shall make such adjustments, if any, in
the Exercise Price, number of Rights and/or securities or other property
purchasable upon exercise of Rights as the Board of Directors of the Company,
in
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<PAGE> 24
its sole discretion, may deem to be appropriate under the circumstances in
order to adequately protect the interests of the holders of Rights generally,
and the Company and the Rights Agent shall amend this Agreement as necessary to
provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an
adjustment to the Exercise Price is made pursuant to this Section 2.4, the
Company shall (i) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment and (ii)
promptly file with the Rights Agent and with each transfer agent for the Common
Stock a copy of such certificate.
(d) Rights certificates shall represent the securities
purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the securities purchasable at the
time of issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person in
whose name any certificate for shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
shares represented thereby on the date upon which the Rights
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<PAGE> 25
Certificate evidencing such Rights was duly surrendered and payment of the
Exercise Price for such Rights (and any applicable taxes and other governmental
charges payable by the exercising holder hereunder) was made; provided,
however, that if the date of such surrender and payment is a date upon which
the stock transfer books of the Company are closed, such person shall be deemed
to have become the record holder of such shares on, and such certificate shall
be dated, the next succeeding Business Day on which the stock transfer books of
the Company are open.
2.6 Execution, Authentication, Delivery and Dating of
Rights Certificates. (a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, President and Chief Executive
Officer or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Rights Certificates may be manual or
facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Separation Time, the Company will notify
the Rights Agent of such Separation Time and
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will deliver Rights Certificates executed by the Company to the Rights Agent
for counter-signature, and, subject to Section 3.1(b), the Rights Agent shall
manually countersign and deliver such Rights Certificates to the holders of the
Rights pursuant to Section 2.3(c) hereof. No Rights Certificate shall be valid
for any purpose unless manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Time, the Company will cause to be kept a register
(the "Rights Register") in which, subject to such reasonable regulations as it
may prescribe, the Company will provide for the registration and transfer of
Rights. The Rights Agent is hereby appointed "Rights Registrar" for the
purpose of maintaining the Rights Register for the Company and registering
Rights and transfers of Rights after the Separation Time as herein provided.
In the event that the Rights Agent shall cease to be the Rights Registrar, the
Rights Agent will have the right to examine the Rights Register at all
reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Section 2.7(c) and (d), the
Company will execute,
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and the Rights Agent will countersign and deliver, in the name of the holder or
the designated transferee or transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the same aggregate
number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all
Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Company, and such Rights
shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
(d) The Company shall not be required to register the
transfer or exchange of any Rights after such Rights
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<PAGE> 28
have become void under Section 3.1(b), been exchanged under Section 3.1(c) or
been redeemed under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates. (a) If any mutilated Rights Certificate is surrendered to the
Rights Agent prior to the Expiration Time, then, subject to Sections 3.1(b),
3.1(c) and 5.1, the Company shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate
evidencing the same number of Rights as did the Rights Certificate so
surrendered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the Expiration Time (i) evidence to their satisfaction of
the destruction, loss or theft of any Rights Certificate and (ii) such security
or indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may
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<PAGE> 29
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b) shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company or the Rights Agent may deem and treat the person
in whose name such Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby for all purposes whatsoever, including the payment
of the Redemption Price and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. As used in this Agreement, unless the
context otherwise requires, the term "holder" of any Rights shall
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mean the registered holder of such Rights (or, prior to the Separation Time,
the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2.10, except
as expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates and deliver a certificate of destruction to the
Company.
