1
EXHIBIT 99.1
--------------------------------------------------------------------------------
ARRAY BIOPHARMA INC.
AND
COMPUTERSHARE TRUST COMPANY, INC.
AS RIGHTS AGENT
RIGHTS AGREEMENT
DATED AS OF AUGUST 2, 2001
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions..............................................................1
Section 2. Appointment of Rights Agent......................................................5
Section 3. Issue of Rights Certificates.....................................................5
Section 4. Form of Rights Certificates......................................................7
Section 5. Countersignature and Registration................................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.........................8
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....................9
Section 8. Cancellation of Rights Certificates.............................................11
Section 9. Reservation and Availability of Capital Stock...................................12
Section 10. Preferred Stock Record Date.....................................................13
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights......................................................14
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......................22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power............22
Section 14. Fractional Rights and Fractional Shares.........................................25
Section 15. Rights of Action................................................................27
Section 16. Agreement of Rights Holders.....................................................27
Section 17. Rights Certificate Holder Not Deemed a Stockholder..............................28
Section 18. Duties of Rights Agent..........................................................28
Section 19. Compensation and Indemnification of the Rights Agent............................31
Section 20. Merger or Consolidation or Change of Name of Rights Agent.......................31
Section 21. Change of Rights Agent..........................................................32
Section 22. Issuance of New Rights Certificates.............................................33
Section 23. Redemption......................................................................33
Section 24. Exchange........................................................................34
Section 25. Notice of Certain Events........................................................35
Section 26. Notices.........................................................................36
Section 27. Supplements and Amendments......................................................36
Section 28. Successors......................................................................37
Section 29. Determinations and Actions by the Board, etc. ..................................37
Section 30. Benefits of this Agreement......................................................38
Section 31. Severability....................................................................38
Section 32. Governing Law...................................................................38
Section 33. Counterparts....................................................................38
Section 34. Descriptive Headings............................................................39
3
EXHIBITS
Exhibit A Certificate of Designation
Exhibit B Summary of Rights
Exhibit C Form of Rights Certificate
4
RIGHTS AGREEMENT
This
RIGHTS AGREEMENT, dated as of August 2, 2001 (the
"Agreement"), is entered into by and between
ARRAY BIOPHARMA INC., a Delaware
corporation (the "Company"), and Computershare trust company, inc., a
Colorado
corporation (the "Rights Agent").
WHEREAS, on August 2, 2001 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a dividend
of one Right for each share of Common Stock (as hereinafter defined) of the
Company outstanding at the Close of Business (as defined herein) on the Record
Date (as defined herein), and has authorized the issuance of one Right with
respect to each share of Common Stock of the Company issued between the Record
Date (whether originally issued or delivered from the Company's treasury) and
the Distribution Date (as hereinafter defined), each Right initially
representing the right to purchase one-one hundredth of a share of Series A
Junior Participating Preferred Stock of the Company having the rights, powers
and preferences set forth in the form of Certificate of Designation, Preferences
and Rights attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and
Associates (as such terms are hereinafter defined) of such Person,
shall be the Beneficial Owner (as such term is hereinafter defined) of
15% or more of the shares of Common Stock then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the Company, or
(iii) any employee benefit plan of the Company or any Subsidiary of the
Company, or any Person holding shares of Common Stock for or pursuant
to the terms of any such plan to the extent, and only to the extent, of
such shares so held. Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of an acquisition of shares
of Common Stock by the Company which, by reducing the number of shares
of Common Stock outstanding, increases the proportionate number of
shares of Common Stock beneficially owned by such Person to 15% or more
of the shares of Common Stock of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial Owner
of 15% or more of the Common Stock of the Company then outstanding by
reason of share purchases by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional
shares of Common Stock of the Company, then such Person shall be deemed
to be an "Acquiring Person" if such Person is then the Beneficial Owner
of 15% or more of the Common
-1-
5
Stock then outstanding. Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person", as defined pursuant to the
foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would
no longer be an "Acquiring Person", then such Person shall not be
deemed an "Acquiring Person" for any purposes of this Agreement unless
and until such Person shall again become an "Acquiring Person". The
determination of whether such Person has become an Acquiring Person in
an inadvertent manner, and the determination of whether the divestment
of sufficient shares shall have been made as promptly as practicable
after becoming an inadvertent Acquiring Person, shall be made by a
majority vote of the Board of Directors of the Company.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange
rights, other rights (other than these Rights), warrants or
options, or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially
own", (A) securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B)
securities issuable upon exercise of Rights at any time prior
to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence
of a Triggering Event which Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior
to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to
Section 11(i) hereof in connection with an adjustment made
with respect to any Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to beneficially own, any
security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security
if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a
-2-
6
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the
Company;
provided, however, that nothing in this paragraph (c)
shall cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such
Person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date
of such acquisition.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking or trust institutions in the State of
Colorado are authorized or obligated by law or executive order to
close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., Denver,
Colorado time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Denver,
Colorado time, on the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the shares of common stock, par value $0.001 per share, of
the Company. "Common Stock" when used with reference to any Person
other than the Company shall mean the class of capital stock with the
greatest aggregate voting power, or the class of equity securities or
other equity interests having power to control or direct the
management, of such Person.
(h) "Company" shall mean
Array BioPharma Inc., a Delaware
corporation.
(i) "Distribution Date" shall mean the earlier of:
(i) the Close of Business on the tenth day after the
Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date);
(ii) the Close of Business on the tenth Business Day
(or, if such tenth Business Day occurs before the Record Date,
the Close of Business on the Record
-3-
7
Date), or such specified or unspecified later date on or after
the Record Date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an
Acquiring Person, after the date of the commencement by any
Person (other than the Company, any Subsidiary of the Company
or any employee benefit plan of the Company or of any
Subsidiary of the Company or any Person holding shares of
Common Stock for or pursuant to the terms of any such plan)
of, or of the first public announcement of the intention of
any Person (other than any of the Persons referred to in the
preceding parenthetical) to commence, a tender or exchange
offer the consummation of which would result in such Person
becoming the beneficial owner of 15% or more of the
outstanding shares of Common Stock.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, as in effect on the date of this Agreement.
(k) "Exchange Date" shall have the meaning set forth in
Section 7(a) hereof.
(l) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(m) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(n) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, joint venture, trust or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
(o) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock of the Company.
(p) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(q) "Purchase Price" shall have the meaning set forth in
Section 4(a) and 11(a)(ii) hereof.
(r) "Record Date" shall mean the Close of Business on August
27, 2001.
(s) "Redemption Period" shall have the meaning set forth in
Section 23(a) hereof.
(t) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(u) "Rights Agent" shall mean Computershare Trust Company,
Inc., a
Colorado corporation.
(v) "Rights Certificate" shall have the meaning set forth in
Section 3(d) hereof.
-4-
8
(w) "Rights Dividend Declaration Date" shall have the meaning
set forth in the recitals hereof.
(x) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.
(y) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(z) "Securities Act" shall mean the Securities Act of 1933, as
amended and as in effect on the date of this Agreement.
(aa) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(bb) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interests is owned, directly or indirectly,
by such Person, or is otherwise controlled by such Person.
