EXHIBIT 4
BIOJECT MEDICAL TECHNOLOGIES, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
RIGHTS AGREEMENT
DATED AS OF JULY 1, 2002
TABLE OF CONTENTS
PAGE
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1. Certain Definitions.................................................................1
2. Appointment of Rights Agent.........................................................6
3. Issue of Rights Certificates........................................................6
4. Form of Rights Certificates.........................................................7
5. Countersignature and Registration...................................................8
6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates............................9
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......................9
8. Cancellation and Destruction of Rights Certificates................................11
9. Reservation and Availability of Capital Stock......................................11
10. Preferred Stock Record Date........................................................13
11. Adjustment of Purchase Price, Number of Shares or Number of Rights.................13
12. Certificate of Adjusted Purchase Price or Number of Shares.........................21
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............21
14. Fractional Rights and Fractional Shares............................................24
15. Rights of Action...................................................................25
16. Agreement of Rights Holders........................................................25
17. Rights Certificate Holder Not Deemed a Shareholder.................................26
18. Concerning the Rights Agent........................................................26
19. Merger or Consolidation or Change of Name of Rights Agent..........................27
20. Duties of Rights Agent.............................................................27
21. Change of Rights Agent.............................................................30
22. Issuance of New Rights Certificates................................................30
23. Redemption.........................................................................31
24. Exchange...........................................................................32
25. Notices............................................................................34
26. Supplements and Amendments.........................................................35
27. Successors.........................................................................35
28. Benefits of this Agreement.........................................................36
29. Severability.......................................................................36
30. Determinations and Actions by the Board of Directors, Etc..........................36
31. Governing Law......................................................................36
32. Counterparts.......................................................................37
33. Descriptive Headings...............................................................37
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July 1, 2002 (the "Agreement"), between
BIOJECT MEDICAL TECHNOLOGIES, INC., an Oregon corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Rights Agent").
WITNESSETH
WHEREAS, on June 13, 2002, the Board of Directors of the Company
determined it desirable and in the best interests of the Company and its
shareholders for the Company to adopt a Rights Agreement; and
WHEREAS, on June 13, 2002 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend
distribution of one Right (as hereinafter defined) for each share of common
stock, no par value, of the Company (the "Common Stock") outstanding at the
close of business on July 19, 2002 (the "Record Date"), and authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(h) hereof) for each share of Common Stock of the
Company issued between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date (as hereinafter defined)
each Right initially representing the right to purchase one one-thousandth of a
share of Series R Preferred Stock of the Company (the "Preferred Stock") having
the rights, powers and preferences set forth in the form of amendment to the
Amended and Restated Articles of Incorporation attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set forth (the
"Rights").
NOW THEREFORE, in consideration of the mutual agreements set forth
herein, the parties hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
a. "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall become the
Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
shares of Common Stock then outstanding; provided, however, that an Acquiring
Person shall not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company or any employee benefit plan of the Company
or of any Subsidiary of the Company, or any entity holding shares of Common
Stock for or pursuant to the terms of any such plan. Notwithstanding the
foregoing, no Person shall be deemed to be an Acquiring Person as the result of
an acquisition of Common Stock by the Company which, by reducing the number of
Common Stock outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% or more of the Common Stock of the
Company then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the Common Stock of the Company then
outstanding by reason of share purchases by the Company and shall, after such
share purchases by the Company, become the Beneficial Owner of additional shares
of Common Stock representing one percent (1%) or more of the Common Stock of the
Company (other than pursuant to a dividend or distribution paid or made by the
Company on the outstanding Common Stock in Common Stock or pursuant to a split
or subdivision of the outstanding Common Stock), then such Person shall be
deemed to be an Acquiring Person unless upon becoming the Beneficial Owner of
such additional Common Stock of the Company such Person does not beneficially
own 15% or more of the Common Stock of the Company then outstanding.
Notwithstanding the foregoing, (i) if the Company's Board of Directors
determines in good faith that a Person who would otherwise be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this paragraph (a),
has become such inadvertently (including, without limitation, because (A) such
Person was unaware that it beneficially owned a percentage of the Common Stock
that would otherwise cause such Person to be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph (a), or (B) such Person
was aware of the extent of the Common Stock it beneficially owned but had no
actual knowledge of the consequences of such beneficial ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, and if such Person divested or divests as promptly as practicable a
sufficient number of Common Stock so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be or to have become an
"Acquiring Person" for any purposes of this Agreement; and (ii) if, as of the
date hereof, any Person is the Beneficial Owner of 15% or more of the Common
Stock outstanding, such Person shall not be or become an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), unless and
until such time as such Person shall become the Beneficial Owner of additional
shares of Common Stock representing one percent (1%) or more of the Common Stock
other than pursuant to a dividend or distribution paid or made by the Company on
the outstanding Common Stock in Common Stock or pursuant to a split or
subdivision of the outstanding Common Stock, unless, upon becoming the
Beneficial Owner of such additional Common Stock, such Person is not then the
Beneficial Owner of 15% or more of the Common Stock then outstanding.
b. "Act" shall mean the Securities Act of 1933, as amended.
c. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act (as such term is hereinafter defined), as in effect on the date
of this Agreement.
d. "Agreement" shall mean this Rights Agreement.
e. A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
i. which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or any
comparable or successor law or regulation), including pursuant to any
agreement, arrangement or understanding, whether or not in writing;
provided however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," any security under this
subparagraph (i) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding (A) arises solely from a revocable proxy given in response
to a public proxy or consent solicitation made pursuant to, and in
accordance with, the
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applicable provisions of the General Rules and Regulations under the
Exchange Act, (B) is not reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor report) and (C) does
not constitute a trust, proxy, power of attorney or other device with
the purpose or effect of allowing two or more persons, acting in
concert, to avoid being deemed "Beneficial Owners" of such security or
otherwise avoid the status of "Acquiring Person" under the terms of this
Agreement or as part of a plan or scheme to avoid the reporting
requirements under Schedule 13D or Sections 13(d) or 13(g) of the
Exchange Act;
ii. which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire voting or
dispositive power over (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of or to "beneficially own" (A) securities
tendered pursuant to a tender or exchange offer made by such Person or
any of such Persons' Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, and (B) securities
issuable upon exercise of Rights at any time prior to the occurrence of
a Stock Acquisition Date.
iii. which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person (or, any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding, whether or not in writing, for
the purpose of acquiring, holding, voting or disposing of any securities
of the Company; provided, however, that nothing in this paragraph (iii)
shall cause a person to be the "Beneficial Owner" of, or to
"beneficially own," (A) any securities that may be issued on the
exercise of Rights, (B) any security if the agreement, arrangement or
understanding to vote such security arises solely from a revocable proxy
or consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act, (C) securities tendered
pursuant to a tender or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (D) any,
securities acquired by a person engaged in business as an underwriter of
securities through such person's participation in good faith in a firm
commitment underwriting until the expiration of 40 days after the date
of such acquisition. For all purposes of this Agreement, any calculation
of the number of shares of Common Stock outstanding at any particular
time for purposes of determining the particular percentage of such
outstanding shares of Common Stock of which any Person is the Beneficial
Owner shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act.
f. "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of Oregon or the
State of New York are authorized or obligated by law or executive order to
close.
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g. "Close of Business" on any given date shall mean 5:00 p.m., State
of New York time, on such date; provided, however, that if such date is not a
Business Day, it shall mean 5:00 p.m., State of New York time, on the next
succeeding Business Day.
h. "Common Stock" shall mean the Common Stock, without par value, of
the Company. The term "common stock" when used with reference to any Person
other than the Company shall mean the capital stock (or equity interest) with
the greatest voting power of such other Person together with all rights and
benefits (however denominated or constituted) relating to such common stock
(including, without limitation, any rights or warrants to acquire additional
shares of such common stock or other securities or assets, or to participate in
any trust for the benefit of holders of such shares, or to share in the benefits
of any agreements or other arrangements for the benefit of such holders),
whether or not such rights are yet exercisable, and together with any other
securities which are represented by the certificates for such common stock or
are transferred in connection with transfers of such common stock.
i. "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii).
j. "Current Per Share Market Price" shall have the meaning set forth
in Section 11(d).
k. "Current Value" shall have the meaning set forth in Section
11(a)(iii).
l. "Distribution Date" shall have the meaning set forth in Section
3(a).
m. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
n. "Final Expiration Date" shall have the meaning set forth in
Section 7(a).
o. "Person" shall mean any individual, firm, corporation,
partnership or other entity and shall include any successor (by merger or
otherwise) of such entity.
p. "Preferred Stock" means Series R Participating Preferred Stock of
the Company and, to the extent that there is not a sufficient number of Series R
Participating Preferred Stock authorized to permit the full exercise of the
Rights, any other series of Preferred Stock of the Company designated for such
purpose containing terms substantially similar to the terms of Series R
Participating Preferred Stock.
q. "Preferred Stock Equivalents" shall have the meaning set forth in
Section 11(b).
r. "Principal Party" shall have the meaning set forth in Section
13(b).
s. "Proposed Acquiror" shall mean any Person who has proposed or
publicly announced an intention to propose a transaction that, if consummated,
would cause a Stock Acquisition Date or any Section 13 Event to occur.
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t. "Purchase Price" shall mean the dollar amount payable upon
exercise of one Right to acquire the number of one one-thousandths of a share of
Preferred Stock or other securities or assets for which the Right is then
exercisable and shall initially be the price set forth in Section 7(b).
u. "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
v. "Redemption Date" shall have the meaning set forth in Section
7(a).
w. "Redemption Price" shall have the meaning set forth in Section
23(a).
x. "Rights" shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.
y. "Rights Certificate" shall have the meaning set forth in Section
3(a).
z. "Section 13 Event" shall mean any event described in Section
13(a).
aa. "Spread" shall have the meaning set forth in Section 11(a)(iii).
bb. "Section 11(h) Event" shall have the meaning set forth in
Section 11(i).
cc. "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the date a report is filed pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become an Acquiring Person.
dd. "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
ee. "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii).
ff. "Trading Day" shall have the meaning set forth in Section 11(d).