2.11 Agreement of Rights Holders. Every holder of Rights
by accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
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(b) after the Separation Time, the Rights Certificates
will be transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will,
under the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time
to time pursuant to Section 2.4(b) or 5.4 hereof.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration
Time a Flip-in Date shall occur, except as provided in this Section 3.1, each
Right shall constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to
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Section 5.10), that number of shares of Common Stock having an aggregate Market
Price on the Stock Acquisition Date equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally
in the event that on or after such Stock Acquisition Date an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or
were Beneficially Owned on or after the Stock Acquisition Date by an Acquiring
Person or an Affiliate or Associate thereof or by any transferee, direct or
indirect, of any of the foregoing shall become void and any holder of such
Rights (including transferees) shall thereafter have no right to exercise or
transfer such Rights under any provision of this Agreement. If any Rights
Certificate is presented for assignment or exercise and the Person presenting
the same will not complete the certification set forth at the end of the form
of assignment or notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates and Associates) as
the Company shall reasonably request, then the Company shall be entitled
conclusively to deem the Beneficial Owner thereof to be an Acquiring Person or
an
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Affiliate or Associate thereof or a transferee of any of the foregoing and
accordingly will deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its
option, at any time after a Flip-in Date and prior to the time that an
Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock elect to exchange all (but not less than
all) the then outstanding Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 3.1(b)) for shares of Common
Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted in order to protect the interests of holders of Rights
generally in the event that after the Separation Time an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock (such exchange ratio, as adjusted
from time to time, being hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right
(other than Rights that have become void pursuant to Section 3.1(b)) will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors
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electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the Rights (other than
Rights that have become void pursuant to Section 3.1(b)) outstanding
immediately prior thereto by mailing such notice in accordance with Section
5.9.
Each Person in whose name any certificate for shares is issued
upon the exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d)
shall for all purposes be deemed to have become the holder of record of the
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 any applicable taxes and other governmental charges payable by
the holder was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business
Day on which the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred
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Stock, at a ratio of one one-hundredth of a share of Preferred Stock for each
share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock or Preferred Stock of
the Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), and the Company elects not to, or is
otherwise unable to, make the exchange referred to in Section 3.1(c), the
Company shall either (i) call a meeting of stockholders seeking approval to
cause sufficient additional shares to be authorized (provided that if such
approval is not obtained the Company will take the action specified in clause
(ii) of this sentence) or (ii) take such action as shall be necessary to ensure
and provide, to the extent permitted by applicable law and any agreements or
instruments in effect on the Stock Acquisition Date to which it is a party,
that each Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, debt or equity
securities or other assets (or a combination thereof) having a fair value equal
to twice the Exercise Price, or (B) without payment of consideration (except as
otherwise required by applicable law), debt or equity securities or other
assets (or a combination thereof) having a fair value equal to the Exercise
Price, or (y) if the Board of Directors of the Company elects to exchange the
Rights in
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accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-in Date and the Exchange Ratio in
effect on the Flip-in Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the
Company shall not enter into any agreement with respect to, consummate or
permit to occur any Flip-over Transaction or Event unless and until it shall
have entered into a supplemental agreement with the Flip-over Entity, for the
benefit of the holders of the Rights, providing that, upon consummation or
occurrence of the Flip-over Transaction or Event (i) each Right shall
thereafter constitute the right to purchase from the Flip-over Entity, upon
exercise thereof in accordance with the terms hereof, that number of shares of
Flip-over Stock of the Flip-over Entity having an aggregate Market Price on the
date of consummation or occurrence of such Flip-over Transaction or Event equal
to twice the Exercise Price for an amount in cash equal to the Exercise Price
(such right to be appropriately adjusted in order to protect the interests of
the holders of Rights
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generally in the event that after such date of consummation or occurrence an
event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Flip-over Stock) and (ii) the Flip-
over Entity shall thereafter be liable for, and shall assume, by virtue of such
Flip-over Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to this Agreement. The
provisions of this Section 3.2 shall apply to successive Flip-over Transactions
or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements,
agreements or instruments that would eliminate or otherwise diminish in any
material respect the benefits intended to be afforded by this Rights Agreement
to the holders of Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company agrees
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to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted to be done 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.
