EXHIBIT 4
AMERISOURCEBERGEN CORPORATION
and
MELLON INVESTOR SERVICES LLC
Rights Agent
Rights Agreement
Dated as of August 27, 2001
TABLE OF CONTENTS
Page
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SECTION 1. Certain Definitions................................................4
SECTION 2. Appointment of Rights Agent........................................8
SECTION 3. Issue of Rights Certificates.......................................8
SECTION 4. Form of Rights Certificates........................................10
SECTION 5. Countersignature and Registration..................................11
SECTION 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.....................................................11
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights...........................................................12
SECTION 8. Cancellation and Destruction of Rights Certificates................14
SECTION 9. Reservation and Availability of Capital Stock......................14
SECTION 10. Preferred Stock Record Date.......................................15
SECTION 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights......................................16
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares........24
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...................................................24
SECTION 14. Fractional Rights and Fractional Shares...........................27
SECTION 15. Rights of Action..................................................27
SECTION 16. Agreement of Rights Holders.......................................28
SECTION 17. Rights Certificate Holder Not Deemed a Stockholder................29
SECTION 18. Concerning the Rights Agent.......................................29
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.........29
SECTION 20. Duties of Rights Agent............................................30
SECTION 21. Change of Rights Agent............................................32
SECTION 22. Issuance of New Rights Certificates...............................33
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SECTION 23. Redemption and Termination........................................34
SECTION 24. Notice of Certain Events..........................................34
SECTION 25. Notices...........................................................35
SECTION 26. Supplements and Amendments........................................36
SECTION 27. Successors........................................................36
SECTION 28. Determinations and Actions by the Board of Directors, etc.........36
SECTION 29. Benefits of this Agreement........................................37
SECTION 30. Severability......................................................37
SECTION 31. Governing Law.....................................................37
SECTION 32. Counterparts......................................................37
SECTION 33. Descriptive Headings..............................................37
SECTION 34. Exchange..........................................................37
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RIGHTS AGREEMENT
----------------
RIGHTS AGREEMENT, dated as of August 27, 2001 (this "Agreement"),
between AMERISOURCEBERGEN CORPORATION, a Delaware corporation (the "Company"),
and MELLON INVESTOR SERVICES LLC, a New Jersey limited liability company (the
"Rights Agent").
WHEREAS, effective August 27, 2001 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and declared a
distribution of one Right (each, a "Right") for each share of Common Stock, par
value $0.01 per share, of the Company (the "Company Common Stock") outstanding
at the Close of Business (as defined below) on August 27, 2001 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereinafter be adjusted pursuant hereto) for each share of Company Common Stock
issued between the Record Date (whether originally issued or delivered from the
Company's treasury) and, except as otherwise provided in Section 22, the
Distribution Date, each Right initially representing the right to purchase upon
the terms and subject to the conditions hereinafter set forth one Unit (as
defined below) of Series A Preferred Stock (as defined below);
WHEREAS, the Company desires to set forth certain terms and conditions
governing the Rights; and
WHEREAS, the Company desires to appoint the Rights Agent to act as
rights agent hereunder, in accordance with the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15% or more of the shares of Company
Common Stock then outstanding, but shall not include (i) Bergen
Brunswig Corporation or AmeriSource Health Corporation (for so long as
they are Affiliates of the Company), the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of
its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, or (ii) any such Person who has become and is
such a Beneficial Owner solely because (A) of a change in the aggregate
number of shares of the Company Common Stock outstanding since the last
date on which such Person acquired Beneficial Ownership of any shares
of the Company Common Stock or (B) it acquired such Beneficial
Ownership in the good faith belief that such acquisition would not (1)
cause such Beneficial Ownership to be equal to or exceed 15% of the
shares of the Company Common Stock then outstanding and such Person
relied in good faith in computing the percentage of its Beneficial
Ownership on publicly filed reports or documents of the Company that
are inaccurate or out-of-date or (2) otherwise cause a Distribution
Date or the adjustment provided for in Section 11(a)(ii) to occur.
