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STOCKHOLDER RIGHTS AGREEMENT
dated as of
April 23, 1997
between
HCIA INC.
and
ChaseMellon Shareholder
Services, L.L.C.
as Rights Agent
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STOCKHOLDER RIGHTS AGREEMENT
Table of Contents
Page
----
Article I
DEFINITIONS
Section 1.1 Definitions................................................ 2
Article II
THE RIGHTS AGENT
Section 2.1 General.................................................... 11
Section 2.2 Merger or Consolidation or Change of Name of
Rights Agent............................................ 12
Section 2.3 Duties of Rights Agent..................................... 13
Section 2.4 Change of Rights Agent..................................... 17
Article III
THE RIGHTS
Section 3.1 Summary of Rights.......................................... 18
Section 3.2 Legend on Common Stock Certificates........................ 19
Section 3.3 Exercise of Rights; Separation of Rights................... 19
Section 3.4 Adjustments to Exercise Price; Number of Rights............ 23
Section 3.5 Date on Which Exercise is Effective........................ 25
Section 3.6 Execution, Authentication, Delivery and Dating of
Rights Certificates........................................ 26
Section 3.7 Registration, Registration of Transfer and Exchange........ 26
Section 3.8 Mutilated, Destroyed, Lost and Stolen Rights
Certificates............................................ 28
Section 3.9 Persons Deemed Owners...................................... 29
Section 3.10 Delivery and Cancellation of Certificates.................. 30
Section 3.11 Agreement of Rights Holders................................ 30
Article IV
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTION
Section 4.1 Flip-in.................................................... 31
Section 4.2 Flip-over.................................................. 35
Article V
MISCELLANEOUS
Section 5.1 Redemption................................................. 36
Section 5.2 Expiration................................................. 37
Section 5.3 Issuance of New Rights Certificates........................ 38
Section 5.4 Supplements and Amendments................................. 39
Section 5.5 Fractional Shares.......................................... 39
Section 5.6 Rights of Action........................................... 39
Section 5.7 Rights Holder Not Deemed a Stockholder..................... 40
Section 5.8 Notice of Proposed Actions................................. 41
Section 5.9 Notices.................................................... 41
Section 5.10 Suspension of Exercisability............................... 42
Section 5.11 Costs of Enforcement....................................... 43
Section 5.12 Successors................................................. 43
Section 5.13 Benefits of this Agreement................................. 43
Section 5.14 Determination and Actions by the Board of
Directors, etc......................................... 43
Section 5.15 Severability............................................... 45
Section 5.16 Governing Law.............................................. 44
Section 5.17 Counterparts............................................... 44
Section 5.18 Descriptive Headings....................................... 44
ii
EXHIBITS
Exhibit A Form of Rights Certificate (Together with Form of
Election to Exercise)
Exhibit B Form of Articles Supplementary
iii
STOCKHOLDER RIGHTS AGREEMENT
----------------------------
STOCKHOLDER RIGHTS AGREEMENT (this "Agreement"), dated as of April
23, 1997, between HCIA Inc., a Maryland corporation (the "Company"), and
ChaseMellon Shareholder Services, as Rights Agent (the "Rights Agent," which
term shall include any successor Rights Agent hereunder).
The Board of Directors of the Company has authorized and declared
a dividend of one right ("Right") in respect of each share of Common Stock
(as hereinafter defined) held of record as of the close of business on April 24,
1997 (the "Record Date") and has further authorized the issuance of one
Right in respect of each share of Common Stock issued after the Record Date and
prior to the Separation Date (as hereinafter defined) and, to the extent
provided in Section 5.3, each share of Common Stock issued after the Separation
Date. Each Right entitles the holder thereof, after the Separation Date, to
purchase securities of the Company (or, in certain cases, of certain other
entities) pursuant to the terms and subject to the conditions set forth herein.
Accordingly, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 15% or more of the outstanding shares of Common Stock; provided,
however, that the term "Acquiring Person" shall not include any Person (i) who
is the Beneficial Owner of 15% or more of the outstanding shares of Common Stock
on the date of this Agreement or who shall become the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock solely as a result of an
acquisition by the Company of shares of Common Stock, until such time hereafter
or thereafter as any of such Persons shall become the Beneficial Owner (other
than by means of a stock dividend or stock split) of any additional shares of
Common Stock, (ii) who is the Beneficial Owner of 15% or more of the outstanding
shares of Common Stock but who acquired Beneficial Ownership of shares of Common
Stock without any plan or intention to seek or affect control of the Company, if
such Person promptly enters into an irrevocable commitment promptly to divest,
and thereafter promptly divests (without exercising or retaining any power,
including voting, with respect to such shares), sufficient shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock or (iii) who Beneficially Owns
shares of
2
Common Stock consisting solely of one or more of (A) shares of Common Stock
Beneficially Owned pursuant to the grant or exercise of an option granted to
such Person by the Company in connection with an agreement to merge with, or
acquire, the Company entered into prior to a Flip-in Date, (B) shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) Beneficially Owned by such Person or its Affiliates or Associates
at the time of grant of such option, (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired by
Affiliates or Associates of such Person after the time of such grant which, in
the aggregate, amount to less than 1% of the outstanding shares of Common Stock
and (D) shares of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock) which are held by such Person in trust
accounts, managed accounts and the like or otherwise held in a fiduciary
capacity, that are beneficially owned by third persons who are not Affiliates or
Associates of such Person or acting together with such Person to hold such
shares, or which are held by such Person in respect of a debt previously
contracted. In addition, the Company, any wholly-owned Subsidiary of the Company
and any employee stock ownership or other employee benefit plan of the Company
or a wholly-owned Subsidiary of the Company shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as such Rule is in effect on the date
of this Agreement.