(b) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it
in connection with its administration of this Agreement in reliance upon any
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
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4.2 Merger or Consolidation or Change of Name of Rights
Agent. (a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation succeeding
to the shareholder services business of the Rights Agent or any successor
Rights Agent, will 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 4.4
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates 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 have not 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 will have the full force provided in the Rights
Certificates and in this Agreement.
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(b) In case at any time the name of the Rights Agent is
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.
4.3 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 will be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder,
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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 a person believed by the Rights Agent to
be the Chairman of the Board, the President and Chief Executive Officer or any
Vice President and by the Treasurer or any Assistant Treasurer or the Secretary
or any Assistant Secretary of the Company and delivered to the Rights Agent;
and such certificate will 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 will be liable hereunder only for
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the certificates for securities purchasable upon exercise of Rights or the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization,
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execution and delivery hereof by the Rights Agent) or in respect of the
validity or execution of any certificate for securities purchasable upon
exercise of Rights or Rights Certificate (except its countersignature thereof);
nor will it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor will it
be responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment
required under the provisions of Section 2.4, 3.1 or 3.2 hereof or responsible
for the manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except with
respect to the exercise of Rights after receipt of the certificate contemplated
by Section 2.4 describing any such adjustment); nor will it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any securities purchasable upon exercise of
Rights or any Rights or as to whether any securities purchasable upon exercise
of Rights will, when issued, be duly and validly authorized, executed, issued
and delivered and 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
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required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from any person believed by the Rights Agent to be the Chairman of the Board,
the President and Chief Executive Officer or any Vice President or the
Secretary or any Assistant Secretary or the Treasurer or any Assistant
Treasurer of the Company, and to apply to such persons 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 person.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in Common Stock,
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
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duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent will 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.
4.4 Change of Rights Agent. The Rights Agent may resign
and be discharged from its duties under this Agreement upon 90 days' notice (or
such lesser notice as is acceptable to the Company) in writing mailed to the
Company and to each transfer agent of Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. The
Company may remove the Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent and to each transfer agent of the Common Stock by registered
or certified mail, and to the holders of the Rights in accordance with Section
5.9. If the Rights Agent should resign or be removed or otherwise become
incapable of acting, the Company will appoint a successor to the Rights Agent.
If the Company fails to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of
any Rights (which holder shall, with such notice, submit such holder's Rights
Certificate for inspection by the
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Company), then the holder of any Rights 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, in good standing, which is authorized under
such laws to exercise the powers of the Rights Agent contemplated by this
Agreement and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent will 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 will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail
a notice thereof in writing to the holders of the Rights. Failure to give any
notice provided for in this Section 4.4, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the
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Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the
Company may, at its option, at any time prior to the close of business on the
Flip-in Date, elect to redeem all (but not less than all) the then outstanding
Rights at the Redemption Price and the Company, at its option, may pay the
Redemption Price either in cash or shares of Common Stock or other securities
of the Company deemed by the Board of Directors, in the exercise of its sole
discretion, to be at least equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (or, if the resolution of the Board
of Directors electing to redeem the Rights states that the redemption will not
be effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and
without any notice, the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive the Redemption Price
in cash or securities, as determined by the Board of Directors. Promptly after
the Rights are redeemed, the Company shall give notice of such redemption to
the
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Rights Agent and the holders of the then outstanding Rights by mailing such
notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall
expire at the Expiration Time and no Person shall have any rights pursuant to
this Agreement or any Right after the Expiration Time, except, if the Rights
are exchanged or redeemed, as provided in Section 3.1 or 5.1 hereof,
respectively.