2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable. The Rights Agent shall have no duty to supervise, and in
no event shall be liable for, the acts or omissions of any such co-Rights Agent.
3. Issue of Rights Certificates.
a. Until the earlier of (i) the Close of Business on the tenth day
after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date is prior to the Record Date, the Close of Business on the
Record Date) or (ii) the Close of Business on the tenth
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day after the date that a tender or exchange offer by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company, or any entity holding shares of Common
Stock for or pursuant to the terms of any such plan) is first published or sent
or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof, such Person
would become an Acquiring Person (the earliest of (i) and (ii) being herein
referred to as the "Distribution Date"), (w) the Rights will be evidenced by the
certificates for the Common Stock registered in the names of the holders of the
Common Stock (which certificates shall also be deemed to be certificates for
Rights) and not by separate Rights Certificates, (x) the Rights and the right to
receive Rights Certificates will be transferable only in connection with the
transfer of the underlying Common Stock (including a transfer to the Company)
and any transfer of Common Stock shall also constitute the transfer of the
associated Rights represented by the same certificate, (y) in the event the
Company purchases or acquires any Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such acquired Common Stock
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with shares of Common Stock that are no longer
outstanding, and (z) in the event the Company issues any Common Stock after the
Record Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date, the Company shall issue one Right for each
such newly issued share of Common Stock (subject to adjustment as provided in
Section 11(h)) which Right shall be evidenced by the certificate for the
associated share of Common Stock. As soon as practicable after the Distribution
Date, the Company will prepare and execute, the Rights Agent will countersign,
and the Company will send or cause to be sent (and the Rights Agent will, if
requested and provided with all necessary information, send) by first-class,
postage-prepaid mail, to each record holder of shares of Common Stock as of the
Close of Business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Rights Certificate, in substantially the form
of Exhibit B hereto (a "Rights Certificate"), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(h), at the time the Rights Certificates are
distributed the Company shall make the necessary and appropriate rounding
adjustments pursuant to Section 14 (A) so that Rights Certificates are
distributed representing only whole numbers of Rights and cash is paid in lieu
of fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
b. As soon as practicable following the Record Date, the Company
will make available a copy of a Summary of Rights to Purchase Preferred Stock,
in substantially the form of Exhibit C (the "Summary of Rights"), to each record
holder of shares of Common Stock who may so request from time to time prior to
the Expiration Date.
c. All Common Stock certificates which are issued, either upon an
original issuance by the Company or upon a transfer by a holder, after the
Record Date but prior to the earliest of the Distribution Date, the Redemption
Date or the Final Expiration Date, shall have impressed on, printed on, written
on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights set forth in a Rights Agreement between Bioject
Medical Technologies, Inc. (the "Company") and the Rights Agent
thereunder, dated as of July 1, 2002
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(the "Rights Agreement"), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. Under
certain circumstances, Rights beneficially owned by Acquiring Persons or
their Affiliates or Associates (as such terms are defined in the Rights
Agreement), and Rights previously owned by such Persons, may become null
and void.
4. Form of Rights Certificates.
a. The Rights Certificates (and the form of election to purchase and
form of assignment to be printed on the reverse thereof) shall be substantially
the same as Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate (but which do not affect the rights, duties, or
responsibilities of the Rights Agent) and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22, the Rights Certificates, whenever distributed, shall entitle the
holders thereof to purchase for the Purchase Price such number of one
one-thousandths of a share of Preferred Stock as shall be set forth therein, but
the amount and type of securities purchasable upon exercise and the Purchase
Price shall be subject to adjustment as provided herein.
b. Any Rights Certificate issued pursuant to Section 3 hereof that
represents Rights beneficially owned by (i) an Acquiring Person or any Associate
or Affiliate of an Acquiring Person, (ii) any other Person if such Rights
formerly were beneficially owned by an Acquiring Person (or by an Associate or
Affiliate of such Acquiring Person) at a time after the Acquiring Person became
an Acquiring Person, or (iii) a transferee of Rights from an Acquiring Person
(or from any Associate or Affiliate thereof) who became a transferee prior to or
concurrently with the Acquiring Person becoming an Acquiring Person and receives
such Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or its Affiliate or Associate) to holders of equity
interests in such Acquiring Person (or its Affiliate or Associate) or to any
Person with whom such Acquiring Person (or its Affiliate or Associate) has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding that has as a primary purpose or effect the
avoidance of Section 7(e), and any Rights Certificate issued pursuant to Section
6, 7(d) or 22 upon transfer, exchange, replacement or adjustment of any other
Rights Certificate referred to in this sentence, shall contain the following
legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are
defined, in the Rights Agreement).
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Accordingly, this Rights Certificate and the Rights represented hereby
may become null and void in the circumstances specified in Section 7(e)
of the Rights Agreement;
provided, however, that the Rights Agent shall not have any responsibility to
ascertain the existence of facts that would require the imposition of such
legend and shall be required to impose such legend only if instructed to do so
by the Company or if a holder fails to certify upon transfer or exchange in the
space provided on the Rights Certificate that such holder is not an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
5. Countersignature and Registration.
a. The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice President, either
manually or by facsimile signature, and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless countersigned. In case any officer of
the Company who shall have signed any of the Rights Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
b. Following the Distribution Date and receipt by the Rights Agent
of all relevant information, the Rights Agent will keep or cause to be kept, at
its offices designated for such purpose, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.
a. Subject to the provisions of sections 4(b), 7(e), 14 and 24, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the earlier of the Redemption Date or the Final
Expiration Date, any Rights Certificate or Certificates may be transferred,
split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one-thousandths of
a share of Preferred Stock (or, following a Stock Acquisition Date, cash,
securities or other assets, as the case may be) as the Rights Certificate or
certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Rights
Certificate or Certificates shall make such request in writing delivered to the
Rights Agent and shall surrender the Rights certificate or Certificates to be
transferred, split up, combined or
8
exchanged at the office of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have properly completed and signed
the certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or the Rights Agent shall reasonably request.
Thereupon the Rights Agent shall, subject to Sections 4(b), 7(e), 14 and 24,
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split-up, combination or
exchange of Rights Certificates. The Rights Agent shall have no duty or
obligation to take any action under any Section of this Agreement which requires
the payment by a Rights holder of applicable taxes or governmental charges
unless and until the Rights Agent is satisfied that all such taxes and/or
charges have been paid.
b. Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security satisfactory to them, and, at the Company's request, reimbursement
to the Company and the Rights Agent of all reasonable expenses incidental
thereto, and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will make and deliver a new Rights
Certificate of like tenor to the Rights Agent for delivery to the registered
holder in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
a. At any time after the Distribution Date and at or prior to the
earlier of (i) the Close of Business on July 1, 2012 or such later date as may
be established by the Board of Directors prior to the expiration of the Rights
(the "Final Expiration Date") or (ii) the time at which the Rights are redeemed
as provided in Section 23 (the "Redemption Date"), subject to Section 7(e), the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Sections 9(c), 11(a)(iii) and 23(a)
and exchange provisions in Section 24 hereof) in whole or in part upon surrender
of the Rights Certificate, with the form of election to purchase and certificate
on the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent designated for such purpose, together with payment of the
Purchase Price for each Right that is exercised.
b. The Purchase Price to be paid on exercise of each Right shall
initially be $50.00 and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below. Each Right shall initially
entitle the holder to acquire one one-thousandth of a share of Preferred Stock
upon exercise of the Right. The Purchase Price and the number of shares of
Preferred Stock or other securities or assets for which a Right is exercisable
shall be subject to adjustment as provided in Sections 11 and 13.
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c. Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be purchased and an
amount equal to any applicable tax or governmental charge as set forth below,
the Rights Agent shall, subject to Section 20(k), thereupon promptly (i)
requisition from any transfer agent of the Preferred Stock (or make available,
if the Rights Agent is the transfer agent) certificates for the number of shares
of Preferred Stock to be purchased and the Company hereby authorizes its
transfer agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14, (iii) after receipt of the
certificates for Preferred Stock cause the same to be delivered to or upon the
order of the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the registered holder
of such Rights Certificate. The payment of the Purchase Price (as such amount
may be reduced pursuant to Section 11(a)) shall be made in cash, by certified
bank check or bank draft payable to the order of the Company or in shares of
Common Stock (having a value determined pursuant to Section 11(a)). In the event
that the Company is obligated to issue other securities (including, but not
limited to, debt securities) of the Company, and/or distribute other property
pursuant to Section 11, the Company covenants that it will make all arrangements
necessary so that such other securities and/or property are available for
distribution by the Rights Agent, if and when necessary to comply with this
Agreement.
d. In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Rights Certificate or to
his duly authorized assigns, subject to the provisions of Section 6 and Section
14.
e. Notwithstanding any other provision of this Agreement, from and
after the occurrence of a Stock Acquisition Date, any Rights beneficially owned
by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) any other Person if such Rights formerly were beneficially owned by an
Acquiring Person (or by an Associate or Affiliate of such Acquiring Person) at a
time after such Acquiring Person became an Acquiring Person, or (iii) a
transferee of Rights from an Acquiring Person (or from any Associate or
Affiliate thereof) who became a transferee prior to or concurrently with the
Acquiring Person becoming an Acquiring Person and receives such Rights pursuant
to either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or its Affiliate or Associate) to holders of equity interests in such
Acquiring Person (or its Affiliate or Associate) or to any Person with whom the
Acquiring Person (or its Affiliate or Associate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights, or (B) a transfer
which the Board of Directors have determined is part of a plan, arrangement or
understanding that has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void and any holder of such Rights shall
thereafter have no right to exercise such Rights under any provision of this
Agreement. The Company shall promptly notify the Rights Agent of the
applicability of this Section 7(e), and the Company shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and of Section 4(b)
are complied with, but neither the Company nor the Rights Agent shall have any
liability to any holder of Rights Certificates or any other Person as a result
10
of their failure to make any determinations with respect to an Acquiring Person,
or any of its Affiliates, Associates or transferees hereunder.
f. Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) properly completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the surrendered Right
Certificate and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall reasonably request.