(cc) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent
for the Company in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents as it may deem necessary or desirable, upon ten
(10) days' prior written notice to the Rights Agent. The Rights Agent shall have
no duty to supervise, and shall in no event be liable for, the acts or omissions
of any such Co-Rights Agent.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Summary of Rights. As promptly as practicable following
the Record Date, the Company will send or deliver a copy of a Summary of Rights
to Purchase Preferred Stock, in substantially the form attached hereto as
Exhibit B (the "Summary of Rights"), to each record holder of Common Stock as of
the Close of Business on the Record Date at the address of such holder shown on
the records of the Company. With respect to certificates for shares of Common
Stock outstanding as of the Record Date, until the Distribution Date, the Rights
will be evidenced by such certificates for the Common Stock and the registered
holders of the Common Stock shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier Expiration Date
or Final Expiration Date), the transfer of any certificate representing shares
of
-5-
9
Common Stock in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with the shares of Common Stock
represented thereby.
(b) New Certificates After Record Date. Rights shall be issued
in respect of all shares of Common Stock issued (whether originally issued or
from the Company's treasury) after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date. Rights shall also be issued to the
extent provided in Section 22 in respect of all shares of Common Stock which are
issued (whether originally issued or from the Company's treasury) after the
Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Common Stock shall also be deemed to be certificates for Rights,
and shall bear the following legend (in addition to any other legends that may
be required):
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF
TO CERTAIN RIGHTS AS SET FORTH IN A
RIGHTS AGREEMENT BETWEEN
ARRAY BIOPHARMA INC. (THE "COMPANY") AND COMPUTERSHARE TRUST
COMPANY, INC. (THE "RIGHTS AGENT") DATED AS OF AUGUST 2, 2001,
AS THE SAME MAY BE AMENDED FROM TIME TO TIME (THE "
RIGHTS
AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN
BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL
EXECUTIVE OFFICES OF THE COMPANY. UNDER CERTAIN CIRCUMSTANCES,
AS SET FORTH IN THE
RIGHTS AGREEMENT, SUCH RIGHTS WILL BE
EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE
EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE
HOLDER OF THIS CERTIFICATE A COPY OF THE
RIGHTS AGREEMENT AS IN
EFFECT ON THE DATE OF MAILING WITHOUT CHARGE AFTER RECEIPT OF A
WRITTEN REQUEST THEREFOR.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE
RIGHTS AGREEMENT,
RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS, WAS OR BECOMES
AN ACQUIRING PERSON OR ANY AFFILIATE OR ASSOCIATE THEREOF (AS
SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any such certificate shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.
(c) Rights Evidenced by Certificates. Until the Distribution
Date (i) the Rights will be evidenced (subject to the provisions of paragraph
(a) of this Section 3) by the certificates for Common Stock registered in the
names of the holders thereof (which certificates for Common Stock shall also be
deemed to be Rights Certificates) and not by separate Rights Certificates, and
(ii) the Rights will be transferable only in connection with the transfer of the
underlying shares of
-6-
10
Common Stock (including a transfer to the Company). The Company shall give the
Rights Agent prompt written notice of the Distribution Date.
(d) Issuance of Rights Certificates After Distribution Date.
As soon as practicable after the Distribution Date and receipt of written notice
of the Distribution Date from the Company, the Rights Agent upon notification
thereof will, at the Company's expense, send by first-class, insured, postage
prepaid mail, to each record holder of Common Stock as of the Close of Business
on the Distribution Date, at the address of such holder shown on the records of
the Company, a rights certificate, in substantially the form of Exhibit C hereto
(the "Rights Certificate"), evidencing one Right for each share of Common Stock
so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock has been made
pursuant to Section 11 hereof, at the time of distribution of the Rights
Certificates, the Company shall make necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and cash
is paid in lieu of any fractional Rights. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof) shall be
substantially in the form of Exhibit C hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate, and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of The NASDAQ National Market or any stock exchange on which
the Rights may from time to time be listed, or to conform to usage. The Rights
Certificates shall be in a machine printable format and in a form reasonably
satisfactory to the Rights Agent. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever issued, shall be dated as
of the Record Date, show the date of countersignature, and on their face shall
entitle the holders thereof to purchase such number of one-one hundredths of a
share of Preferred Stock as shall be set forth therein at the price set forth
therein (such exercise price per one-one hundredth of a share, the "Purchase
Price"), but the amount and type of securities purchasable upon exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any Rights Certificate issued pursuant to Section 3(d) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person or any Associate or Affiliate of an Acquiring Person; (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such; or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which a majority of the Directors has determined is
part of an
-7-
11
agreement, arrangement or understanding which has as a primary purpose or effect
avoidance of Section 7(e) hereof and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(E) OF SUCH RIGHTS AGREEMENT.
The Company shall instruct the Rights Agent in writing of the
Rights which should be so legended and shall supply the Rights Agent with such
legended Rights Certificates.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chief Executive Officer, President or Chief Financial Officer and
a Secretary or Assistant Secretary either manually or by facsimile signature.
The Rights Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or at offices designated as
the appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on the Expiration
Date, any Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates,
-8-
12
entitling the registered holder to purchase a like number of one-one hundredths
of a share of Preferred Stock (or following a Triggering Event, Common Stock,
other securities, cash, or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or exchanged
at the office of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have properly completed and signed the certificate
contained in the form of assignment on the reverse side of such Rights
Certificate and shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign
and deliver to the Person entitled thereto a Rights Certificate or Certificates,
as the case may be, as so requested. The Company may require payment by the
holder of Rights of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate, if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed, or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Exercise of Rights. Subject to Section 7(e) hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof) in whole or in part at any time after the Distribution
Date upon surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly and properly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the Purchase Price for each one-one
hundredth of a share of Preferred Stock (or other securities, cash or other
assets, as the case may be) as to which the Rights are exercised, at or prior to
the earlier of (i) the close of business on August 2, 2011 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof, or (iii) the time at which such Rights are exchanged (the
"Exchange Date") as provided in Section 24 hereof (the earliest of (i), (ii) and
(iii) being herein referred to as the "Expiration Date").
-9-
13
(b) Purchase Price. Each Right shall entitle the registered
holder thereof to purchase one-one hundredth of a share of Preferred Stock, and
the Purchase Price for each one-one hundredth of a share of Preferred Stock
pursuant to the exercise of a Right shall initially be seventy and no/100
dollars ($70.00), and shall be subject to adjustment from time to time as
provided in Sections 11 and 13 hereof and shall be payable in lawful money of
the United States of America in accordance with paragraph (c) below.
(c) Payment Procedure. Upon receipt of a Rights Certificate
representing exercisable Rights, with the form of election to purchase and the
certificate duly and properly executed, accompanied by payment, with respect to
each Right so exercised, of the Purchase Price per one-one hundredth of a share
of Preferred Stock (or Common Stock, other securities, cash or other assets, as
the case may be) to be purchased and an amount equal to any applicable transfer
tax or governmental charge in cash, or by certified check or cashier's check
payable to the order of the Company, the Rights Agent shall, subject to Section
18(k) hereof, thereupon promptly:
(i) (A)requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer
agent) certificates for the total number of one-one hundredths of a
share of Preferred Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit the total
number of shares of Preferred Stock issuable upon exercise of the
Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of
one-one hundredths of a share of Preferred Stock as are to be purchased
(in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent
with the depositary agent) and the Company will direct the depositary
to comply with such request;
(ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of issuance of fractional shares in accordance with
Section 14;
(iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder; and
(iv) after receipt thereof, promptly deliver such cash, if
any, to or upon the order of the registered holder of such Rights
Certificate.