5.3 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 number or kind or class of shares of stock
purchasable upon exercise of Rights made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or sale of shares
of Common Stock by the Company following the Separation Time and prior to the
Expiration Time pursuant to the terms of securities convertible or redeemable
into shares of Common Stock or to options, in each case issued or granted prior
to, and outstanding at, the Separation Time, the Company shall issue to the
holders of such shares of Common Stock, Rights Certificates representing the
appropriate number of Rights in connection with the issuance or sale of such
shares of Common Stock; provided, however, in each case, (i)
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no such Rights Certificate shall be issued, if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or to the
Person to whom such Rights Certificates would be issued, (ii) no such Rights
Certificates shall be issued if, and to the extent that, appropriate adjustment
shall have otherwise been made in lieu of the issuance thereof, and (iii) the
Company shall have no obligation to distribute Rights Certificates to any
Acquiring Person or Affiliate or Associate of an Acquiring Person or any
transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the
Rights Agent may from time to time supplement or amend this Agreement without
the approval of any holders of Rights (i) prior to the close of business on the
Flip-in Date, in any respect and (ii) after the close of business on the
Flip-in Date, to make any changes that the Company may deem necessary or
desirable and which shall not materially adversely affect the interests of the
holders of Rights generally or in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be inconsistent with any
other provisions herein or otherwise defective. The Rights Agent will duly
execute and deliver any supplement or amendment hereto requested by the Company
which satisfies the terms of the preceding sentence.
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5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Company shall, in lieu thereof, in the sole discretion of the Board
of Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a
depositary selected by it, providing that each holder of a depositary receipt
shall have all of the rights, privileges and preferences to which such holder
would be entitled as a beneficial owner of such fractional share, or (b) pay to
the registered holder of such Rights the appropriate fraction of the Market
Price per share in cash.
5.6 Rights of Action. Subject to the terms of this
Agreement (including Sections 3.1(b) and 5.14), rights of action in respect of
this Agreement, other than rights of action vested solely in the Rights Agent,
are vested in the respective holders of the Rights; and any holder of any
Rights, without the consent of the Rights Agent or of the holder of any other
Rights, may, on such holder's own behalf and for such holder's own benefit and
the benefit of other holders of Rights, enforce, and may institute and maintain
any suit, action or proceeding against the Company to enforce, or otherwise act
in respect of, such holder's right to exercise such holder's Rights in the
manner provided in such holder's Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that
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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.
5.7 Holder of Rights Not Deemed a Stockholder. No
holder, as such, of any Rights shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of shares or any other securities which
may at any time be issuable on the exercise of such Rights, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights, 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 5.8 hereof), or
to receive dividends or subscription rights, or otherwise, until such Rights
shall have been exercised or exchanged in accordance with the provisions
hereof.
5.8 Notice of Proposed Actions. In case the Company
shall propose after the Separation Time and prior to the Expiration Time (i) to
effect or permit a Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such
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case, the Company shall give to each holder of a Right, in accordance with
Section 5.9 hereof, a notice of such proposed action, which shall specify the
date on which such Flip-over Transaction or Event, liquidation, dissolution, or
winding up is to take place, and such notice shall be so given at least 20
Business Days prior to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required
by this Agreement to be given or made by the Rights Agent or by the holder of
any Rights to or on the Company shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Pharmacia & Upjohn, Inc.
The Pharmacia & Upjohn Centre
67 Alma Road
Windsor, Berkshire
SL4 3HD
United Kingdom
Attention: General Counsel
With a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Neil T. Anderson and
Francis J. Aquila
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of
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any Rights to or on the Rights Agent shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
Harris Trust & Savings Bank
311 W. Monroe, 11th Floor
Chicago, Illinois 60606
Attention: Susan M. Shadel
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time,
on the registry books of the transfer agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or need be taken
pursuant to Section 3.1 or to comply with federal or state securities laws, the
Company may suspend the exercisability of the Rights for a reasonable period in
order to take such action or comply with such laws. In the event of any such
suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability or exchangeability of the
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Rights has been temporarily suspended. Notice thereof pursuant to Section 5.9
shall not be required.
Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such
holder in actions to enforce such holder's rights pursuant to any Rights or
this Agreement.
5.12 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.