8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
9. Reservation and Availability of Capital Stock.
a. The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Stock
(and, following the occurrence of a Stock Acquisition Date or a Section 13
Event, out of its authorized and unissued shares of Common Stock and/or other
securities), the number of shares of Preferred Stock (and, following the
occurrence of a Stock Acquisition Date or a Section 13 Event, Common Stock
and/or other securities) that, as provided in this Agreement, will be sufficient
to permit the exercise in full of all outstanding Rights; provided, however,
that shares issuable pursuant to Section 11(a)(ii) shall be reserved only
following the occurrence of an event described in that section.
b. If any shares of Preferred Stock are listed on a national
securities exchange, and so long as the shares of Preferred Stock (and,
following the occurrence of a Stock Acquisition Date or a Section 13 Event,
Common Stock and/or other securities) issuable and deliverable upon the exercise
of the Rights may be listed on that exchange, the Company shall use its best
efforts to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on the exchange upon official
notice of issuance upon exercise.
c. The Company shall use its best efforts (i) to file, as soon as
practicable following a Stock Acquisition Date and the determination by the
Company in accordance with Section 11(a)(iii) of the consideration to be
delivered by the Company upon exercise of the Rights, or as soon as is required
by law following the Distribution Date, as the case may be, a
11
registration statement under the Act with respect to the securities purchasable
upon exercise of the Rights on an appropriate form, (ii) to cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) to cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights. The Company will
also take such action as may be appropriate under or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend the
exercisability of the Rights, for a period of time not to exceed 90 days after
the date the Company first becomes obligated to use its best efforts to file a
registration statement as set forth in clause (i) of the first sentence of this
Section 9(c), in order to prepare and file such registration statement and
permit it to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. The Company will promptly notify the Rights
Agent whenever it makes a public announcement pursuant to this Section 9(c) and
will promptly provide the Rights Agent with a copy of such announcement.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction, unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
has been declared effective.
d. The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock (and,
following the occurrence of a Stock Acquisition Date or Section 13 Event, Common
Stock and/or other securities) delivered upon exercise of Rights shall, at the
time of delivery of the certificates for such shares of such shares (subject to
payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable shares.
e. The Company further covenants and agrees that it will pay when
due and payable any and all taxes and governmental charges which may be payable
in respect of the issuance or delivery of the Rights Certificates or of any
shares of Preferred Stock or other securities upon the exercise of Rights. The
Company shall not, however, be required to pay any tax or governmental charge
which may be payable in respect of any transfer, split-up, combination or
exchange of Rights Certificates, or any issuance or delivery of certificates for
shares in a name other than that of the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise, and shall not be
required to issue or deliver any certificates for shares upon the exercise of
any Rights until any such tax or charge shall have been paid (any such tax or
charge being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax or charge is due.
10. Preferred Stock Record Date. Each Person in whose name any
certificate for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was
12
duly surrendered and payment of the Purchase Price (and any applicable taxes or
governmental charges) was made; provided, however, that if the date of such
surrender and payment is a date upon which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
closed, such person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be dated, the
next succeeding Business Day on which the Preferred Stock (or Common Stock
and/or other securities, as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the holder of a
Rights Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
11. Adjustment of Purchase Price, Number of Shares or Number of Rights.
The Purchase Price, the number and kind of securities covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
a. (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares of Preferred Stock
or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 7(e) and Section
11(a), (1) the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification shall be adjusted so that the Purchase Price thereafter shall
equal the result obtained by dividing the Purchase Price in effect immediately
prior to such time by a fraction (the "Adjustment Fraction"), the numerator of
which shall be the total number of Preferred Stock (or shares of capital stock
issued in such reclassification of the Preferred Stock) outstanding immediately
following such time and the denominator of which shall be the total number of
Preferred Stock outstanding immediately prior to such time, and (2) the number
and kind of shares of capital stock issuable at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred Stock
transfer books of the Company were open, he or she would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. The adjustments provided for in this Section
11(a)(i) shall be made successively whenever such a dividend is declared or paid
or such a subdivision, combination or reclassification is effected. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) In the event that a Stock Acquisition Date occurs, proper
provision shall be made so that each holder of a Right, except as
provided below and in Section 7(e), shall thereafter have a right to
receive, upon exercise thereof and payment
13
of the Purchase Price in accordance with the terms of this Agreement, in
lieu of a number of one one-thousandths of a share of Preferred Stock,
such number of shares of Common Stock as shall equal the result obtained
by dividing the then current Purchase Price by 50 percent of the Current
Per Share Market Price of the Common Stock (determined pursuant to
Section 11(d)) on the Stock Acquisition Date (such number of shares
being the "Adjustment Shares").
(iii) In the event the number of shares of Common Stock which
are authorized by the Company's restated articles of incorporation but
not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) of this
Section 11(a), the Company shall (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the then current Purchase Price (such
excess, the "Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the applicable
Purchase Price, (3) shares of Common Stock or other equity securities of
the Company (including, without limitation, shares, or units of shares,
of preferred stock that the Board of Directors of the Company has deemed
to have the same value as shares of Common Stock ("Common Stock
Equivalents")), (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of
the Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within
30 days following the Stock Acquisition Date, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock
(to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely
that sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, the 30-day period set
forth above may be extended to the extent necessary, but not more than
90 days after the Stock Acquisition Date, in order that the Company may
seek shareholder approval for the authorization of such additional
shares (such period, as it may be extended as so permitted, the
"Substitution Period"). To the extent the Company determines that some
action must be taken pursuant to the first or second sentences of this
Section 11(a)(iii), the Company (x) shall provide that such action shall
apply uniformly to all outstanding Rights other than those that are null
and void as provided in Section 7(e), and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no
longer in effect (with prompt notice by the Company of such
announcements (as well as a written copy) to the Rights Agent). For
purposes of this Section 11(a)(iii), the value of the Common Stock shall
be the Current Per Share Market
14
Price (as determined pursuant to Section 11(d) hereof) of the Common
Stock on the date of the Stock Acquisition Date and the value of any
Common Stock Equivalent shall be deemed to have the same value as the
Common Stock on such date.
b. In case the Company shall at any time after the date of this
Agreement fix a record date for the issuance of rights, options or warrants to
all holders of Preferred Stock entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or purchase Preferred
Stock (or shares having the same rights, privileges and preferences as the
Preferred Stock ("Preferred Stock Equivalents")) or securities convertible into
Preferred Stock or Preferred Stock Equivalents at a price per share of Preferred
Stock or Preferred Stock Equivalent (or having a conversion price per share, if
a security convertible into Preferred Stock or Preferred Stock Equivalents) less
than the then Current Per Share Market Price of the Preferred Stock (as defined
in Section 11(d)) on such record date, the number of shares of Preferred Stock
for which each Right shall be exercisable after such record date shall be
determined by multiplying the number of shares of Preferred Stock for which each
Right was exercisable immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date plus the number of additional shares of Preferred Stock
and/or Preferred Stock Equivalents to be offered for subscription or purchase
(or into which the convertible securities so to be offered are initially
convertible) and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date plus the number of shares of
Preferred Stock which the aggregate offering price of the total number of shares
of Preferred Stock and/or Preferred Stock Equivalents so to be offered (and/or
the aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Per Share Market Price. In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and which shall be binding
on the Rights Agent and the holders of the Rights. Preferred Stock owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such rights, options
or warrants are not so issued, the number of shares of Preferred Stock for which
each Right shall be exercisable shall be readjusted to be the number of shares
of Preferred Stock for which each Right would then be exercisable if such record
date had not been fixed; and to the extent such rights, options or warrants are
issued but not exercised prior to their expiration, the number of shares for
which each Right shall be exercisable shall be readjusted to be the number which
would have resulted from the adjustment provided for in this Section 11(b) if
only the rights or warrants that were exercised had been issued.
c. (i) In case the Company shall at any time after the date of this
Agreement fix a record date for the making of a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness or assets (other than a regular
quarterly cash dividend or a dividend payable in shares of Preferred Stock but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)),
the number of shares of Preferred Stock for which each Right shall be
exercisable after such record date shall be determined by
15
multiplying the number of shares of Preferred Stock for which each Right was
exercisable immediately prior to such record date by a fraction, the numerator
of which shall be the then Current Per Share Market Price of the Preferred Stock
(as defined in Section 11(d)) on such record date, and the denominator of which
shall be such Current Per Share Market Price of the Preferred Stock, less the
fair market value (as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
which shall be binding on the Rights Agent and the holders of the Rights) of the
portion of the assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one share of Preferred Stock.
Such adjustments shall be made successively whenever such a record date is fixed
and in the event that such distribution is not so made, the number of shares of
Preferred Stock for which each Right shall be exercisable shall be readjusted to
be the number of shares of Preferred Stock for which each Right would then be
exercisable if such record date had not been fixed.