In the event that the Company is obligated to issue other securities (including
Common Stock) of the Company, pay cash and/or distribute other property pursuant
to Section 11(a) hereof, the Company will make all arrangements necessary so
that such securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate.
(d) Partial Exercise. In case the registered holder of any
Rights Certificate shall exercise less than all the Rights evidenced thereby, a
new Rights Certificate evidencing Rights
-10-
14
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be designated by
such holder, subject to the provisions of Section 14 hereof.
(e) Acquiring Person Rights Void. Notwithstanding anything in
this Agreement to the contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring Person or an
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which a majority of the Directors has determined is part of an agreement,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder. The Rights Agent
will endeavor to comply with the provisions hereof to the extent it has received
instructions from the Company concerning such matters.
(f) Full Information Concerning Ownership. Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) properly completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
SECTION 8. CANCELLATION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if surrendered to
the Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Rights Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company.
-11-
15
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event, shares of
Common Stock and/or other securities) that, as provided in this Agreement,
including Section 11(a)(iii) hereof, will be sufficient to permit the exercise
in full of all outstanding Rights.
(b) In the event the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Common Stock and/or other securities)
issuable upon the exercise of Rights become listed on any national securities
exchange or quoted and traded on a national quotation system, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
or quoted on such quotation system upon official notice of issuance upon such
exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance with this
Agreement, or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Securities Act with respect
to the securities purchasable upon exercise of the Rights on an appropriate
form, (ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the Expiration Date. The Company
will also take such action as may be appropriate under, or to ensure compliance
with, the securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a
period of time not to exceed ninety (90) days after the date set forth in clause
(i) of the first sentence of this Section 9(c), the exercisability of the Rights
in order to prepare and file such registration statement and permit it to become
effective. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Upon any suspension of
exercisability of Rights referred to in this Section 9(c), the Company shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect, in each case with simultaneous written notice
to the Rights Agent. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable and shall be null and void so long
as held by a holder in any jurisdiction where the requisite qualification to the
issuance to such holder, or the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be obtainable, or the exercise
thereof shall not be permitted under applicable law or a registration statement
shall not have been declared effective. The Rights Agent may assume that
-12-
16
any Right exercised is permitted to be exercised under applicable law and shall
have no liability for acting in reliance upon such assumption.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one-one hundredths of a share
of Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock and/or other securities) delivered upon exercise of the Rights shall, at
the time of delivery of the certificates for such shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and non-assessable.
(e) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates or of any certificates for a number of one-one hundredths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) upon the exercise of Rights. The Company shall not, however, be required
to pay any transfer tax or charge which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or the
issuance or delivery of certificates for a number of one-one hundredths of a
share of Preferred Stock (or Common Stock and/or other securities, as the case
may be) in a name other than that of the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number of one-one hundredths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise of any Rights until
any such tax or charge shall have been paid (any such tax or charge being
payable by the holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax or
charge is due.
SECTION 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for a number of
one-one hundredths of a share of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of such fractional
shares of Preferred Stock (or Common Stock and/or other securities, as the case
may be) represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and any applicable transfer taxes and
charges) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Stock (or Common Stock and/or other
securities as the case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Preferred Stock (or Common Stock and/or
other securities as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
-13-
17
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.
The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) Dividends, Subdivisions, Combinations, etc. In the
event the Company shall at any time after the date of this Agreement (A) declare
a dividend on the Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred
Stock into a smaller number of shares or (D) issue any shares of its capital
stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or the number and kind of shares of capital stock
issuable on such date, as the case may be, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive, upon payment of the aggregate adjusted Purchase Price then in effect
necessary to exercise a Right in full, the aggregate number and kind of shares
of Preferred Stock or the number and kind of shares of capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Stock (or other capital stock, as the case
may be) transfer books of the Company were open, such holder would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination, or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Acquiring Person Triggering Events. Subject to
Sections 23 and 24 of this Agreement, in the event that any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person organized, appointed
or established by the Company for or pursuant to the terms of any such plan),
alone or together with its Affiliates and Associates, shall, at any time after
the Rights Dividend Declaration Date, become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a transaction set
forth in Section 13(a) hereof, (such event being referred to as a "Section
11(a)(ii) Event"), proper provision shall be made so that promptly following the
Redemption Period (as defined in Section 23(a)), each holder of a Right (except
as provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof and payment of an amount equal to the then
current Purchase Price in accordance with the terms of this Agreement, in lieu
of a number of one-one hundredths of a share of Preferred Stock, such number of
shares of Common Stock of the Company as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the then number of one-one
hundredths of a share of Preferred Stock for which a Right was or would have
been
-14-
18
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, whether or not such Right was then exercisable, and (y) dividing that
product (which, following such first occurrence, shall thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of this Agreement
except to the extent set forth in Section 13 hereof) by 50% of the current
market price per share of Common Stock (determined pursuant to Section 11(d)
hereof) on the date of such first occurrence (such number of shares, the
"Adjustment Shares").
(iii) Substitution of Common Stock; Insufficient
Shares. The Company may at its option substitute for a share of Common Stock
issuable upon the exercise of Rights in accordance with the foregoing
subparagraph (ii) such number or fractions of shares of Preferred Stock having
an aggregate market value equal to the current per share market price of a share
of Common Stock. In the event that the number of shares of Common Stock which is
authorized by the Company's Amended and Restated Certificate of Incorporation,
as amended, but not outstanding, or reserved for issuance for purposes other
than upon exercise of the Rights, is not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii), the Board
shall take all such action reasonably necessary to authorize additional Shares
of Common Stock for issuance upon exercise of the Rights, provided, however,
that if the Board determines that it is unable to cause the authorization of a
sufficient number of additional shares of Common Stock, then, in the event the
Rights become exercisable, the Board shall, to the extent permitted by
applicable law and by any agreements or instruments then in effect to which the
Company is a party, (A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess, the "Spread"), and (B) with respect to each Right
(subject to Section 7(e) hereof), make adequate provision to substitute for some
or all of the Adjustment Shares, upon exercise of a Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of Preferred Stock which the Board has
deemed to have the same value as shares of Common Stock) (such shares of equity
securities being herein called "common stock equivalents"), (4) debt securities
of the Company, (5) other assets, or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such aggregate value
has been determined by the Board based upon the advice of an investment banking
firm selected by the Board; provided, however, if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, shares of Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread.