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A Person shall be deemed to be the "Beneficial Owner," and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities as to
which such Person or any of such Person's Affiliates or Associates is or may be
deemed to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Exchange Act, as such Rules are in effect on the date of this Agreement, as well
as any securities as to which such Person or any of such Person's Affiliates or
Associates has the right to become Beneficial Owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of
conditions) pursuant to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed to be the "Beneficial Owner," or to have "Beneficial Ownership" of, or to
"Beneficially Own," any security (i) solely because such security has been
tendered pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered security is accepted
for payment or exchange or (ii) solely because such Person or any of such
Person's Affiliates or Associates has or shares the power to vote or direct the
voting of such security pursuant to a revocable proxy given in response to a
public proxy or consent solicitation made to more than ten holders of shares of
a class of stock of the Company registered under Section 12 of the Exchange Act
and pursuant to, and in accordance with, the applicable rules and regulations
under the Exchange Act, except if such power (or the arrangements relating
thereto) is then reportable under Item 6 of Schedule 13D
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under the Exchange Act (or any similar provision of a comparable or successor
report). Notwithstanding the foregoing, no officer or director of the
Company shall be deemed to Beneficially Own any securities of any other
Person by virtue of any actions such officer or director takes in such capacity.
For purposes of this Agreement, in determining the percentage of the
outstanding shares of Common Stock with respect to which a Person is the
Beneficial Owner, all shares as to which such Person is deemed the Beneficial
Owner shall be deemed outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in Baltimore, Maryland are generally
authorized or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m.
Baltimore, Maryland time on such date (or, if such date is not a Business Day,
5:00 p.m. Baltimore, Maryland time on the next succeeding Business Day).
"Common Stock" shall mean the shares of Common Stock, par value $0.01
per share, of the Company.
"Disinterested Director" shall mean any member of the Board of
Directors of the Company, while such Person is a member of the board, who is
not (i) an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative of an Acquiring Person or of any such Affiliate
or Associate, or (ii) a Person, or an Affiliate, Associate, or representative
of a Person, any of whom has stated
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an intent to take, or to consider taking, any action which would result in
such Person becoming an Acquiring Person, or which would cause a
Flip-over Transaction or Event.
"Exchange Date" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 4.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a
holder may purchase the securities issuable upon exercise of one whole
Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $240.
"Expiration Date" shall mean the earliest of (i) the Exchange Date,
(ii) the Redemption Date, (iii) April 22, 2007 or (iv) upon the merger of the
Company into another corporation pursuant to an agreement entered into
prior to a Flip-in Date.
"Flip-in Date" shall mean the tenth business day after any Stock
Acquisition Date or such earlier or later date as the Board of Directors of
the Company may from time to time fix by resolution adopted prior to the
Flip-in Date that would otherwise have occurred.
"Flip-over Entity", for purposes of Section 4.2, shall mean
(x) in the case of a Flip-over Transaction or Event described in clause (i) of
the definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-over Transaction or Event and (y) in
the case of a Flip-over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the assets or
earning power being transferred in such Flip-over Transaction
6
or Event, provided in all cases if such Person is a subsidiary of a
corporation, the parent corporation shall be the Flip-over Entity.
"Flip-over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of
directors (or other persons similarly responsible for direction of the
business and affairs) of the Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or series
of transactions after a Flip-in Date in which, directly or indirectly, (i)
the Company shall consolidate or merge or participate in a share exchange
with any other Person if, at the time of the consolidation, merger or share
exchange or at the time the Company enters into any agreement with respect to
any such consolidation, merger or share exchange, the Acquiring Person Controls
the Board of Directors of the Company and either (A) any term of or arrangement
concerning the treatment of shares of capital stock in such consolidation,
merger or share exchange relating to the Acquiring Person is not identical to
the terms and arrangements relating to other holders of the Common Stock or (B)
the Person with whom the transaction or series of transactions occurs is the
Acquiring Person or an Affiliate or Associate of the Acquiring Person or (ii)
the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer) assets (A) aggregating more than 50% of the
assets (measured by either book value or fair market value) or (B) generating
more than 50% of the operating income or cash flow of the Company and its
Subsidiaries (taken as a whole) to any Person (other than the Company or one or
more of its wholly owned
7
Subsidiaries) or to two or more such Persons which are Affiliates or Associates
or otherwise acting in concert, if, at the time of the entry by the Company (or
any such Subsidiary) into an agreement with respect to such sale or transfer of
assets, the Acquiring Person Controls the Board of Directors of the
Company. An Acquiring Person shall be deemed to Control the Company's Board
of Directors when, following a Flip-in Date, the persons who were directors
of the Company before the Flip-in Date shall cease to constitute a majority of
the Company's Board of Directors.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date; provided,
however, that if an event of a type analogous to any of the events described in
Section 3.4 hereof shall have caused the closing prices used to determine the
Market Price on any Trading Days during such period of 20 Trading Days not to be
fully comparable with the closing price on such date, each such closing price so
used shall be appropriately adjusted in order to make it fully comparable with
the closing price on such date. The closing price per share of any securities on
any date shall be the last reported sale price, or, in case no sale takes place
or is quoted on such date, the average of the closing bid and asked prices for
each share of such securities, in either case as reported by the Nasdaq National
Market or, if the securities are not quoted on the Nasdaq National Market, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the
8
principal national securities exchange on which the securities are listed or
admitted to trading or, if the securities are not listed or admitted to
trading on any national securities exchange or national market system, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System or such other system then in use, or, if on any such date the
securities are not listed or admitted to trading on any national securities
exchange or national market system or 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 securities selected by the Board of
Directors of the Company; provided, however, that if on any such date the
securities are not listed or admitted to trading on a national securities
exchange or national market system or traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith by the
Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Exchange Act, as such Rule
is in effect on the date of this Agreement), corporation or other entity, and
shall include any successor (by merger or otherwise) of such entity.
