FIRST AMENDMENT
TO RIGHTS AGREEMENT
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FIRST AMENDMENT, dated as of March 25, 1996 (the "First Amendment"), to
Rights Agreement dated as of September 4, 1992 (the "Rights Agreement"), between
Candela Corporation, a Delaware corporation (the "Company"), and The First
National Bank of Boston, a national banking association, as Rights Agent (the
"Rights Agent").
WHEREAS, the Board of Directors of the Company has determined that it would
be desirable and in the best interests of the Company and its stockholders for
the Company to supplement and amend the Rights Agreement in the manner set forth
in this First Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein and in the Rights Agreement and for other good and
valuable consideration, the receipt of which is hereby acknowledged, and
pursuant to Section 26 of the Rights Agreement, the parties hereby agree as
follows:
1. Section 1(a) of the Rights Agreement is hereby amended to read in its
entirety as follows:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial
Owner of more than 25% of the shares of Common Stock then outstanding,
but shall not include the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan.
2. Section 1 (OO) of the Rights Agreement is amended to read in its
entirety as follows:
(OO) "Stock Acquisition Date" shall mean the first date on which the
Company's chief executive officer becomes aware that a person or
entity has become an Acquiring Person.
3. The forms of Rights Certificate and Summary of Rights to Purchase
Common Stock attached as Exhibits A and B to the Rights Agreement, respectively,
are amended to read in their entireties as set forth in the forms of such
documents attached hereto and labeled Exhibits A and B, respectively.
4. The term "Agreement" as used in the Rights Agreement shall be deemed
to refer to the Rights Agreement as amended hereby.
5. The foregoing Amendments shall be effective as of the date hereof and,
except as set forth herein, the Rights Agreement shall remain in full force and
effect and shall be otherwise unaffected hereby.
6. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and their respective corporate seals to be hereunto affixed,
all as of the day and year first above written.
Attest: CANDELA CORPORATION
By: /s/ Xxxxxx X. Xxxxx, Xx. By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxx, Xx. Name: Xxxxxx X. Xxxxxx
Title: Assistant Secretary Title: President and Chief
Executive Officer
Attest: THE FIRST NATIONAL BANK OF BOSTON
By: /s/ Xxxxx Zenit By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxx Zenit Name: Xxxxxx X. Xxxxxxxxx
Title: Account Manager Title: Administration Manager
EXHIBIT A
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Certificate No. R- _________________ Rights
NOT EXERCISABLE AFTER SEPTEMBER 22, 2002 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.005 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL
BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE
REQUISITE QUALIFICATION TO THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE
BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN
OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN [ACQUIRING] [ADVERSE] PERSON OR AN AFFILIATE OR ASSOCIATE OF
AN [ACQUIRING] [ADVERSE] 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 CIRCUMSTANCE
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]/1/
Rights Certificate
CANDELA CORPORATION
This certifies that , or registered assigns, is
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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 September 4, 1992 (the "Rights Agreement"),
between Candela Corporation, a Delaware corporation (the "Company"), and The
First National Bank of Boston (the "Rights Agent"), to purchase from the Company
at any time
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/1/ The portion of the legend in brackets shall be inserted only if applicable,
shall be modified to apply to an Acquiring Person or an Adverse Person,
as applicable, and shall replace the preceding sentence.
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prior to 5:00 P.M. (Eastern time) on September 22, 2002 at the office or offices
of the Rights Agent designated for such purpose, or its successors as Rights
Agent, one fully paid and nonassessable share of common stock, par value $.01
per share (the "Common Stock"), of the Company, at a purchase price of $48.00
per share (the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related Certificate duly
executed. The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
September 22, 1992, based on the Common Stock as constituted at such date.
As more fully set forth in the Rights Agreement, following 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, an Adverse Person or an Affiliate or Associate of any such
Person (as such terms are defined in the Rights Agreement), which the Company's
Continuing Directors (as defined in the Rights Agreement), in their sole
discretion, determine is or was involved in or caused or facilitated, directly
or indirectly (including through any change in the Board), such Section
11(a)(ii) Event, (ii) a transferee of any such Acquiring Person, Adverse Person,
Affiliate or Associate who becomes a transferee after such Acquiring Person,
Adverse Person, Affiliate or Associate becomes such, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of any such
Acquiring Person, Adverse Person, Affiliate or Associate who becomes a
transferee prior to or concurrently with such Acquiring Person or Adverse Person
becoming such, 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.
