Exhibit 1
---------
CYTOGEN CORPORATION
And
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
As Rights Agent
____________
Rights Agreement
Dated as of June 19, 1998
TABLE OF CONTENTS
Section 1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . . . . . . . . . . . . 4
Section 3. Issue of Right Certificates. . . . . . . . . . . . . . . . . . . 5
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . 6
Section 5. Countersignature and Registration. . . . . . . . . . . . . . . . 7
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates. . . . . 7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. . 8
Section 8. Cancellation and Destruction of Right Certificates . . . . . . . 9
Section 9. Availability of Preferred Shares . . . . . . . . . . . . . . . . 9
Section 10. Preferred Shares Record Date . . . . . . . . . . . . . . . . . . 10
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares . . . 16
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 14. Fractional Rights and Fractional Shares. . . . . . . . . . . . . 17
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 16. Agreement of Right Holders . . . . . . . . . . . . . . . . . . . 19
Section 17. Right Certificate Holder Not Deemed a Stockholder. . . . . . . . 19
Section 18. Concerning the Rights Agent. . . . . . . . . . . . . . . . . . . 20
Section 19. Merger or Consolidation or Change of Name of Rights Agent. . . . 20
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . 21
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . 22
Section 22. Issuance of New Right Certificates . . . . . . . . . . . . . . . 23
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 24. Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 25. Notice of Certain Events . . . . . . . . . . . . . . . . . . . . 25
Section 26. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 27. Supplements and Amendments . . . . . . . . . . . . . . . . . . . 27
Section 28. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 29. Benefits of this Rights Agreement. . . . . . . . . . . . . . . . 27
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 31. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . 28
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
Rights Agreement
Rights Agreement, dated as of June 19, 1998, between
Cytogen Corporation, a Delaware corporation (the "Company"),
and ChaseMellon Shareholder Services, L.L.C. (the "Rights
Agent").
The Board of Directors of the Company has authorized
and declared a dividend of one preferred share purchase right
(a "Right") for each Common Share of the Company outstanding
on June 30, 1998 (the "Record Date"), each Right representing
the right to purchase one one-thousandth of a Preferred Share,
upon the terms and subject to the conditions herein set forth,
and has further authorized and directed the issuance of one
Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Expiration
Date.
Accordingly, 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 Rights
Agreement, the following terms have the meanings indicated:
(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 20% or more of the
Common Shares then outstanding, but shall not include (i) the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or
any entity holding Common Shares for or pursuant to the terms
of any such plan, (ii) any person who becomes the Beneficial
Owner of 20% or more of the Common Shares then outstanding as
the result of a reduction in the outstanding Common Shares
resulting from acquisition of Common Shares by the Company
approved by a majority of the Continuing Directors, unless and
until such Person become the Beneficial Owner of any
additional Common Shares, (iii) any person who becomes the
Beneficial Owner of 20% or more of the Common Shares then
outstanding pursuant to any action or transaction or series of
related actions or transactions approved by the majority of
the Continuing Directors before such person otherwise becomes
an Acquiring Person or (iv) any Person who or which the Board
of Directors of the Company (upon the approval of a majority
of the Continuing Directors) determines, in good faith, became
an Acquiring Person inadvertently, if such Person divests as
promptly as practicable a sufficient number of Common Shares
so that such Person would no longer be an Acquiring Person.
(b) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 under
the Exchange Act.
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(c) A Person shall be deemed the "Beneficial Owner"
of and shall be deemed to "Beneficially Own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, as determined
pursuant to Rule 13d-3 under the Exchange Act;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect to
a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise,
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own, 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) the right to vote pursuant to any
agreement, arrangement or understanding, provided, however,
that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own, any security if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not
also then reportable 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 with which such
Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling
group members with respect to a bona fide public offering of
securities) for the purpose of acquiring, holding, voting
(except to the extent contemplated by the proviso to Section
1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then 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.
(d) "Business Day" shall mean any day other than
a Saturday, a Sunday, or a day on which banking institutions
in New York are authorized or obligated by law or executive
order to close.
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(e) "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.
(f) "Common Shares" shall mean the shares of common
stock, par value $.01 per share, of the Company, except that
"Common Shares" when used with reference to any Person other
than the Company shall mean the capital stock (or equity
interest) with the greatest voting power of such other Person
or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(g) "Company" shall have the meaning set forth in
the preamble hereof.
(h) "Continuing Director" shall mean any member of
the Board of Directors of the Company, while such person is a
member of the Board of Directors, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person,
or a representative or nominee of an Acquiring Person or of
any such Affiliate or Associate, and who either (i) was a
member of the Board of Directors on the date of this Agreement
or (ii) subsequently became a member of the Board of
Directors, and whose nomination for election or election to
the Board of Directors was recommended or approved by a
majority of the Continuing Directors then on the Board of
Directors. For purposes of this Rights Agreement, a
determination, calculation, interpretation or other action
shall not be deemed approved by a majority of the Continuing
Directors unless there is at least one Continuing Director in
office who approved such action.
(i) "current per share market price" shall have the
meaning set forth in Section 11(d) hereof.
(j) "Distribution Date" shall have the meaning set
forth in Section 3(a) hereof.