(ii) In case the Company shall at any time after the date of
this Agreement fix a record date for the making of a distribution to all
holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or
assets (other than a regular quarterly cash dividend or a dividend
payable in shares of Common Stock) or subscription rights or warrants
(excluding those referred to in Section 11(h)(ii)), the number of shares
of Preferred Stock for which each Right shall be exercisable after such
record date shall be determined by multiplying the number of shares of
Preferred Stock for which each Right was exercisable immediately prior
to such record date by a fraction, the numerator of which shall be the
then Current Per Share Market Price of the Common Stock (as defined in
Section 11(d)) on such record date, and the denominator of which shall
be such Current Per Share Market Price of the Common Stock, less the
fair market value (as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed
with the Rights Agent and which shall be binding on the Rights Agent and
the holders of the Rights) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to one share of Common Stock. Such adjustments shall
be made successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the number of shares of
Preferred Stock for which each Right shall be exercisable shall be
readjusted to be the number of shares of Preferred Stock for which each
Right would then be exercisable if such record date had not been fixed.
d. (i) For the purposes of any computation hereunder, the "Current Per
Share Market Price" of common stock (including Common Stock) on any date shall
be deemed to be the average of the daily closing prices per share of the common
stock for the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior but not including to such date; provided, however, that in the
event the Current Per Share Market Price of common stock is determined during a
period following the announcement by the issuer of such common stock of (A) a
dividend or distribution on such common stock payable in such common stock or
securities convertible into such common stock, or (B) any subdivision,
combination or reclassification of such common stock, and prior to the
expiration of 30 Trading Days after but not including the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
16
Current Per Share Market Price shall be appropriately adjusted to take into
account such event. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the Nasdaq National Market or, if the common
stock is not listed or admitted to trading on the Nasdaq National Market, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
common stock is listed or admitted to trading or, if the common stock is not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such other
system then in use, or, if on any such date the common stock is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the common stock
selected by a majority of the Board of Directors. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
common stock is listed or admitted to trading is open for the transaction of
business or, if the common stock is not listed or admitted to trading on any
national securities exchange, a Business Day. If the common stock is not
publicly held or so listed or traded, "Current Per Share Market Price" shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and which shall be binding on the Rights Agent and
the holders of the Rights.
(ii) For the purpose of any computation hereunder, the "Current
Per Share Market Price" of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in clause (i) of
this Section 11(d) (other than the last sentence thereof). If the
Current Per Share Market Price of Preferred Stock cannot be determined
in the manner provided above or if the Preferred Stock is not publicly
held or listed or traded in a manner described in clause (i) of this
Section 11(d), the "Current Per Share Market Price" of Preferred Stock
shall be conclusively deemed to be an amount equal to the Current Per
Share Market Price of the Common Stock multiplied by the Adjustment
Number as that term is defined in Section 2 of the Amendment to the
Company's Amended and Restated Articles of Incorporation designating the
Preferred Stock (initially 1,000). If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "Current Per
Share Market Price" of Preferred Stock shall mean the fair value per
share as determined in good faith, by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes. For all
purposes of this Agreement, the current market price of one
one-thousandth of a share of Preferred Stock shall be equal to the
Current Per Share Market Price of one share of Preferred Stock divided
by 1,000.
e. No adjustment in the Purchase Price or the number of shares for
which a Right is exercisable shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price or
the number of shares for which a Right is exercisable; provided, however, that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the
17
nearest ten-thousandth of a share of Common Stock or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the date of the expiration of the right to
exercise any Rights.
f. If as a result of an adjustment made pursuant to Section 11(a),
the holder of any Right thereafter exercised shall become entitled to receive
any shares of capital stock of the Company other than Preferred Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Section 11 and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Preferred Stock shall apply on like terms to any
such other shares.
g. All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price or the number of shares of Preferred Stock
for which a Right is exercisable hereunder shall evidence the right to purchase,
at the adjusted Purchase Price, the number of one one-thousandths of a share of
Preferred Stock purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
h. (i) In the event the Company shall, after the date of this
Agreement and prior to the Distribution Date, (A) declare a dividend on the
Common Stock payable in Common Stock, (B) subdivide the outstanding Common
Stock, (C) combine the outstanding Common Stock into a smaller number of shares
of Common Stock, or (D) issue any shares of Common Stock in a reclassification
of the Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), the number of Rights associated with each share of Common Stock
then outstanding, and the number of Rights to be associated with each share of
Common Stock which may thereafter become outstanding prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights associated
with each share of Common Stock following any such event shall equal the result
obtained by multiplying the number of Rights associated with each share of
Common Stock immediately prior to such event by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event.
(ii) In the event the Company shall, after the date of this
Agreement and prior to the Distribution Date, fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock
entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase common stock or securities
convertible into Common Stock at a price per share of Common Stock (or
having a conversion price per share, if a security convertible into
common Stock) less than the then Current Per Share Market Price (as
defined in Section 11(d)) of the Common Stock on such record date, the
number of Rights associated with each share of Common Stock then
outstanding, and the number of Rights to be associated with each share
of Common Stock which may thereafter become outstanding prior to the
Distribution Date, shall be proportionately adjusted so that the number
of Rights
18
associated with each share of Common Stock after such record date shall
be determined by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Common
Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of
shares of Common Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would
purchase at such Current Per Share Market Price and the denominator of
which shall be the number of shares of Common Stock outstanding on such
record date plus the number of additional shares of Common Stock to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. Common Stock owned by or
held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed. In the event that
such rights, options or warrants are not so issued, the number of Rights
associated with each share of Common Stock shall be readjusted to be the
number of Rights that would have been associated with each share of
Common Stock if such record date had not been fixed and to the extent
such rights, options or warrants are issued but not exercised prior to
their expiration, the number of Rights associated with each share shall
be readjusted to be the number which would have resulted from the
adjustment provided for in this Section 11(h)(ii) if only the rights,
options or warrants that were exercised had been issued.
(iii) Notwithstanding the foregoing, the adjustments provided
for in this Section 11(h) shall not be made if the Company exercises its
election provided for in Section 11(i).
i. The Company may elect on or after the date of any event described
in clauses (A) through (D) of Section 11(h)(i) or described in Section
11(h)(ii), if such event occurs before the Distribution Date (a "Section 11(h)
Event"), to adjust the Purchase Price and the number of shares of Preferred
Stock purchasable upon the exercise of a Right in substitution for any
adjustment under Section 11(h) in the number of Rights associated with each
share of Common Stock. If such election is made, (i) the number of Rights
associated with each share of Common Stock prior to the Section 1l(h) Event
shall be maintained after the Section 11(h) Event, (ii) any new shares of Common
Stock issued in the Section 11(h) Event shall, as provided in Section 3(a), have
issued with it the number of Rights associated with each share of Common Stock
outstanding, and (iii) any combination of shares of Common Stock into a smaller
number of shares in the Section 11(h) Event shall result in a similar
combination of the associated Rights. The Purchase Price and the number of
shares of Preferred Stock purchasable upon exercise of a Right after such
adjustment shall be determined by multiplying the Purchase Price and the number
of shares of Preferred Stock purchasable upon exercise of a Right, respectively,
in effect immediately prior to such adjustment by a fraction, the numerator of
which shall be the number of Rights that would have been associated with each
share of Common Stock after the Section 11(h) Event if the Company had not
exercised its election provided for in this
19
Section 11(i) and the denominator of which shall be the number of Rights
associated with each share of Common Stock immediately prior to the Section
11(h) Event. To the extent the number of Rights that would have been associated
with each share of Common Stock if the Company had not exercised its election
provided for in this Section 11(i) may be readjusted as provided in the last
sentence of Section 11(h)(ii), the Purchase Price and number of shares of
Preferred Stock purchasable upon exercise of a Right shall be similarly
readjusted.
j. Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a share of Preferred Stock issuable upon
the exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one one-thousandth of a
share and the number of one one-thousandths of a share of Preferred Stock which
were expressed in the initial Rights Certificates issued hereunder.
k. In any case in which this Section 11 shall require that an
adjustment in the Purchase Price or the number of one one-thousandths of a share
of Preferred Stock for which a Right is exercisable be made effective as of a
record date for a specified event, the Company may elect to defer (with prompt
notice of such deferral to the Rights Agent) until the occurrence of such event
the issuance to the holder of any Right exercised after such record date the
number of one one-thousandth of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price and the number of one one-thousandths of a
share of Preferred Stock for which a Right is exercisable in effect prior to
such adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing such holder's right
to receive such additional shares upon the occurrence of the event requiring
such adjustment.
l. Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board of Directors shall
determine to be advisable in order that any consolidation or subdivision of the
Preferred Stock, issuance wholly for cash of any Preferred Stock at less than
the current market price, issuance wholly for cash of Preferred Stock or
securities which by their terms are convertible into or exchangeable for shares
of Preferred Stock, dividends on Preferred Stock payable in Preferred Stock or
issuance of rights, options or warrants referred to in Section 11(b), hereafter
made by the Company to holders of its Preferred Stock shall not be taxable to
such shareholders or shall reduce the taxes payable by such shareholders.
m. The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26, take (or
permit any Subsidiary to take) any action, including any merger, consolidation
or sale of assets if at the time such action is taken or immediately thereafter
it is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever
an adjustment is made as provided in Sections 11 and 13, the Company shall
promptly (A) prepare a certificate setting forth such adjustment and a brief
statement of the facts and computations
20
accounting for such adjustment, (B) file with the Rights Agent and with each
transfer agent for the Preferred Stock and the Common Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of Rights in
accordance with Section 25. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment contained therein, and the Rights
Agent shall have no duty with respect to and shall not be deemed to have
knowledge of any adjustment unless and until it shall have received such
certificate. Notwithstanding the foregoing sentence, the failure of the Company
to make such certification or give such notice shall not affect the validity of
such adjustment or the force or effect of the requirement of such adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
a. In the event that, following the Distribution Date, directly or
indirectly,
i. the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(m)) and the Company shall not
be the continuing or surviving Person of such consolidation or merger,
ii. any Person shall acquire shares of Common Stock of the
Company in a share exchange,
iii. any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(m)) shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the
outstanding Common Stock shall be changed into or exchanged for stock or
other securities, of any other Person or cash or any other property, or
iv. the Company shall sell or otherwise transfer (or one or more
of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50 percent or more of
the assets or earning power 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 Subsidiaries in a transaction that complies with Section
11(m),
then, and in each such case, proper provision shall be made so that (A) each
holder of a Right (except as otherwise provided in Section 7(e)) shall
thereafter have the right to receive, upon the exercise thereof and payment of
the Purchase Price in accordance with the terms of this Agreement, such number
of validly authorized and issued, fully paid, nonassessable and freely tradeable
shares of common stock of the Principal Party (as hereinafter defined) not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by dividing the then current
Purchase Price by 50 percent of the Current Per Share Market Price of the common
stock of the Principal Party (determined pursuant to Section 11(d)) on the date
of consummation of the Section 13 Event, (B) the Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations
21
and duties of the Company pursuant to this Agreement, (C) the term "Company"
shall thereafter be deemed to refer to the Principal Party, it being
specifically intended that the provisions of Section 11 shall apply to the
Principal Party only following the first occurrence of a Section 13 Event, and
(D) the Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its common stock in
accordance with Section 9) in connection with such consummation as may be
necessary to ensure that the provisions of this Agreement shall thereafter be
applicable, as nearly as reasonably may be, in relation to the common stock
thereafter deliverable upon the exercise of the Rights. The provisions of
Section 11(a)(ii) shall be of no effect following the first occurrence of an
event described in Section 13.