Notwithstanding clause (ii)(B) of the prior
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sentence, if any Person that is not an Acquiring Person due to such
clause (ii)(B) does not reduce its percentage of Beneficial Ownership
of the Company Common Stock to less than 15% by the Close of Business
on the fifth Business Day after notice from the Company (the date on
which such notice is first mailed or sent being the first day) that
such person's Beneficial Ownership of the Company Common Stock is equal
to or exceeds 15%, such Person shall, at the end of such five Business
Day period, become an Acquiring Person (and such clause (ii)(B) shall
no longer apply to such Person). For purposes of this definition, the
determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Company,
acting by a vote of those directors of the Company whose approval would
be required to redeem the Rights under Section 23.
(b) "Adjustment Shares" has the meaning set forth in Section
11(a)(ii).
(c) "Adjustment Spread" has the meaning set forth in Section
34(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the Exchange Act
Regulations as in effect on the date of this Agreement.
(e) "Agreement" has the meaning set forth in the preamble to
this Agreement.
(f) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own", and shall be deemed to have
"Beneficial Ownership" of, any securities:
(i) of which such Person or any of such Person's
Affiliates or Associates is considered to be a "beneficial
owner" under Rule 13d-3 of the Exchange Act Regulations as in
effect on the date of this Agreement; provided, however, that
a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", or to have "Beneficial Ownership" of, any
securities under this subparagraph (i) as a result of an
agreement, arrangement or understanding to vote such
securities if such agreement, arrangement or understanding (A)
arises solely from a revocable proxy given in response to a
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Exchange Act
and the Exchange Act Regulations, and (B) is not reportable by
such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report);
(ii) that are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate of such
other Person) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable
proxy as described in the proviso to subparagraph (i) of this
paragraph (f)) or disposing of such securities; or
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(iii) that such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only
after the passage of time or upon the satisfaction of
conditions) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise;
provided, however, that under this paragraph (f) a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, (A) securities tendered pursuant to a tender
or exchange offer made in accordance with Exchange Act Regulations by
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, (B)
securities that may be issued upon exercise of Rights at any time prior
to the occurrence of a Triggering Event or (C) securities that may be
issued upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date
or pursuant to Section 3(c) or Section 22 or pursuant to Section 11(i)
in connection with an adjustment made with respect to any such Rights.
(g) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of Delaware
are authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date shall mean 5:00
p.m., Eastern time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m., Eastern time, on the
next succeeding Business Day.
(i) "Common Stock" of any Person other than the Company shall
mean the capital stock of such Person with the greatest voting power,
or, if such Person shall have no capital stock, the equity securities
or other equity interest having power to control or direct the
management of such Person.
(j) "Company" has the meaning set forth in the preamble to
this Agreement.
(k) "Company Common Stock" has the meaning set forth in the
recitals to this Agreement.
(l) "Current Value" has the meaning set forth in Section
11(a)(iii).
(m) "Depositary Agent" has the meaning set forth in Section
7(c).
(n) "Distribution Date" has the meaning set forth in Section
3(a).
(o) "Equivalent Preferred Stock" has the meaning set forth in
Section 11(b).
(p) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
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(q) "Exchange Act Regulations" shall mean the General Rules
and Regulations under the Exchange Act.
(r) "Expiration Date" has the meaning set forth in Section
7(a).
(s) "Final Expiration Date" has the meaning set forth in
Section 7(a).
(t) "Final Order" has the meaning set forth in Section 18(a).
(u) "Non-Third Party Proceeding" has the meaning set forth in
Section 18(a).
(v) "Person" shall mean any individual, partnership, limited
liability company, firm, corporation, joint venture, association,
trust, unincorporated organization or other entity, as well as any
syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act.
(w) "Preferred Stock" shall mean the Series A Preferred Stock,
par value $0.01 per share, of the Company having the voting powers,
designation, preferences and relative, participating, optional or other
special rights and qualifications, limitations and restrictions
described in the Certificate of Designation set forth as Exhibit C
hereto.
(x) "preferred stock equivalents" has the meaning set forth in
Section 11(a)(iii).
(y) "Principal Party" has the meaning set forth in Section
13(b).
(z) "Purchase Price" has the meaning set forth in Section
7(b).
(aa) "Record Date" has the meaning set forth in the recitals
to this Agreement.