(k) "equivalent preferred shares" shall have the
meaning set forth in Section 11(b) hereof.
(l) "Exchange Act" shall mean the Securities
Exchange Act of 1934.
(m) "Exchange Ratio" shall have the meaning set
forth in Section 24(a) hereof.
(n) "Expiration Date" shall mean the Close of
Business on June 19, 2008.
(o) "NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotations System.
(p) "Person" shall mean any individual, firm,
corporation, partnership or other entity, and shall include
any successor (by merger or otherwise) of such entity.
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(q) "Preferred Shares" shall mean shares of Series
C Junior Participating Preferred Stock, $.01 par value, of the
Company having the rights and preferences set forth in the
Form of Certificate of Designations attached to this Rights
Agreement as Exhibit A.
(r) "Purchase Price" shall initially be $20 or each
one one-thousandth of a Preferred Share purchasable pursuant
to the exercise of a Right, and shall be subject to adjustment
from time to time as provided in Section 11 or 13 hereof.
(s) "Record Date" shall have the meaning set forth
in the second paragraph hereof.
(t) "Redemption Date" shall mean the time at which
the Rights are redeemed as provided in Section 23 hereof.
(u) "Redemption Price" shall have the meaning set
forth in Section 23(a) hereof.
(v) "Right" shall have the meaning set forth in the
second paragraph hereof.
(w) "Right Certificate" shall have the meaning set
forth in Section 3(a) hereof.
(x) "Rights Agent" shall have the meaning set forth
in the preamble hereof.
(y) "Security" shall have the meaning set forth in
Section 11(d)(i) hereof.
(z) "Stock Acquisition Date" shall mean the first
date of public announcement (including, without limitation, by
a filing under the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such or
such earlier date as a majority of the Continuing Directors
shall become aware of the existence of an Acquiring Person.
(aa) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
owned or otherwise controlled, directly or indirectly, by such
Person.
(bb) "Trading Day" shall have the meaning set forth
in Section 11(d)(i) hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the distribution Date
also be the holders of the Common Shares) in accordance with the terms and
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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 Right Certificates. (a) Until the earlier of the
Close of Business on (i) the Stock Acquisition Date or (ii) such date, if any,
as may be determined by action of the Board of Directors of the Company (upon
approval by a majority of the Continuing Directors) after the date of the
commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of any
such plan) of, or of the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan) to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming an Acquiring Person (including any such date which is after
the date of this Rights Agreement and prior to the issuance of the Rights;
the earlier of such dates being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Shares registered in the
names of the holders thereof (which certificates shall also be deemed to be
Right Certificates) and not by separate Right Certificates and (y) the right
to receive Right Certificates will be transferable only in connection with
the transfer of Common Shares. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send) by first-class, insured, postage-prepaid mail,
to each record holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the records of
the Company, a Right Certificate, in substantially the form of Exhibit B
hereto (a "Right Certificate"), evidencing one Right for each Common Share so
held. As of the Distribution Date, the Rights will be evidenced solely by such
Right Certificates.
(b) The Company will make available, as promptly as
practicable following the Record Date, a Summary of Rights to
Purchase Preferred Shares, in substantially the form of
Exhibit C hereto, to any holder of Rights who may so request
from time to time prior to the Expiration Date. With respect
to certificates for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights will be
evidenced by such certificates and the registered holders of
the Common Shares shall also be the registered holders of the
associated Rights. Until the Distribution Date (or the earlier
of the Redemption Date or the Expiration Date), the surrender
for transfer of any certificate for Common Shares in respect
of which Rights have been issued shall also constitute the
transfer of the Rights associated with such Common Shares.
(c) Rights shall be issued in respect of all
Common Shares which are issued (whether originally issued or
from the Company's treasury) after the Record Date but prior
to the earliest of the Distribution Date, the Redemption Date
or the Expiration Date. Certificates representing such Common
Shares shall bear the following legend:
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THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE
HOLDER HEREOF TO CERTAIN RIGHTS AS SET FORTH IN A
RIGHTS AGREEMENT BETWEEN CYTOGEN CORPORATION (THE
"COMPANY") AND THE RIGHTS AGENT THEREUNDER (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 WITHOUT CHARGE AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO ANY PERSON WHO BECOMES
AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT), INCLUDING SUCH RIGHTS HELD BY A
SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the
foregoing legend, until the Distribution Date, the Rights
associated with the Common Shares represented by such
certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated with the
Common Shares represented thereby. In the event that the
Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed cancelled
and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase Preferred Shares and of assignment
to be printed on the reverse thereof) shall be substantially the same as
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
Rights 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 automated quotation system on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-thousandths
of a Preferred Share as shall be set forth therein at the price per one
one-thousandth of a Preferred Share set forth therein, but the number of one
one-thousandths of a Preferred Share and the Purchase Price shall be subject
to adjustment as provided herein.
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Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile Thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned by 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 Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
(b) Following the Distribution Date, the
Rights Agent will keep or cause to be kept, at its principal
office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date of each of the
Right Certificates.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates.
(a) Subject to the provisions of 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 earlier
of the Redemption Date or the Expiration Date, any Right
Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void
pursuant to Section 11(a)(ii) hereof or that have been
exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Right Certificate
or Right Certificates entitling the registered holder to
purchase a like number of one one-thousandths of a Preferred
Share as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or
exchanged at the principal office of the Rights Agent.