If, upon the occurrence of a Section 11(a)(ii) Event, the
Board shall determine in good faith that it is likely that sufficient additional
shares of Common Stock could be authorized for issuance upon exercise in full of
the Rights, then if the Board so elects, the thirty (30) day period set forth
above may be extended to the extent necessary, but not more than ninety (90)
days after the Section 11(a)(ii) Trigger Date, in order that the Company may
seek stockholder
-15-
19
approval for the authorization of such additional shares (such period, as it may
be extended, the "Substitution Period"). To the extent that action is to be
taken pursuant to the preceding provisions of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to decide the
appropriate form of distribution to be made pursuant to the first sentence of
this Section 11(a)(iii) and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall be the current
market price (as determined pursuant to Section 11(d) hereof) per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common
stock equivalent" shall be deemed to have the same value as the Common Stock on
such date. The Board may, but shall not be required to, establish procedures to
allocate the right to receive shares of Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) Dilutive Rights Offering. In case the Company shall fix a
record date for the issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within forty-five (45)
calendar days after such record date) to subscribe for or purchase Preferred
Stock (or shares having the same rights, privileges and preferences as the
shares of Preferred Stock ("equivalent preferred stock") or securities
convertible into Preferred Stock at a price per share of Preferred Stock or per
share of "equivalent preferred stock" (or having a conversion price per share of
Preferred Stock, if a security convertible into Preferred Stock) less than the
current per share market price of the Preferred Stock (as defined in Section
11(d) hereof) on such record date, then the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, (x) the numerator of which
shall be the number of shares of Preferred Stock outstanding on such record
date, plus the number of shares of Preferred Stock which the aggregate offering
price of the total number of shares of Preferred Stock and/or equivalent
preferred stock so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such current
market price, and (y) the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or equivalent preferred stock to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. Shares of Preferred Stock owned
by or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
-16-
20
(c) Distributions. In case the Company shall fix a record date
for a distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in Preferred Stock, but including any dividend payable in stock other
than Preferred Stock), or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, (x) the numerator of which
shall be the current per share market price of the Preferred Stock (as defined
in Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes) of the portion of the cash, assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants applicable to a share
of Preferred Stock and (y) the denominator of which shall be such current per
share market price of the Preferred Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) Current Market Price. (i) For the purpose of any
computation hereunder, the "current market price" of the Common Stock on any
date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to but not including such date; provided,
however, that in the event that the current market price of the Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (i) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into such Common Stock
(other than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and prior to the expiration of the
requisite thirty (30) Trading Day period, as set forth above, after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
"current market price" shall be appropriately adjusted to take into account
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System ("NASDAQ") or such other system then in use, or, if
on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
-17-
21
a professional market maker making a market in the shares of Common Stock
selected by the Board.
If on any such date no market maker is making a market in the
Common Stock, the fair value of such shares on such date as determined in good
faith by the Board shall be used and shall be conclusive for all purposes. If
the Common Stock is not publicly held or not listed or traded, "current market
price" shall mean the fair value per share as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. The term "Trading Day"
shall mean a day on which the principal national securities exchange on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business, or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, the term "Trading Day"
shall mean a Business Day.
(ii) For the purpose of any computation hereunder,
the "current market price" per share of Preferred Stock shall be determined in
the same manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last paragraph thereof). If the current market
price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current market price"
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 100 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current market price"
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current market price" of
one-one hundredth of a share of Preferred Stock shall be equal to the "current
market price" of one share of Preferred Stock divided by 100 (as such number may
be appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of
this Agreement).
(e) Insignificant Adjustments. Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least one percent
(1%) in such price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a share of Common Stock or other share or one-millionth of a share of Preferred
Stock, as the case may be. Notwithstanding the first sentence of this Section
11(e), an adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which requires such
adjustment or (ii) the Expiration Date.
-18-
22
(f) Shares Other than Preferred Stock. If as a result of an
adjustment made pursuant to Section 11(a)(ii) or Section 13(a) hereof, the
holder of any Right thereafter exercised shall become entitled to receive any
shares of capital stock of the Company other than Preferred Stock, thereafter
the number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e), (g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to any such
other shares.
(g) Rights Issued Subsequent to Adjustment. All Rights
originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of one-one hundredths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
(h) Rights Issued Prior to Adjustment. Unless the Company
shall have exercised its election as provided in Section 11(i), upon each
adjustment of the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one-one hundredths of a share of
Preferred Stock (calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of one-one hundredths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) Adjustment in Number of Rights. The Company may elect on
or after the date of any adjustment of the Purchase Price to adjust the number
of Rights, in lieu of any adjustment in the number of one-one hundredths of a
share of Preferred Stock issuable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one-one hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least
ten (10) days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be
-19-
23
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and may
bear, at the option of the Company, the adjusted Purchase Price) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
(j) Rights Certificates Unchanged. Irrespective of any
adjustment or change in the Purchase Price or the number of one-one hundredths
of a share of Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the Purchase Price per one-one hundredth of a share and the number of one-one
hundredths of a share which were expressed in the initial Rights Certificates
issued hereunder.
(k) Par Value Limitation. Before taking any action that would
cause an adjustment reducing the Purchase Price below the then-par value, if
any, of the number of one-one hundredths of a share of Preferred Stock issuable
upon exercise of the Rights, the Company shall take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and non-assessable such number of one-one
hundredths of a share of Preferred Stock at such adjusted Purchase Price.
(l) Deferral of Issuance. In any case in which this Section 11
shall require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right exercised after
such record date the number of one-one hundredths of a share of Preferred Stock
and other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one-one hundredths of a share of Preferred
Stock and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring such
adjustment.
(m) Reduction in Purchase Price. Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that the Board in its sole
discretion shall determine to be advisable in order that any (i) consolidation
or subdivision of the Preferred Stock, (ii) issuance wholly for cash of any
shares of Preferred Stock at less than the current market price, (iii) issuance
wholly for cash of shares of Preferred Stock or securities which by their terms
are convertible into or exchangeable for Preferred Stock, (iv) stock dividends
or (v) issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.
-20-
24
(n) Certain Prohibited Business Transactions. The Company
covenants and agrees that it shall not, at any time after the Distribution Date,
(i) consolidate with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) hereof), (ii) merge with or into
any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
if (x) at the time of or immediately after such consolidation, merger or sale
there are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation, merger or sale, the
stockholders of the Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have received a distribution
of Rights previously owned by such Person or any of its Affiliates and
Associates.
(o) No Diminishment of Rights. The Company covenants and
agrees that, after the Distribution Date, it will not, except as permitted by
Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
(p) Adjustments Affecting Common Stock. Anything in this
Agreement to the contrary notwithstanding, in the event that the Company shall
at any time after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction (x) the numerator of which shall be the total number of shares of
Common Stock outstanding immediately prior to the occurrence of the event and
(y) the denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event, and each share
of Common Stock outstanding immediately after such event shall have issued with
respect to it that number of Rights which each share of Common Stock outstanding
immediately prior to such event had issued with respect to it. Such adjustment
shall be made successively whenever a record date is fixed for such dividend,
subdivision or combination. If such an event occurs that would require an
adjustment under Section 11(a)(ii) and this subsection (p), the adjustment
provided for in this subsection (p) shall be in addition to and prior to any
adjustment pursuant to Section 11(a)(ii).