9
"Preferred Stock" shall mean the series of Class A Preferred Stock,
par value $0.01 per share, of the Company created by Articles Supplementary
in substantially the form set forth in Exhibit B hereto appropriately
completed.
"Redemption Price" shall mean an amount equal to $0.01.
"Redemption Date" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Separation Date" shall mean the close of business on the earlier
of (i) the tenth business day (or such later date as the Board of
Directors of the Company may from time to time fix by resolution adopted prior
to the Separation Date that would otherwise have occurred) after the date on
which any Person commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person and (ii) the Flip-in
Date; provided, that if the foregoing results in the Separation Date being prior
to the Record Date, the Separation Date shall be the Record Date and provided
further, that if any tender or exchange offer referred to in clause (i) of this
paragraph is cancelled, terminated or otherwise withdrawn prior to the
Separation Date without the purchase of any shares of Common Stock pursuant
thereto, such offer shall be deemed, for purposes of this paragraph, never to
have been made.
"Stock Acquisition Date" shall mean the day of the first public
announcement by the Company (by any means) that an Acquiring Person has become
such.
10
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities
or a majority of the equity interest is Beneficially Owned, directly or
indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall mean a
day on which the New York Stock Exchange, Inc. is open for the
transaction of business or, if such securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., a day on which the principal
national securities exchange on which such securities are listed or admitted to
trading is open for the transaction of business or, if such securities are not
listed or admitted to trading on any national securities exchange, a Business
Day.
ARTICLE II
THE RIGHTS AGENT
2.1 General. (a) The Company hereby appoints the Rights Agent
to act as agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company agrees
to pay to the Rights Agent reasonable compensation for all services rendered by
it hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the
11
part of the Rights Agent, for anything done or omitted to be done by the Rights
Agent in connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any
certificate for securities purchasable upon exercise of Rights, Rights
Certificate, certificate for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper person or persons.
2.2 Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent is a party, or any corporation succeeding to the shareholder
services business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 2.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this
12
Agreement any of the Rights Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates have not
been countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
will have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
2.3 Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
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(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel will be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Senior Vice President or the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent; and such certificate will be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
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(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due authorization, execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 4.1(b) hereof) or any adjustment required under the provisions of
Section 3.4, 4.1 or 4.2 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights after
receipt of the certificate contemplated by Section 3.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any
representation or warranty as to the authorization of any Rights or the
reservation of any securities purchasable upon exercise of Rights, or as to
whether any securities purchasable upon exercise of Rights will, when issued, be
duly and validly authorized, executed, issued and delivered and fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by
15
the Rights Agent for the carrying out or performing by the Rights Agent of the
provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any person believed by the Rights Agent to be the Chairman of the Board, the
President or any Senior Vice President or the Secretary or any Assistant
Secretary of the Company, and to apply to such persons for advice or
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such person.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Company or become interested in any transaction in which
the Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent will not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to
16
the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued employment
thereof.
2.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to the transfer agent for the Common Stock by registered or certified mail,
and to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights
Agent and to the transfer agent for the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the State of Maryland or any other State of the United States, in
good standing, which is authorized under such laws to exercise the powers of the
Rights Agent contemplated by
17
this Agreement and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50,000,000. After
appointment, the successor Rights Agent will be vested with the same powers,
rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not later than
the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the holders of the
Rights. Failure to give any notice provided for in this Section 4.4, however, or
any defect therein, shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
ARTICLE III
THE RIGHTS
3.1 Summary of Rights. As soon as practicable after the Record
Date, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Date, at such holder's address
as shown by the records of the Company.
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3.2 Legend on Common Stock Certificates. Certificates for the
Common Stock issued after the Record Date but prior to the Separation Date shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
Until the Separation Date (as defined in the Rights Agreement
referred to below), this certificate also evidences and
entitles the holder hereof to certain Rights as set forth in a
Rights Agreement, dated as of April 30, 1997 (as such may be
amended from time to time, the "Rights Agreement"), between
HCIA Inc. (the "Company") and Chemical Mellon Shareholder
Services, as Rights Agent, the terms of which are hereby
incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement,
such Rights may be redeemed, may become exercisable for
securities or assets of the Company or of another entity, may
be exchanged for shares of Common Stock or other securities or
assets of the Company, may expire, may become void (if they
are "Beneficially Owned" by an "Acquiring Person" or an
Affiliate or Associate thereof, as such terms are defined in
the Rights Agreement, or by any transferee of any of the
foregoing) or may be evidenced by separate certificates and
may no longer be evidenced by this certificate. The Company
will mail or arrange for the mailing of a copy of the Rights
Agreement to the holder of this certificate without charge
promptly after the receipt of a written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Date shall evidence one Right for each share of Common Stock
evidenced thereby notwithstanding the absence of the foregoing legend.