b. The term "Principal Party" shall mean
i. in the case of any transaction described in clause (i), (ii)
or (iii) of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, or for which shares of Common
Stock are exchanged in such share exchange, and if no securities are so
issued, the Person that is the other party to such merger, consolidation
or share exchange or, if there is more than one such Person, the Person
the common stock of which has the highest aggregate Current Per Share
Market Price (determined pursuant to Section 11(d)); and
ii. in the case of any transaction described in clause (iv) of
Section 13(a), the Person that is the party receiving the greatest
portion of the assets or earning power transferred pursuant to such
transaction or transactions; or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or
earning power transferred pursuant to such transaction or transactions
or if the Person receiving the largest portion of the assets or earning
power cannot be determined, whichever Person the common stock of which
has the highest aggregate Current Per Share Market Price (determined
pursuant to Section 11(d));
provided, however, that, if the common stock of such Person is not at such time
and has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act or such Person is not a corporation, then
(A) if such Person is a direct or indirect Subsidiary of one other Person which
has common stock so registered, "Principal Party" shall refer to such other
Person, (B) if such Person is a direct or indirect Subsidiary of another Person
but is not a direct or indirect Subsidiary of another Person which has common
stock so registered, "Principal Party" shall refer to the ultimate parent entity
of such first-mentioned Person, (C) if such Person is directly or indirectly
controlled by more than one Person, and one or more of such other persons has
common stock so registered, "Principal Party" shall refer to whichever of such
Persons that is the issuer of common stock so registered having the highest
aggregate Current Per Share Market Price (determined pursuant to Section 11(d)),
and (D) if such Person is directly or indirectly controlled by more than one
Person, and none of such other Persons have common stock so registered,
"Principal Party" shall refer to whichever ultimate parent entity is the
corporation having the greatest shareholders' equity or, if no such ultimate
parent entity is a corporation, shall refer to whichever ultimate parent entity
is the entity having the greatest net assets.
22
c. The Company shall not enter into any transaction described in
this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. In addition, the Company shall not consummate any such transaction
unless the Principal Party shall have a sufficient number of authorized shares
of common stock which have not been issued or reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in this Section 13 and further providing that, as soon as practicable
after execution of such agreement, the Principal Party will
i. prepare and file a registration statement under the Act with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable
after such filing, (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final Expiration Date
and, as soon as practicable following the execution of such agreement,
take such action as may be required to ensure that any acquisition of
such shares of common stock upon the exercise of the Rights complies
with any applicable state security or "blue sky" laws; and
ii. will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
under the Exchange Act.
d. In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Articles or Certificate of Incorporation or
Bylaws or other instrument governing its corporate affairs, which provision
would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of common stock of such Principal Party
at less than the then Current Per Share Market Price (determined pursuant to
Section 11(d)) or securities exercisable for, or convertible into, shares of
common stock of such Principal Party at less than the then Current Per Share
Market Price (other than to holders of Rights pursuant to this Section 13) or
(ii) providing for any special payment, tax or similar provisions in connection
with the issuance of the shares of common stock of such Principal Party pursuant
to the provisions of Section 13; then, in such event, the Company shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
e. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the Stock Acquisition
Date, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13. The
23
provisions of Section 11(a)(ii) shall be of no effect following the first
occurrence of a Section 13 Event.
14. Fractional Rights and Fractional Shares.
a. The Company shall not be required to issue fractions of Rights or
to distribute Rights certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction or reporting system with
respect to securities listed or admitted to trading on the Nasdaq National
Market or, if the Rights are not listed or admitted to trading on the Nasdaq
National Market, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
b. The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandths of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandths of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandths of a share of Preferred Stock
the Company shall pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the
same fraction of the current market value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-thousandth of a share of Preferred Stock shall be one one-thousandth of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of
such exercise.
c. Following the occurrence of a Stock Acquisition Date or Section
13 Event, the Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of current market value of one share of
Common Stock. For purposes
24
of this Section 14(c), the current market value of one share of Common Stock
shall be the closing price of one share of Common Stock (as determined pursuant
to Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of
such exercise.
d. The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
e. The Rights Agent shall have no duty or obligation with respect to
this Section 14 or with respect to any other Section hereof regarding fractional
shares unless and until the Rights Agent shall have received specific
instructions (and sufficient cash, if required) from the Company with respect to
its duties and obligations under such Sections.
15. Rights of Action. All rights of action in respect of this Agreement,
excepting the rights of action given to the Rights Agent under Section 18, are
vested in the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Right Certificate (or, prior to the Distribution
Date, of Common Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this Agreement.
16. Agreement of Rights Holders. Every holder of a Right, by accepting
the same, consents and agrees with the Company and the Rights Agent and with
every other holder of a Right that:
a. prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
b. after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer and with the appropriate forms
and certificates fully executed;
c. subject to Sections 6 and 7(f), the Company and the Rights Agent
may deem and treat the Person in whose name the Rights Certificate (or, prior to
the Distribution Date, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
associated Common Stock certificate made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
25
Rights Agent, subject to the last sentence of Section 7(e), shall be affected by
any notice to the contrary; and
d. Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, judgment, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, judgment, decree or ruling lifted or otherwise
overturned as soon as possible.
17. Rights Certificate Holder Not Deemed a Shareholder. No holder, as
such, of any Rights Certificate shall be entitled to vote, receive dividends or
be deemed for any purpose the holder of the number of one one-thousandths of a
share of Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in Section 23(c)), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
18. Concerning the Rights Agent.
a. The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the preparation, delivery, administration,
execution and any amendment 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, damage, judgment,
fine, penalty, claim, demand, settlement, cost or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent (each as may be finally determined by a court of competent jurisdiction),
for any action taken, suffered or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including, without
limitation, the costs and expenses of defending against any claim of liability.
The indemnity provided herein shall survive the termination of this Agreement
and the termination and the expiration of the Rights. The costs and expenses
incurred by the Rights Agent in enforcing this right of indemnification shall be
paid by the Company.
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 acceptance and administration of this Agreement in reliance upon any
Rights Certificate or certificate for shares of Common Stock or for other
securities of the Company, instrument of assignment or transfer,
26
power of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons, or otherwise upon the advice of counsel as set
forth in Section 20.
19. Merger or Consolidation or Change of Name of Rights Agent.
a. Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the stock
transfer business of the Rights Agent or any successor rights agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Rights Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
b. In case at any time the name of the Rights Agent shall be changed
and at 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.
20. Duties of Rights Agent. The Rights Agent undertakes only the duties
and obligations expressly imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
a. The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent for, and the
Rights Agent shall incur no liability for in respect of, any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
b. Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking, omitting to take or
suffering any action hereunder (including, without limitation, the identity of
any Acquiring Person and the determination of the Current Per Share Market
Price), such fact or matter (unless other evidence in respect thereof be herein
27
specifically prescribed) may be deemed to be conclusively provided and
established by a certificate signed by any one of the Chairman of the Board,
Chief Executive Officer, President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization and protection to the Rights Agent for any action
taken, omitted to be taken or suffered by it under the provisions of this
Agreement in reliance upon such certificate.
c. The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct
(each as may be finally determined by a court of competent jurisdiction).
Anything to the contrary notwithstanding, in no event shall the Rights Agent be
liable for special, punitive, indirect, consequential or incidental loss or
damage of any kind whatsoever (including but not limited to lost profits), even
if the Rights Agent has been advised of the likelihood of such loss or damage.
Any liability of the Rights Agent under this Right Agreement shall be limited to
the amount of fees paid by the Company to the Rights Agent.
d. The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
e. The Rights Agent shall not have any liability or be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void
pursuant to Section 7(e) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in this Agreement
or the ascertaining of the existence of facts that would require any such change
or adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice that such change or adjustment is required);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Preferred Stock
or Common Stock to be issued pursuant to this Agreement or any Right Certificate
or as to whether any shares of Preferred Stock or Common Stock will, when
issued, be validly authorized and issued, fully paid and nonassessable.
f. The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
g. The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken, omitted to be taken or suffered by
it
28
in accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken, omitted to be taken or suffered by
the Rights Agent under this Agreement and the date on or after which such action
shall be taken or suffered, or such omission shall be effective. The Rights
Agent shall not be liable for any action taken or suffered by, or omission of,
the Rights Agent in accordance with a proposal included in any such application
on or after the date specified in such application (which date shall not be less
than five Business Days after the date any such officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to an earlier date) unless, prior to taking any such action (or the
effective dates in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken, suffered or omitted.
h. The Rights Agent and any shareholder, affiliate, director,
officer, or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
i. The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company or any other Person resulting from any
such act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct (each as may be finally determined by a court of competent
jurisdiction) in the selection and continued employment thereof.
