RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 21, 1996 (the
"Agreement"), between Cerner Corporation, a Delaware corporation
(the "Company"), and UMB Bank, n.a., a national banking
association as agent (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on November 21, 1996 (the "Rights Dividend
Declaration Date"), the Board of Directors of the Company (the
"Board of Directors") authorized and declared a dividend
distribution of one Right for each share of Common Stock of the
Company outstanding at the close of business on December 2, 1996
(the "Record Date"), and has authorized the issuance of one (as
such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p) hereof) Right for each share of
Common Stock issued between the Record Date (whether originally
issued or delivered from the Company's treasury) and the
Distribution Date, and, in certain circumstances provided in
Section 22 of this Agreement, after the Distribution Date, each
Right initially representing the right to purchase one
one-thousandth of a share of 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 ("Rights");
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 collectively
any Person who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding
(other than as a result of a Qualifying Offer) or was such a
Beneficial Owner at any time after the date hereof, whether
or not such Person together with all Affiliates or
Associates of such Person continues to be the Beneficial
Owner of 15% or more of the then outstanding Common Stock.
Notwithstanding the foregoing, (A) the term "Acquiring
Person shall not include (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan
of the Company or of any Subsidiary of the Company, (iv) any
Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan, (v)
any Person together with all Affiliates and Associates of
such Person who or which becomes the Beneficial Owner of 15%
or more of the then outstanding shares of Common Stock as a
result of the acquisition of Common Stock directly from the
Company (each of (i) through (v), an "Exempted Person");
(B) no Person shall become an "Acquiring Person" as a result
of an acquisition of Common Stock by the Company which, by
reducing the number of such shares then outstanding,
increases the proportionate number of shares beneficially
owned by such Person together with all Affiliates and
Associates of such Person to 15% or more of the outstanding
Common Stock, except that if such Person, after such share
purchases by the Company, becomes the Beneficial Owner of
additional shares of Common Stock constituting 1% or more of
the then outstanding shares of Common Stock other than
pursuant to a Qualifying Offer, such Person shall be deemed
to be an "Acquiring Person"; and (C) if the Board of
Directors of the Company determines in good faith that a
Person who would otherwise be an "Acquiring Person" 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 to be
an "Acquiring Person." The term "outstanding," when used
with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such
securities then issued and outstanding together with the
number of such securities not then actually issued and
outstanding which such Person would be deemed to
beneficially own hereunder.
(b) "Act" shall mean the Securities Act of 1933,
as amended and in effect on the date hereof.
(c) "Adjustment Shares" shall have the meaning
set forth in Section 11(a)(ii) of this Agreement.
(d) "Affiliate" shall have the meaning set forth
in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act as amended and in effect on the date hereof.
(e) "Associate" shall have the meaning set forth
in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act as amended and in effect on the date hereof.
(f) 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,
rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to beneficially
own," (A) securities tendered pursuant to a tender or
exchange offer made by 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 ("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 as amended and in effect on the date
hereof), 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 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 as amended and as in
effect on the date hereof, 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 (f)) or disposing of any voting securities of
the Company;
provided, however, that nothing in this paragraph (f) 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 bona fide firm
commitment underwriting until the expiration of forty days
after the date of such acquisition. Notwithstanding
anything in this definition of Beneficial Owner to the
contrary, a Person who, prior to the Distribution Date, is a
member of the Board of Directors or an officer of the
Company or who is an Affiliate or Associate of a member of
the Board of Directors or officer of the Company (each, an
"Excluded Person") shall not be deemed to "beneficially own"
shares of Common Stock held by another Excluded Person
solely by reason of any agreement, arrangement or
understanding, written or otherwise, entered into in
opposition to any transaction or in support of a Qualifying
Offer.
(g) "Business Day" shall mean any day other than
a Saturday, Sunday or a day on which banking institutions in
the States of Missouri or New York or the state in which the
principal office of the Rights Agent is located are
authorized or obligated by law or executive order to close.
(h) "Close of business" on any given date shall
mean 5:00 p.m., New York City time, on such date; provided,
however, that if such date is not a Business Day it shall
mean 5:00 p.m., New York City time, on the next succeeding
Business Day.
(i) "Common Stock" shall mean the common stock,
par value $.01 per share, of the Company (or in the event of
a subdivision, combination or reclassification with respect
to such shares of Common stock, the shares of Common Stock
resulting from such subdivision, combination or
reclassification), except, subject to the proviso in Section
13(b) of this Agreement, that "Common Stock" when used with
reference to any Person other than the Company shall mean
the capital stock (or other equity securities or equity
interests) of such Person with the greatest voting power to
control or direct the management of such Person, or if such
Person is a Subsidiary of another Person, the Person or
Persons which ultimately control such first-mentioned
Person.
(j) "Common Stock Equivalents" shall have the
meaning set forth in Section 11(a)(iii) of this Agreement.
(k) "Company" shall have the meaning set forth in
the introductory paragraph of this Agreement.
(l) "Current Market Price" shall have the meaning
set forth in Section 11(d).
(m) "Current Value" shall have the meaning set
forth in Section 11(a)(iii) of this Agreement.
(n) "Distribution Date" shall have the meaning
set forth in Section 3(a) of this Agreement.
(o) "Equivalent preferred stock" shall have the
meaning set forth in Section 11(b) of this Agreement.
(p) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended and in effect on the date
hereof.
(q) "Excluded Person" shall have the meaning set
forth in Section 1(f) of this Agreement.
(r) "Exempted Person" shall have the meaning set
forth in Section 1(a) of this Agreement.
(s) "Expiration Date" shall have the meaning set
forth in Section 7(a) of this Agreement.
(t) "Final Expiration Date" shall have the
meaning set forth in Section 7(a) of this Agreement.
(u) "Interested Stockholder" shall mean any
Acquiring Person or any Affiliate or Associate of an
Acquiring Person or any other Person in which such Acquiring
Person, Affiliate or Associate has an interest, or any other
Person acting directly or indirectly on behalf of or in
concert with any such Acquiring Person, Affiliate or
Associate.
(v) "NASDAQ" shall have the meaning set forth in
Section 4(a) of this Agreement.
(w) "Original Rights" shall have the meaning set
forth in Section 1(f)(i) of this Agreement.
(x) "Person" shall mean any individual, firm,
corporation, partnership or other entity.
(y) "Preferred Stock" shall mean shares of Series
A Preferred Stock, par value $.01 per share, of the Company
(or in the event of a subdivision, combination or
reclassification with respect to such shares of Preferred
Stock, the shares of Preferred Stock resulting from such
subdivision, combination or reclassification), and, to the
extent that there is not a sufficient number of shares of
Series A Preferred Stock authorized to permit the full
exercise of the Rights, any other series of preferred stock
of the Company designated for such purpose containing terms
substantially similar to the terms of the Series A Preferred
Stock.
(z) "Principal Party" shall have the meaning set
forth in Section 13(b) of this Agreement.
(aa) "Purchase Price" shall have the meaning set
forth in Section 4(a) of this Agreement.
(bb) "Qualifying Offer" shall mean an acquisition
of shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock at
a price and on terms determined by at least a majority of
the members of the Board of Directors, after receiving
advice from one or more nationally recognized investment
banking firms selected by the Board of Directors, to be
(a) fair to stockholders (taking into account all factors
which the Board of Directors may deem relevant including,
without limitation, prices which could reasonably be
achieved if the Company or its assets were sold on an
orderly basis designed to realize maximum value) and
(b) otherwise in the best interests of the Company and its
stockholders (other than the Person or any Affiliate or
Associate thereof on whose behalf the offer is being made)
taking into account all factors that the Board of Directors
may deem relevant; provided, however, that (i) such
determination is made by the Board of Directors prior to the
purchase of shares under such tender offer or exchange
offer, and (ii) a majority of the members of the Board of
Directors are not Acquiring Persons or Affiliates,
Associates, nominees or representatives of an Acquiring
Person.
(cc) "Record Date" shall have the meaning set
forth in the "WHEREAS" clause at the beginning of this
Agreement.
(dd) "Redemption Date" shall have the meaning
set forth in Section 7(a) of this Agreement.
(ee) "Redemption Price" shall have the
meaning set forth in Section 23 of this Agreement.
(ff) "Rights" shall have the meaning set forth in
the "WHEREAS" clause at the beginning of this Agreement.
(gg) "Rights Agent" shall have the meaning set
forth in the introductory paragraph of this Agreement.
(hh) "Rights Certificates" shall have the meaning
set forth in Section 3(a) of this Agreement.