-21-
25
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 or
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts and computations accounting
for such adjustment, (b) promptly file with the Rights Agent and with each
transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail or deliver a brief summary thereof to each holder of a
Rights Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 25
hereof. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of any adjustment unless and until it shall have received such
certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) Section 13 Event. Subject to Section 23 of this Agreement,
in the event that, following the Stock Acquisition Date, directly or indirectly:
(x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or
surviving corporation of such consolidation or merger,
(y) any Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o) hereof)
shall consolidate with, or merge with or into, the Company,
and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection
with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or
cash or any other property, or
(z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons
(other than the Company or any Subsidiary of the Company in
one or more transactions each of which complies with Section
11(o) hereof),
(each such event being referred to as a "Section 13 Event") then, and in each
such case, proper provision shall be made so that:
(i) each holder of a Right, except as provided in
Section 7(e) hereof, shall, upon the expiration of the
Redemption Period (as defined in Section 23(a)), thereafter
have the right to receive, upon the exercise thereof at the
then current
-22-
26
Purchase Price in accordance with the terms of this Agreement,
such number of validly authorized and issued, fully paid,
non-assessable and freely tradable shares of Common Stock of
the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained
by:
(1) multiplying the then current Purchase Price
by the number of one-one hundredths of a share of
Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event,
multiplying the number of one-one hundredths of a share
of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and
(2) dividing that product (which product,
following the first occurrence of a Section 13 Event,
shall be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of
the current market price per share of the shares of
Common Stock of such Principal Party on the date of
consummation of such Section 13 Event (or the fair
market value on such date of other securities or
property of the Principal Party, as provided for
herein).
(ii) Such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13 Event, all
the obligations and duties of the Company pursuant to this
Agreement.
(iii) The term "Company" shall thereafter be deemed to
refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to
such Principal Party following the first occurrence of a
Section 13 Event.
(iv) Such Principal Party shall take such steps
(including, but not limited to, the reservation of a
sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to its shares of Common Stock thereafter deliverable
upon the exercise of the Rights.
(v) The provisions of Section 11(a)(ii) hereof shall be
of no effect following the first occurrence of any Section 13
Event.
(b) "Principal Party" shall mean:
-23-
27
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which shares of
Common Stock of the Company are converted in such merger or
consolidation or, if there is more than one such Person, the
Person having shares of Common Stock with the greatest
aggregate market value; or if no securities are so issued, the
Person that is the other party to such merger or
consolidation, or, if there is more than one such Person, the
Person having shares of Common Stock with the greatest
aggregate market value; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) if the Common Stock of such Person is not registered Common Stock or
such Person is not a corporation, and such Person is a Subsidiary, directly or
indirectly, of another Person, but is not a direct or indirect Subsidiary of
another Person which has registered Common Stock outstanding, "Principal Party"
shall refer to the ultimate parent entity of such first-mentioned Person; (3) if
such Person shall be a Subsidiary, directly or indirectly, of more than one
Person, the shares of Common Stock of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value; and (4)
if the Common Stock of such Person is directly or indirectly controlled by more
than one Person, and none of such Persons has registered Common Stock
outstanding, then "Principal Party" shall refer to whichever ultimate parent
entity is the corporation having the greatest aggregate shareholders' equity or,
if no such ultimate parent entity is a corporation, the ultimate parent entity
having the greatest net assets.
(c) Sufficient Shares; Agreement with Principal Party. The
Company shall not consummate any Section 13 Event unless the Principal Party
shall have a sufficient number of authorized shares of its Common Stock which
have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any such Section 13 Event, the Principal Party
will:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until
the Expiration Date;
-24-
28
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act;
(iii) use its best efforts to obtain any necessary
regulatory approvals in respect of the securities purchasable
upon exercise of outstanding Rights; and
(iv) use its best efforts, if such Common Stock of the
Principal Party shall be listed or admitted to trading on the
New York Stock Exchange or on another national securities
exchange, to list or admit to trading (or continue the listing
of) the Rights and the securities purchasable upon exercise of
the Rights on the New York Stock Exchange or on such
securities exchange, or if the securities of the Principal
Party purchasable upon exercise of the Rights shall not be
listed or admitted to trading on the New York Stock Exchange
or a national securities exchange, to cause the Rights and the
securities purchasable upon exercise of the Rights to be
reported by such other system then in use.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a) hereof.
(d) No Liability of Rights Agent. In no event shall the Rights
Agent have any liability in respect of any such Principal Party transactions,
including, without limitation, the propriety thereof. The Rights Agent may rely
and be fully protected in relying upon a certificate of the Company stating that
the provisions of this Section 13 have been fulfilled. Notwithstanding anything
in this Agreement to the contrary, the prior written consent of the Rights Agent
must be obtained in connection with any supplemental agreement which alters the
rights or duties of the Rights Agent.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered holders
of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of the whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, or, in case no such sale takes place on such
day, the average of the high bid and low asked prices, in either case as
reported by the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading, or
-25-
29
such other system then in use or, if on any such date the Rights are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights selected
by the Board. If on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in good faith by
the Board shall be used. In the event the Rights are listed or admitted to
trading on a national securities exchange, the closing price for any day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the high bid and low asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to the national securities exchange on which the Rights are
listed or admitted to trading.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one-one hundredth of a share of Preferred Stock) upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one-one hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one-one hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one-one hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one-one hundredth of a share of Preferred Stock shall be one-one hundredth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) Following the occurrence of one of the events specified in
Section 11 giving rise to the right to receive Common Stock, common stock
equivalents or other securities upon the exercise of a Right, the Company shall
not be required to issue fractions of shares of Common Stock, common stock
equivalents or other securities upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock, common stock
equivalents or other securities. In lieu of fractional shares of Common Stock,
common stock equivalents or other securities the Company may pay to the
registered holders of Rights Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one (1) share of Common Stock, common stock equivalents or other
securities. For purposes of this Section 14(c), the current market value of one
share of Common Stock shall be the closing price of one share of Common Stock
(as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
-26-
30
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, except the
rights of action vested in the Rights Agent pursuant to Section 18 and Section
19 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations hereunder of any Person subject to this
Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.
Every holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate form of
assignment and the certificate contained therein duly completed and executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the Person in whose name the
Rights Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be affected by any notice to the contrary; and
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether
interlocutory or final) issued by a court of competent jurisdiction or by a
governmental,
-27-
31
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any government
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
the Preferred Stock or any other securities of the Company which may at any time
be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 18. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes only the duties and obligations
expressly 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 of its
selection (who may be legal counsel for the Company), and the advice or opinion
of such counsel shall be full and complete authorization and protection to the
Rights Agent, and the Rights Agent shall incur no liability, for or in respect
of any action taken or omitted by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "current market price") be proved or established by the
Company prior to taking or suffering or omitting to take any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by any person believed by the Rights Agent to be any one
of the Chief Executive Officer, President or Chief Financial Officer of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent, and the Rights Agent shall incur no
liability, for or in respect of any action taken, omitted or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith, or willful misconduct.