Thereupon the Rights Agent shall countersign and deliver to
the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company
may require payment 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 Right
Certificates.
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(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and,
in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right
Certificate if mutilated, the Company will make and deliver a
new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) The registered holder of any Right Certificate
may exercise the Rights evidenced thereby (except as otherwise
provided herein), in whole or in part, at any time after the
Distribution Date, upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the
Purchase Price for each one one-thousandth of a Preferred
Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Expiration Date, (ii) the Redemption Date
or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof.
(b) The Purchase Price shall be payable in lawful
money of the United States of America in accordance with
paragraph (c) below.
(c) Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the Purchase
Price for the shares to be purchased and an amount equal to
any applicable transfer tax required to be paid by the holder
of such Right Certificate in accordance with Section 9 hereof
by certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably
authorizes any such transfer agent to comply with all such
requests, or (B) requisition from the depositary agent
depositary receipts representing such number of one one-thousandths
of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent of
the Preferred Shares with such depositary agent) and the
Company hereby directs such depositary agent to comply with
such request; (ii) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof; (iii)
promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order
of the registered holder of such Right Certificate, registered
in such name or names as may be designated by such holder; and
(iv) when appropriate, after receipt, promptly deliver such
cash to or upon the order of the registered holder of such
Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
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to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall,
if surrendered to the Company or to any of its agents, be
delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Right Certificates shall be issued in
lieu thereof except as expressly permitted by any of the
provisions of this Rights Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise
than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at
the written request of the Company, destroy such cancelled
Right Certificates, and, in such case, shall deliver a
certificate of destruction thereof to the Company.
Section 9. Availability of Preferred Shares.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized
and unissued Preferred Shares or any Preferred Shares held in
its treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7. The Company covenants and
agrees that it will take all such action as may be necessary
to ensure that all securities delivered upon exercise of
Rights shall, at the time of delivery of the certificates for
such securities (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and
nonassessable.
(b) The Company further covenants and agrees
that it will pay when due and payable any and all federal and
state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates
or of any Preferred Shares upon the exercise of 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 Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts
for the Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any
certificates or depositary receipts for Preferred Shares upon
the exercise of any Rights until any such tax shall have been
paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no
such tax is due.
(c) The Company will use its best efforts to ensure
that any securities issued pursuant hereto are issued in
compliance with all applicable laws.
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Section 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of the
Preferred Shares represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the
Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and
payment is a date upon which the Preferred Shares transfer
books of the Company are closed, such Person shall be deemed
to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day
on which the Preferred Shares transfer books of the Company
are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred 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 of
Shares or Number of Rights. The Purchase Price, the number of Preferred
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 Rights Agreement (A) declare a dividend
on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the
outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock
in a reclassification of the Preferred Shares (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), 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 capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to
such date and at a time when the Preferred Shares transfer
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;
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 issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Rights
Agreement, in the event any Person becomes an Acquiring
Person, each holder of a Right shall thereafter have a right
to receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one one-thousandths
of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Rights
10
Agreement and in lieu of Preferred Shares, such number of
Common Shares as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of
one one-thousandths of a Preferred Share for which a Right is
then exercisable and dividing that product by (B) 50% of the
then current per share market price of the Company's Common
Shares (determined pursuant to Section 11(d) hereof) on the
date of the occurrence of such event. In the event that any
Person shall become an Acquiring Person and the Rights shall
then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be
afforded by the Rights.
Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of such event, any
Rights that are or were acquired or Beneficially Owned by any
Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) shall be void and any holder of such Rights
shall thereafter have no right to exercise such Rights under
any provision of this Rights Agreement. No Right Certificate
shall be issued pursuant to Section 3 that represents Rights
Beneficially Owned by an Acquiring Person whose Rights would
be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence
or any Associate or Affiliate thereof or to any nominee of
such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) If there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the
Rights. If the Company shall, after good faith effort, be
unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall
substitute, for each Common Share that would otherwise be
issuable upon exercise of a Right, a number of Preferred
Shares or fraction thereof (or a security with substantially
similar rights, privileges, preferences, voting power and
economic rights) such that the current per share market price
of one Preferred Share (or such other security) multiplied by
such number or fraction is equal to the current per share
market price of one Common Share as of the date of issuance of
such Preferred Shares or fraction thereof (or other security).
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares
("equivalent preferred shares")) or securities convertible
into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or
having a conversion price per share, if a security convertible
into Preferred Shares or equivalent preferred shares) less
than the then current per share market price of the Preferred
11
Shares 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
Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price
of the total number of Preferred Shares and/or equivalent
preferred shares 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 Preferred
Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares
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 issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good
faith by the Board of Directors of the Company (upon the
approval of a majority of the Continuing Directors), whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Preferred Shares owned by or held for
the account of the Company shall not be deemed outstanding for
the purpose of any such computatio. Such adjustment shall be
made successively whenever such a record date is fixed; and in
the event that such rights, options 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
the making of a distribution to all holders of the Preferred
Shares (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 or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) 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 then
current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company (upon the
approval of a majority of the Continuing Directors), whose
determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and
holders of the Rights) of the portion of the assets or
evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred
Share and the denominator of which shall be such current per
share market price of the Preferred Shares; 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 again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been
fixed.