(bb) "Redemption Price" has the meaning set forth in Section
23(a).
(cc) "Registered Common Stock" has the meaning set forth in
Section 13(b)(ii).
(dd) "Registration Date" has the meaning set forth in Section
9(c).
(ee) "Registration Statement" has the meaning set forth in
Section 9(c).
(ff) "Right" has the meaning set forth in the recitals to this
Agreement.
(gg) "Rights Agent" has the meaning set forth in the preamble
to this Agreement.
(hh) "Rights Certificates" has the meaning set forth in
Section 3(a).
(ii) "Rights Dividend Declaration Date" has the meaning set
forth in the recitals to this Agreement.
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(jj) "Section 11(a)(ii) Event" has the meaning set forth in
Section 11(a)(ii).
(kk) "Section 11(a)(iii) Trigger Date" has the meaning set
forth in Section 11(a)(iii).
(ll) "Section 13 Event" has the meaning set forth in Section
13(a).
(mm) "Section 34(a)(i) Exchange Ratio" has the meaning set
forth in Section 34(a)(i).
(nn) "Section 34(a)(ii) Exchange Ratio" has the meaning set
forth in Section 34(a)(ii).
(oo) "Securities Act" shall mean the Securities Act of 1933,
as amended.
(pp) "Spread" has the meaning set forth in Section 11(a)(iii).
(qq) "Stock Acquisition Date" shall mean the first date of
public announcement (including, without limitation, the filing of any
report pursuant to Section 13(d) of the Exchange Act) by the Company or
an Acquiring Person that an Acquiring Person has become such.
(rr) "Subsidiary" of any Person shall mean any other Person of
which a majority of the voting securities or equity interests is
beneficially owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
(ss) "Summary of Rights" has the meaning set forth in Section
3(b).
(tt) "Trading Day" has the meaning set forth in Section
11(d)(i).
(uu) "Triggering Event" shall mean any Section 11(a)(ii) Event
or any Section 13 Event.
(vv) "Unit" has the meaning set forth in Section 7(b).
SECTION 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. With
the consent of the Rights Agent, 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. In the event that the Company appoints
one or more Co-Rights Agents, the respective duties of the Rights Agent and any
Co-Rights Agent shall be as the Company shall determine and shall not be
inconsistent with this Agreement.
SECTION 3. Issue of Rights Certificates. (a) Until the earlier of (i)
the Close of Business on the tenth day after the Stock Acquisition Date and (ii)
the Close of Business on the tenth Business Day (or such later date as may be
determined by action of the Company's Board
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of Directors prior to such time as any Person becomes an Acquiring Person, and
of which the Company will give the Rights Agent prompt written notice) 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 maintained by the Company
or any of its Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity) is commenced within the meaning of Rule 14d-2 of the
Exchange Act Regulations or any successor rule, if upon consummation thereof
such Person would become an Acquiring Person (the earlier of (i) and (ii) above
being the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the certificates for shares of
Company Common Stock registered in the names of the holders of shares of Company
Common Stock as of and subsequent to the Record Date (which certificates for
shares of Company Common Stock shall be deemed also to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying shares of
Company Common Stock (including a transfer to the Company). As soon as
practicable after the Distribution Date and the Company has notified the Rights
Agent of the occurrence thereof and provided the Rights Agent with a list of
shareholders of record of Company Common Stock, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of shares of
Company 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, one or more
rights certificates, in substantially the form set forth in Exhibit A hereto
(the "Rights Certificates"), evidencing one Right for each share of Company
Common Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Company Common Stock has
been made pursuant to Section 11(p), at the time of distribution of the Rights
Certificates, the Company may make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a)) so that Rights Certificates
evidencing only whole numbers of Rights are distributed and cash is paid in lieu
of any fractional Rights. As of and after the Distribution Date, the Rights will
be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Preferred Stock, in a form
that may be appended to certificates that evidence shares of Company Common
Stock, in substantially the form attached hereto as Exhibit B (the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of shares
of Company Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company.