-28-
32
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except as to its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
(e) The Rights Agent is serving as an administrative agent and
shall not be under any responsibility in respect of, the validity of any
provision of this Agreement or the execution and delivery of this Agreement
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section 7(e) hereof) or
any adjustment required under any of the provisions 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 evidenced by Rights Certificates after the Rights
Agent's actual receipt of notice of any such adjustment); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock or shares of
Preferred Stock to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Common Stock or shares of Preferred
Stock will, when so issued, be validly authorized and issued, fully paid and
non-assessable, nor shall the Rights Agent be responsible for the legality of
the terms hereof in its capacity as an administrative agent.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any person believed by the Rights Agent to be any one of the Chief Executive
Officer, President or Chief Financial Officer of the Company, and to apply to
such officers for advice or instructions in connection with its duties, and it
shall not be liable for any action taken, omitted to be taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer or
for any delay in acting while waiting for those instructions. Any application by
the Rights Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken, suffered
or omitted by the Rights Agent under this Agreement and the date on or after
which such action shall be taken or suffered or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or suffered
by, or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case
-29-
33
of an omission), the Rights Agent shall have received written instruction in
response to such application specifying the action to be taken, suffered or
omitted.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person
or legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect, or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect, or misconduct; provided, however, the Rights Agent was
not grossly negligent in the selection thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has either
not been properly completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting with the
Company.
(l) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or obligations
shall be read into this Agreement against the Rights Agent.
(m) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certification concerning beneficial ownership appended to the form of assignment
and the form of election to purchase attached to the Rights Certificate unless
the Rights Agent shall have actual knowledge that, as executed, such
certification is untrue, or (ii) the non-execution of such certification
including, without limitation, any refusal to honor any otherwise permissible
assignment or election by reason of such non-execution.
(n) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or transfer
of the Rights Certificates.
-30-
34
SECTION 19. COMPENSATION AND INDEMNIFICATION OF THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent such
compensation as shall be agreed in writing between the Company and the Rights
Agent 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
expenses 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, its officers, employees,
agents and directors for, and to hold each of them harmless against, any loss,
liability, or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for any action taken, suffered or
omitted by the Rights Agent or such other indemnified party in connection with
the acceptance and administration of this Agreement and the exercise of its
duties hereunder, including but not limited to the costs and expenses of
defending against any claim (whether asserted by the Company, a holder of
Rights, or any other Person) of liability in the premises. The indemnity
provided for hereunder shall survive the expiration of the Rights and the
termination of this Agreement.
(b) The Rights Agent shall be authorized and 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 or the
exercise of its duties hereunder in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed and executed by the proper person
or persons.
(c) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of the action
unless such loss or damage results from the gross negligence, bad faith or
willful misconduct of the Rights Agent.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to all or
substantially all the stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, however, that such Person would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates shall
have been countersigned but not delivered, any such successor Rights Agent may
adopt the countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been
-31-
35
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at any such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and
be discharged from its duties under this Agreement upon thirty (30) days' notice
in writing mailed to the Company. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days after giving
notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the Rights Agent or the
registered holder of any Rights Certificate may, at the expense of the Company,
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 (i) a Person organized and doing business under the laws of the
United States or the States of Delaware or
Colorado (or of any other state of
the United States so long as such Person is authorized to do business in the
States of Delaware or
Colorado), in good standing, having an office in the
States of Delaware or
Colorado which is authorized under such laws to exercise
corporate trust power and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (ii) an affiliate of
such a Person. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and the Preferred Stock, and mail a notice thereof in writing
to the registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of
-32-
36
the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of
the Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price per share and the number
or kind of class of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date (other than upon exercise of a Right) and prior
to the redemption or expiration of the Rights, the Company (a) shall, with
respect to shares of Common Stock so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Rights
Certificate shall be issued if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 23. REDEMPTION.
(a) The Board may, at its option, at any time during the
period commencing on the Rights Dividend Declaration Date and ending on the
earlier of (i) the Close of Business on the tenth day following the Stock
Acquisition Date (or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the Close of Business on the tenth day following the Record
Date), or (ii) the Close of Business on the Final Expiration Date, (the
"Redemption Period") cause the Company to redeem all but not less than all the
then outstanding Rights at a redemption price of $.001 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"); provided, however, that, if
the Board authorizes redemption of the Rights on or after the time a Person
becomes an Acquiring Person, then such authorization shall require the
concurrence of two-thirds of the Directors. If, following the occurrence of a
Stock Acquisition Date and following the expiration of the Company's right of
redemption hereunder (i) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Common Stock in one
transaction or series of transactions, not directly or indirectly involving the
Company or any of its Subsidiaries, which did not result in the occurrence of a
Triggering Event such that such Person is thereafter a Beneficial Owner of 15%
or less of the outstanding shares of Common Stock, (ii) there are no other
Persons, immediately following the occurrence of the event described in clause
(i), who are Acquiring Persons, and (iii) the Board, by a vote of two-thirds of
the Board, shall so approve,
-33-
37
then the Company's right of redemption shall be reinstated and thereafter be
subject to the provisions of this Section 23. Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event or a Section 13 Event until such
time as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, shares of Common Stock
(based on the current market price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. Promptly after the
action of the Board ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the Transfer Agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made.
SECTION 24. EXCHANGE.
(a) The Board may, at its option, at any time after any Person
becomes an Acquiring Person, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 7(e) hereof) 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 hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio").
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of Common Stock for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
-34-
38
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute common stock equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the initial
rate of one common stock equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of common stock equivalents pursuant to the terms thereof, so that
each common stock equivalent delivered in lieu of each share of Common Stock
shall have essentially the same dividend, liquidation and voting rights as one
share of Common Stock.
(d) In the event that there shall not be sufficient Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares, the Company shall pay
to the registered holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock. For
the purposes of this paragraph (e), the current market value of a whole share of
Common Stock shall be the closing price of a share of Common Stock (as
determined pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to this Section
24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings) or (ii) to offer to the holders of Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of Preferred
Stock or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred Stock (other
than a reclassification involving only the subdivision of outstanding Preferred
Stock), or (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than
50% of the assets or earning power of the Company and its subsidiaries (taken as
a whole) to, any other Person, or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case, the Company shall give to
each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26 hereof, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights
or warrants, or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of Preferred Stock,
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of
-35-
39
the shares of Preferred Stock for purposes of such action and in the case of any
such other action, at least twenty (20) days prior to the date of the taking of
such proposed action or the date of participation therein by the holders of the
shares of Preferred Stock whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in
any such case, (i) the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate and to the Rights Agent, to the extent
feasible and in accordance with Section 26 hereof, a notice of the occurrence of
such event which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter to refer to
Common Stock and/or, if appropriate other securities.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Array BioPharma Inc.
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Computershare Trust Company, Inc.
00000 Xxxx Xxxxxxx Xxxxxxx, Xxxxx X-0
Xxxxxxxx, Xxxxxxxx 00000
Attention: Trust Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to any such holder at the address of such holder as shown on the
registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Prior to the Distribution Date and subject to the last
sentence of this Section 27, the Company may in its sole and absolute
discretion, and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement in any respect without the
-36-
40
approval of any holders of certificates representing shares of Common Stock;
provided, however, that the that the right of the Board of Directors to extend
the Distribution Date shall not require any amendment or supplement hereunder.