(ii) "Rights Dividend Declaration Date" shall have
the meaning set forth in the "WHEREAS" clause at the
beginning of this Agreement.
(jj) "Section 11(a)(ii) Event" shall have the
meaning set forth in Section 11(a)(ii) of this Agreement.
(kk) "Section 11(a)(ii) Trigger Date" shall have
the meaning set forth in Section 11(a)(iii) of this
Agreement.
(ll) "Section 13 Event" shall mean any event
described in clauses (x), (y) or (z) of Section 13(a) of
this Agreement.
(mm) "Spread" shall have the meaning set forth in
Section 11(a)(iii) of this Agreement.
(nn) "Stock Acquisition Date" shall mean the
earlier of the date of (i) the public announcement (which,
for purposes of this definition, shall include, without
limitation, a report filed under the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has
become such or (ii) the public disclosure of facts by the
Company or an Acquiring Person indicating that an Acquiring
Person has become an Acquiring Person; provided, however,
that if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a)(C) hereof, then no
Stock Acquisition Date shall be deemed to have occurred.
(oo) "Subsidiary" shall mean, with reference to
any Person, any corporation or other Person of which an
amount of voting securities sufficient to elect at least a
majority of the directors or others having similar authority
over such corporation or other Person is beneficially owned,
directly or indirectly, by such first-named Person, or
otherwise controlled by such first-named Person.
(pp) "Substitution Period" shall have the meaning
set forth in Section 11(a)(iii) of this Agreement.
(qq) "Summary of Rights" shall have the meaning
set forth in Section 3(b) of this Agreement.
(rr) "Trading Day" shall have the meaning set
forth in Section 11(d)(i) of this Agreement.
(ss) "Transaction" shall mean any merger,
consolidation or sale of assets or earning power described
in Section 13(a) hereof or any acquisition of Common Stock
which, without regard to any required approval of the
Company, would result in a Person becoming an Acquiring
Person.
(tt) "Triggering Event" shall mean any Section
11(a)(ii) Event or any Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The
Company hereby appoints the Rights Agent to act as agent for the
Company and the record holders of the Rights (who in accordance
with Section 3 hereof, shall prior to the Distribution Date also
be the record holders of Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until 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 such later date as the
Board of Directors shall determine) after the date of the earlier
of commencement by any Person (other than an Exempted Person) of,
or the first public announcement of the intention of any Person
(other than an Exempted Person) to commence (which intention to
commence remains in effect for five Business Days after such
announcement), a tender or exchange offer the consummation of
which would result in any Person becoming an Acquiring Person, or
(iii) the Expiration Date (the earlier of (i) and (ii) being
herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) of
this Agreement) by the certificates for the Common Stock
registered in the names of the record holders of the Common Stock
(which certificates for Common Stock shall be deemed also to be
certificates for Rights) and not by separate certificates, and
(y) the Rights will be transferable only in connection with the
transfer of the underlying shares of Common Stock (including a
transfer to the Company); provided, however, that if a tender or
exchange offer is terminated prior to the occurrence of a
Distribution Date, then no Distribution Date shall occur as a
result of such tender or exchange offer. The Board of Directors
may defer the date set forth in clause (ii) of the preceding
sentence to a specified later date or to an unspecified later
date, each to be determined by action of the Board of Directors.
As soon as practicable after the Distribution Date, the Rights
Agent will, at the Company's expense, send by first-class,
postage prepaid mail, to each record holder of the Common Stock
as of the Close of business on the Distribution Date, at the
address of such holder shown on the registry books of the
Company, one or more rights certificates, in substantially the
form of Exhibit B hereto (the "Rights Certificates"), 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(p) hereof, at the time of distribution of
the Rights Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section
14(a) hereof) so that Rights Certificates representing only whole
numbers of Rights are 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.
(b) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary
of Rights"), by first-class, postage prepaid mail, to each record
holder of the 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 the 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 record holders of the Common Stock shall
also be the record holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date, the
transfer of any certificates representing shares of Common Stock
in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with such shares of Common
Stock.
(c) Rights shall be issued in respect of all shares of
Common Stock which are 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, and, in
certain circumstances provided in Section 22 of this Agreement,
after the Distribution Date. Certificates representing such
shares of Common Stock shall also be deemed to be certificates
for Rights and shall bear the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the
Rights Agreement between Cerner Corporation (the
"Company") and UMB Bank, n.a. (the "Rights Agent"),
dated as of November 21, 1996 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
principal 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, promptly 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 the Distribution Date or the
Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and record holders of Common Stock shall also
be the record holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of
the Rights associated with the Common Stock represented by such
certificates. In the event the Company purchases or acquires any
Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be
deemed canceled and retired so that the Company shall not be
entitled to exercise any Rights associated with the Common Stock
which are no longer outstanding.
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 each be substantially in the form set forth in
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto, or with any rule or regulation
of any stock exchange or the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ") on which or
with whom the Rights may from time to time be listed or quoted,
or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their
face shall entitle the record holders thereof to purchase such
number of one one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such
exercise price per one one-thousandth of a share, the "Purchase
Price"), but the amount and the type of securities purchasable
upon the 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(a) or Section 22 hereof that represents Rights which are null
and void pursuant to Section 7(e) of this Agreement, 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 Agreement.
The provisions of Section 7(e) of this Agreement shall
be operative whether or not the foregoing legend is contained in
any such Rights Certificate.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its President
or any Vice President, either manually or by facsimile signature,
and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by an
authorized signatory of the Rights Agent, either manually or by
facsimile signature, 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 an
authorized signatory of 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. Any Rights Certificates may be
signed on behalf of the Company by any person who, at the actual
date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate,
although at the date of the execution of this Rights Agreement
any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, registry books for
registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the
respective record 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.
The Company and Rights Agent may deem and treat the person in
whose name any Rights Certificate (or prior to the Distribution
Date, the associated Common Stock Certificate) is recorded on the
books for the registration and transfer of Rights (or, the Common
Stock) as the absolute owner thereof, for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
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, entitling the
record holder to purchase a like number of one one-thousandths 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 record holder desiring to transfer,
split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing in a form
acceptable and delivered to the Rights Agent, and shall surrender
the Rights Certificate or Certificates to be transferred, split
up, combined or exchanged at the office or offices 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 record holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof
as the Company shall reasonably request. Thereupon the Rights
Agent shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as
so requested. The Company may require payment by the record
holder of a Rights Certificate 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 the Rights Agent 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 the Rights Agent, and
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 Rights Agent will deliver a new Rights Certificate
of like tenor to the record holder in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the record 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
executed, to the Rights Agent at the office or offices of the
Rights Agent designated for such purpose, along with a signature
guarantee and such other and further documentation as the Rights
Agent may reasonably request, together with payment of the
aggregate Purchase Price with respect to the total number of one
one-thousandths of a share of Preferred Stock (or, following the
occurrence of a Triggering Event, Common Stock or other
securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, at or prior to the
earlier of (i) the close of business on November 21, 2006 (the
"Final Expiration Date"), or (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof (the "Redemption
Date") (the earlier of the Final Expiration Date and the
Redemption Date being herein referred to as the "Expiration
Date").
(b) The Purchase Price for each one one-thousandth of
a share of Preferred Stock pursuant to the exercise of a Right
shall initially be $80.00, and shall be subject to adjustment
from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price per one
one-thousandth of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(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 for such
shares) certificates for the total number of one one-thousandths
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-thousandths of a share of
Preferred Stock as are to be purchased (in which case 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 agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to
be paid in lieu of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of
the record holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order
of the record holder of such Rights Certificate. The payment of
the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified
check or bank draft payable to the order of the Company. 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 other
securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate. The
Company reserves the right to require, prior to the occurrence of
a Triggering Event that, upon any exercise of Rights, a number of
Rights be exercised so that only whole shares of Preferred Stock
would be issued.
(d) In case the record holder of any Rights
Certificate shall exercise less than all the Rights evidenced
thereby, a new Rights Certificate evidencing Rights equivalent to
the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to, or upon the order of, the record 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) 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 Affiliate or Associate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Affiliate or Associate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Affiliate or Associate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Board of Directors
has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further
action, and no record 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
neither the Rights Agent nor the Company shall have any liability
to any record 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 Company may require (or cause the Rights Agent or
any transfer agent of the Company to require) any Person who
submits a Rights Certificate (or a certificate representing
shares of Common Stock that evidences, or but for the provisions
of this Section 7(e) would evidence, Rights) for transfer on the
registry books or to exercise the Rights represented thereby to
establish to the satisfaction of the Company in its sole
discretion that such Rights have not become null and void
pursuant to the provisions of this Section 7(e).