12
(d) (i) For the purpose of any computation
hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section
11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30
consecutive Trading Days immediately prior to such date;
provided, however, that in the event that the current per
share market price of the Security is determined during a
period following the announcement by the issuer of such
Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible
into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration
of 30 Trading Days after the ex-dividend date for such
dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in
each such case, the current per share market price shall be
appropriately adjusted to reflect the current market price per
share equivalent of such Security. 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 Security is 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 Security is listed
or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market,
as reported by the NASDAQ or such other system then in use,
or, if on any such date the Security is 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 Security selected by the Board of Directors of the Company
(upon the approval of a majority of the Continuing Directors).
The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed
or admitted to trading is open for the transaction of business
or, if the Security is not listed or admitted to trading on
any national securities exchange, a Business Day.
(ii) For the purpose of any computation
hereunder, the "current per share market price" of the
Preferred Shares shall be determined in accordance with the
method set forth in Section 11(d)(i). If the Preferred Shares
are not publicly traded, the "current per share market price"
of the Preferred Shares shall be conclusively deemed to be the
current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by
one thousand. If neither the Common Shares nor the Preferred
Shares are publicly held or so listed or traded, "current per
share market price" shall mean the fair value per share as
determined in good faith by the Board of Directors of the
Company (upon the approval of a majority of the Continuing
Directors), whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided,
13
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 one-millionth of a Preferred
Share or one ten-thousandth of any other share or security 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 years
from the date of the transaction which requires such
adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
(f) If, as a result of an adjustment made pursuant
to Section 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon
exercise of any Right 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
Shares contained in Section 11(a) through (c), inclusive, and
the provisions of Sections 7, 9, 10 and 13 with respect to the
Preferred Shares 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 Preferred Share 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 Preferred Share
(calculated to the nearest one millionth of a Preferred Share)
obtained by (A) 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
(B) 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 substitution for any adjustment in the number of one
one-thousandths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for
the number of one one-thousandths of a Preferred Share 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 millionth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment
of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for
14
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 Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement.
If Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such
record date Right 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 Right
Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein
and shall be registered in the names of the holders of record
of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-thousandths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-thousandth
of the then par value, if any, of the Preferred
Shares 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 nonassessable Preferred
Shares at such adjusted Purchase Price.
(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 issuing to the holder of any Right exercised after such
record date of the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise
over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver
to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such
adjustment.
(m) 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, it, in its sole discretion, shall determine
to be advisable in order that any consolidation or subdivision
of the Preferred Shares, issuance wholly for cash of any
Preferred Shares at less than the current market price,
15
issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in
Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(n) In the event that at any time after the date of
this Rights Agreement and prior to the Distribution Date, the
Company shall (i) declare or pay any dividend on the Common
Shares payable in Common Shares or (ii) effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
Common Shares) into a greater or lesser number of Common
Shares, then in any such case (A) the number of one one-thousandths
of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by
multiplying the number of one one-thousandths of a Preferred
Share so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common
Shares outstanding immediately before such event and the
denominator of which is the number of Common Shares
outstanding immediately after such event, and (B) each Common
Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in
this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision,
combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as
provided in Sections 11 or 13 hereof, the Company shall promptly
(a) prepare a certificate setting forth such adjustment, and a brief
statement of the facts accounting for such adjustment, (b)
file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such
certificate and (c) if a Distribution Date has occurred, mail
a brief summary thereof to each holder of a Right Certificate
in accordance with Section 25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power. In the event, directly or
indirectly, at any time after a Person has become an Acquiring
Person, (a) the Company shall consolidate with, or merge with
and into, any other Person, (b) any Person shall consolidate with
the Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in
connection with such merger, all or part of the Common Shares
shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any
other property or (c) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole)
to any other Person other than the Company or one or more of
its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that
16
(i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the
then current Purchase Price multiplied by the number of one
one-thousandths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Rights
Agreement and in lieu of Preferred Shares, such number of
Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall
equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share
market price of the Common Shares of such other Person
(determined pursuant to Section 11(d) hereof) on the date of
consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall
thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations
and duties of the Company pursuant to this Rights Agreement;
(iii) the term "Company" shall thereafter
be deemed to refer to such issuer; and
(iv) such issuer shall take such steps
(including, but not limited to, the reservation of a
sufficient number of its Common Shares in accordance with
Section 9 hereof) in connection with such consummation as may
be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in
relation to the Common Shares thereafter deliverable upon the
exercise of the Rights.
The Company shall not consummate any such consolidation,
merger, sale or transfer unless prior thereto the Company and
such issuer shall have executed and delivered to the Rights
Agent a supplemental agreement so providing. The Company shall
not enter into any transaction of the kind referred to in this
Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any
agreements or arrangements which, as a result of the
consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by
the Rights. The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or
other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right
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 the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price,
17
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 quoted price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by 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 of the Company (upon the approval of a majority of
the Continuing 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 of the Company (upon the approval of a majority
of the Continuing Directors) shall be used.