3.3 Exercise of Rights: Separation of Rights.
(a) Subject to Sections 4.1, 5.1 and 5.10 and subject to
adjustment as herein set forth, each Right will entitle the holder thereof,
after the Separation Date and
19
prior to the Expiration Date, to purchase, for the Exercise Price, one one-
hundredth of a share of Preferred Stock.
(b) Until the Separation Date, (i) no Right may be exercised
and (ii) each Right will be evidenced by the certificate for the associated
share of Common Stock (together, in the case of certificates issued prior to the
Record Date, with the letter mailed to the record holder thereof pursuant to
Section 3.1) and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter) of, such
associated share.
(c) Subject to this Section 3.3 and to Sections 4.1, 5.1 and
5.10, after the Separation Date and prior to the Expiration Date, the Rights (i)
may be exercised and (ii) may be transferred independent of shares of Common
Stock. Promptly following the Separation Date, the Rights Agent will mail to
each holder of record of Common Stock as of the Separation Date (other than any
Person whose Rights have become void pursuant to Section 4.1(b)), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Date and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or
20
regulation made pursuant thereto or with any rule or regulation of any
national securities exchange or quotation system on which the Rights may from
time to time be listed or traded, or to conform to usage, and (y) a disclosure
statement describing the Rights.
(d) Subject to Sections 4.1, 5.1 and 5.10, Rights may be
exercised on any Business Day after the Separation Date and prior to the
Expiration Date by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check or money
order payable to the order of the Company, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares or depositary receipts (or both) in a name
other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 3.3(d), and subject to
Sections 4.1, 5.1 and 5.10, the Rights Agent will thereupon promptly (i)(A)
request stock certificates evidencing such number of shares or other securities
to be purchased (the Company hereby irrevocably authorizing its transfer agent
to comply with all such requisitions) and (B) if the Company elects pursuant to
Section 5.5 not to issue certificates
21
representing fractional shares, request depositary receipts representing
the fractional shares to be purchased or request the amount of cash to be
paid in lieu of fractional shares in accordance with Section 5.5 and (ii)
after receipt of such certificates, depositary receipts and/or cash,
deliver the same to or upon the order of the registered holder of such Rights
Certificate, registered (in the case of certificates or depositary receipts)
in such name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than
all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon exercise
of Rights; and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights,
22
provided that the Company shall not be required to pay any transfer tax or
charge which may be payable in respect of any transfer involved in the transfer
or delivery of Rights Certificates or the issuance or delivery of certificates
for shares in a name other than that of the holder of the Rights being
transferred or exercised.
3.4 Adjustments to Exercise Price; Number of Rights. (a) In
the event the Company shall at any time after the Record Date and prior to the
Separation Date (i) declare or pay a dividend on Common Stock payable in Common
Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares of Common Stock, (x)
the Exercise Price in effect after such adjustment will be equal to the Exercise
Price in effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Adjustment Factor") that a holder of one share of
Common Stock immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof and (y) each Right held prior to such
adjustment will become that number of Rights equal to the Adjustment Factor, and
the adjusted number of Rights will be deemed to be distributed among the shares
of Common Stock with respect to which the original Rights were associated (if
they remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
23
In the event the Company shall at any time after the Record
Date and prior to the Separation Date issue any shares of Common Stock otherwise
than in a transaction referred to in the preceding paragraph, each such share of
Common Stock so issued shall automatically have one new Right associated with
it, which Right shall be evidenced by the certificate representing such share.
To the extent provided in Section 5.3, Rights shall be issued by the Company in
respect of shares of Common Stock that are issued or sold by the Company after
the Separation Date.
(b) In the event the Company shall at any time after the
Record Date and prior to the Separation Date issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or recapitalization (including
any such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 3.4 shall be calculated to the nearest cent. Whenever an adjustment
to the Exercise Price
24
is made pursuant to this Section 3.4, the Company shall promptly (i) prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment and (ii) file with the Rights Agent and with
the transfer agent for the Common Stock a copy of such certificate.
(d) Rights certificates shall represent the securities
purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the securities purchasable at the time
of issuance of the initial Rights Certificates.
3.5 Date on Which Exercise is Effective. Each person in whose
name any certificate for shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Exercise Price for such
Rights (and any applicable taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the stock transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the stock transfer books of the Company are open.
25
3.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or one of its Senior Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company shall
bind the Company, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the countersignature and delivery of such
Rights Certificates.
Promptly after the Separation Date, the Company will notify
the Rights Agent of such Separation Date and will deliver Rights Certificates
executed by the Company to the Rights Agent for countersignature, and, subject
to Section 4.1(b), the Rights Agent shall manually countersign and deliver such
Rights Certificates to the holders of the Rights pursuant to Section 3.3(c)
hereof. No Rights Certificate shall be valid for any purpose unless manually
countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
3.7 Registration, Registration of Transfer and Exchange.
(a) After the Separation Date, the Company will cause to be kept a register
(the "Rights Register") in which, subject to such reasonable regulations as
it may prescribe, the Company will
26
provide for the registration and transfer of Rights. The Rights Agent is hereby
appointed "Rights Registrar" for the purpose of maintaining the Rights Register
for the Company and registering Rights and transfers of Rights after the
Separation Date as herein provided. In the event that the Rights Agent shall
cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Date.