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a record holder
upon the occurrence of any purported exercise as set forth in
this Section 7 unless such holder shall have (i) completed and
signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES. All Rights Certificates surrendered for the
purpose of exercise, transfer, split up, combination or exchange
shall, if surrendered to the Company or any of its agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent shall destroy such canceled Rights Certificates and
deliver a certificate of destruction thereof to the Company.
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, 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) So long as the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable and deliverable upon the
exercise of the Rights may be listed on any national securities
exchange or national automated quotation system, the Company
shall use its best efforts to cause, from and after such time as
the Rights become exercisable (but only to the extent that it is
reasonably likely that the Rights will be exercised), all shares
reserved for such issuance to be listed on such exchange or
authorized to be 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 Section 11(a)(iii)
hereof, a registration statement under the 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 Act)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the
expiration of the Rights. 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. Upon any such suspension, the
Company shall issue a public announcement, and shall give
simultaneous written notice to the Rights Agent 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 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. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not
be exercisable in any jurisdiction if the requisite qualification
in such jurisdiction shall not have been obtained, the exercise
thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all one
one-thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock or other
securities, as the case may be) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such
shares or other securities, as the case may be (subject to
payment of the Purchase Price), be duly and validly authorized
and issued, and fully paid and nonassessable shares or
securities.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all U.S. federal and state
transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock or other securities, as the case
may be) upon the exercise of the Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable
in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of
one one-thousandths of a share of Preferred Stock (or, following
the occurrence of a Triggering Event, Common Stock or other
securities, as the case may be) in respect of a name other than
that of, the record holder of the Rights Certificates evidencing
Rights surrendered for exercise or to issue or deliver any
certificates for a number of one one-thousandths of a share of
Preferred Stock (or, following the occurrence of a Triggering
Event, Common Stock or other securities, as the case may be) in a
name other than that of the record holder upon the exercise of
any Rights until such tax shall have been paid (any such tax
being payable by such holder of such Rights Certificate at the
time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED STOCK RECORD DATE. Each
person in whose name any certificate for a number of one
one-thousandths of a share of Preferred Stock (or, following the
occurrence of a Triggering Event, Common Stock 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,
following the occurrence of a Triggering Event, Common Stock 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 all applicable transfer taxes)
was made; provided, however, that if the date of such surrender
and payment is a date upon which the Preferred Stock (or,
following the occurrence of a Triggering Event, Common Stock or
other securities, as the case may be) registry 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, following the occurrence of
a Triggering Event, Common Stock or other securities, as the case
may be) record books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the record 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.
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) 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 capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so
that the record holder of any Right exercised after such
time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind
of shares of Preferred Stock or 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
registry books of the Company were open, he 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) In the event any Person, alone or
together with its Affiliates and Associates, shall, at
any time after the Rights Dividend Declaration Date,
become an Acquiring Person (such an event being
referred to herein as a "Section 11(a)(ii) Event"),
then, subject to the penultimate sentence of Section
23(a) and except as otherwise provided in this Section
11, proper provision shall be made by the Company so
that each record holder of a Right (except as provided
below and in Section 7(e) hereof) shall thereafter have
the right to receive, upon exercise thereof at the then
current Purchase Price in accordance with the terms of
this Agreement, in lieu of a number of one
one-thousandths 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-thousandths 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, and (y)
dividing that product (which, following such first
occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price
(determined pursuant to Section 11(d)(i) hereof) per
share of Common Stock on the date of such first
occurrence (such number of shares being referred to as
the "Adjustment Shares"); provided, however, that if
the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions
of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall
be made pursuant to this Section 11(a)(ii).
(iii) Subject to such limitations
existing as of the date hereof as are necessary to
prevent a default under any agreement to which the
Company is a party prior to the Distribution Date, in
the event that the number of shares of Common Stock
which are authorized by the Company's certificate of
incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing
subparagraph (ii) of this Section 11(a), the Company,
acting by resolution of its Board of Directors shall
(A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current
Value"), and (B) with respect to each Right which has
not become null and void pursuant to Section 7(e)
hereof, make adequate provision to substitute for the
Adjustment Shares, upon the 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, such as the Preferred Stock, which the
Board of Directors has deemed to have essentially the
same value or economic rights as shares of Common Stock
(such shares of preferred stock or other equity
securities being referred to as "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
(less the amount of any reduction in the Purchase
Price), where such aggregate value has been determined
by the Board of Directors based upon the advice of a
nationally recognized investment banking firm selected
by the Board of Directors; provided, however, that 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 (other
than an amount equal to the par value of the shares of
Common Stock to be issued), 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. For purposes of the preceding sentence,
the term "Spread" shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If the
Board of Directors determines 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, the thirty (30) day period set
forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may
seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it
may be extended, is herein called the "Substitution
Period"). To the extent that action is to be taken
pursuant to the first and/or third sentences of this
Section 11(a)(iii), the Company (1) shall provide,
subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights, and (2) may
suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek
such stockholder approval for such authorization of
additional shares and/or to decide the appropriate form
of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the
event of any such suspension, the Company shall issue a
public announcement and shall give simultaneous written
notice to the Rights Agent 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 Current Value
of each Adjustment Share shall be the Current Market
Price (as determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date, and the per share or per unit
value of any Common Stock Equivalent shall be deemed to
equal the Current Market Price per share of the Common
Stock on such date.
(b) In case the Company shall fix a record date
for the issuance of rights, options or warrants to all
record holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date)
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 or equivalent preferred stock at a
price per share of Preferred Stock or per share of
equivalent preferred stock (or having a conversion price per
share, if a security convertible into Preferred Stock or
equivalent preferred stock) less than the Current Market
Price per share of Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of 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 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; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one
Right). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a
form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors,
whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights
Agent and the record holders of the Rights. 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.
(c) In case the Company shall fix a record date
for a distribution to all record 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, the
numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d)(i) hereof) per share of
Preferred Stock on such record date, less the fair market
value (as determined in good faith by the Board of
Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding
on the Rights Agent and the record holders of the Rights) 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 the
denominator of which shall be such Current Market Price per
share of Preferred Stock; provided, however, that in no
event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed, and in
the event that such distribution is not so made, the
Purchase Price shall be adjusted to be the Purchase Price
which would have been in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation
hereunder, other than computations made pursuant to
Section 11(a)(iii) hereof, the "Current Market Price"
per share of 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 thirty (30) consecutive
Trading Days immediately prior to such date, and for
purposes of computations made pursuant to Section
11(a)(iii) hereof, the Current Market Price per share
of 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 ten (10) consecutive Trading Days
immediately following such date; provided, however,
that in the event that the Current Market Price per
share of the Common Stock is determined during a period
following the announcement by the issuer of such Common
Stock of (A) a dividend or distribution on such Common
Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock
(other than the Rights), or (B) any subdivision,
combination or reclassification of such Common Stock,
and the ex-dividend date for such dividend or
distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred
prior to the commencement of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set
forth above, then, and in each such case, the Current
Market Price shall be properly adjusted to take into
account ex-dividend trading or the effect of such
subdivision, combination or reclassification, as the
case may be. 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 sale price, regular way,
or, if such last sale price is not reported, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by 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 a professional market maker
making a market in the Common Stock selected by the
Board of Directors. 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 of Directors shall be used. 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, a
Business Day. If the Common Stock is not publicly held
or not so listed or traded, Current Market Price per
share shall mean the fair value per share as determined
in good faith by the Board of Directors, whose
determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all
purposes.
(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 sentence
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 1000 (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 of Directors, 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-thousandth of a share of Preferred
Stock shall be equal to the Current Market Price of one
share of Preferred Stock divided by 1000.
(e) Anything herein to the contrary
notwithstanding, no adjustment in the Purchase Price shall
be required unless such adjustment would require an increase
or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest
hundred-thousandth of a share of Common Stock or other share
or one-ten-millionth of a share of Preferred Stock, as the
case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three (3)
years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section 11(a)(ii) or Section 13(a) hereof, the record
holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock 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) 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-thousandths
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) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment
of the Purchase Price as a result of the calculations made
in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a
share of Preferred Stock (calculated to the nearest one
ten-millionth) obtained by (i) multiplying (x) the number of
one one-thousandths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase
Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of
any adjustment of the Purchase Price to adjust the number of
Rights, in lieu of any adjustment in the number of one
one-thousandths of a share of Preferred Stock purchasable
upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights
shall be exercisable for the number of one one-thousandths
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 one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The
Company shall make a public announcement and shall give
simultaneous written notice to the Rights Agent 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 record
holders of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as
a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights
to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the
names of the record holders of Rights Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in
the Purchase Price or the number by one one-thousandths 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-thousandths of a share and the number of one
one-thousandths of a share which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par
value, if any, of the number of one one-thousandths of a
share of Preferred Stock, Common Stock or other securities
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-thousandths of a share of Preferred Stock, Common
Stock or other securities at such adjusted Purchase Price.