(b) The Company shall not be required to issue
fractions of Preferred Shares (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share)
upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth
of a Preferred Share). Fractions of Preferred Shares in
integral multiples of one one-thousandth of a Preferred Share
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
that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as Beneficial Owners of
the Preferred Shares represented by such depositary receipts.
In lieu of fractional Preferred Shares that are not integral
multiples of one one-thousandth of a Preferred Share, the
Company shall pay to the registered holders of Right
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 Preferred Share. For the purposes
of this Section 14(b), the current market value of a Preferred
Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of
such exercise.
(c) The holder of a Right by the acceptance of the
Right expressly waives his right to receive any fractional
Rights or any fractional shares upon exercise of a Right
(except as expressly provided above).
Section 15. Rights of Action. All rights of action in
respect of this Rights Agreement, except the rights of action given
to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Shares),
18
without the consent of the Rights Agent or of the holder of
any other Right Certificate (or, prior to the Distribution
Date, of the Common Shares), 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 Right Certificate in the manner provided in
such Right Certificate and in this Rights Agreement. Without
limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Rights Agreement and will be entitled to
specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the
obligations of any Person subject to, this Rights Agreement.
Section 16. Agreement of Right Holders. Every holder of
a Right, by accepting the same, consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the
Common Shares;
(b) after the Distribution Date, the Right
Certificates are transferable only on the registry books of
the Rights Agent if surrendered at the principal office of the
Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer; and
(c) the Company and the Rights Agent may deem and
treat the Person in whose name the Right Certificate (or,
prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificate or the
associated Common Shares certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any
purpose the holder of the Preferred Shares 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 Right Certificate be
construed to confer upon the holder of any Right Certificate,
as such, any of the rights of a stockholder of the Company or
any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
19
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of
this Rights Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss,
liability or expense incurred without negligence, bad faith or
willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection
with the acceptance and administration of this Rights
Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall
incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its
administration of this Rights Agreement in reliance upon any
Right Certificate or certificate for the Preferred Shares or
Common Shares 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, executed and, where
necessary, verified 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 stock transfer or corporate trust powers of the Rights
Agent or any successor Rights Agent, shall be the successor to
the Rights Agent under this Rights 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 Rights Agreement, any of the Right
Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any
of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all
such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights
Agreement.
(b) In case at any time the name of the Rights
Agent shall be changed and at such time any of the Right
Certificates shall have been countersigned but not delivered,
20
the Rights Agent may adopt the countersignature under its
prior name and deliver Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall
not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates
and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights
Agreement upon the following terms and conditions, by all of which
the Company and the holders of Right Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the opinion of
such counsel 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 Rights Agreement the Rights Agent shall deem it necessary
or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice
President, the Treasurer or the 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
suffered in good faith by it under the provisions of this
Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own negligence,
bad faith or willful misconduct. Anything to the contrary
notwithstanding, the Rights Agent shall not be liable for
special, indirect, incidental or consequential loss or damage
of any kind whatsoever.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained
in this Rights Agreement or in the Right Certificates (except
its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Rights
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 Right Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained
in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any change in the exercisability
21
of the Rights (including the Rights becoming void pursuant to
Section 11(a)(ii) hereof) or any adjustment in the terms of
the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after actual notice
that such change or adjustment is required); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Rights
Agreement or any Right Certificate or as to whether any
Preferred Shares will, when 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
Rights Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Secretary or the 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 suffered 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 Rights 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 reasonable care was exercised in the selection and
continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent
or any successor Rights Agent may resign and be discharged from its
duties under this Rights Agreement upon 30-days' notice in writing
mailed to the Company and to each transfer agent of the Common Shares
or Preferred Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30-days'
notice in writing, mailed to the Rights Agent or successor
22
Rights Agent, as the case may be, and to each transfer agent
of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right 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
30 days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by
the resigning or incapacitated Rights Agent or by the holder
of a Right Certificate (who shall, with such notice, submit
his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate 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 either (a) a
corporation organized and doing business under the laws of the
United States or of 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 New York, in good standing, having an office in the
State of New York), which is authorized under such laws to
exercise corporate trust or stock transfer 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 $50
million, or (b) an affiliate of such corporation. After
appointment, the successor Rights Agent shall be vested with
the same powers, rights, duties and responsibilities as if it
had been originally named as Rights Agent without further act
or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common
Shares or Preerred Shares, and mail a notice thereof in
writing to the registered holders of the Right 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 Right Certificates. Notwithstanding
any of the provisions of this Rights Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by the Board of Directors of
the Company (upon the approval of a majority of the Continuing
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 Right
Certificates made in accordance with the provisions of this
Rights Agreement.
Section 23. Redemption. (a) The Board of Directors of the
Company (upon the approval of a majority of the Continuing Directors) may,
at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then
outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as
the "Redemption Price"). The redemption of the Rights by the
23
Board of Directors of the Company may be made effective at
such time, on such basis and with such conditions as the Board
of Directors of the Company (upon the approval of a majority
of the Continuing Directors), in its sole discretion, may
establish. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based on the current
market price at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors
(upon the approval of a majority of the Continuing Directors).