(c) Rights shall, without any further action, be issued in respect of
all shares of Company Common Stock that are issued (including any shares of
Company Common Stock held in treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
evidencing such shares of Company Common Stock issued after the Record Date but
prior to the earlier of the Distribution Date or the Expiration Date shall bear
the following legend:
"This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement, dated as
of August 27, 2001 (the "Rights Agreement"), between AmerisourceBergen
Corporation (the "Company") and Mellon Investor Services LLC (the
"Rights Agent"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the
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office of the Rights Agent designated for such purpose. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may become
null and void."
With respect to certificates evidencing shares of Company Common Stock
(whether or not such certificates include the foregoing legend or have appended
to them the Summary of Rights), until the earlier of the Distribution Date and
the Expiration Date, the Rights associated with the shares of Company Common
Stock evidenced by such certificates shall be evidenced by such certificates
alone and registered holders of the shares of Company Common Stock shall also be
the registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the shares of Company Common Stock evidenced by such certificates.
SECTION 4. Form of Rights Certificates. (a) The Rights Certificates
(and the forms of election to purchase, assignment and certificate to be printed
on the reverse thereof) shall each be substantially in the form set forth in
Exhibit A hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or any rule or
regulation thereunder 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 be dated as of the Record Date and on their face
shall entitle the holders thereof to purchase such number of Units of Preferred
Stock as shall be set forth therein at the price set forth therein, but the
amount and type of securities, cash or other assets that may be acquired upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant hereto that evidences Rights
beneficially owned by: (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and that receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding either the transferred Rights,
shares of Company Common Stock or the Company or (B) a transfer that a majority
of the Company's Board of Directors has determined to be part of a plan,
arrangement or understanding that has as a primary purpose or effect the
avoidance of Section 7(e) hereof, shall,
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upon the written direction of a majority of the Company's Board of Directors,
contain (to the extent feasible) the following legend:
"The Rights evidenced by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights evidenced hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement."
The absence of the foregoing legend on any Rights Certificate shall in
no way affect any of the other provisions of this Agreement.
SECTION 5. Countersignature and Registration. (a) Rights Certificates
shall be executed on behalf of the Company by its Chairman of the Board, the
President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any one or more of these officers on the Rights Certificates may be
manual or facsimile. Rights Certificates bearing the manual or facsimile
signatures of the individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature of such
Rights Certificates or did not hold such offices at the date of such Rights
Certificates. No Rights Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose unless there appears on such Rights
Certificate a countersignature duly executed by the Rights Agent by manual
signature of an authorized signatory, and such countersignature upon any Rights
Certificate shall be conclusive evidence, and the only evidence, that such
Rights Certificate has been duly countersigned as required hereunder.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated for surrender of Rights Certificates
upon exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate and the date of each Rights Certificate.
SECTION 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) and 14, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of Units
of Preferred Stock (or, following a Triggering Event, other securities, cash 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 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
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transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and executed the certificate set forth 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) of the Rights evidenced by such Rights Certificate or
Affiliates or Associates thereof as the Company shall reasonably request;
whereupon the Rights Agent shall, subject to the provisions of Sections 4(b),
7(e) and 14, 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.
(b) If a Rights Certificate shall be mutilated, destroyed, lost or
stolen, upon request by the registered holder of the Rights evidenced thereby
and upon payment to the Company and the Rights Agent of all reasonable expenses
incident thereto, there shall be issued, in exchange for and upon cancellation
of the mutilated Rights Certificate, or in substitution for the lost, stolen or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and evidencing the
equivalent number of Rights, but, in the case of loss, theft or destruction,
only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested
by the Company or the Rights Agent, indemnity also satisfactory to such
requesting party.
SECTION 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) Prior to the earlier of (i) the Close of Business on the tenth
anniversary hereof (the "Final Expiration Date") and (ii) the time at which the
Rights are redeemed as provided in Section 23 (the earlier of (i) and (ii) being
the "Expiration Date"), the registered holder of any Rights Certificate may,
except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Sections 7(e), 9(c) and 23(a)
hereof, exercise the Rights evidenced thereby in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the aggregate Purchase Price (as
hereinafter defined) for the number of Units of Preferred Stock (or, following a
Triggering Event, other securities, cash or other assets, as the case may be)
for which such surrendered Rights are then exercisable.