The Rights evidenced by this Rights Certificate shall not be exercisable,
and shall be void so long as held, by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been obtained or be
obtainable.
A-3
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Common Stock or other securities, which may be purchased upon
the exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events.
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 Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal 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 shares of Common 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 (unless the Continuing Directors shall have made a
determination that a Person is an Adverse Person) be redeemed by the Company at
its option at a redemption price of $0.005 per Right at any time prior to the
earlier of the close of business on (i) the tenth day following the Stock
Acquisition Date (as defined in the Rights Agreement and as such time period may
be extended pursuant to the Rights Agreement), and (ii) the Expiration Date (as
defined in the
A-4
Rights Agreement). Under certain circumstances set forth in the Rights
Agreement, the decision to redeem shall require the concurrence of a majority of
the Continuing Directors. After the expiration of the redemption period, the
Company's right of redemption may be reinstated if either (i) an Acquiring
Person reduces his beneficial ownership to less than 10% of the outstanding
shares of Common Stock in a transaction or series of transactions not involving
the Company or (ii) the Board approves the merger of the Company with, or
acquisition of the Company by, a Person unrelated to the Acquiring Person, and
such reinstatement is approved by the Company's Board of Directors (with the
concurrence of a majority of the Continuing Directors).
No fractional shares of Common Stock will be issued upon the exercise of any
Right or Rights evidenced hereby, 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 Common 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.
A-5
WITNESS the facsimile signature of the proper officer of the Company under
seal.
Dated as of _______________ 19__.
CANDELA CORPORATION
By
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Title:
By
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Title:
Countersigned:
THE FIRST NATIONAL
BANK OF BOSTON
By
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Authorized Signature
A-6
FORM OF ASSIGNMENT
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(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
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(Please print name and address of transferee)
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this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _________________, 19__
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Signature
Signature Guaranteed:
A-7
Certificate
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The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate
from any Person who is, was or subsequently became an Acquiring Person, an
Adverse Person or an Affiliate or Associate of any such Person.
Dated: _________________, 19__ ________________________________
Signature
Signature Guaranteed:
NOTICE
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The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
A-8
FORM OF ELECTION TO PURCHASE
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(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: CANDELA CORPORATION
The undersigned hereby irrevocably elects to exercise Rights represented by
this Rights Certificate to purchase the shares of Common Stock issuable upon the
exercise of the Rights (or such other securities of the Company or of any other
person which may be issuable upon the exercise of the Rights) and requests that
certificates for such shares be issued in the name of and delivered to:
Please insert social security
or other identifying number
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(Please print name and address)
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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:
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Please insert social security
or other identifying number:
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(Please print name and address)
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Dated: ________________, 19__
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Signature
Signature Guaranteed:
A-10
Certificate
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The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person,
an Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or became an Acquiring Person, an Adverse Person or an
Affiliate or Associate of any such Person.
Dated: _______________, 19__ _________________________________
Signature
Signature Guaranteed:
NOTICE
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The signature to the foregoing, Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT B
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SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On September 4, 1992, the Board of Directors of Candela Corporation (the
"Company") declared a dividend distribution of one Right for each outstanding
share of Common Stock of the Company to stockholders of record at the close of
business on September 22, 1992. Each Right entitles the registered holder to
initially purchase from the Company one share of Common Stock at a purchase
price of $48.00, subject to adjustment (the "Purchase Price"). The description
and terms of the Rights are set forth in a Rights Agreement, as amended from
time to time (the "Rights Agreement") between the Company and The First National
Bank of Boston, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 10 days following the date
on which the Company's chief executive officer becomes aware that a person or
group of affiliated or associated persons (an "Acquiring Person") has acquired,
or obtained the right to acquire, beneficial ownership of more than 25% of the
outstanding shares of Common Stock (the "Stock Acquisition Date"), (ii) 10
business days following the commencement of a tender offer or exchange offer
that may result in a person or group beneficially owning 25% or more of such
outstanding shares of Common Stock or (iii) 10 business days after the
Continuing Directors of the Company shall declare any Person to be an Adverse
Person, upon a determination that such person, alone or together with its
affiliates and associates, has become the Beneficial Owner of an amount of
Common Stock which the Continuing Directors determine to be substantial (which
amount shall in no event be less than 10% of the shares of Common Stock then
outstanding) and a majority of the Continuing Directors (with the concurrence of
a majority of the Independent Directors) determines, after reasonable inquiry
and investigation, including consultation with such persons as such directors
shall deem appropriate, that (a) such beneficial ownership by such person is
intended to cause the Company to repurchase the Common Stock beneficially owned
by such person or to cause pressure on the Company to take action or enter into
a transaction or series of transactions intended to provide such person with
short-term financial gain under circumstances where such directors determine
that the best long-term interests of the Company and its stockholders (taking
into account any impact on the national security of the United States or the
impact on any constituency which applicable law permits directors to consider in
discharging their fiduciary duty) would not be served by taking such action or
entering into such transaction or series of transactions at that time or (b)
such beneficial ownership is causing or reasonably likely to cause a material
adverse impact (including, but not limited to, impairment of relationships with
customers or impairment of the Company's ability to maintain its competitive
position) on the business or prospects of the Company.