(b) Immediately upon the action of the Board of
Directors of the Company (upon the approval of a majority of
the Continuing Directors) ordering the redemption of the
Rights pursuant to paragraph (a) of this Section 23, 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. The Company shall promptly give public
notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not
affect the validity of such redemption. Within 10 days after
such action of the Board of Directors of the Company (upon the
approval of a majority of the Continuing Directors) ordering
the redemption of the Rights, the Company shall mail a notice
of redemption to all the holders of the then outstanding
Rights at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24
hereof, and other than in connection with the purchase of
Common Shares prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors
of the Company (upon the approval of a majority of the Continuing
Directors) may, at its option, at any time after any Person becomes
an Acquiring Person, exchange all or part of the then outstanding
and exercisable Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any
entity holding Common Shares for or pursuant to the terms of
any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of
the Common Shares then outstanding.
24
(b) Immediately upon the action of the Board of
Directors of the Company (upon the approval of a majority of
the Continuing Directors) ordering the exchange of any Rights
pursuant to paragraph (a) of this Section 24 and without any
further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of
a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The
Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of exchange will state the method by which
the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all
such action as may be necessary to authorize additional Common
Shares for issuance upon exchange of the Rights. In the event
the Company shall, after good faith effort, be unable to take
all such action as may be necessary to authorize such
additional Common Shares, the Company shall substitute, for
each Common Share that would otherwise be issuable upon
exchange of a Right, a number of Preferred Shares or fraction
thereof (or a security with substantially similar rights,
privileges, preferences, voting power and economic rights)
such that the current per share market price of one Preferred
Share (or other such security) multiplied by such number or
fraction is equal to the current per share market price of one
Common Share as of the date of issuance of such Preferred
Shares or fraction thereof (or other such security).
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates which
evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a
whole Common Share. For the purposes of this paragraph (d),
the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events. (a) In case the
Company shall propose (i) to pay any dividend payable in stock of any
class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its
Preferred Shares rights or warrants to subscribe for or to
25
purchase any additional Preferred Shares or shares of stock of
any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any
consolidation or merger into or with, or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any
other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any
dividend on the Common Shares payable in Common Shares or to
effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such
case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for
the purposes of such stock dividend, or distribution of rights
or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Shares
and/or Preferred Shares, 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 10 days prior to
the record date for determining holders of the Preferred
Shares for purposes of such action, and in the ase of any such
other action, at least 10 days prior to the date of the taking
of such proposed action or the date of participation therein
by the holders of the Common Shares and/or Preferred Shares,
whichever shall be the earlier.
(b) In case the event set forth in Section
11(a)(ii) hereof shall occur, then the Company shall as soon
as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized
by this Rights Agreement to be given or made by the Rights
Agent or by the holder of any Right 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:
Cytogen Corporation
000 Xxxxxxx Xxxx Xxxx
XX0000
Princeton, New Jersey 08540-5308
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any
notice or demand authorized by this Rights Agreement to be
given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently
26
given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the
Company) as follows:
ChaseMellon Shareholder Services, L.L.C.
Overpeck Centre
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Notices or demands authorized by this Rights Agreement to
be given or made by the Company or the Rights Agent to the
holder of any Right Certificate shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed
to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments. The
Company (upon the approval of a majority of the Continuing
Directors) may from time to time supplement or amend this
Rights Agreement without the approval of any holders of Right
Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or
to make any other provisions with respect to the Rights which
the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by
the Company and the Rights Agent, provided, however, after any
Person becomes an Acquiring Person, this Rights Agreement
shall not be amended in any manner which would adversely
affect the interests of the holders of Rights (other than an
Acquiring Person or Affiliate or Associate thereof).
Section 28. Successors. All the covenants and
provisions of this Rights Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Benefits of this Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any Person, other than
the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares)
any legal or equitable right, remedy or claim under this Rights Agreement;
but this Rights Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision,
covenant or restriction of this Rights 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 Rights Agreement shall remain in
full force and effect and shall in no way be affected, impaired
or invalidated.
27
Section 31. Governing Law. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of New York and for all purposes shall be
governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed
entirely within such State.
Section 32. Counterparts. This Rights 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 Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
28
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed and attested, all as of
the day and year first above written.