After the Separation Date and prior to the Expiration Date,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of this Section 3.7(c) and (d), the
Company will execute, and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 4.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Company, and such Rights shall be entitled
to the same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly
27
executed by the holder thereof or such holder's attorney duly authorized
in writing. As a condition to the issuance of any new Rights Certificate
under this Section 3.7, the Company may require the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in relation
thereto.
(d) The Company shall not be required to register the transfer
or exchange of any Rights after such Rights have become void under Section
4.1(b), been exchanged under Section 4.1(c) or been redeemed or terminated under
Section 5.1.
3.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
(a) If any mutilated Rights Certificate is surrendered to the Rights Agent prior
to the Expiration Date, then, subject to Sections 4.1(b), 4.1(c) and 5.1, the
Company shall execute and the Rights Agent shall countersign and deliver in
exchange therefor a new Rights Certificate evidencing the same number of Rights
as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights
Agent prior to the Expiration Date (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to hold each of them and any of their
agents harmless, then, subject to Sections 4.1(b), 4.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate
28
evidencing the same number of Rights as did the Rights Certificate so
destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 3.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 3.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 4.1(b), shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
3.9 Persons Deemed Owners. Prior to due presentment of a
Rights Certificate (or, prior to the Separation Date, the associated Common
Stock certificate) for registration of transfer, the Company, the Rights Agent
and any agent of the Company or the Rights Agent may deem and treat the person
in whose name such Rights Certificate (or, prior to the Separation Date, such
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, including the payment of
the Redemption Price and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary. As used in this Agreement, unless the
context otherwise requires, the term "holder" of any
29
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Date, the associated shares of Common Stock).
3.10 Delivery and Cancellation of Certificates. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 3.10, except
as expressly permitted by this Agreement. The Rights Agent shall return all
cancelled Rights Certificates to the Company.
3.11 Agreement of Rights Holders. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent
and with every other holder of Rights that:
(a) prior to the Separation Date, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
(b) after the Separation Date, the Rights Certificates will
be transferable only on the Rights Register as provided herein;
30
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Date, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under
the circumstances set forth in Section 4.1(b), become void; and
(e) this Agreement may be supplemented or amended from
time to time pursuant to Section 3.4(b) or 5.4 hereof.
ARTICLE IV
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
4.1 Flip-in. (a) In the event that prior to the Expiration
Date a Flip-in Date shall occur, except as provided in this Section 4.1, each
Right shall constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to Section 5.10), that
number of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be
31
appropriately adjusted in order to protect the interests of the holders of
Rights generally in the event that on or after such Stock Acquisition Date an
event of a type analogous to any of the events described in Section 3.4(a)
or (b) shall have occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company shall
reasonably request, then the Company shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or Associate
thereof or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced thereby to be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option,
at any time after a Flip-in Date and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Common Stock, elect to
32
exchange all (but not less than all) of the then outstanding Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 4.1(b)) for shares of Common Stock at an exchange ratio
of one share of Common Stock per Right, appropriately adjusted in order to
protect the interests of holders of Rights generally in the event that after
the Separation Date an event of a type analogous to any of the events
described in Section 3.4(a) or (b) shall have occurred with respect to the
Common Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and without
any notice, the right to exercise the Rights will terminate and each Right
(other than Rights that have become void pursuant to Section 4.1(b)) will
thereafter represent only the right to receive a number of shares of Common
Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the Rights (other than Rights
that have become void pursuant to Section 4.1(b)) Outstanding immediately prior
thereto by mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued
upon the exchange of Rights pursuant to this Section 4.1(c) or Section 4.1(d)
shall for all purposes be deemed to have become the holder of record of the
shares represented thereby on,
33
and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of any
applicable taxes and other governmental charges payable by the holder was
made; provided, however, that if the date of such surrender and payment is a
date upon which the stock transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section
4.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Company, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one one-hundredth of a share of Preferred Stock
for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient authorized
but unissued shares of Common Stock or Preferred Stock of the Company to permit
the exercise or exchange in full of the Rights in accordance with Section 4.1(a)
or (c), the Company shall either (i) call a meeting of stockholders seeking
approval to cause sufficient additional shares to be authorized (provided that
if such approval is not obtained the Company will take the action specified in
clause (ii) of this sentence) or (ii) take such action as shall be necessary to
ensure and provide, to the extent permitted by applicable law and any agreements
or instruments in effect on the Stock Acquisition Date to which it is a party,
that each Right shall thereafter constitute the right to receive,
34
(x) at the Company's option, either (A) in return for the Exercise Price,
debt or equity securities or other assets (or a combination thereof) having a
fair value equal to twice the Exercise Price, or (B) without payment of
consideration (except as otherwise required by applicable law), debt or equity
securities or other assets (or a combination thereof) having a fair value
equal to the Exercise Price, or (y) if the Board of Directors of the Company
elects to exchange the Rights in accordance with Section 3.1(c), debt or equity
securities or other assets (or a combination thereof) having a fair value
equal to the product of the Market Price of a share of Common Stock on the
Flip-in Date times the Exchange Ratio in effect on the Flip-in Date, where in
any case set forth in (x) or (y) above the fair value of such debt or equity
securities or other assets shall be as determined in good faith by the
Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm.