If upon any exercise of the Rights, a record
holder is to receive a combination of Common Stock and
common stock equivalents, a portion of the consideration
paid upon such exercise, equal to at least the then par
value of a share of Common Stock of the Company, shall be
allocated as the payment for each share of Common Stock of
the Company so received.
(l) In any case in which this Section 11 shall
require that an adjustment in the Purchase Price be made
effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such
event the issuance to the record holder of any Right
exercised after such record date the number of one
one-thousandths 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-thousandths of a share of Preferred Stock, Common 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 (fractional
or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of
Directors 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 thereof, (iii)
issuance wholly for cash of shares of Preferred Stock or
securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock
dividends, or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the
Company to record holders of its Preferred Stock shall not
be taxable to such holders.
(n) 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 certificate of
incorporation or bylaw provisions or any rights, warrants or
other instruments or securities outstanding or agreements in
effect or other actions taken 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. The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto
the Company and such other person shall have executed and
delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after
the Distribution Date, it will not, except as permitted by
Section 23 or Section 26 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) 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 or pay any dividend on the
outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide or split the outstanding shares
of Common Stock into a greater number of shares, or (iii)
combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares or effect a reverse
split of the outstanding shares of Common Stock, then, and
in each such event, 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 the numerator of which shall be the total number of
shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall
be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE
OR NUMBER OF SHARES. Whenever an adjustment is made as provided
in Section 11 and Section 13 hereof, the Company shall (a)
promptly prepare a certificate setting forth such adjustment, the
adjusted Purchase Price and a brief statement of the facts
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 a
brief summary thereof to each record holder of a Rights
Certificate (or, if prior to the Distribution Date, to each
record 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 such adjustment unless and until it shall have
received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER.
(a) In the event that on or following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any Interested
Stockholder or, if in such merger or consolidation all holders of
Common Stock are not treated alike, 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) the Company shall consolidate with, or merge with,
any Interested Stockholder or, if in such merger or consolidation
all holders of Common Stock are not treated alike, any other
Person, and the Company shall be the continuing or surviving
corporation of such consolidation or merger (other than, in a
case of any transaction described in (x) or (y), a merger or
consolidation which would result in all the securities generally
entitled to vote in the election of directors of the Corporation
outstanding prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of
the surviving entity) all the voting securities of the
Corporation or such surviving entity outstanding immediately
after such merger or consolidation and the holders of such
securities not having changed as a result of such merger or
consolidation), 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 Interested Stockholder or
Stockholders or, if in such transaction all holders of Common
Stock are not treated alike, any other 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),
then, and in each such case (except as may be contemplated in
Section 13(d) hereof), proper provision shall be made so that:
(i) each record holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase
Price, in accordance with the terms of this Agreement and in lieu
of Preferred Stock, Common Stock and other securities of the
Company, such number of validly authorized and issued, fully
paid, non-assessable and freely tradeable shares of Common Stock
of the Principal Party, 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-thousandths of a share of
Preferred Stock for which a Right is exercisable immediately
prior to the first occurrence of a Section 13 Event (or, if a
Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such
one one-thousandths of a share for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such
first occurrence), and (2) dividing that product (which,
following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price
(determined pursuant to Section 11(d)(i) hereof) per share of the
Common Stock of such Principal Party on the date of consummation
of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
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; and (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
(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, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; 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; (2) in case such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks 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 (3) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the
chains of ownership having an interest in such joint venture as
if such party were a "Subsidiary" of both or all of such joint
venturers and the Principal Parties in each such chain shall bear
the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized 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
consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party at its own expense
will :
(i) prepare and file a registration statement
under the 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
Act) until the Expiration Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise of
the Rights under the blue sky laws of such jurisdictions as
may be necessary or appropriate; and
(iii) deliver to record 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.
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). If, for
any reason, the Rights cannot be exercised for Common Stock of
the Company or such Principal Party, then a record holder of
Rights will have the right to exchange such Rights for cash from
the Company or such Principal Party in an amount equal to the
number of shares of such Common Stock such holder would otherwise
be entitled to purchase times 50% of the then Current Market
Price, as determined pursuant to Section 11(d)(i) hereof, of such
stock of such Principal Party or the Company. If, for any reason,
including, without limitation, such Principal Party is an
individual, private partnership or private company, the foregoing
formulation cannot be applied to determine the cash amount into
which the Rights are exchangeable, then the Board of Directors,
based upon advice from one or more nationally recognized
investment banking firms, shall determine such amount reasonably
and with utmost good faith to the record holders of Rights. Any
such determination shall be binding and final.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons who
acquired shares of Common Stock pursuant to a Qualifying Offer
(or a wholly owned Subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such
transaction is not less than the price per share of Common Stock
paid to all record holders of shares of Common Stock whose shares
were purchased pursuant to such Qualifying Offer, and (iii) the
form of consideration being offered to the remaining record
holders of shares of Common Stock pursuant to such transaction is
the same as the form of consideration paid pursuant to such
Qualifying Offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall
expire.
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 record holders of
the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of a whole Right.
For 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 of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights
are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities
exchange, the last sale price or, if such last sale price is not
reported, the average of the high bid and low asked prices in
the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors.
If on any such date no such market maker is making a market in
the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue
fractions of shares of Preferred Stock (other than, except as
provided in Section 7(c), fractions which are integral multiples
of one one-thousandth 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-thousandth of a
share of Preferred Stock). Fractions of shares of Preferred
Stock in integral multiples of one one-thousandth of a share of
Preferred Stock may, at the election of the Company, be evidenced
by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided,
however, that such agreement shall provide that the holders of
such depository receipts shall have the rights, privileges and
preferences to which they are entitled as beneficial owners of
shares of Preferred Stock represented by such depositary
receipts. In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of
Preferred Stock, the Company may pay to the record 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-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-thousandth of a share of Preferred Stock
shall be one one-thousandth 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 a Triggering Event,
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 record 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 share of Common Stock, Common Stock Equivalents or other
securities. For purposes of this Section 14(c), the current
market value shall be determined in a manner set forth in Section
11(d) hereof) for the Trading Day immediately prior to the date
of such exercise and, if such Common Stock Equivalent is not
traded, such Common Stock Equivalent shall have the value of one
one-thousandth of a share of Preferred Stock.
(d) The record 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.
SECTION 15. RIGHTS OF ACTION. All rights of action
in respect of this Agreement, excepting the rights of action
given to the Rights Agent, are vested in the respective record
holders of the Rights Certificates (and, prior to the
Distribution Date, the record holders of the Common Stock); and
any record 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 record 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 record holders of Rights, it is
specifically acknowledged that such holders of Rights would not
have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations
hereunder 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
record holder of a Right, by accepting the same, consents and
agrees with the Company and the Rights Agent and with every other
record holder of a Right that:
(a) prior to the Distribution Date, the Rights
will be transferable only in connection with the transfer of
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 or offices of
the Rights Agent designated for such purposes, duly endorsed
or accompanied by a proper instrument of transfer and with
the appropriate forms and certificates fully executed;
(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 a Rights Certificate (or, prior to
the Distribution Date, the associated Common Stock
certificate) is recorded on the books for registration and
transfer of the Rights, or the Common Stock, as the case may
be, 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 required to 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
or ruling issued by a court of competent jurisdiction or by
a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligations; provided, however, the Company must use its
reasonable 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 record holder, as such, of any Rights
Certificate shall be entitled to vote, receive dividends or be
deemed for any purpose the holder of the number of one
one-thousandths of a share of 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 record holder of any Rights
Certificate, as such, any of the rights of holder of Common Stock
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 24 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. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent such
compensation as shall be agreed to 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 disbursements 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
including its members, directors, officers, employees,
sharholders and agents, for, and to hold it harmless against, any
loss, liability, or expense, incurred without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent,
for anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Agreement,
including, without limitation, the costs and expenses of
defending against any claim of liability in the premises
(including reasonable counsel fees and expenses). The indemnity
provided for herein shall survive the expiration of the Rights
and the termination of this Agreement.