CYTOGEN CORPORATION
By: /s/ Xxxxxx X. Xxxxx
--------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and General
Counsel
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/ Xxxx X. Xxxxxxxxxxx
------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Assistant Vice President
29
Exhibit A
---------
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
of
CYTOGEN CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-------------------------------
Cytogen Corporation, a corporation organized and existing
under the General Corporation Law of the State of Delaware
(hereinafter called the "Corporation"), hereby certifies that
the following resolution was adopted by the Board of Directors
of the Corporation as required by Section 151 of the General
Corporation Law at a meeting duly called and held on June 17,
1998:
RESOLVED, that pursuant to the authority granted to and
vested in the Board of Directors of this Corporation
(hereinafter called the "Board of Directors" or the "Board")
in accordance with the provisions of the Certificate of
Incorporation, the Board of Directors hereby creates a series
of Preferred Stock of the Corporation, par value $.01 per
share (the "Preferred Stock"), and hereby states the
designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Series C Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of
such series shall be designated as "Series C Junior
Participating Preferred Stock" (the "Series C Preferred
Stock") and the number of shares constituting the Series C
Preferred Stock shall be 200,000. 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 C Preferred Stock to a number less than
the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible
into Series C Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of
any series of Preferred Stock (or any similar stock) ranking
prior and superior to the Series C Preferred Stock with
respect to dividends, the holders of shares of Series C
Preferred Stock, in preference to the holders of Common Stock,
A-1
par value $.01 per share (the "Common Stock"), of the
Corporation, and of any other 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, quarterly
dividends payable in cash on the first day of March, June,
September and December in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series
C Preferred Stock, in an amount per share (rounded to the
nearest cent) equal to the greater of (a) $10 or (b) subject
to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends,
and 1,000 times the aggregate per share amount (payable in
kind) of all non- cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a
share of Series C Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of
shares of Series C Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series C Preferred Stock as provided in
paragraph (A) of this Section immediately after it declares a
dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $10 per share on the
Series C Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series C Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of
holders of shares of Series C Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of
Series C Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share
A-2
basis among all such shares at the time outstanding. The Board
of Directors may fix a record date for the determination of
holders of shares of Series C Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of
Series C Preferred Stock shall have the following voting
rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series C 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 declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series C Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred
Stock or any similar stock, or by law, the holders of shares
of Series C 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) Except as set forth herein, or as otherwise provided
by law, holders of Series C 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 quarterly dividends or other dividends or
distributions payable on the Series C Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series C Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series C Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
A-3
winding up) with the Series C Preferred Stock, except
dividends paid ratably on the Series C 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 stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series C Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series C
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series C Preferred Stock, or any
shares of stock ranking on a parity with the Series C
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective Series Cnd 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
C 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 subject to the conditions
and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any
similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders
of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series C
Preferred Stock unless, prior thereto, the holders of shares
of Series C Preferred Stock shall have received $1000 per
share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares of
Series C Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1000 times the
aggregate amount to be distributed per share to holders of
shares of Common Stock, or (2) to the holders of shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series C
Preferred Stock, except distributions made ratably on the
Series C Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all
A-4
such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series C Preferred Stock
were entitled immediately prior to such event under the
proviso in clause (1) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior tosuch 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 each share of Series C Preferred Stock shall at the same
time be similarly exchanged or changed into 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 declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of
shares of Series C 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 C
Preferred Stock shall not be redeemable.
Section 9. Rank. The Series C Preferred Stock shall
rank, with respect to the payment of dividends and the
distribution of assets, junior to all series of any other
class of the Corporation's Preferred Stock.
Section 10. Amendment. The Certificate of
Incorporation of the Corporation shall not be amended in any
manner which would materially alter or change the powers,
preferences or special rights of the Series C Preferred Stock
so as to affect them adversely without the affirmative vote of
the holders of at least two-thirds of the outstanding shares
of Series C Preferred Stock, voting together as a single
class.
A-5
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its President and
attested by its Secretary this the 19th day of June, 1998.
CYTOGEN CORPORATION
By:_______________________
Attest:
By:_______________________
A-6
Exhibit B
---------
Form of Right Certificate
Certificate No. R-
_________ Rights
NOT EXERCISABLE AFTER JUNE 19, 2008 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT.
Rights Certificate
CYTOGEN 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 June 19, 1998 (the "Rights Agreement"), between
Cytogen Corporation, a Delaware corporation (the "Company"),
and ChaseMellon Shareholder Services, L.L.C. (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 prior to 5:00 p.m., New York time, on June 19,
2008 at the principal office of the Rights Agent, or at the
office of its successor as Rights Agent, one one-thousandth of
a fully paid non-assessable share of Series C Junior
Participating Preferred Stock of the Company, par value $.01
per share (the "Preferred Shares"), at a purchase price of $20
per one one-thousandth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase duly
executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a
Preferred Share which may be purchased upon exercise hereof)
set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of _________, based on the
Preferred Shares as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of one
one-thousandths of a Preferred Share which may be purchased
upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon
the happening of certain events.
This Right 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 Right Certificates. Copies of the Rights
Agreement are on file at the principal executive offices of
the Company and the offices of the Rights Agent.
B-1
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate
or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have
entitled such holder to purchase. If this Right Certificate
shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or
Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate (i) may be redeemed
by the Company at a redemption price of $.01 per Right or (ii)
may be exchanged, in whole or in part, for Preferred Shares or
shares of the Company's Common Stock, par value $.01 per
share.
No fractional Preferred Shares 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 Preferred Share, 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 Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the
holder of the Preferred Shares 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 Right Certificate shall have
been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory
for any purpose until it shall have been countersigned by the
Rights Agent.
B-2
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of ___________.
CYTOGEN CORPORATION
By:_______________________
Name:
Title:
COUNTERSIGNED:
By_______________________________
Name:
Title:
B-3
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________________________
hereby sells, assigns and transfers unto___________________________
___________________________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ________________ Attorney, to transfer the within
Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: _______________________
Signature _________________________
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or
correspondent in the United States.
Certificate
-----------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement). After due inquiry and
to the best knowledge of the undersigned, the Rights evidenced
by this Right Certificate were not acquired or beneficially
owned by an Acquiring Person or an Affiliate or Associate
thereof.
Dated:____________________________
Signature _________________________
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
B-4
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Right Certificate.)