5.13 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 holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
5.14 Determination and Actions by the Board of Directors,
etc. The Board of Directors of the Company shall
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have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement. All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors of the
Company to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear
herein for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
DELAWARE AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED
ENTIRELY WITHIN SUCH STATE.
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5.17 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.
5.18 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions hereof or the application of such term or provision to
circumstances other than those as to which it is held invalid or unenforceable.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
PHARMACIA & UPJOHN, INC.
By: /s/ Don W. Schmitz
----------------------------------
Name: Don W. Schmitz
Title: Vice President
HARRIS TRUST & SAVINGS BANK
By: /s/ Susan M. Shadel
----------------------------------
Name: Susan M. Shadel
Title: Assistant Vice President
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EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
Certificate No. W- _______ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT
THE OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED BY ACQUIRING
PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
Rights Certificate
PHARMACIA & UPJOHN, INC.
This certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Stockholder Protection Rights Agreement, dated
as of March 4, 1997 (as amended from time to time, the "Rights Agreement"),
between Pharmacia & Upjohn, Inc., a Delaware corporation (the "Company"), and
Harris Trust & Savings Bank, an Illinois corporation, as Rights Agent (the
"Rights Agent", which term shall include any successor Rights Agent under the
Rights Agreement), to purchase from the Company at any time after the
Separation Time (as such term is defined in the Rights Agreement) and prior to
the close of business on March 7, 2007, one one-hundredth of a fully paid share
of Participating Preferred Stock, par value $.01 per share (the "Preferred
Stock"), of the Company (subject to adjustment as provided in the Rights
Agreement)
<PAGE> 58
at the Exercise Price referred to below, upon presentation and surrender to the
Rights Agent of this Rights Certificate with the Form of Election to Exercise
duly executed at the principal office of Harris Trust Company of New York, an
affiliate of the Rights Agent in The City of New York. The Exercise Price shall
initially be $150.00 per Right and shall be subject to adjustment in certain
events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities of the
Company other than Preferred Stock or assets of the Company, all as provided in
the Rights Agreement.
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
office of the Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the
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<PAGE> 59
Rights Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor evidencing an aggregate number
of Rights equal to the aggregate number of Rights evidenced by the Rights
Certificate or Rights Certificates surrendered. If this Rights Certificate
shall be exercised in part, the registered 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, each Right evidenced by this
Certificate may be (a) redeemed, by the Company under certain circumstances, at
its option, at a redemption price of $0.01 per Right or (b) exchanged by the
Company under certain circumstances, at its option, for one share of Common
Stock or one one-hundredth of a share of Preferred Stock per Right (or, in
certain cases, other securities or assets of the Company), subject in each case
to adjustment in certain events 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 any securities which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to
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<PAGE> 60
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 Rights evidenced by this Rights
Certificate shall have been exercised or exchanged 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.
Date: ____________
ATTEST: PHARMACIA & UPJOHN, INC.
By
- ---------------------------- ------------------------------
Secretary Name:
Title:
Countersigned:
HARRIS TRUST & SAVINGS BANK
By
-------------------------
Authorized Signature
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<PAGE> 61
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this 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: _______________, ____
Signature Guaranteed:
_________________________
Signature (Signature must
correspond to name as written
upon the face of this Rights
Certificate in every
particular, without
alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
<PAGE> 62
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate
are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
-----------------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
<PAGE> 63
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: PHARMACIA & UPJOHN, INC.
The undersigned hereby irrevocably elects to exercise
_______________________ whole Rights represented by the attached Rights
Certificate to purchase the shares of Participating Preferred Stock issuable
upon the exercise of such Rights and requests that certificates for such shares
be issued in the name of:
___________________________________
Address:
___________________________________
Social Security or Other Taxpayer
___________________________________
Identification Number:
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
___________________________________
Address:
___________________________________
Social Security or Other Taxpayer
___________________________________
Identification Number:
Dated: _______________, ____
Signature Guaranteed: _________________________
Signature
(Signature must correspond to name
as written upon the face of the
attached Rights Certificate in
every particular, without
alteration or enlargement or
any change whatsoever)
<PAGE> 64
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17Ad-15.