4.2 Flip-over. (a) Prior to the Expiration Date, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event unless and until it shall have entered
into a supplemental agreement with the Flip-over Entity, for the benefit of the
holders of the Rights, providing that, upon consummation or occurrence of the
Flip-over Transaction or Event (i) each Right shall thereafter constitute the
right to purchase from the Flip-over Entity, upon exercise thereof in accordance
with the terms hereof, that number of shares of Flip-over Stock of the Flip-over
Entity having an aggregate Market Price on the date of consummation or
occurrence of such Flip-over Transaction or Event equal to twice the
35
Exercise Price for an amount in cash equal to the Exercise Price (such
right to be appropriately adjusted in order to protect the interests of the
holders of Rights generally in the event that after such date of consummation or
occurrence an event of a type analogous to any of the events described in
Section 3.4(a) or (b) shall have occurred with respect to the Flip-over
Stock) and (ii) the Flip-over Entity shall thereafter be liable for, and shall
assume, by virtue of such Flip-over Transaction or Event and such supplemental
agreement, all the obligations and duties of the Company pursuant to this
Agreement. The provisions of this Section 4.2 shall apply to successive
Flip-over Transactions or Events.
(b) Prior to the Expiration Date, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the Company
shall not enter into any agreement with respect to, consummate or permit to
occur any Flip-over Transaction or Event if at the time thereof there are any
rights, warrants or securities outstanding or any other arrangements, agreements
or instruments that would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to the
holders of Rights upon consummation of such transaction.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company may,
at its option, by a vote which includes the concurrence, by affirmative vote, of
a majority
36
of the Disinterested Directors, at any time prior to the close of business on
the Flip-in Date, elect to redeem all (but not less than all) of the then
outstanding Rights at the Redemption Price and the Company, at its option, may
pay the Redemption Price either in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors, by a vote which
includes the concurrence, by affirmative vote, of a majority of the
Disinterested Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after the Rights
are redeemed, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice in
accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at
the Expiration Date and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Date, except, if the Rights are
exchanged or redeemed, as provided in Section 3.1 or 5.1 hereof.
37
5.3 Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock by
the Company following the Separation Date and prior to the Expiration Date
pursuant to the terms of securities convertible or redeemable into shares of
Common Stock or to options, in each case issued or granted prior to, and
outstanding at, the Separation Date, the Company shall issue to the holders of
such shares of Common Stock, Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of such shares of
Common Stock; provided, however, in each case, (i) no such Rights Certificate
shall be issued, if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be issued
if, and to the extent that, appropriate adjustment shall have otherwise been
made in lieu of the issuance thereof, and (iii) the Company shall have no
obligation to distribute Rights Certificates to any Acquiring Person or
Affiliate or Associate of an Acquiring Person or any transferee of any of the
foregoing.
38
5.4 Supplements and Amendments. The Company and the Rights
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) prior to the close of business on the
Flip-in Date, in any respect and (ii) after the close of business on the Flip-in
Date, to make any changes that the Company may deem necessary or desirable and
which shall not materially adversely affect the interests of the holders of
Rights generally or in order to cure any ambiguity or to correct or supplement
any provision contained herein which may be inconsistent with any other
provisions herein or otherwise defective. The Rights Agent will duly execute and
deliver any supplement or amendment hereto requested by the Company which
satisfies the terms of the preceding sentence.
5.5 Fractional Shares. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Company shall, in lieu thereof, in the sole discretion of the Board
of Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) sell such shares
on behalf of the holders of Rights and pay to the registered holders of such
Rights the appropriate fraction of price per share received upon such sale.
5.6 Rights of Action. Subject to the terms of this Agreement
(including Section 4.1(b)), rights of action in respect of this Agreement, other
than rights of action
39
vested solely in the Rights Agent, are vested in the respective holders of
the Rights; and any holder of any Rights, without the consent of the Rights
Agent or of the holder of any other Rights, may, on such holder's own behalf
and for such holder's own benefit and the benefit of other holders of Rights,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder's right to
exercise such holder's Rights in the manner provided in such holder's Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
5.7 Rights Holder Not Deemed a Stockholder. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 5.8 hereof), or to receive dividends
40
or subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall
propose after the Separation Date and prior to the Expiration Date (i) to effect
or permit occurrence of any Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such Flip-over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
HCIA Inc.
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Secretary and General Counsel
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be
41
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Company)
as follows:
ChaseMellon Shareholder Services
0000 Xxxxx Xxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Date, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
5.10 Suspension of Exercisability. To the extent that the
Company determines in good faith that some action will or need be taken pursuant
to Section 4.1 or to comply with federal or state securities laws, the Company
may suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with such laws. In the event of any such suspension,
the Company shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this
Agreement shall not affect the validity of any action taken hereunder.
42
5.11 Costs of Enforcement. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the holders of the Rights any legal or equitable right, remedy or
claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the
Rights.
5.14 Determination and Actions by the Board of Directors, etc.
The Board of Directors of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement. All such actions, calculations,
43
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company to any liability to the holders of
the Rights.
5.15 Severability. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
MARYLAND 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.
5.17 Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an
44
original, and all such counterparts shall together constitute but one and the
same instrument.
5.18 Descriptive Headings. Descriptive headings appear
herein for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
ATTEST: HCIA INC.