(b) 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 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, and where necessary,
verified, guaranteed or acknowledged, by the proper Person or
Persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF
NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent
or any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stockholder services business of the Rights
Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the
parties hereto, provided, that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions
of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not
delivered; any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights
Certificates in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights
Agent undertakes only the specirfic duties and obligations
expressly imposed by this Agreement, and no implied duties or
obligations shall be read into this Agreement against the Rights
Agent, upon the following terms and conditions, by all of which
the Company and the record 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 opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as
to any action taken or omitted by it in good faith and in
accordance with such opinion.
(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 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 the Chairman of the
Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the
Rights Agent for any action taken or omitted to be taken 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.
(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 or
be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement
or the execution and delivery hereof (except the due
execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate;
nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming
void pursuant to Section 7(e) hereof); nor shall it be
responsible for any adjustment required under the provisions
of Section 11 or Section 13 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 actual 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 Preferred Stock to be issued pursuant to this Agreement
or any Rights Certificate or as to whether any shares of
Common Stock, Preferred Stock or other securities, will when
so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be
required by 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 the Chairman of the
Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for
advice or instructions in connection with its duties, and it
shall not be liable for any action taken or omitted 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.
(h) The Rights Agent and any stockholder,
director, officer or employee of the Rights Agent may buy,
sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction
in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent
from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers hereby vested in it or perform any
duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided, that reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require
the Rights Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance
of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to
it.
(k) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer,
the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take
any further action with respect to such requested exercise
or transfer without written instructions from the Company.
(l) The Rights Agent shall have no responsibility
to the Company, any holders of Rights or any holders of
shares of Common Stock for interest or earnings on any
moneys held by the Rights Agent pursuant to this Agreement.
(m) The Rights Agent shall not be required to
take notice or be deemed to have notice of any event or
condition hereunder, including, but not limited to, a
Distribution Date, a Redemption Date, any adjustment of the
Purchase Price of the Common Stock, and adjustment to the
Purchase Price of the Preferred Stock, the existence of an
Acquiring Person or any other event or condition that may
require action by the Rights Agent, unless the Rights Agent
shall be specifically notified in writing of such event or
condition by the Company, and all notices or other
instruments required by this Agreement to be delivered to
the Rights Agent must, in order to be effective, be received
by the Rights Agent as specified in Section 25 hereof, and
in the absence of such notice so delivered, the Rights Agent
may conclusively assume no such event or condition exists.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights
Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days'
notice in writing, mailed to the Company and to each transfer
agent of the Common Stock or Preferred Stock by registered or
certified mail, and to the record holders of the Rights
Certificate by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty (30) days'
notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the
Common Stock and Preferred Stock, by registered or certified
mail, and to the record 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 record holder of a Rights
Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then the Company
shall become the Rights Agent until a successor Rights Agent has
been appointed, and any record holder of any Rights Certificate
or the Rights Agent may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by
such a court, shall be a corporation or banking association
organized and doing business under the laws of the United States
or of the State of Missouri or the State of New York (or of any
other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State
of Missouri or the State of New York), in good standing, which is
authorized under such laws to exercise corporate trust or
shareholder services powers and is subject to supervision or
examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000. 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 and the rights
and obligations of the predecessor shall cease and terminate; 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
record holders of the Rights Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, subject
to Section 4 hereof, issue new Rights Certificates evidencing
Rights in such form as may be approved by its Board of Directors
to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the earlier of the Redemption date
or the Final Expiration Date, 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, granted or awarded or upon the exercise, conversion
or exchange of securities, notes or debentures hereinafter issued
by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors, issue Rights
Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that
(i) the Company shall not be obligated to issue any such Rights
Certificates 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 AND TERMINATION.
(a) Subject to the provisions of Section 30 of this
Agreement, and any shortening or lengthening of time periods
permitted under Section 26 of this Agreement, the Board of
Directors, at its option, at any time prior to the earlier of (i)
the close of business on the tenth Business 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 Business Day following the Record Date), or (ii) the
Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right, as
such amount may be adjusted pursuant to Section 23(c) hereof
(such redemption price being hereinafter referred to as the
"Redemption Price"). Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until
such time as the Company's right of redemption 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
of Directors.
(b) Immediately upon the action of the Board of
Directors ordering the redemption of the Rights becoming
effective, 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 for each Right so held. Promptly
after the action by the Board of Directors ordering the
redemption of the Rights becoming effective, the Company shall
give notice of such redemption to the Rights Agent and the record
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears 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 record
holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price
will be made.
(c) In the event the Company shall at any time after
the date of this Agreement (i) declare or pay any dividend on the
outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide or split the outstanding shares of Common
Stock into a greater number of shares, or (iii) combine or
consolidate the outstanding shares of Common Stock into a smaller
number of shares or effect a reverse split of the outstanding
shares of Common Stock, then, and in each such event, the Board
of Directors shall adjust the Redemption Price so that the
Redemption Price after such event shall equal the Redemption
Price immediately prior to such event multiplied 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 outstanding
immediately prior to such event; provided, however, that in each
case such adjustment to the Redemption Price shall be made only
if the amount of the Redemption Price shall be reduced or
increased by $.01 per Right.
SECTION 24. 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 record holders of Preferred Stock or to
make any other distribution to the record holders of Preferred
Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company), 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 shares of Preferred Stock), or (iv) to
effect any consolidation or merger into or with any other Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), 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 transaction or a
series of related 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 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), or (v) to effect
the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each record holder
of a Rights Certificate and to the Rights Agent, to the extent
feasible and in accordance with Section 25 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 record 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 record holders of 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 record holders of the shares of Preferred Stock whichever
shall be the earlier.
(b) In the event that a Section 11(a)(ii) Event shall
occur, then (i) the Company shall as soon as practicable
thereafter give to each record holder of a Rights Certificate, to
the extent feasible and in accordance with Section 25 hereof, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to record 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 of the Company.
SECTION 25. NOTICES. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by
the record 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:
Cerner Corporation
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: President
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company
or by the record holder of any Rights Certificate to or on the
Rights Agent shall be sufficiently given or made upon receipt by
the Corporate Trust Department of the Rights Agent, if sent by
registered or certified mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
UMB Bank, n.a.
000 Xxxxx Xxx., 00xx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the record holder of
any Rights Certificate (or, if prior to the Distribution Date, to
the record holder of certificates representing shares of Common
Stock) shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such record holder at the
address of such holder as shown on the registry books for the
Rights Certificates of the Company.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. Prior to
the Distribution Date, the Company may by resolution of its Board
of Directors and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement
without the approval of any record holders of certificates
representing shares of Common Stock or Preferred Stock. From and
after the Distribution Date and subject to the penultimate
sentence of this Section 26, the Company may, from time to time,
by resolution of its Board of Directors and the Rights Agent
shall, if the Company so directs, supplement or amend this
Agreement without the approval of any record holders of Rights
Certificates, Preferred Stock or other securities of the Company
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, in the case of
this clause (iv), shall not adversely affect the interests of the
record holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person);
provided, however, that this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence,
(A) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or (B) any other
time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the
benefits to, the record holders of Rights. 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 26, the Rights Agent shall execute
such supplement or amendment; provided, however, that the Rights
Agent may, but shall not be obligated to, enter into any such
supplement or amendment which adversely affects the Rights
Agent's own rights, duties or immunities under this Agreement.
Prior to the Distribution Date, the interests of the record
holders of Rights shall be deemed coincident with the interests
of the record holders of Common Stock. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or
amendment shall be made after the Distribution Date which changes
the Redemption Price, the Final Expiration Date, the Purchase
Price or the number of one one-thousandths of a share of
Preferred Stock for which a Right is exercisable. Prior to the
consent of the Rights Agent to any supplement or amendment to
this Agreement, the Rights Agent may require that an opinion of
counsel stating that such supplement or amendment is authorized
or permitted by the Agreement, complies with its respective
terms, will, upon the execution and delivery thereof, be valid
and binding upon the Company in accordance with its terms and
will not adversely affect the interests of the holders of the
Right Certificates.