From and after the Distribution Date and subject to the last sentence of this
Section 27, the Company may in its sole and absolute discretion, and the Rights
Agent shall at any time and from time to time, if the Company so directs,
supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of any such Person); provided, however, that this
Agreement may not be supplemented or amended (A) to lengthen a time period
relating to when the Rights may be redeemed at such time as the Rights are not
then redeemable, or (B) to lengthen any other time period unless such
lengthening is for the purpose of protecting, enhancing or clarifying the rights
of, and/or the benefits to, the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of any such Person) and is approved by a
two-thirds vote of the Board. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any amendment or
supplement pursuant to this Section 27 which alters the Rights Agent's rights or
duties. Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC.
For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board (with, where specifically
provided for herein, the concurrence of two-thirds of the Directors) shall have
the exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board (with, where
specifically provided for herein, the concurrence of two-thirds of the
Directors) or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including without limitation a
-37-
41
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board (with, where specifically provided for herein, the
concurrence of two-thirds of the Directors) in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other Persons, and (y) not subject any Director to any liability
to the holders of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of Common
Stock). Prior to the Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of shares of Common
Stock.
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board of Directors determines in
its good faith judgment that severing the invalid language from this Agreement
would materially and adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business on the tenth day following the date
of such determination by the Board.
SECTION 32. GOVERNING LAW.
This Agreement, each Right and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance
with the laws of such State; provided, however, that the rights and obligations
of the Rights Agent shall be governed by and construed in accordance with the
internal laws of the State of
Colorado without regard to choice of law
principles therein.
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts.
It shall not be necessary that the signature of or on behalf of each party
appears on each counterpart, but it shall
-38-
42
be sufficient that the signature of or on behalf of each party appears on one or
more of the counterparts. All counterparts shall collectively constitute a
single agreement. It shall not be necessary in any proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of or on behalf of all of the parties.
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
-39-
43
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
ARRAY BIOPHARMA INC.
By:/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
Chief Executive Officer
COMPUTERSHARE TRUST COMPANY,
INC., as Rights Agent
By:/s/
------------------------------------
Name:
Title:
-40-
44
EXHIBIT A
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
ARRAY BIOPHARMA INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
I, Xxxxxx X. Xxxxxx, Chief Executive Officer of
Array
BioPharma Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions of
Section 103 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on August 2, 2001 adopted the following
resolution creating a series of 500,000 shares of Preferred Stock designated
as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (the "Board"), in accordance with
the provisions of its Amended and Restated Certificate of Incorporation a series
of Preferred Stock of the Corporation be and it hereby is created, and that the
designation and amount thereof and the voting rights or powers, preferences and
relative, participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are as
follows:
Section 1. Designation and Amount. The shares of such series,
par value $0.001 per share, shall be designated as "Series A Junior
Participating Preferred Stock" and the number of shares constituting such series
shall be 500,000. Such number of shares may be increased or decreased by
resolution of the Board; provided that no decrease shall reduce the number of
shares of Series A Junior Participating Preferred Stock to a number less than
the number of shares then outstanding plus the number of shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series A Junior Participating Preferred Stock.
45
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Junior Participating Preferred
Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the 15th day of January, April, July and October, in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after first
issuance of a share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest cent) equal to
the greater of (a) $10.00 or (b) subject to the provision for adjustment
hereinafter set forth, 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of common stock, par value $0.001 per share, of the Corporation (the
"Common Stock"), or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Participating Preferred Stock. In the
event the Corporation shall at any time after August 2, 2001 (the "Rights
Declaration Date") (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided in paragraph
(A) above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided that,
in the event no dividend or distribution shall have been declared on the Common
Stock during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $10.00 per share on
the Series A Junior Participating Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series A Junior Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date set for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is a Quarterly
A-2
46
Dividend Payment Date or is a date after the record date for the determination
of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which event such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 50 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred Stock shall entitle
the holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
after the Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the number of votes per share to which holders of shares
of Series A Junior Participating Preferred Stock were entitled immediately prior
to such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided by law, the holders of shares
of Series A Junior Participating Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(C) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the Series
A Junior Participating Preferred Stock as provided in Section 2 are not paid,
thereafter and until such dividends and distributions, whether or not declared,
on shares of Series A Junior Participating Preferred Stock outstanding shall
have been paid in full, the Corporation shall not:
A-3
47
(i) declare or pay dividends on, or make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating Preferred Stock;
or
(ii) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Junior Participating Preferred Stock, except dividends paid ratably on the
Series A Junior Participating Preferred Stock and all such parity stock on which
dividends are payable in proportion to the total amounts to which the holders of
all such shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Junior Participating Preferred Stock, or
any shares of stock ranking on a parity with the Series A Junior Participating
Preferred Stock, except in accordance with a purchase offer made in writing or
by publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
A-4
48
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the Corporation, no distribution shall be made (i) to the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior Participating
Preferred Stock unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received one hundred dollars ($100.00)
per share, plus any unpaid dividends and distributions payable thereon, whether
or not declared, to the date of such payment, provided that the holders of
shares of Series A Junior Participating Preferred Stock shall be entitled to
receive an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be distributed
per share to holders of shares of Common Stock, or (ii) to the holders of shares
of stock ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Junior Participating Preferred
Stock, except distributions made ratably on the Series A Junior Participating
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up.
(B) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the aggregate amount to which holders of shares of Series A
Junior Participating Preferred Stock are entitled to receive pursuant to Section
6(A)(i) above shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying such amount by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
A-5
49
Section 8. No Redemption. The Series A Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. Notwithstanding anything contained herein
to the contrary, the Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to voting
rights, the payment of dividends and the distribution of assets in liquidation,
unless the terms of any such series shall provide otherwise.
Section 10. Amendment. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be further amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series A Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least a majority of
the outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holders, in proportion to such holders fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred Stock.
A-6
50
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation by its Chief Executive Officer and
attested to by its Secretary, who affirm the foregoing as true under the
penalties of perjury this 2nd day of August, 2001.
ARRAY BIOPHARMA INC.
By:
--------------------------------
Xxxxxx X. Xxxxxx
Chief Executive Officer
ATTEST:
By:
--------------------------------
Secretary
A-7
51
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
The Board of Directors of
Array BioPharma Inc., a Delaware
Corporation (the "Company"), has declared a dividend distribution of one right
("Right") for each outstanding share of common stock of the Company (the "Common
Stock"). The distribution is payable to stockholders of record on August 27,
2001. Each Right, when exercisable, entitles the registered holder to purchase
from the Company one-one hundredth of a share of Series A Junior Participating
Preferred Stock ("Preferred Stock") at a price of $70.00 per one-one hundredth
share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and The Bank of New York, as Rights Agent (the "Rights
Agent").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate
certificates evidencing the Rights will be distributed. The Rights will separate
from the Common Stock and a distribution of Rights Certificates (as defined
below) will occur upon the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") has acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding shares of Common Stock (the "Stock
Acquisition Date") or (ii) 10 business days (or such later date as the Board of
Directors of the Company may determine) following the commencement of, or the
first public announcement of the intention to commence, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person of 15% or more of the outstanding shares of Common Stock.
The earlier of these dates is referred to as the "Distribution Date".