(b) The purchase price for each one one-hundredth of a share (each such
one one-hundredth of a share being a "Unit") of Preferred Stock upon exercise of
Rights shall be $[275], subject to adjustment from time to time as provided in
Sections 11 and 13(a) (such purchase price, as so adjusted, being the "Purchase
Price"), and shall be payable in accordance with paragraph (c) below.
(c) As promptly as practicable following the occurrence of the
Distribution Date, the Company shall deposit with a corporation, limited
liability company or association in good standing organized under the laws of
the United States or any state of the United States, that is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority (such institution being
the "Depositary Agent"), certificates evidencing the shares of Preferred Stock
that may be acquired
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upon exercise of the Rights and shall cause such Depositary Agent to enter into
an agreement pursuant to which the Depositary Agent shall issue receipts
evidencing interests in the shares of Preferred Stock so deposited. Upon receipt
of a Rights Certificate evidencing exercisable Rights, with the form of election
to purchase and the certificate duly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price for the Units of
Preferred Stock (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) to be purchased thereby as set forth below and
an amount equal to any applicable tax or governmental charge or evidence
satisfactory to the Company of payment of such tax or governmental charge, the
Rights Agent shall, subject to Section 20(k), thereupon promptly (i) requisition
from the Depositary Agent depositary receipts or certificates evidencing such
number of Units of Preferred Stock as are to be purchased and the Company will
direct the Depositary Agent to comply with such request, (ii) requisition from
the Company the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14, (iii) after receipt of such depositary receipts
or certificates, 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) after receipt thereof, deliver
such cash, if any, to or upon the order of the registered holder of such Rights
Certificate. In the event that the Company is obligated to issue Company Common
Stock, issue other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11(a), the Company will make all arrangements
necessary so that such Company Common Stock, other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
necessary to comply with this Agreement. Subject to Section 34, the payment of
the Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii)) may be made in cash or by certified or bank check payable to the
order of the Company, or by wire transfer of immediately available funds to the
account of the Company (provided that notice of such wire transfer shall be
given by the holder of the related Right to the Rights Agent).
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights remaining unexercised shall be issued by the Rights Agent
and 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, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of any Triggering Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) that becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) that becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and that receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person (or any
such Associate or Affiliate) to holders of equity interests in such Acquiring
Person (or such Associate or Affiliate) or to any Person with whom such
Acquiring Person (or such Associate or Affiliate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights, shares of Company
Common Stock or the Company or (B) a transfer that a majority of the Company's
Board of Directors has determined to be part of a plan, arrangement or
understanding that has as a primary purpose or effect the avoidance of this
Section 7(e), shall be null and void without any further
13
action, and no holder of such Rights shall have any rights whatsoever with
respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) are complied with, but neither
the Company nor the Rights Agent shall have any liability to any holder of
Rights or any other Person as a result of the Company's failure to make any
determination under this Section 7(e) or Section 4(b) with respect to an
Acquiring Person or its Affiliates, Associates or transferees.
(f) Notwithstanding anything in this Agreement or any Rights
Certificate 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 by such registered holder unless such
registered holder shall have (i) properly completed and executed the certificate
following the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of the Rights evidenced by such Rights Certificate or
Affiliates or Associates thereof as the Company or the Rights Agent shall
reasonably request.
SECTION 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. Reservation and Availability of Capital Stock. (a) The
Company shall at all times prior to the Expiration Date cause to be reserved and
kept available, out of its authorized and unissued shares of Preferred Stock,
the number of shares of Preferred Stock that, as provided in this Agreement,
will be sufficient to permit the exercise in full of all outstanding Rights.
Upon the occurrence of any events resulting in an increase in the aggregate
number of shares of Preferred Stock (or other equity securities of the Company)
issuable upon exercise of all outstanding Rights above the number then reserved,
the Company shall make appropriate increases in the number of shares so
reserved.