SECTION 27. 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 28. DETERMINATIONS AND ACTIONS BY THE BOARD
OF DIRECTORS, 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 as amended
and in effect on the date hereof. The Board of Directors shall
have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically
granted to the Board of 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 a determination to
redeem or not redeem the Rights or to amend the Agreement and
whether any proposed amendment adversely affects the interests of
the holders of Rights Certificates). 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 of Directors in
good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the record holders of the Rights (and,
prior to the Distribution Date, record holders of the Common
Stock) and all other parties, and (y) not subject the Board of
Directors to any liability to the record holders of the Rights.
SECTION 29. 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 record holders of the
Rights Certificates (and, prior to the Distribution Date, record
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 record holders of the Rights Certificates (and, prior to
the Distribution Date, record holders of the Common Stock).
SECTION 30. SEVERABILITY. If any term, provision,
covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant
or restriction is held by such court or authority to be invalid,
void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until
the close of business on the tenth Business Day (or such longer
period of time as permitted pursuant to Section 26 of this
Agreement) following the date of such determination by the Board
of Directors.
SECTION 31. 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 applicable to contracts
made and to be performed entirely within such State.
SECTION 32. COUNTERPARTS. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and
the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive
headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning
or construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
CERNER CORPORATION
By:
Name:
Title:
UMB BANK, N.A., as Rights
Agent
By:
Name:
Title:
EXHIBIT A
CERTIFICATE OF DESIGNATION
OF SERIES A PREFERRED STOCK
OF
CERNER CORPORATION
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, Xxxxxxxx X. Xxxxx, President, and Xxxx X. Xxxxxx,
Assistant Secretary of Cerner Corporation, a corporation
organized and existing under the General Corporation Law of the
State of Delaware (the "Corporation"), in accordance with the
provisions of Sections 103 and 151(g) thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board
of Directors by the Restated Certificate of Incorporation, as
amended, of the Corporation, the Board of Directors on
November 21, 1996, adopted the following resolution creating a
series of One Hundred Fifty Thousand (150,000) shares of
Preferred Stock designated as Series A Preferred Stock, par value
$.01 per share:
RESOLVED, that pursuant to the authority vested in
the Board of Directors of this Corporation in
accordance with the provisions of its Restated
Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), a series of Preferred
Stock, par value $.01 per share, of the Corporation be
and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences and
relative, participating, optional and other special
rights of the shares of such series, and the
qualifications, limitations and restrictions thereof
are as follows:
Section 1. Designation and Amount. The shares
of such series shall be designated as "Series A
Preferred Stock" and the number of shares constituting
such series shall be One Hundred Fifty Thousand
(150,000). Such number of shares may be increased or
decreased by resolution of the Board of Directors,
provided that no decrease shall reduce the number of
shares of Series A Preferred Stock to a number less
than the number of shares outstanding plus the number
of shares reserved for issuance upon the exercise of
outstanding rights to purchase or convert into shares
of Series A Preferred Stock.
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 Preferred
Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in
preference to the holders of Common Stock,
par value $.01 per share (the "Common
Stock"), of the Corporation and of any other
class of stock ranking junior (either as to
dividends or upon liquidation, dissolution or
winding up) to the shares of Series A
Preferred Stock ("Junior Stock"), shall be
entitled to receive, when, as and if declared
by the Board of Directors out of funds
legally available for the purpose, dividends
payable in cash in an amount per share
(rounded to the nearest cent), subject to the
provision for adjustment hereinafter set
forth, equal to 1000 times the aggregate per
share amount of all cash dividends, and 1000
times the aggregate per share amount of all
non-cash dividends or (other distributions
other than a dividend payable in shares of
Common Stock, or a subdivision of the
outstanding shares of Common Stock (by
reclassification or otherwise)), declared on
the Common Stock. In the event the
Corporation shall at any time after
November 21, 1996 (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 of
dividends to which holders of shares of
Series A Preferred Stock were entitled
immediately prior to such event under the
preceding sentence shall be adjusted by
multiplying such amount by a fraction the
numerator of which is the number of shares of
Common Stock outstanding immediately after
such event and the denominator of which is
the number of shares of Common Stock that
were outstanding immediately prior to such
event.
(B) The Board of Directors of the
Corporation shall not declare a dividend or
distribution on the Common Stock (other than
a dividend payable in shares of Common Stock)
unless it shall concurrently therewith
declare a dividend or distribution on the
Series A Preferred Stock as provided in
paragraph (A) above. Payment of a dividend
or distribution determined on the Series A
Preferred Stock shall be in preference to
payment of any dividend or distribution on
the Common Stock or any Junior Stock.
(C) The Board of Directors may fix a
record date for the determination of holders
of shares of Series A Preferred Stock
entitled to receive payment of a dividend or
distribution declared thereon, which record
date shall be no more than thirty (30) days
prior to the date fixed for the payment
thereof.
Section 3. Voting Rights. Except as otherwise
provided herein or by law and in addition to the rights
provided in Article Three of the Certificate of
Incorporation, the holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for
adjustment hereinafter set forth, each share
of Series A Preferred Stock shall entitle the
holder thereof to 1000 votes on all matters
submitted to a vote of the stockholders of
the Corporation. In the event the
Corporation shall at any time (i) declare 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 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) The holders of shares of Series A
Preferred Stock and the holders of shares of
Common Stock and any other capital stock of
the Corporation having general voting rights
shall vote together as one class on all
matters submitted to a vote of stockholders
of the Corporation.
(C) The holders of Series A Preferred
Stock shall have no special voting rights and
their consent shall not be required (except
to the extent they are entitled to vote with
holders of Common Stock as set forth herein)
for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions
payable on the Series A Preferred Stock as
provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid
dividends and distributions on shares of
Series A Preferred Stock outstanding shall
have been paid in full, the Corporation shall
not:
(i) declare or pay dividends
(other than a dividend payable in shares
of Common Stock) on, make any other
distributions on, or redeem or purchase
or otherwise acquire for consideration
any shares of Junior Stock;
(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 Preferred Stock
("Parity Stock"), except dividends paid
ratably on the Series A Preferred Stock
and all such Parity Stock on which
dividends are payable or in arrears in
proportion to the total amounts to which
the holders of all such shares are then
entitled;
(iii) redeem or purchase or
otherwise acquire for consideration
shares of any Parity 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 Junior Stock;
or
(iv) purchase or otherwise
acquire for consideration any shares of
Series A Preferred Stock, or any shares
of Parity Stock, except in accordance
with a purchase offer made in writing or
by publication (as determined by the
Board of Directors) to all holders of
such shares upon such terms as the Board
of Directors, after consideration of the
respective annual dividend rates and
other relative rights and preferences of
the respective series and classes, shall
determine in good faith will result in
fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit
any subsidiary of the Corporation to purchase
or otherwise acquire for consideration any
shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of
Series A Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever
shall be retired and cancelled 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, in the Certificate of Incorporation, in any
other Certificate of Designation establishing a series
of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding
Up.
(A) Subject to the prior and superior
rights of holders of any shares of any series
of Preferred Stock ranking prior and superior
to the shares of Series A Preferred Stock
with respect to rights upon liquidation
(voluntary or otherwise), dissolution or
winding up, the holders of the shares of
Series A Preferred Stock, in preference to
the holders of Common Stock and any Junior
Stock, shall be entitled to receive upon such
liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation,
$1,000.00 per share, plus an amount equal to
any unpaid dividends and distributions
thereon to the date of such payment
("Series A Liquidation Preference").
Following the payment of the full amount of
the Series A Liquidation Preference, no
additional distribution shall be made to the
holders of shares of Series A Preferred Stock
unless, prior thereto, the holders of shares
of Common Stock shall have received an amount
per share (the "Capital Adjustment") equal to
the quotient obtained by dividing (i) the
Series A Liquidation Preference by (ii) 1000
(such number in clause (ii), the "Adjustment
Number"). Following payment of the full
amount of the Series A Liquidation Preference
and the Capital Adjustment in respect of all
outstanding shares of Series A Preferred
Stock and Common Stock, respectively, holders
of Series A Preferred Stock and holders of
Common Stock shall receive their ratable and
proportionate share of the remaining assets
to be distributed in the ratio of the
Adjustment Number to one (1) with respect to
such Preferred Stock and Common Stock, on a
per share basis, respectively.
(B) In the event, however, that there
are not sufficient assets available to permit
payment in full of the aggregate amount of
the Series A Liquidation Preference and the
liquidation preferences of all series of
Parity Stock, then such remaining assets
shall be distributed ratably to the holders
of such Series A Preferred Stock and Parity
Stock in proportion to their respective
aggregate liquidation preferences. After
payment of the Series A Liquidation
Preference, in the event that there are not
sufficient assets available to permit payment
in full of the aggregate amount of the
Capital Adjustment, then such remaining
assets shall be distributed ratably to the
holders of Common Stock.