Until the Distribution Date, (i) the Rights will be evidenced
by the Common Stock certificates, and will be transferred with and only with the
Common Stock certificates, (ii) new Common Stock certificates issued after
August 27, 2001 upon transfer or new issuance of shares of the Common Stock will
contain a notation incorporating the Rights Agreement by reference, and (iii)
the surrender for transfer of any certificates for Common Stock outstanding will
also constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on August 2, 2011, unless earlier redeemed
or exchanged by the Company as described below. The Rights will not be
exercisable by a holder in any jurisdiction where the requisite qualification to
the issuance to such holder, or the exercise by such holder, of the Rights has
not been obtained or is not obtainable.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates alone
will evidence the Rights. Except as otherwise determined by the Board of
Directors of the Company, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15%
or more of the then outstanding shares of Common Stock, each holder of a Right
will, after the end of a redemption period referred to below, have the right, in
lieu of purchasing the Preferred Stock, to exercise the Right by purchasing, for
an amount equal to the Purchase Price, Common Stock (or, in certain
circumstances,
52
cash, property or other securities of the Company) having a value equal to two
times the Purchase Price. Notwithstanding any of the foregoing, all Rights that
are, or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
For example, at a Purchase Price of $70.00 per Right, each
Right not owned by an Acquiring Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder to
purchase $140.00 worth of Common Stock (or other consideration, as noted above)
for $70.00. Assuming that the Common Stock had a per share value of $10.00 at
that time, the holder of each valid Right would be entitled to purchase 14
shares of Common Stock for $70.00.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, or (ii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) shall, after the expiration of the redemption period referred to below,
have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the Purchase Price of the Right (e.g., common
stock of the acquiring company having a value of $140.00 for the $70.00 Purchase
Price per Right).
At any time after a person or group of affiliated or
associated persons becomes an Acquiring Person, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such person or group
which have become void), in whole or in part, at an exchange ratio of one share
of Common Stock (or, in certain circumstances, other equity securities of the
Company which are deemed by the Board of Directors of the Company to have the
same value as shares of Common Stock) per Right (subject to adjustment).
The Purchase Price payable, and the number of one-one
hundredths of a share of Preferred Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution under certain circumstances.
In general, the Board of Directors of the Company, may cause
the Company to redeem the Rights in whole, but not in part, at any time during
the period commencing on August 2, 2001 and ending on the tenth day following
the Stock Acquisition Date (the "Redemption Period") at a price of $0.001 per
Right (payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors of the Company). Under certain circumstances set forth
in the Rights Agreement, the decision to redeem the Rights will require the
concurrence of the two-thirds of Directors. After the Redemption Period has
expired, the Company's right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 15% or less of the outstanding shares
of Common Stock in a transaction or series of transactions not involving the
Company, there are no other Acquiring Persons and two-thirds of the Board of
Directors so approves. Immediately upon the action of the Board of Directors of
the Company ordering redemption of the Rights, the Rights will terminate and
Rights holders will be entitled only to receive the $0.001 redemption price.
-B-2-
53
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the Rights
will not be subject to federal taxation to stockholders or to the Company,
stockholders may, depending upon the circumstances, recognize taxable income in
the event that the Rights become exercisable for Common Stock (or other
consideration) of the Company or for common stock of the acquiring company as
set forth above.
* * *
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form
8-K. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
-B-3-
54
EXHIBIT C
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R- Rights
------ ------
NOT EXERCISABLE AFTER AUGUST 2, 2011 OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY SUCH
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. THE RIGHTS
SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO LONG AS HELD, BY A
HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS
IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.] */
--------
*/ The portion of the legend in brackets shall be inserted only if applicable
and shall replace the preceding sentence.
C-1
55
RIGHTS CERTIFICATE
ARRAY BIOPHARMA INC.
This certifies that , or its registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of August 2, 2001, as the same may be amended from time to
time (the "Rights Agreement"), between Array BioPharma Inc., a Delaware
corporation (the "Company"), and Computershare Trust Company, Inc., a
Colorado
corporation, as Rights Agent (the "Rights Agent"), to purchase from the Company
at any time prior to August 2, 2011 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one-one
hundredth of a fully paid, non-assessable share of Series A Junior Participating
Preferred Stock, par value $0.001 per share (the "Preferred Stock") of the
Company, at a purchase price of $70.00 per one-one hundredth share (the
"Purchase Price"), upon presentation and surrender of this Rights Certificate
with the Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of August
2, 2001, based on the Preferred Stock as constituted at such date, and are
subject to adjustment upon the happening of certain events as provided in the
Rights Agreement.
From and after the occurrence of an event described in Section
11(a)(ii) of the Rights Agreement, the Rights evidenced by this Rights
Certificate beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such Section
11(a)(ii) Event.
The Rights evidenced by this Rights Certificate shall not be
exercisable, and shall be void so long as held, by a holder in any jurisdiction
where the requisite qualification to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction shall not have been
obtained or be obtainable.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events (as such term is defined 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,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
C-2
56
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number of one-one hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $0.001 per Right at any time prior to the earlier of the
close of business on (i) the tenth day following the Stock Acquisition Date, and
(ii) the Final Expiration Date (as defined in the Rights Agreement). Under
certain circumstances set forth in the Rights Agreement, the decision to redeem
shall require the concurrence of two-thirds of the Company's Board of Directors.
After the expiration of the redemption period, the Company's right of redemption
may be reinstated if the Acquiring Person reduces its beneficial ownership to
15% or less of the outstanding shares of Common Stock in a transaction or series
of transactions not involving the Company, and such reinstatement is approved by
a two-thirds vote of the Company's Board of Directors.
At any time after a person becomes an Acquiring Person, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by such Acquiring Person which have become void), in whole or in part, at
an exchange ratio of one share of Common Stock (or, in certain circumstances,
other equity securities of the Company which are deemed by the Company's Board
of Directors to have the same value as shares of Common Stock) per Right
(subject to adjustment).
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one-one hundredth of a share of Preferred Stock, which
may, at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
shares of Preferred Stock or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by an authorized signatory of
the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company.
Dated as of ,
--------------------- -------
C-3
57
ARRAY BIOPHARMA INC.
By:
----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Attest:
By:
----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Countersigned:
Dated as of ,
--------------------- -------
Computershare Trust Company, Inc.
as rights agent
By:
---------------------------------------
Authorized Signatory
C-4
58
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED
------------------------------------------------------------
hereby sells, assigns and transfers unto
--------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____ Attorney, to transfer
the within Rights Certificate on the books of the within-named Company, with
full power of substitution.
Dated: ,
-------------------- -----
---------------------------------
Signature
Signature Guaranteed:
------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
C-5
59
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of any such Person.
Dated: ,
-------------------- -----
---------------------------------
Signature
Signature Guaranteed:
------------------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
C-6
60
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to
exercise Rights represented by the Rights Certificate.)
To: Array Biopharma Inc.
The undersigned hereby irrevocably elects to exercise _______
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Please insert social security
or other identifying 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:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Please insert social security
or other identifying number:
------------------------------------------
-----------------------------------------------------------------------
Dated: ,
-------------------- -----
---------------------------------
Signature
Signature Guaranteed:
------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
C-7
61
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of any such Person.
Dated: ,
-------------------- -----
---------------------------------
Signature
Signature Guaranteed:
------------------------------------
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
C-8