j. No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights
believes that repayment of such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
k. If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
21. Change of Rights Agent. The Rights Agent or any successor Rights
Agent may resign and be discharged from its duties under this Agreement upon 30
days' notice in writing mailed to the Company and to each transfer agent of the
Common Stock and Preferred Stock by registered or certified mail, and to the
holders of the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be
29
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (A) a Person organized and doing business under the laws of the United
States or of any State of the United States, in good standing, which is
authorized under such laws to exercise corporate trust powers or stock transfer
powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million or (B) an affiliate or
subsidiary of a Person described in clause (A) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and
Preferred Stock, and mail a notice thereof in writing to the registered holders
of the Rights Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights Certificates made in accordance with
the provisions of this Agreement. In addition, in connection with the issuance
or sale of Common Stock of the Company following the Distribution Date and prior
to the Final Expiration Date, the Company (A) shall, with respect to Common
Stock of the Company so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities issued by the Company prior to the Distribution Date, and
(B) may, in any other case, if deemed necessary or appropriate by the Board of
Directors, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
30
23. Redemption.
a. The Board of Directors of the Company may at its option, at any
time prior to the earlier of (i) a Stock Acquisition Date or (ii) the Close of
Business on the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). Notwithstanding anything contained in
this Agreement to the contrary, the Rights shall not be exercisable as provided
in Section 11(a)(ii) until such time as the Company's right of redemption
hereunder has expired.
b. Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (or at such later time as shall be
specified, in the resolution taking such action), and without any further action
and without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Promptly after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall give notice of such redemption
to the holders of the then outstanding Rights and the Rights Agent by mailing
such notice to all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the shares of Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made. The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the Current Per Share Market Price, as defined in Section 11(d),
of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
c. In case the Company shall propose (A) to pay any dividend payable
in stock of any class to the holders of its Preferred Stock or Common Stock or
to make any other distribution to the holders of its Preferred Stock or Common
Stock (other than a regular quarterly cash dividend), (B) to offer to the
holders of its Preferred Stock or Common Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or Common Stock or
shares of stock of any class or any other securities, (C) to effect any
reclassification of its Preferred Stock or Common Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock or Common Stock), (D) to effect any consolidation, merger or
share exchange into or with any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(m)), (E) to effect any
sale or other transfer or to permit one or more of its Subsidiaries to effect
any sale or other transfer, in one or more related transactions, of 50 percent
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(m)), or (F) to effect the liquidation, dissolution or winding up of the
Company, then, in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with Section 25, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend or distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, exchange, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Preferred Stock or Common Stock
if any such date is to be fixed, and such notice shall be so given in the case
of any action covered by clause (A) or (B) above at least 20 days prior to the
record date for
31
determining holders of the Preferred Stock or Common Stock for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Preferred Stock or Common Stock whichever shall be the
earlier.
In case a Stock Acquisition Date shall occur, the Company shall as soon
as practicable thereafter give to the Rights Agent and to each holder of a
Rights Certificate, in accordance with Section 25, a notice of the occurrence of
such event, which shall specify the event and the consequences of the event to
holders of Rights under Section 11(a)(ii).
24. Exchange.
a. The Board of Directors of the Company may, at its option, at any
time and from time to time after a Stock Acquisition Date, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section 7(e)) for
shares of Common Stock or Common Stock Equivalents, or any combination thereof,
at an exchange ratio of one share of Common Stock, or such number of Common
Stock Equivalents or units representing fractions thereof as would be deemed to
have the same value as one share of Common Stock, per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such exchange ratio being hereinafter referred
to as the "Exchange Ratio").
b. Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (A) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock and/or
Common Stock Equivalents equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange (with prompt notice thereof to the Rights Agent); provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to the Rights Agent and to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of Common
Stock and/or Common Stock Equivalents for Rights will be effected and, in the
event of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become null and void pursuant to the provisions of
Section 7(e)) held by each holder of Rights.
c. In the event that the number of shares of Common Stock which are
authorized by the Company's Amended and Restated Articles of Incorporation but
not outstanding or reserved for issuance for purposes other than upon exercise
of the Rights are not sufficient to permit an exchange of Rights as contemplated
in accordance with this Section 24, the Company shall either take such action as
may be necessary to authorize additional Common Stock for issuance upon exchange
of the Rights or alternatively, at the option of a majority of the Board of
Directors, with respect to each Right (i) pay cash in an amount equal to the
Current
32
Value (as hereinafter defined), in lieu of issuing Common Stock in exchange
therefor, or (ii) issue debt of equity securities or a combination thereof,
having a value equal to the Current Value, in lieu of issuing Common Stock in
exchange for each such Right, where the value of such securities shall be
determined by a nationally recognized investment banking firm selected by
majority vote of the Board of Directors, or (iii) deliver any combination of
cash, property, Common Stock and/or other securities having a value equal to the
Current Value in exchange for each Right. For purposes of this Section 24(c),
the Current Value shall mean the product of the Current Per Share Market Price
of Common Stock on the date of the occurrence of the event described above in
subparagraph (a), multiplied by the number of Common Stock for which the Right
otherwise would be exchangeable if there were sufficient shares available. To
the extent that the Company determines that some action need be taken pursuant
to clauses (i), (ii) or (iii) of this Section 24(c), the Board of Directors may
temporarily suspend the exercisability of the Rights for a period of up to sixty
(60) days following the date on which the event described in this Section 24(a)
shall have occurred, in order to seek any authorization of additional Common
Stock and/or to decide the appropriate form of distribution to be made pursuant
to the above provision and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement (with prompt
notice thereof to the Rights Agent) stating that the exercisability of the
Rights has been temporarily suspended.
d. The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of Rights with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the value of a whole share of Common Stock. For
purposes of this Section 24, the value of a whole share of Common Stock shall be
the closing price (as determined pursuant to the second sentence of Section
11(d)(i)) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24, and the value of any Common Stock Equivalent shall be deemed
to have the same value as the Common Stock on such date.
e. The Company may, at its option, by majority vote of the Board of
Directors, at any time before any Person has become an Acquiring Person,
exchange all or part of the then outstanding Rights for rights of substantially
equivalent value, as determined reasonably and with good faith by the Board of
Directors based upon the advice or one or more nationally recognized investment
banking firms.
f. Immediately upon the action of the Board of Directors ordering
the exchange of any Rights pursuant to subsection 24(e) of this Section 24 and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of rights in exchange therefor as has been
determined by the Board of Directors in accordance with subsection 24(e) above.
The Company shall give public notice of any such exchange; provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall mail a notice of any such exchange
to all of the holders of such Rights at their last address as they appear upon
the registry books of the transfer agent for the Common Stock of the Company.
Any notice which is mailed in the manner herein provided shall be deemed
33
given, whether or not the holder receives such notice. Each such notice of
exchange will state the method by which the exchange of the Rights will be
effected.
25. Notices. Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Rights Certificate to or on
the Company shall be in writing and shall be deemed given if delivered
personally or by commercial delivery service, or mailed by registered or
certified mail (return receipt requested) or sent via facsimile (with
acknowledgment of a complete transmission), addressed (until another address is
filed in writing with the Rights Agent) as follows:
BIOJECT MEDICAL TECHNOLOGIES, INC.
Bedminster Professional Center
211 Somerville Road (Route 202 North)
Bedminster, NJ 07921
Attention: John Gandolfo
Fax No.: (908) 470-1728
With a copy to:
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Attention: Todd A. Bauman
Fax No.: (503) 220-2480
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be in writing and shall be deemed
given if delivered personally or by commercial delivery service, or mailed by
registered or certified mail (return receipt requested) or sent via facsimile
(with acknowledgment of a complete transmission) addressed (until another
address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
59 Maiden Lane, Plaza Level
New York, NY 10038
Attention: Wilbert Myles
Phone No.: (718) 921-8247
34
With a copy to:
Herbert Lemmer
Senior Vice President and General Counsel
59 Maiden Lane, Plaza Entrance
New York, NY 10038
Phone No.: (718) 921-8209
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
26. Supplements and Amendments. Prior to the Distribution Date, the
Company may supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock and
the Rights Agent shall, if the Company so directs and at the expense of the
Company and subject to the penultimate sentence of this section, execute such
supplement or amendment. From and after the Distribution Date, the Company and
the Rights Agent may supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to change or supplement the provisions hereunder
in any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interest of the holders of Rights Certificates (other
than an Acquiring Person or an Affiliate or Associate of any such Person);
provided, however, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating
to when the Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of or the benefits to
the holders of Rights (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26 and provided that
such amendment or supplement does not change or increase the Rights Agent's
duties, liabilities or obligations, the Rights Agent shall execute such
supplement or amendment. Prior to Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of shares of Common Stock.
27. Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns.
28. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, the Common Stock) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the Common Stock).
35
29. Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated and any invalid
or unenforceable provision shall be modified to the extent necessary to allow
for enforceability and to give effect to the original intent of the parties to
the extend possible; provided, however, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or restriction
is held by such court or authority to be invalid, void or unenforceable and the
Board of Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely affect the
purpose or effect of this Agreement, the right of redemption set forth in
Section 23(a) shall be reinstated and shall not expire until the Close of
Business on the tenth day following the date of such determination by the Board
of Directors of the Company.
30. Determinations and Actions by the Board of Directors, Etc. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding Common Stock of which any Person
is the Beneficial Owner, shall be made in accordance with the last sentence of
Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange Act.
The Board 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 of Directors of the Company 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, interpretations and determinations (including, for purposes of
clause (B) below, all omissions with respect to the foregoing) which are done or
made by the Board of Directors of the Company in good faith, shall (A) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (B) not subject the Board of Directors of the
Company to any liability to the holders of the Rights. The Rights Agent shall
always be entitled to assume that the Company's Board of Directors acted in good
faith and shall be fully protected and shall incur no liability in reliance
thereon.
31. Governing Law. This Agreement and each Rights certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Oregon 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; provided, however, that all provisions regarding the
rights, duties and obligations of the Rights Agent shall be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
36
33. Descriptive Headings. Descriptive headings of the several Sections
of this Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
[SIGNATURE PAGE FOLLOWS]
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
BIOJECT MEDICAL TECHNOLOGIES, INC.