To: CYTOGEN CORPORATION
The undersigned hereby irrevocably elects to exercise
______ Rights represented by this Right Certificate to
purchase the Preferred Shares issuable upon the exercise of
such Rights and requests that certificates for such Preferred
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 Right Certificate, a new Right Certificate for the
balance remaining 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 a member firm of a
registered national securities exchange, a member of the
National Association of Securities Dealers, Inc., or a
commercial bank or trust company having an office or
correspondent in the United States.
B-5
Certificate
-----------
The undersigned hereby certifies that the Rights
evidenced by this Right Certificate are not beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement). After due inquiry and to
the best knowledge of the undersigned, the Rights evidenced by
this Right Certificate were not acquired or beneficially owned
by an Acquiring Person or an Affiliate or Associate thereof.
Dated:_______________________________
Signature_____________________________
The signature in the Form of Assignment or Form of
Election to Purchase, as the case may be, must conform to the
name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any
change whatsoever.
In the event the certification set forth above in the
Form of Assignment or the Form of Election to Purchase, as the
case may be, is not completed, the Company and the Rights
Agent will deem the beneficial owner of the Rights evidenced
by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights
Agreement) and such Assignment or Election to Purchase will
not be honored.
B-6
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On June 17, 1998, the Board of Directors of Cytogen
Corporation (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each
outstanding share of common stock, par value $.01 per share
(the "Common Shares"), of the Company. The dividend is
payable on June 30, 1998 (the "Record Date") to the
stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one
one-thousandth of a share of Series C Junior Participating
Preferred Stock of the Company, par value $.01 per share (the
"Preferred Shares"), at a price of $20 per one one-thousandth
of a Preferred Share (the "Purchase Price"), subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between
the Company and ChaseMellon Shareholder Services, L.L.C. as
Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all Common
Share certificates and no separate Rights certificates will be
issued. Separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the earlier to
occur of (i) a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") have
acquired beneficial ownership of 20% or more of the
outstanding Common Shares or (ii) such date as may be
determined by action of the Board of Directors of the Company,
upon approval of a majority of the Continuing Directors (as
defined below), following the commencement of, or announcement
of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership
by a person or group of 20% or more of the outstanding Common
Shares (the earlier of such dates being the "Distribution
Date").
The Rights Agreement provides that, until the
Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be transferred with and only with
the Common Shares, (ii) new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common
Shares will contain a notation incorporating the Rights
Agreement by reference and (iii) the surrender for transfer of
any certificates for Common Shares outstanding as of the
Record Date will also constitute the transfer of the Rights
associated with the Common Shares represented by such
certificate.
The Rights are not exercisable until the Distribution
Date. The Rights will expire on June 19, 2008 (the "Expiration
Date"), unless the Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in
each case, as described below.
If a person or group becomes an Acquiring Person, each
holder of a Right will thereafter have the right to receive,
upon exercise, Common Shares (or, in certain circumstances,
C-1
Preferred Shares or other similar securities of the Company)
having a value equal to two times the exercise price of the
Right. Notwithstanding any of the foregoing, following the
existence of an Acquiring Person, all Rights that are, or
(under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person
will be null and void.
For example, at an exercise price of $20 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 $40 worth of Common Shares (or other consideration,
as noted above) for $20. Assuming a value of $10 per Common
Share at such time, the holder of each valid Right would be
entitled to purchase four Common Shares for $20.
In the event that the Company is acquired in a merger or
other business combination transaction or 50% or more of its
consolidated assets or earning power are sold after a person
or group has become an Acquiring Person, proper provision will
be made so that each holder of a Right will thereafter have
the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of
common stock of the acquiring company which at the time of
such transaction will have a market value of two times the
exercise price of the Right. In the event that any person or
group becomes an Acquiring Person, proper provision shall be
made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market
value of two times the exercise price of the Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares, the
Board of Directors of the Company may exchange the Rights
(other than Rights owned by such person or group which will
have become void), in whole or in part, at an exchange ratio
of one Common Share, or one one-thousandth of a Preferred
Share (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
At any time prior to the existence of an Acquiring
Person, the Board of Directors of the Company (upon the
approval of a majority of the Continuing Directors) may redeem
the Rights, in whole but not in part, at a price of $.01 per
Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time on such basis with such
conditions as the Board of Directors, in its sole discretion,
may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the
Redemption Price.
The terms of the Rights may be amended by the Board of
Directors of the Company (upon the approval of a majority of
the Continuing Directors) without the consent of the holders
of the Rights, except that from and after the existence of an
Acquiring Person no such amendment may adversely affect the
interests of the holders of the Rights (other than the
Acquiring Person).
C-2
"Continuing Director" means a member of the Board of
Directors, who is not an Acquiring Person or a representative
or nominee of an Acquiring Person, and who either (i) was a
member of the Board of Directors on the date of the Rights
Agreement or (ii) subsequently became a member of the Board of
Directors, and whose nomination for election or election to
the Board of Directors was recommended or approved by a
majority of the Continuing Directors then on the Board of
Directors.
The number of outstanding Rights and the number of one
one-thousandths of a Preferred Share issuable upon exercise of
each Right are subject to adjustment under certain
circumstances.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one
one-thousandth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
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.
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 dated June 22, 1998. 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 hereby
incorporated herein by reference.
C-3