B-2
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 September 22, 1992
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on September 22, 2002 unless earlier redeemed
by the Company as described below.
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.
In the event that the Continuing Directors determine that a person is an
Adverse Person or, at any time following the Distribution Date, (i) the Company
is the surviving corporation in a merger with an Acquiring Person and its Common
Stock is not changed or exchanged, (ii) a Person becomes the beneficial owner of
more than 25% of the then outstanding shares of Common Stock (except pursuant to
an offer for all outstanding shares of Common Stock which the Independent
Directors determine to be fair to and otherwise in the best interests of the
Company and its stockholders), (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement, or (iv) during
such time as there is an Acquiring Person, an event occurs which results in such
Acquiring Person's ownership interest being increased by more than 1% (e.g., a
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reverse stock split), each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the exercise price of the Right. However, Rights are not exercisable following
the occurrence of either of the events set forth above until such time as the
Rights are no longer redeemable by the Company as set forth below.
Notwithstanding any of the foregoing, following the occurrence of any of the
events set forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were, beneficially owned by an
Acquiring Person or an Adverse Person will be null and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than a
merger described in the preceding paragraph or a merger which follows an offer
described in the preceding paragraph), or (ii) more than 50% of the Company's
assets or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as set forth above) shall thereafter
have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the exercise price of the Right.
The Purchase Price payable, and the number of shares of Common 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
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reclassification of, the Common Stock, (ii) if holders of the Common Stock are
granted certain rights or warrants to subscribe for Common Stock or convertible
securities at less than the current market price of the Common Stock, or
(iii) upon the distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding regular quarterly or other periodic cash
dividends) 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. No fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the Common Stock
on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in part, at
any time until ten days following the Stock Acquisition Date, at a price of
$0.005 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). Under certain circumstances set forth
in the Rights Agreement, the decision to redeem shall require the concurrence of
a majority of the Continuing Directors. The Company may not redeem the Rights
if the Continuing Directors have previously declared a person to be an Adverse
Person. After the redemption period has expired, the Company's right of
redemption may be reinstated if either (i) an Acquiring Person reduces its
beneficial ownership to less than 10% of the outstanding shares of Common Stock
in a transaction or a series of transactions not involving the Company or
(ii) the Board of Directors approves the merger of the Company with, or
acquisition of the Company by, a Person unrelated to the Acquiring Person.
Immediately upon the action of the Board of Directors ordering redemption
of the Rights, with, where required, the concurrence of the Continuing
Directors, the Rights will terminate and the only right of the holders of Rights
will be to receive the $0.005 per Right redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board on the date of the Rights
Agreement, and any person who is subsequently elected to the Board if such
person is recommended or approved by a majority of the Continuing Directors, but
shall not include an Acquiring Person, an Adverse Person or an affiliate or
associate of an Acquiring Person or an Adverse Person, or any representative of
the foregoing entities. The term "Independent Directors" means Continuing
Directors who are not officers of the Company.
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 in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Other than those provisions relating to the principal economic terms of the
Rights, any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the earlier to occur of the
determination that a person is an Adverse Person or