- --------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the Rights evidenced by the
attached Rights Certificate are not, and, to the knowledge of the undersigned,
have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
-------------------------
Signature
- --------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
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<PAGE> 65
EXHIBIT B
FORM OF CERTIFICATE OF DESIGNATION
AND TERMS OF PARTICIPATING PREFERRED
STOCK OF PHARMACIA & UPJOHN, INC.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
We, the undersigned, _______________________ and
___________________, the ________________________, and _____________,
respectively, of Pharmacia & Upjohn, Inc., a Delaware corporation (the
"Corporation"), do hereby certify as follows:
Pursuant to authority granted by Article FOURTH of the
Restated Certificate of Incorporation of the Corporation, and in accordance
with the provisions of Section 151 of the General Corporation Law of the State
of Delaware, the Board of Directors of the Corporation has adopted the
following resolutions fixing the designation and certain terms, powers,
preferences and other rights of a new series of the Corporation's Preferred
Stock, par value $.01 per share, and certain qualifications, limitations and
restrictions thereon:
RESOLVED, that there is hereby established a series of
Preferred Stock, par value $.01 per share, of the Corporation, and the
designation and certain terms, powers, preferences and other rights of
the shares of such series, and certain qualifications, limitations and
restrictions thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series
shall be "Participating Preferred Stock" (hereinafter called
"this Series"). Each share of this Series shall be identical
in all respects with the other shares of this Series except as
to
<PAGE> 66
the dates from and after which dividends thereon shall be
cumulative.
(ii) The number of shares in this Series shall
initially be _______,* which number may from time to time be
increased or decreased (but not below the number then
outstanding) by the Board of Directors. Shares of this Series
purchased by the Corporation shall be cancelled and shall
revert to authorized but unissued shares of Preferred Stock
undesignated as to series. Shares of this Series may be
issued in fractional shares, which fractional shares shall
entitle the holder, in proportion to such holder's fractional
share, to all rights of a holder of a whole share of this
Series.
(iii) The holders of full or fractional shares of this
Series shall be entitled to receive, when and as declared by
the Board of Directors, but only out of funds legally
available therefor, dividends, (A) on each date that dividends
or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) are payable on or
in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of
this Series equal to the aggregate amount of dividends or
other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) that would be
payable on such date to a holder of the Reference Package and
(B) on the last day of March, June, September and December in
each year, in an amount per whole share of this Series equal
to the excess (if any) of $____** over the aggregate dividends
paid per whole share of this Series during the three month
period ending on such last day. Each such dividend shall be
paid to the holders of record of shares of this Series on the
date, not exceeding sixty days preceding such dividend or
distribution
____________________
* Insert a number equivalent to 1/100 of the sum of the number of
outstanding shares of Common Stock, reserved conversion shares (if any),
and stock options, rounded up to a round number.
** Insert an amount equal to 1/4 of 1% of the Exercise Price divided by the
number of shares of Preferred Stock purchasable upon exercise of one
Right (i.e., a guaranteed 1% dividend).
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<PAGE> 67
payment date, fixed for the purpose by the Board of Directors
in advance of payment of each particular dividend or
distribution. Dividends on each full and each fractional
share of this Series shall be cumulative from the date such
full or fractional share is originally issued; provided that
any such full or fractional share originally issued after a
dividend record date and on or prior to the dividend payment
date to which such record date relates shall not be entitled
to receive the dividend payable on such dividend payment date
or any amount in respect of the period from such original
issuance to such dividend payment date.