By:
----------------------------------
Name: John Gandolfo
Title: Chief Financial Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY
By:
----------------------------------
Name: Herbert Lemmer
Title: Senior Vice President and
General Counsel
38
EXHIBIT A
FORM OF AMENDMENT TO RESTATED
ARTICLES OF INCORPORATION
OF
BIOJECT MEDICAL TECHNOLOGIES, INC.
ESTABLISHING
SERIES R PREFERRED STOCK
ARTICLE IV, Section 3
ARTICLES OF AMENDMENT
OF
BIOJECT MEDICAL TECHNOLOGIES INC.
ESTABLISHING
SERIES R PARTICIPATING PREFERRED STOCK
Pursuant to the Oregon Business Corporation Act, these Articles of
Amendment were adopted by the undersigned corporation:
34. The name of the Corporation is Bioject Medical Technologies Inc.
35. On June 13, 2002, the following amendment to the Amended and
Restated Articles of Incorporation of the corporation was duly adopted by the
Board of Directors pursuant to ORS 60.134:
Article IV is amended to add a new Section 3, which reads as
follows:
Section 3. Additional Preferred Stock. This Section 3 sets forth the
designation, preferences, limitations and relative rights of a series of
Preferred Stock of the corporation as determined by the board of
directors of the corporation pursuant to its authority under Oregon
Revised Statutes 60.134 and Section 2 of Article IV of these Restated
Articles of Incorporation.
3.1. Designation and Amount. The shares of such series shall be
designated as "Series R Participating Preferred Stock" and the number of
shares constituting such series shall be 125,000.
3.2. Dividends and Distributions
(a) The holders of shares of Series R Participating Preferred
Stock shall be entitled to receive, when and as declared by the board of
directors, out of funds legally available for the purpose, dividends in
an amount per share equal to 1,000 (the "Adjustment Number") multiplied
by the aggregate per share amount of all cash dividends, and the
Adjustment Number multiplied by the aggregate per share amount (payable
in kind) of all non-cash dividends or other
A-1
distributions other than a dividend payable in Common Stock or a
subdivision of the outstanding Common Stock (by reclassification or
otherwise), declared on the Common Stock, without par value, of the
corporation (the "Common Stock") after the first issuance of any share
or fraction of a share of Series R Participating Preferred Stock.
(b) The corporation shall declare a dividend or distribution on
the Series R Participating Preferred Stock as provided in subparagraph
3.2(a) at the same time that it declares a dividend or distribution on
the Common Stock (other than a dividend payable in Common Stock).
(c) Dividends shall not be cumulative. Unpaid dividends shall
not bear interest. Dividends paid on the shares of Series R
Participating Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at
the time outstanding.
3.3. Voting Rights. The holders of Series R Participating Preferred
Stock shall have the following voting rights:
(a) Each share of Series R Participating Preferred Stock shall
entitle the holder thereof to the number of votes equal to the
Adjustment Number then in effect on all matters submitted to a vote of
the shareholders of the corporation.
(b) Except as otherwise provided herein or by law, the holders
of Series R Participating Preferred Stock and the holders of Common
Stock shall vote together as one class on all matters submitted to a
vote of shareholders of the corporation.
3.4. Certain Restrictions
(a) Whenever dividends or distributions payable on the Series R
Participating Preferred Stock as provided in Section 3.2 have not been
declared or paid for any fiscal year, until all such dividends and
distributions for such fiscal year on Series R Participating Preferred
Stock outstanding shall have been declared and paid in full, the
corporation shall not in such fiscal year
(i) declare or pay dividends on or make any other
distributions on any shares of stock ranking junior or on a parity
(either as to dividends or upon liquidation, dissolution or winding up)
to the Series R Participating Preferred Stock except dividends paid
ratably on the Series R Participating Preferred Stock and all such
parity stock on which dividends are payable in proportion to the total
amounts to which the holders of all such shares are then entitled and
dividends or distributions payable in Common Stock;
(ii) purchase or otherwise acquire for consideration any
shares of Series R Participating Preferred Stock or any shares of stock
ranking on
A-2
a parity with the Series R Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the board of directors) to all holders of such shares upon
such terms as the board of directors, after consideration of the
respective dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(b) The corporation shall not permit any subsidiary of the
corporation to purchase or otherwise acquire for consideration any
shares of stock of the corporation unless the corporation could, under
subparagraph 3.4(a), purchase or otherwise acquire such shares at such
time and in such manner.
3.5 Restriction on Issuance of Stock; Reacquired Stock. The
corporation shall not issue any shares of Series R Participating
Preferred Stock except upon exercise of rights (the "Rights") issued
pursuant to the Rights Agreement dated as of July 1, 2002, between the
corporation and American Stock Transfer & Trust Company (the "Rights
Agreement"), a copy of which is on file with the secretary of the
corporation at its principal executive office and shall be made
available to shareholders of record without charge upon written request.
Any shares of Series R Participating Preferred Stock purchased or
otherwise acquired by the corporation in any manner whatsoever may be
restored to the status of authorized but unissued shares after the
acquisition thereof. All such shares shall upon any such restoration
become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by the
board of directors, subject to the conditions and restrictions on
issuance set forth herein.
3.6 Liquidation, Dissolution or Winding Up
(a) Upon any liquidation (voluntary or otherwise), dissolution
or winding up of the corporation, no distribution shall be made to the
holders of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series R
Participating Preferred Stock unless, prior thereto, the holders of
shares of Series R Participating Preferred Stock shall have received the
Adjustment Number multiplied by the per share amount to be distributed
to holders of Common Stock, plus an amount equal to declared and unpaid
dividends and distributions thereon to the date of such payment (the
"Series R Liquidation Preference"). Following the payment of the full
amount of the Series R Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series R
Participating Preferred Stock.
(b) In the event that there are not sufficient assets available
to permit payment in full of the Series R Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any,
which rank senior to or on a parity with the Series R Participating
Preferred Stock, then assets shall be distributed first to holders of
any series of Preferred Stock ranking senior to the Series R
Participating Preferred Stock to the extent of their liquidation
A-3
preferences and such remaining assets shall be distributed ratably to
the holders of Series R Participating Preferred Stock and such parity
shares in proportion to their respective liquidation preferences.
3.7 Consolidation, Merger, etc. In case the corporation shall enter
into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such
case the shares of Series R Participating Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share equal
to the Adjustment Number multiplied by the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is
changed or exchanged.
3.8 Anti-Dilution, Adjustments to Adjustment Number. In the event
the corporation shall at any time after July 19, 2002 (the "Rights
Declaration Date") (a) declare any dividend on Common Stock payable in
shares of Common Stock, (b) subdivide the outstanding shares of Common
Stock, or (c) combine the outstanding shares of Common Stock into a
smaller number of shares, then in each such case the Adjustment Number
for all purpose of this Section 3 of Article IV shall be adjusted by
multiplying the Adjustment Number then in effect by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately prior to
such event. In the event the corporation shall at any time after the
Rights Declaration Date, fix a record date for the issuance of rights,
options or warrants to all holders of Common Stock entitling them (for a
period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Stock or securities convertible into
Common Stock at a price per share of Common Stock (or having a
conversion price per share, if a security convertible into Common Stock)
less than the then Current Per Share Market Price (as defined in Section
11(d) of the Rights Agreement) of the Common Stock on such record date,
then in each such case the Adjustment Number for all purposes of this
Section 3 of Article IV shall be adjusted by multiplying the Adjustment
Number then in effect by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date plus
the number of additional shares of Common Stock to be offered for
subscription or purchase (or into which the convertible securities so to
be offered are initially convertible) and the denominator of which shall
be the number of shares of Common Stock outstanding on such record date
plus the number of shares of Common Stock which the aggregate offering
price of the total number of shares of Common Stock so to be offered
(and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Per Share
Market Price (as defined in Section 11(d) of the Rights Agreement). In
case such subscription price may be paid in a consideration part or all
of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the board of
directors. Shares of Common Stock owned by or held
A-4
for the account of the corporation shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed. In the event that
such rights, options or warrants are not so issued, the Adjustment
Number shall be readjusted as if such record date had not been fixed;
and to the extent such rights, options or warrants are issued but not
exercised prior to their expiration, the Adjustment Number shall be
readjusted to be the number which would have resulted from the
adjustment provided for in this paragraph 3.8 if only the rights,
options or warrants that were exercised had been issued.
3.9 No Redemption. Shares of the Series R Participating Preferred
Stock shall not be redeemable at the option of the corporation or any
holder thereof. Notwithstanding the foregoing sentence, the corporation
may acquire Series R Participating Preferred Stock in any other manner
permitted by law.
3.10 Amendment. Subsequent to the Distribution Date (as defined in
the Rights Agreement) these articles of incorporation shall not be
further amended in any manner which would materially alter or change the
preferences, limitations and relative rights of the Series R
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority of the outstanding shares
of Series R Participating Preferred Stock, voting separately as a class.
3.11 Fractional Shares. Shares of Series R Participating Preferred
Stock may be issued in fractions of a share in integral multiples of one
one-thousandth of a share, which shall entitle the holder, in proportion
to such holders' fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all
other rights of holders of Series R Participating Preferred Stock.
Dated: July 1, 2002
BIOJECT MEDICAL TECHNOLOGIES INC.