(b) If the shares of Preferred Stock to be issued and delivered upon
the exercise of the Rights may be listed on any national securities exchange,
the Company shall during the period from the Distribution Date through the
Expiration Date use its best efforts to cause all securities reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its best efforts (i) as soon as practicable
following the occurrence of a Section 11(a)(ii) Event and a determination by the
Company in accordance
14
with Section 11(a)(iii) of the consideration to be delivered by the Company upon
exercise of the Rights or, if so required by law, as soon as practicable
following the Distribution Date (such date being the "Registration Date"), to
file a registration statement on an appropriate form under the Securities Act
with respect to the securities that may be acquired upon exercise of the Rights
(the "Registration Statement"), (ii) to cause the Registration Statement to
become effective as soon as practicable after such filing, (iii) to cause the
Registration Statement to continue to be effective (and to include a prospectus
complying with the requirements of the Securities Act) until the earlier of (A)
the date as of which the Rights are no longer exercisable for the securities
covered by the Registration Statement and (B) the Expiration Date and (iv) to
take as soon as practicable following the Registration Date such action as may
be required to ensure that any acquisition of securities upon exercise of the
Rights complies with any applicable state securities or "blue sky" laws. If the
Registration Statement does not become effective prior to the Close of Business
on the 45th Business Day following the occurrence of a Section 11(a)(ii) Event,
the Company shall, unless otherwise determined by a majority of the Company's
Board of Directors, on the 46th Business Day following the occurrence of such
Section 11(a)(ii) Event, be obligated to exercise the option described in
Section 34.
(d) The Company shall take such action as may be necessary to ensure
that all shares of Preferred Stock (and, following the occurrence of a
Triggering Event, any other securities that may be delivered upon exercise of
Rights) shall be, at the time of delivery of the certificates or depositary
receipts for such securities, duly and validly authorized and issued and fully
paid and non-assessable.
(e) The Company shall pay any documentary, stamp or transfer tax
imposed in connection with the issuance or delivery of the Rights Certificates
or upon the exercise of Rights; provided, however, that the Company shall not be
required to pay any such tax imposed in connection with the issuance or delivery
of Units of Preferred Stock, or any certificates or depositary receipts for such
Units of Preferred Stock (or, following the occurrence of a Triggering Event,
any other securities, cash or assets, as the case may be) to any Person other
than the registered holder of the Rights Certificates evidencing the Rights
surrendered for exercise. The Company shall not be required to issue or deliver
any certificates or depositary receipts for Units of Preferred Stock (or,
following the occurrence of a Triggering Event, any other securities, cash or
assets, as the case may be) to, or in a name other than that of, the registered
holder of the Rights Certificate upon the exercise of any Rights evidenced
thereby until any such tax shall have been paid (any such tax 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 governmental
charge is due.
SECTION 10. Preferred Stock Record Date. Each Person in whose name any
certificate or depositary receipt for Units of Preferred Stock (or, following
the occurrence of a Triggering Event, other securities) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Units of Preferred Stock (or, following the occurrence of a
Triggering Event, other securities) evidenced thereby on, and such certificate
or depositary receipt shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable tax or governmental charge) was made; provided, however,
that if the date of such surrender and payment is a date upon which the
Preferred Stock (or, following the occurrence of a Triggering
15
Event, other securities) transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such securities on, and such
certificate or depositary receipt shall be dated, the next succeeding Business
Day on which the Preferred Stock (or, following the occurrence of a Triggering
Event, other securities) transfer books of the Company are open; and further
provided, however, that if delivery of Units of Preferred Stock is delayed as a
result of a failure to register such Units of Preferred Stock pursuant to
Section 9(c), such Persons shall be deemed to have become the record holders of
such Units of Preferred Stock only when such Units first become deliverable.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a stockholder of the Company
with respect to securities for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
SECTION 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of 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 shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
or consolidate the outstanding Preferred Stock into a smaller number of shares
or (D) issue any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination, consolidation or
reclassification, and the number and kind of shares of Preferred Stock or
capital stock, as the case may be, issuable on such date upon exercise of the
Rights, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date, such holder would have owned upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination, consolidation or reclassification. If an event occurs
that 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:
(A) any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, at any time after the date of this Agreement,
directly or indirectly, shall (1) merge into the Company or otherwise