The term "Reference Package" shall initially
mean 100 shares of Common Stock, par value $.01 per share
("Common Stock"), of the Corporation. In the event the
Corporation shall at any time after the close of business on
________, ____* (A) declare or pay a dividend on any Common
Stock payable in Common Stock, (B) subdivide any Common Stock
or (C) combine any Common Stock into a smaller number of
shares, then and in each such case the Reference Package after
such event shall be the Common Stock that a holder of the
Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be
entitled to any dividends, whether payable in cash,
property or stock, in excess of full cumulative
dividends, as herein provided on this Series.
So long as any shares of this Series are
outstanding, no dividend (other than a dividend in Common
Stock or in any other stock ranking junior to this Series as
to dividends and upon liquidation) shall be declared or paid
or set aside for payment or other distribution declared or
made upon the Common Stock or upon any other stock ranking
junior to this Series as to dividends or upon liquidation, nor
shall any Common Stock nor
____________________
* For a certificate of designation relating to shares to be issued
pursuant to Section 2.3 of the Rights Agreement, insert the
Separation Time. For a certificate of designation relating to
shares to be issued pursuant to Section 3.1(d) of the Rights
Agreement, insert the Flip-in Date.
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<PAGE> 68
any other stock of the Corporation ranking junior to or on a
parity with this Series as to dividends or upon liquidation be
redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any shares of any such
stock) by the Corporation (except by conversion into or
exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation), unless, in each
case, the full cumulative dividends (including the dividend to
be due upon payment of such dividend, distribution,
redemption, purchase or other acquisition) on all outstanding
shares of this Series shall have been, or shall
contemporaneously be, paid.
(iv ) In the event of any merger, consolidation,
reclassification or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case the shares of this Series shall at the same time be
similarly exchanged or changed in an amount per whole share
equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may
be, that a holder of the Reference Package would be entitled
to receive as a result of such transaction.
(v) In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation, whether
voluntary or involuntary, the holders of full and fractional
shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of
the Common Stock or any other stock of the Corporation ranking
junior to this Series upon liquidation, to be paid in full an
amount per whole share of this Series equal to the greater of
(A) $__________* or (B) the aggregate amount distributed or
to be distributed prior to such date in connection with such
liquidation, dissolution or winding up to a holder of the
Reference Package (such greater amount being hereinafter
referred to as the "Liquidation Preference"), together with
accrued dividends to such distribution or payment date,
whether or not earned or declared. If such payment shall have
been made in
____________________
* Insert an amount equal to 100 times the Exercise Price in effect as of the
Separation Time.
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<PAGE> 69
full to all holders of shares of this Series, the holders of
shares of this Series as such shall have no right or claim to
any of the remaining assets of the Corporation.
In the event the assets of the Corporation
available for distribution to the holders of shares of this
Series upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders
are entitled pursuant to the first paragraph of this Section
(v), no such distribution shall be made on account of any
shares of any other class or series of Preferred Stock ranking
on a parity with the shares of this Series upon such
liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of
this Series, ratably in proportion to the full distributable
amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or
winding up.
Upon the liquidation, dissolution or winding
up of the Corporation, the holders of shares of this Series
then outstanding shall be entitled to be paid out of assets of
the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to the
first paragraph of this Section (v) before any payment shall
be made to the holders of Common Stock or any other stock of
the Corporation ranking junior upon liquidation to this
Series.
For the purposes of this Section (v), the
consolidation or merger of, or binding share exchange by, the
Corporation with any other corporation shall not be deemed to
constitute a liquidation, dissolution or winding up of the
Corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of
stockholders required by law or by the Restated Certificate of
Incorporation, as amended, of the Corporation, each whole
share of this Series shall, on any matter, vote as a class
with any other capital stock comprising part of the
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<PAGE> 70
Reference Package and voting on such matter and shall have the
number of votes thereon that a holder of the Reference Package
would have.
IN WITNESS WHEREOF, the undersigned have signed and attested
this certificate on the ____ day of _________, _____.
_________________________________
Attest:
_________________________
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