(C) In the event the Corporation shall
at any time (i) declare any dividend on
Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common
Stock (by reclassification or otherwise), or
(iii) combine the outstanding Common Stock
into a smaller number of shares, then in each
such case the Adjustment Number in effect
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.
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 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 1000 times the aggregate amount of
stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any
time (i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide the
outstanding Common Stock (by reclassification or
otherwise), 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 Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock
outstanding immediately after such event and the
denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of
Series A Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series A Preferred
Stock shall rank junior to all other series of the
Corporation's Preferred Stock, or any similar stock
that specifically provides that it shall rank prior to
the shares of Series A Preferred Stock, as to the
payment of dividends and the distribution of assets,
unless the terms of any such series shall provide
otherwise. Nothing herein shall preclude the Board of
Directors from creating any series of Preferred Stock
or any similar stock ranking on a parity with or prior
to the shares of Series A Preferred Stock as to the
payment of dividends or the distribution of assets.
Section 10. Fractional Shares. Series A
Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to
have the benefit of all other rights of holders of
Series A Preferred Stock.
Section 11. Amendment. The Certificate of
Incorporation, including this Certificate of
Designation establishing the shares of the Series A
Preferred Stock, shall not be amended in any manner
which would materially alter or change the powers,
preferences or special rights of the Series A Preferred
Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds or more
of the outstanding shares of Series A Preferred Stock
voting separately as a class.
IN WITNESS WHEREOF, this Certificate is executed on
behalf of the Corporation by its president and attested by it
Secretary this ___ day of November, 1996.
_________________________________
Xxxxxxxx X. Xxxxx
President
ATTEST:
___________________________
Xxxx X. Xxxxxx
Assistant Secretary
STATE OF MISSOURI )
) ss.
COUNTY OF CLAY )
BE IT REMEMBERED, that before me, a notary public in and for
the aforesaid county and state, personally appeared Xxxxxxxx X.
Xxxxx, President, and Xxxx X. Xxxxxx Assistant Secretary, of
Cerner Corporation, a Delaware corporation, who are known to me
to be the same persons who executed the foregoing instrument, and
duly acknowledged the execution of the same this ____ day of
November, 1996.
________________________________
Notary Public
My commission expires:
________________________
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- Rights
NOT EXERCISABLE AFTER NOVEMBER 21, 2006 OR EARLIER IF REDEEMED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION
OF THE COMPANY, AT $.0l PER RIGHT ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS 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.)
RIGHTS CERTIFICATE
CERNER CORPORATION
This certifies that ____________________, or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject to
the terms, provisions and conditions of the Rights Agreement,
dated as of November 21, 1996 (the "Rights Agreement"), between
Cerner Corporation, a Delaware corporation (the "Company"), and
UMB Bank, n.a., a national banking association (the "Rights
Agent"), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights
Agreement) and at any time prior to 5:00 p.m. (New York City
time) on November 21, 2006 at the office or offices of the Rights
Agent designated for such purpose, or its successors as Rights
Agent, one one-thousandth of a fully paid, nonassessable share of
Series A Preferred Stock (the "Preferred Stock") of the Company,
at a purchase price of $___ per one one-thousandth of a share
(the "Purchase Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and
related Certification duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of one
one-thousandths of a share of Preferred Stock 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 November 21, 1996, based on the Preferred
Stock as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number and kind of shares
of Preferred Stock or other securities of the Company or any
other Person (as such term is defined in the Rights Agreement),
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 a
Triggering Event (as such term is defined in the Rights
Agreement).
Upon the occurrence of a Section 11(a)(ii) Event (as
such term is defined in the Rights Agreement), if the Rights
evidenced by this Rights Certificate are beneficially owned by
(i) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person,
Affiliate or Associate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, such Rights 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.
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.
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 Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a
like aggregate number of one one-thousandths 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 $.0l per Right at
any time prior to the earlier of the close of business on (i) the
tenth Business Day following the Stock Acquisition Date (as such
time period may be extended pursuant to the Rights Agreement),
and (ii) the Final Expiration Date.
No fractional shares of Preferred Stock or other
securities will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a 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 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 the Rights Agent.
WITNESS the facsimile signature of the proper officers
of the Company and its corporate seal.
Dated as of __________________, ____
CERNER CORPORATION
By: ________________________
[SEAL] Name:
Title:
ATTEST:
________________________
Name:
Title:
Countersigned:
UMB BANK, N.A., as Rights Agent
By: _____________________
Name:
Title:
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the record 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 by SEC Rule 17Ad-15 (12 C.F.R. 240.17Ad-15) or
any similar rule which the Rights Agent deems applicable.
[Form of Reverse Side of Rights Certificate (continued)]
Certification
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Rights Certificate 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
Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced
by this Rights Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ________________, ____ _________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (12 C.F.R. 240.17Ad-15)
or any similar rule which the Rights Agent deems applicable.
NOTICE
The signature to the foregoing Assignment and Certification
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above is not or
cannot be completed, the Company and the Rights Agent will deem
the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Certificate) and such
Assignment will not be honored.
[Form of Reverse Side of Rights Certificate (continued)]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: Cerner Corporation:
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 (as such term is defined in the Rights Agreement)
which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If 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 insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Dated: ____________, ____ _________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (12 C.F.R. 240.17Ad-15)
or any similar rule which the Rights Agent deems applicable.
[Form of Reverse Side of Rights Certificate (continued)]
Certification
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate
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
Acquiring Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned 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 an Acquiring
Person.
Dated: ____________, ____
____________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an Eligible Guarantor
Institution as defined by SEC Rule 17Ad-15 (12 C.F.R. 240.17Ad-15)
or any similar rule which the Rights Agent deems applicable.
NOTICE
The signature to the foregoing Election to Purchase and
Certification must correspond to the name as written upon the
face of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above is not or
cannot be completed, the Company and the Rights Agent will deem
the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Certificate) and such
Election to Purchase will not be honored.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On November 21, 1996, the Board of Directors of Cerner
Corporation (the "Company") declared a dividend distribution of
one right (a "Right") for each outstanding share of the Company's
common stock, par value $.01 per share (the "Common Stock"),
payable to stockholders of record at the close of business on
December 2, 1996 (the "Record Date") and with respect to the
Common Stock issued thereafter until the Distribution Date
(defined below) and, in certain circumstances, with respect to
the Common Stock issued after the Distribution Date. Except as
set forth below, each Right, when it becomes exercisable,
entitles the registered holder to purchase from the Company a
unit consisting initially of one one-thousandth of a share (a
"Unit") of Series A Preferred Stock, par value $.01 per share
(the "Preferred Stock"), of the Company, at a purchase price of
$80.00 per Unit, subject to adjustment (the "Purchase Price").
The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement"), dated as of November 21,
1996, between the Company and UMB Bank, n.a., as 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
("Rights Certificates") will be distributed. The Rights will
separate from the Common Stock and a Distribution Date will occur
upon the earlier of (i) ten days following public announcement or
disclosure that a person has become an "Acquiring Person"
(defined below), or (ii) ten business days (or such later date as
the Board shall determine) following the commencement of, or an
announcement of an intention to commence, a tender or exchange
offer that would result in a person or group becoming an
"Acquiring Person." Except as set forth below, an "Acquiring
Person" is collectively a person, together with all Affiliates
(defined below) and Associates (defined below) of such person who
or which has acquired beneficial ownership of 15% or more of the
outstanding shares of Common Stock except pursuant to a
Qualifying Offer (defined below). The term "Acquiring Person"
excludes (i) the Company, (ii) any subsidiary of the Company,
(iii) any employee benefit plan of the Company or any subsidiary
of the Company, (iv) any person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan, and (v) any person, together with such person's
Affiliates and Associates, who or which becomes a beneficial
owner of 15% or more of the outstanding shares of Common Stock as
a result of acquiring such shares directly from the Company.
An "Affiliate" of a person is a person that directly,
or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person
specified. An "Associate" of a person is (i) any corporation or
organization (other than the Company or any majority-owned
subsidiary of the Company) of which such person is an officer or
partner or is, directly or indirectly, the beneficial owner of
10% or more of any class of equity securities, (ii) any trust or
other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a
similar fiduciary capacity, and (iii) any relative or spouse of
such person, or any relative of such spouse, who has the same
home as such person or who is a director or officer of such
person or any of its parents or subsidiaries.