combine with the Company and the Company shall be the continuing or
surviving corporation of such merger or combination and Company Common
Stock shall remain outstanding and unchanged, (2) in one transaction or
a series of transactions, transfer any assets to the Company or to any
of its Subsidiaries in
16
exchange (in whole or in part) for shares of Company Common Stock, for
other securities of the Company or any such Subsidiary, or for
securities exercisable for or convertible into securities of the
Company or any of its Subsidiaries (whether Company Common Stock or
otherwise) or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional securities
exercisable for or convertible into such securities (other than
pursuant to a pro rata distribution to all holders of Company Common
Stock), (3) sell, purchase, lease, exchange, mortgage, pledge, transfer
or otherwise acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its Subsidiaries
or any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan
acting in such capacity, assets (including securities) on terms and
conditions less favorable to the Company or such Subsidiary or plan
than those that could have been obtained in arm's-length negotiations
with an unaffiliated third party, other than pursuant to a transaction
set forth in Section 13(a), (4) sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with the Company
or any of the Company's Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity (other than
transactions, if any, consistent with those engaged in, as of the date
hereof, by the Company and such Acquiring Person or such Associate or
Affiliate), assets (including securities) having an aggregate fair
market value of more than US $5,000,000, other than pursuant to a
transaction set forth in Section 13(a), (5) sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose
of, in one transaction or a series of transactions, to, from or with
the Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity, any
material trademark or material service mark, other than pursuant to a
transaction set forth in Section 13(a), (6) receive, or any designee,
agent or representative of such Acquiring Person or any Affiliate or
Associate of such Acquiring Person shall receive, any compensation from
the Company or any of its Subsidiaries other than compensation for
full-time employment as a regular employee at rates in accordance with
the Company's (or its Subsidiaries') past practices, or (7) receive the
benefit, directly or indirectly (except proportionately as a holder of
Company Common Stock or as required by law or governmental regulation),
of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantage provided by the
Company or any of its Subsidiaries or any employee benefit plan
maintained by the Company or any of its Subsidiaries or any trustee or
fiduciary with respect to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person, unless the
event causing such Person to become an Acquiring Person is a
transaction set forth in Section 13(a); or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse
stock split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or any other
transaction or series of transactions involving the Company or any of
its Subsidiaries, other than a transaction or transactions to which the
provisions of
17
Section 13(a) apply (whether or not with or into or otherwise involving
an Acquiring Person), which has the effect, directly or indirectly, of
increasing by more than 1% the proportionate share of the outstanding
securities of the Company or any of its Subsidiaries that is directly
or indirectly beneficially owned by any Acquiring Person or any
Associate or Affiliate of any Acquiring Person;
then, immediately upon the date of the occurrence of an event described in
Section 11(a)(ii)(A), (B) or (C) (a "Section 11(a)(ii) Event"), proper provision
shall be made so that each holder of a Right (except as provided below and in
Section 7(e)) shall thereafter have the right to receive, upon exercise thereof
at the then-current Purchase Price in accordance with the terms of this
Agreement, in lieu of the number of Units of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, such number of Units of Preferred Stock as shall equal the result
obtained by (x) multiplying the then-current Purchase Price by the then number
of Units of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event (such product thereafter
being, for all purposes of this Agreement other than Section 13, the "Purchase
Price"), and (y) dividing that product by 50% of the then-current market price
(determined pursuant to Section 11(d)) per Unit of Preferred Stock on the date
of such first occurrence (such Units of Preferred Stock being the "Adjustment
Shares").
(iii) In the event that the number of shares of Preferred Stock that
are authorized by the Company's Certificate of Incorporation but not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights is
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, by the vote
of a majority of the Company's Board of Directors, 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 Purchase Price (such excess being the
"Spread"), and (B) with respect to each Right, make adequate provision to
substitute for such Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Company Common Stock
or other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock (such other shares being
"preferred 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 a
majority of the Company's Board of Directors, after receiving advice from a
nationally recognized investment banking firm; provided, however, that if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(iii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, Units of Preferred
Stock (to the extent available) and then, if necessary, cash, which Units of
Preferred Stock and/or cash shall have an aggregate value equal to the Spread.