By:
-------------------------------
Name:
Title:
A-5
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER JULY 1, 2012 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS OR THEIR RESPECTIVE AFFILIATES OR ASSOCIATES (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY RIGHTS PREVIOUSLY
OWNED BY SUCH PERSONS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED
BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME
NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE
RIGHTS AGREEMENT.(1)]
Rights Certificate
----------------------
This certifies that _______________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of July 1, 2002 (the "Rights Agreement") between
BIOJECT MEDICAL TECHNOLOGIES, INC., an Oregon corporation (the "Company"), and
American Stock Transfer & Trust Company (the "Rights Agent"), to purchase from
the Company at any time prior to 5 p.m., State of New York time, on July 1,
2012 (the "Final Expiration Date") at the office or offices of the Rights Agent
designated for such purpose, one one-thousandth of a fully paid and
nonassessable share of Series R Preferred Stock (the "Preferred Stock") of the
Company, at a purchase price of $50.00 (the "Purchase Price"), upon presentation
and surrender of this Rights Certificate with the Form of Election to Purchase
and related Certificate duly executed. The Purchase Price may be paid in cash or
by certified check or cashier's check payable to the order of the Company. The
number of Rights evidenced by this Rights Certificate, the number of one
one-thousandths of a share of Preferred Stock which may be purchased upon
exercise hereof, and the Purchase Price per Right set forth, above are the
number of Rights, the number of one one-thousandths of a share and the Purchase
Price as of July 1, 2002, based on the Preferred Stock and Common Stock as
constituted at such date.
Upon the occurrence of a Stock Acquisition Date (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or any Affiliate or Associate of
such Acquiring Person (as such terms are defined in the Rights Agreement), (ii)
any other person if such Rights formerly were beneficially
- --------------------
(1) The portion of the legend in brackets shall be inserted only if
applicable and shall replaced the preceding sentence.
B-1
owned by such Acquiring Person (or by an Associate or Affiliate thereof) at a
time after such Acquiring Person became an Acquiring Person, or (iii) under
certain circumstances specified in the Rights Agreement, a transferee of Rights
from such Acquiring Person (or from any Associate or Affiliate thereof) who
became a transferee prior to or concurrently with such Acquiring Person becoming
an Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of such an event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities or property which may
be obtained upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events,
including a Stock Acquisition Date or a Section 13 Event (as such terms are
defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions, and
conditions of the Rights Agreement, which terms, provisions, and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the Rights
and the limitations on the rights, obligations, duties, and immunities hereunder
of the Rights Agent, the Company, and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in the
Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Rights Certificate or Rights Certificates
of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of one one-thousandths of a share of Preferred Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights certificate or Rights certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this certificate may be redeemed by the Company at its option at a redemption
prices of $.001 per Right at any time prior to the earlier of (i) the Stock
Acquisition Date or (ii) the Close of Business on the Final Expiration Date.
No fractional shares of Preferred Stock will be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at the
election of the Company be evidenced by depository receipts), but in lieu
thereof a cash payment will be made as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote, receive dividends, or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall
B-2
anything contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Rights Certificate shall have been exercised as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ________________, 20____.
ATTEST: BIOJECT MEDICAL TECHNOLOGIES, INC.
- ------------------------------------- ----------------------------------
Secretary Title:
-------------------------
Countersigned:
By
---------------------------------
Authorized Signature
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[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED _____________________________ hereby sells, assigns,
and transfers unto _____________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Rights Certificate, together with all right, title, and interest therein,
and does hereby irrevocably constitute and appoint ____________________________,
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated ___________, 20____.
________________________________
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned, and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was, or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated ___________, 20____. ________________________________
Signature
Signature Guaranteed:
B-4
NOTICE
The signatures to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Rights
Certificate.)
TO: ____________________
The undersigned hereby irrevocably elects to exercise _______________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security or other identifying number: _____________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
Please insert social security or other identifying number: _____________________
Dated ___________, 20____. ___________________________________
Signature
Signature Guaranteed:
B-5
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are defined
pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was, or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated ___________, 20____. ___________________________________
Signature
Signature Guaranteed:
B-6
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On July 2, 2002, the Board of Directors of Bioject Medical Technologies
Inc. (the "Company") announced that it has declared a dividend of one Right for
each outstanding share of Common Stock of the Company to shareholders of record
at the close of business on July 19, 2002. Each Right entitles the registered
holder to purchase from the Company one one-thousandth of a share of Series R
Participating Preferred Stock (the "Preferred Stock") at a Purchase Price of
$50.00, subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement between the Company and American Stock Transfer &
Trust Company (the "Rights Agent"), dated as of July 1, 2002 (the "Rights
Agreement").
Initially, the Rights will be attached to the certificates representing
outstanding Common Stock, and no separate certificates representing the Rights
("Rights Certificates") will be distributed. A "Distribution Date" will occur
upon the earlier of (i) ten days following a public announcement that a person
or group of affiliated or associated persons has acquired, or obtained the right
to acquire from shareholders, beneficial ownership of 15 percent or more of the
outstanding Common Stock or (ii) ten days following the commencement of a tender
offer or exchange offer that would result in a person or group beneficially
owning 15 percent or more of such outstanding Common Stock, as such periods may
be extended pursuant to the Rights Agreement.
Until the Distribution Date, (i) the Rights will be evidenced by and
transferred with the Common Stock certificates, (ii) after July 19, 2002, new
Common Stock certificates will incorporate the Rights Agreement by reference in
a legend and (iii) the transfer of a Common Stock certificate will also
constitute a transfer of the Rights associated with the Common Stock.
A holder cannot exercise Rights until the Distribution Date. Rights
expire on the close of business on July 1, 2012, unless the Company has
redeemed them in the manner described below.
If and when the Distribution Date occurs, the Rights will separate from
the Common Stock and the Company will promptly mail Rights Certificates to
holders of record of the Common Stock as of the close of business on the
Distribution Date. Thereafter, Rights Certificates alone will represent the
Rights. Except as otherwise determined by the Board of Directors, only Common
Stock issued before the moment the Rights become exercisable or issued upon
exercise or conversion of rights, warrants, options or convertible securities
issued before the time the Rights become exercisable will be issued with Rights.
If a person becomes an "Acquiring Person" under the Rights Agreement,
each holder of a Right thereafter has the right to receive, upon exercise, in
lieu of Preferred Stock, Common Stock of the Company (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right. If any person becomes an
Acquiring Person all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by an Acquiring Person will
become null and void.
C-1
For example, at an exercise price of $50.00 per Right, each Right not
owned by the Acquiring Person (or by certain related parties or transferees)
following the events described above would entitle its holder to purchase
$100.00 worth of Common Stock (or other consideration as described above) for
$50.00. Assuming that the Common Stock had a per share value of $25.00 at that
time, the holder of each valid Right would be entitled to purchase four shares
of Common Stock for $50.00.
If, at any time after the Distribution Date, (i) the Company is acquired
in a merger or other business combination transaction in which the Company does
not survive or in which the Common Stock is exchanged for stock or other
securities or property, or (ii) 50 percent or more of the Company's assets or
earning power is sold or transferred, each holder of a Right (except Rights
voided as set forth above) shall thereafter have the right to exercise the Right
for common stock of the Acquiring Person having a value equal to two times the
exercise price of the Right.
The Purchase Price, as defined in the Rights Agreement, payable, and the
number of one one-thousandths of a share of Preferred Stock or other securities
or property issuable upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock or the
Common Stock, (ii) if holders of the Preferred Stock are granted certain rights
or warrants to subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock, (iii) if holders of Common
Stock are granted certain rights or warrants to subscribe for Common Stock or
convertible securities at less than the current market price of the Common
Stock, or (iv) upon the distribution to holders of Preferred Stock or Common
Stock of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price or the
number of shares of Preferred Stock issuable upon exercise of a Right will be
required until cumulative adjustments would require an increase or decrease of
at least one percent. The Company will not issue fractional shares of Preferred
Stock (except fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock) and, in lieu thereof, an adjustment in cash will be
made based on the market price of the Preferred Stock on the last trading date
before the date of exercise.
Before a person becomes an Acquiring Person, the Company may redeem the
Rights in whole, but not in part, at a price of $0.001 per Right (payable in
cash, Common Stock or other consideration), appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring in the future.
If a person or group proposes or publicly announces an intention to propose a
transaction that, if consummated, would cause that person to become an Acquiring
Person, or cause the Company to be acquired in a merger or other business
combination (a "Proposed Acquiror"), the board of directors may redeem the
Rights. If the board redeems the Rights, the Rights terminate and the holders of
Rights are only entitled to receive the redemption price of $.001 per Right.
If and when a person becomes an Acquiring Person, the Company's board
may exchange the Rights (except for voided Rights), in whole or in part, at an
exchange ratio of one share of
C-2
Common Stock, or one one-thousandth of a share of Preferred Stock (or of a share
of a class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
Until a Right is exercised, the holder of a Right has no rights as a
shareholder of the Company, including the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to shareholders or to
the Company, shareholders may, depending upon particular circumstances,
recognize taxable income if Rights become exercisable for Common Stock or other
consideration of the Company or for common stock of the acquiring company.
The Preferred Stock will be non-redeemable and may rank lower in
priority than other classes or series of the Company's preferred stock with
respect to dividend preference and the distribution of assets. Each share of
Preferred Stock will be entitled to an aggregate of 1,000 times the cash and
non-cash (payable in kind) dividends and distributions (other than dividends and
distributions payable in Common Stock) declared on the Company's Common Stock.
In the event of liquidation, the holders of Preferred Stock will be entitled to
receive a liquidation payment in an amount equal to 1,000 times the payment made
per share of Common Stock, plus an amount equal to declared and unpaid dividends
and distributions thereon. If a merger, consolidation or other transaction in
which Common Stock is exchanged occurs, each share of Preferred Stock will be
entitled to receive 1,000 times the amount received per share of Common Stock.
Antidilution provisions protect the dividend and liquidation rights of the
Preferred Stock. Each share of Preferred Stock will be entitled to 1,000 votes
(subject to certain adjustments) on all matters submitted to the shareholders.
The Company has filed a copy of the Rights Agreement with the Securities
and Exchange Commission as an exhibit to its Current Report on Form 8-K dated
July 2, 2002. You may obtain a copy of the Rights Agreement free of charge from
the Rights Agent. This summary of the characteristics of the Rights is not
complete and is qualified by reference to the Rights Agreement, which is
incorporated herein by reference.
C-3