No person shall become an "Acquiring Person" either:
(i) as the result of an acquisition of Common Stock by the
Company which, by reducing the number of such shares then
outstanding, increases the proportionate number of shares
beneficially owned by such person, together with all Affiliates
and Associates of such person, unless such persons, after such
share purchases by the Company, becomes the beneficial owner of
additional shares of Common Stock constituting 1% or more of the
then outstanding shares of Common Stock (other than pursuant to a
Qualifying Offer); or (ii) the Board of Directors of the Company
determines in good faith that a person who would otherwise be an
"Acquiring Person" 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.
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates and will be
transferred with and only with such Common Stock certificates,
(ii) new Common Stock certificates issued after the Record Date
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. Pursuant to the Rights
Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (defined below) that, upon any
exercise of Rights, a number of Rights be exercised so that only
whole shares of Preferred Stock will be issued.
As soon as practicable after the Distribution Date,
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
represent the Rights. Except in certain circumstances specified
in the Rights Agreement or as otherwise determined by the Board
of Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
The Rights are not exercisable until after the
Distribution Date and until the Rights are no longer are
redeemable. The Rights will expire at the close of business on
November 21, 2006, unless extended or earlier redeemed by the
Company as described below.
In the event that, at any time following the
Distribution Date, a person becomes an Acquiring Person, except
pursuant to an offer for all outstanding shares of Common Stock
which a majority of the directors determine, after receiving
advice from one or more nationally recognized investment banking
firms, to be fair to the stockholders and otherwise in the best
interests of the Company and its stockholders (other than the
Acquiring Person on whose behalf the offer is being made) (a
"Qualifying Offer"), each holder of a Right will thereafter have
the right to receive, upon exercise of the Right, Common Stock
(or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times the Purchase
Price of the Right. Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this
paragraph, all Rights that are, or (under certain circumstances
specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person (or any Affiliate or Associate of an
Acquiring Person) will be null and void and nontransferable and
any holder of any such Right (including any purported transferee
or subsequent holder) will be unable to exercise or transfer any
such right. For example, at a Purchase Price of $80.00 per
Right, each Right not owned by an Acquiring Person following an
event set forth in the preceding paragraph would entitle its
holder to purchase $160.00 worth of Common Stock (or other
consideration, as noted above) for $80.00. Assuming that the
Common Stock had a per share value of $12.00 at such time, the
holder of each valid Right would be entitled to purchase 13.3
shares of Common Stock for $80.00.
In the event that, at any time following the date on
which there has been public announcement or disclosure that a
person has become an Acquiring Person or of facts indicating that
such person has become an Acquiring Person (the "Stock
Acquisition Date"), (i) the Company merges or consolidates with
another corporation or association in a transaction in which the
holders of all of the outstanding shares of Common Stock
immediately prior to the consummation of the transaction are not
the holders of all of the surviving corporation's voting power,
or (ii) more than 50% of the Company's assets or earning power is
sold or transferred, in either case with or to an Acquiring
Person or any Affiliate or Associate or any other person in which
such Acquiring Person, Affiliate or Associate has an interest or
any person acting on behalf of or in concert with such Acquiring
Person, Affiliate or Associate, or, if in such transaction all
holders of Common Stock are not treated alike, any other person,
then each holder of a Right (except Rights which previously have
been voided as set forth above), shall thereafter have the right
to receive upon exercise of the Right, common stock of the
acquiring company having a value equal to two times the Purchase
Price of the Right. The events set forth in this paragraph and
in the preceding paragraph are referred to as the "Triggering
Events."
The Purchase Price payable, and the number of Units 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 (i) in the event of a stock dividend on,
or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are
granted certain rights or warrants to subscribe for or purchase
Preferred Stock at a price, or convertible into Preferred Stock
with a conversion price, less than the current market price of
the Preferred Stock, or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets or of
subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase
Price will be required until cumulative adjustments amount to at
least 1% of the Purchase Price.
Because of the nature of the Preferred Stock's
dividend, liquidation and voting rights, the value of the one
Unit of Preferred Stock purchasable upon exercise of each Right
should approximate the value of one share of Common Stock.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be
entitled to a quarterly dividend payment of 1000 times the
dividend declared per share of Common Stock. Preferred Stock
will only be entitled to receive dividends when concurrently
declared with the Common Stock and then at a rate equal to 1000
times the amount per share to be received by holders of Common
Stock. In the event of liquidation, the holders of shares of
Preferred Stock will be entitled to receive (i) a minimum
preferential liquidation payment of $1,000 per share; and (ii)
after the holders of shares of Common Stock receive a liquidation
payment of $1.00 per share, then the holders of shares of
Preferred Stock and the holders of shares of Common Stock will
share the remaining assets in the ratio of 1000 to 1 (as
adjusted) for each share of Preferred Stock and Common Stock so
held, respectively. Each share of Preferred Stock will have 1000
votes, voting together with the shares of Common Stock. These
rights are protected by customary antidilution provisions.
At any time until ten business days following the Stock
Acquisition Date (or such later date as the Board of Directors
may determine), the Company may redeem the Rights in whole, but
not in part, at a price (the "Redemption Price") of $.01 per
Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors) by resolution of
the Board of Directors. Immediately upon such action of the
Board of Directors ordering redemption of the Rights, the Rights
will terminate and the only right of the holders of Rights will
be to receive the Redemption Price.
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
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income upon
the Distribution Date.
Any of the provisions of the Rights Agreement may be
amended by resolution of the Company's Board of Directors prior
to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement, other than those provisions
relating to the principal economic terms of the Rights, may be
amended from time to time by resolution of the Company's Board of
Directors in order to cure any ambiguity, to make changes which
do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or its
affiliates or associates), or to shorten or lengthen any time
period under the Rights Agreement; provided, however, that no
amendment to adjust the time period governing redemption shall be
made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A. A copy of the Rights
Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.
November 21, 1996
_________________________________________________________________
RIGHTS AGREEMENT
CERNER CORPORATION
and
UMB BANK, N.A.,
a National Banking Association
Rights Agent
Dated as of November 21, 1996
_________________________________________________________________
TABLE OF CONTENTS
Page
Section 1. Certain Definitions. . . . . . . . . . . . .1
Section 2. Appointment of Rights Agent. . . . . . . . .8
Section 3. Issue of Rights Certificates . . . . . . . .8
Section 4. Form of Rights Certificates. . . . . . . . 10
Section 5. Countersignature and Registration. . . . . 11
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates . . . . 12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights. . . . . . . . . 13
Section 8. Cancellation and Destruction of Rights
Certificates . . . . . . . . . . . . . . . 15
Section 9. Reservation and Availability of Capital
Stock. . . . . . . . . . . . . . . . . . . 15
Section 10. Preferred Stock Record Date. . . . . . . . 17
Section 11. Adjustment of Purchase Price, Number and
Kind of Shares or Number of Rights . . . . 17
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares . . . . . . . . . . . . . 27
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. . . . . . . . . . 28
Section 14. Fractional Rights and Fractional Shares. . 31
Section 15. Rights of Action . . . . . . . . . . . . . 32
Section 16. Agreement of Rights Holders. . . . . . . . 33
Section 17. Rights Certificate Holder Not Deemed a
Stockholder. . . . . . . . . . . . . . . . 34
Section 18. Concerning the Rights Agent. . . . . . . . 34
Section 19. Merger or Consolidation or Change of Name of
Rights Agent . . . . . . . . . . . . . . . 35
Section 20. Duties of Rights Agent . . . . . . . . . . 35
Section 21. Change of Rights Agent . . . . . . . . . . 38
Section 22. Issuance of New Rights Certificates. . . . 39
Section 23. Redemption and Termination . . . . . . . . 39
Section 24. Notice of Certain Events . . . . . . . . . 41
Section 25. Notices. . . . . . . . . . . . . . . . . . 41
Section 26. Supplements and Amendments . . . . . . . . 42
Section 27. Successors . . . . . . . . . . . . . . . . 43
Section 28. Determinations and Actions by the Board of
Directors, etc . . . . . . . . . . . . . . 43
Section 29. Benefits of this Agreement . . . . . . . . 44
Section 30. Severability . . . . . . . . . . . . . . . 44
Section 31. Governing Law. . . . . . . . . . . . . . . 44
Section 32. Counterparts . . . . . . . . . . . . . . . 44
Section 33. Descriptive Headings . . . . . . . . . . . 44
EXHIBIT A -- Form of Certificate of Designation,
Preferences and Rights
EXHIBIT B -- Form of Rights Certificate
EXHIBIT C -- Summary of Rights