__________________________ By:_____________________________________
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
ATTEST: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
__________________________ By:_____________________________________
Name:
Title:
45
EXHIBIT A
---------
[Form of Rights Certificate]
Certificate No. _____________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR
MANDATORY EXCHANGE, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF
THE FOREGOING WILL BE VOID.
Rights Certificate
HCIA INC.
This certifies that _______________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms,
provisions and conditions of the Stockholder Rights Agreement, dated as of April
23, l997 (as amended from time to time, the "Rights Agreement"), between HCIA
Inc., a Maryland corporation (the "Company"), and ChaseMellon Shareholder
Services, as Rights Agent (the "Rights Agent", which term shall include any
successor Rights Agent under the Rights Agreement), to purchase from the Company
at any time after the Separation Date (as such term is defined in the Rights
Agreement) and prior to the close of business on April 22, 2007, one
one-hundredth of a fully paid share of Class A Preferred Stock, par value $0.01
per share (the "Preferred Stock"), of the Company (subject to adjustment as
provided in the Rights Agreement) at the Exercise Price referred to below, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Exercise duly executed at the principal office of the Rights Agent in Miami,
Florida. The Exercise Price shall initially be $240 per Right and shall be
subject to adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement,
the Rights evidenced hereby may entitle the registered holder thereof to
purchase securities of an entity other than the Company or securities or assets
of the Company other than Preferred Stock, all as provided in the Rights
Agreement.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates.
Copies of the Rights Agreement are on file at the principal office of the
Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor evidencing an aggregate number of Rights equal to the
aggregate number of Rights evidenced by
2
the Rights Certificate or Rights Certificates surrendered. If this Rights
Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or
Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-hundredth of a share of Preferred Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
any securities which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by
3
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Date: _____________________
ATTEST: HCIA INC.
____________________________ By_____________________________________
Xxxxxxx X. Xxxxxxxxxx Xxxxxx X. Xxxxxxx
Secretary President and Chief Executive Officer
Countersigned:
----------------------------
By:_________________________
Authorized Signature
4
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED _____________________________ hereby sells,
assigns and transfers unto _____________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________ Attorney,
to transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _____________________, ____
Signature Guaranteed: _________________________________
Signature
(Signature must correspond to
name as written upon the face of
this Rights Certificate in every
particular, without alteration or
enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee Medallion program),
pursuant to SEC Rule 17AD-15.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
_________________________________
Signature
--------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not
completed in connection with a purported assignment, the Company will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
2
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
----------------------------
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: HCIA INC.
The undersigned hereby irrevocably elects to exercise
__________________ whole Rights represented by the attached Rights Certificate
to purchase the shares of Preferred Stock issuable upon the exercise of such
Rights and requests that certificates for such shares be issued in the name of:
------------------------------------------
Address:
------------------------------------------
------------------------------------------
Social Security or Other Taxpayer
Identification Number:
------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
------------------------------------------
Address:
------------------------------------------
------------------------------------------
Social Security or Other Taxpayer
Identification Number:
------------------------------------------
Dated: __________________, ____
Signature Guaranteed: __________________________________________
Signature
(Signature must correspond to name as
written upon the face of the attached
Rights Certificate in every particular,
without alteration or enlargement or
any change whatsoever)
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.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all
holders of Rights and shares of Common Stock, that the Rights evidenced by the
attached Rights Certificate are not, and, to the knowledge of the undersigned,
have never been, Beneficially Owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_________________________________
Signature
--------------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not
completed in connection with a purported exercise, the Company will deem the
Beneficial Owner of the Rights evidenced by the attached Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
2
EXHIBIT B
---------
HCIA INC.
ARTICLES SUPPLEMENTARY
HCIA INC., a Maryland corporation having its principal office
in Baltimore City, Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: The Corporation's Amended and Restated Articles of
Incorporation, as amended by Articles of Amendment thereto (the "Charter"),
currently provides for Five Hundred Thousand (500,000) authorized but unissued
shares of preferred stock which may be classified by the Board of Directors.
Pursuant to the authority contained in the Charter, the Board of Directors has
now duly classified __________________________ shares of the Corporation's
authorized but unissued preferred stock, as a new class of preferred stock, to
be entitled "Class A Preferred Stock."
SECOND: A description of the new class of Class A Preferred
Stock, and of the preferences, rights, voting powers, restrictions, dividends,
qualifications and terms and conditions thereof, is as follows:
Section 1. Class A Preferred Stock.
---------- ------------------------
The Class A Preferred Stock shall have a par value of $0.01
per share, but shall have a stated value of One Hundred Dollars ($100.00) per
share. The Board of
Directors may from time to time classify additional unissued shares of Preferred
Stock as Class A Preferred Stock.
Section 2. Dividends and Distributions.
---------- ----------------------------
The holders of record of full or fractional shares of Class A
Preferred Stock shall be entitled to receive, when and as declared by the Board
of Directors, but only out of funds legally available for the purpose (A) on
each date that dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) are payable on or in
respect of Common Stock comprising part of the Reference Package (as defined
below), an amount per whole share of this Series equal to the aggregate amount
of dividends or other distributions (other than dividends or distributions
payable in Common Stock of the Corporation) that would be payable on such date
to a holder of the Reference Package and (B) on the last day of March, June,
September and December in each year, in an amount per whole share of this Series
equal to the excess (if any) of $60 over the aggregate dividends paid per whole
share of this Series during the three month period ending on such last day. Each
such dividend shall be paid to the holders of record of shares of this Series on
the date, not exceeding sixty days preceding such dividend or distribution
payment date, fixed for the purpose by the Board of Directors in advance of
payment of each particular dividend or distribution. Dividends on each full and
each fractional share of this Series shall be cumulative from the date such full
or fractional share is originally issued; provided that any such full or
fractional share originally issued after a dividend record date and on or
2
prior to the dividend payment date to which such record date relates shall
not be entitled to receive the dividend payable on such dividend payment date
or any amount in respect of the period from such original issuance to such
dividend payment date.
The term "Reference Package" shall initially mean 100 shares
of Common Stock, par value $0.01 per share ("Common Stock"), of the Corporation.
In the event the Corporation shall at any time after the close of business on,
April 24, 1997 (A) declare or pay a dividend on any Common Stock payable in
Common Stock, (B) subdivide any Common Stock or (C) combine any Common Stock
into a smaller number of shares, then and in each such case the Reference
Package after such event shall be the Common Stock that a holder of the
Reference Package immediately prior to such event would hold thereafter as a
result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided on this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock ranking
junior to this Series as to dividends and upon liquidation) shall be declared or
paid or set aside for payment or other distribution declared or made upon the
Common Stock or upon any other stock ranking junior to this Series as to
dividends or upon liquidation, nor shall any Common Stock nor any other stock of
the Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise
3
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any shares of any such stock) by the
Corporation (except by conversion into or exchange for stock of the
Corporation ranking junior to this Series as to dividends and upon
liquidation), unless, in each case, the full cumulative dividends (including
the dividend to be due upon payment of such dividend, distribution,
redemption, purchase or other acquisition) on all outstanding shares of
this Series shall have been, or shall contemporaneously be, paid.
Section 3. Redemption.
---------- -----------
The shares of Class A Preferred Stock shall not be redeemable.
Section 4. Liquidation Rights.
---------- -------------------
In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the holders of
full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Common Stock
or any other stock of the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of this Series equal
to the greater of (A) $24,000 or (B) the aggregate amount distributed or to be
distributed prior to such date in connection with such liquidation, dissolution
or winding up to a holder of the Reference Package (such greater amount being
hereinafter referred to as the "Liquidation Preference"), together with accrued
dividends to such distribution or payment date, whether or not earned or
declared. If such payment shall have been made in full to all holders of shares
of this Series, the holders of shares of this
4
Series as such shall have no right or claim to any of the remaining assets of
the Corporation.
In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay in full all amounts to which such holders are
entitled pursuant to the first paragraph of this Section 4, no such distribution
shall be made on account of any shares of any other class or series of Preferred
Stock ranking on a parity with the shares of this Series upon such liquidation,
dissolution or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding shall be
entitled to be paid out of assets of the Corporation available for distribution
to its stockholders all amounts to which such holders are entitled pursuant to
the first paragraph of this Section 4 before any payment shall be made to the
holders of Common Stock or any other stock of the Corporation ranking junior
upon liquidation to this Series.
For the purposes of this Section 4, the consolidation or
merger of, or binding share exchange by, the Corporation with any other
corporation shall not be
5
deemed to constitute a liquidation, dissolution or winding up of the
Corporation.
Section 5. Merger, Consolidation.
---------- ----------------------
Except as otherwise provided herein, the holders of shares of
Class A Preferred Stock shall not have any rights herein to convert such shares
into or exchange such shares for shares of any other class or classes or of any
other series of any class or classes of capital stock of the Corporation.
In the event of any merger, consolidation, reclassification or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case the shares of this Series shall at the same time be similarly
exchanged or changed in an amount per whole share equal to the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, that a holder of the Reference Package would be entitled to receive
as a result of such transaction.
Section 6. Voting.
---------- -------
In addition to any other vote or consent of stockholders
required by law or by the Charter, each whole share of this Series shall, on any
matter, vote as a class with any other capital stock comprising part of the
Reference Package and voting on such matter and shall have the number of votes
thereon that a holder of the Reference Package would have.
6
Section 7. Fractional Shares.
---------- ------------------
Class A Preferred Shares may be issued in fractions of a
share, which may be represented by certificates or scrip for fractional shares,
or by depository receipts, and which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Class A Preferred Stock.
THIRD: The classification of authorized but unissued shares as
set forth in these Articles Supplementary has effected no change in the
authorized capital of the Corporation consisting of Five Hundred Thousand
(500,000) shares of Preferred Stock, with a par value of $0.01, and Fifty
Million (50,000,000) shares of Common Stock, with a par value of $0.01 each,
amounting in the aggregate to Five Hundred Five Thousand Dollars ($505,000).
IN WITNESS WHEREOF, HCIA Inc. has caused these presents to be
signed in its name and on its behalf by its President and its corporate seal to
be hereunto affixed and attested by its Secretary this ________ day of ________,
____ and the undersigned officers acknowledge that these Articles Supplementary
are the acts of the Corporation, that to the best of their knowledge,
information and belief all matters and facts set forth herein relating to the
authorization and approval of these Articles are
7
true in all material respects, and that this statement is made under the
penalties of perjury.
ATTEST: HCIA INC.
_____________________________ By_____________________________________
Xxxxxxx X. Xxxxxxxxxx Xxxxxx X. Xxxxxxx
Secretary President and Chief Executive Officer
8