To the extent that the Company determines that some action need be taken
pursuant to the first sentence of this Section 11(a)(iii), the Company shall
provide, subject to Section 7(e), that such action shall apply uniformly to all
outstanding Rights. For purposes of this Section 11(a)(iii), the value of a Unit
of Preferred Stock shall be the current market price (as determined pursuant to
Section 11(d)) per Unit of Preferred Stock on the
18
Section 11(a)(iii) Trigger Date and the value of any preferred stock equivalent
shall be deemed to have the same value as the Preferred Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them to
subscribe for or purchase (for a period expiring within forty-five calendar days
after such record date) shares of Preferred Stock (or shares having
substantially the same rights, privileges and preferences as shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the current market price (as determined pursuant to Section 11(d)) per
share of Preferred Stock on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the sum of the number of shares of Preferred Stock outstanding on
such record date plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
Equivalent Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current market price, and the denominator of which shall be the sum of
the number of shares of Preferred Stock outstanding on such record date plus the
number of additional shares of Preferred Stock and/or Equivalent Preferred Stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration shall be as
determined in good faith by a majority of the Company's Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive and binding on the Rights Agent and the holders of
the Rights. Shares of Preferred Stock owned by or held for the account of the
Company or any Subsidiary shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that would
then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of shares of Preferred Stock (including any such distribution made
in connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in 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 Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d)) per share of Preferred Stock on such
record date less the fair market value (as determined in good faith by a
majority of the Company's Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holder of the Rights) of the cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or warrants
distributable in respect of a share of Preferred Stock and the denominator of
which shall be such
19
current market price (as determined pursuant to Section 11(d)) per 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 Purchase Price shall be adjusted to be the Purchase Price that would have
been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
market price" per share of Company Common Stock or Common Stock on any date
shall be deemed to be the average of the daily closing prices per share of such
shares for the ten consecutive Trading Days immediately prior to such date;
provided, however, that if prior to the expiration of such requisite ten Trading
Day period the issuer announces either (A) a dividend or distribution on such
shares payable in such shares or securities convertible into such shares (other
than the Rights) or (B) any subdivision, combination, consolidation or
reclassification of such shares, then, following the ex-dividend date for such
dividend or the record date for such subdivision, as the case may be, the
"current market price" shall be properly adjusted to take into account such
event. The closing price for each day shall be, if the shares are listed and
admitted to trading on a national securities exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which such shares are
listed or admitted to trading or, if such shares 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 The Nasdaq Stock Market Consolidated Quotations Service
or such other system then in use, or, if on any such date such shares 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 such shares
selected by a majority of the Company's Board of Directors. If, on any such date
no market maker is making a market in such shares, the fair value of such shares
on such date as determined in good faith by a majority of the Company's Board of
Directors shall be used. If such shares are not publicly held or not so listed
or traded, "current market price" per share shall mean the fair value per share
as determined in good faith by a majority of the Company's Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. The term "Trading Day" shall
mean, if such shares are listed or admitted to trading on any national
securities exchange, a day on which the principal national securities exchange
on which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current market
price" per share of Preferred Stock shall be determined in the same manner as
set forth above for Company Common Stock in clause (i) of this Section 11(d)
(other than the fourth sentence thereof). If the current market price per share
of Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the "current market price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 100 (as
such amount may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to Company Common Stock occurring
after the date of this Agreement) multiplied by the current market price per
share of Company Common Stock. If neither Company Common Stock nor Preferred
Stock is publicly held or so listed or traded, "current market price" per share
of the Preferred Stock shall mean the fair value per share as determined in good
faith by a majority of the Company's Board of Directors, whose determination
shall be described in a
20
statement filed with the Rights Agent and shall be conclusive and binding on the
Rights Agent and the holders of the Rights. For all purposes of this Agreement,
the "current market price" of a Unit of Preferred Stock shall be equal to the
"current market price" of one share of Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest one-hundredth of a share of Company Common Stock or
Common Stock or other share or ten-thousandth 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 that mandates such
adjustment and (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section 11(a)(ii)
or 13(a), the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Preferred Stock, thereafter the
number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (d), (e),
(g), (h), (i), (j), (k), (l) and (m), 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 hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of Units of Preferred Stock
(or other securities or amount of cash or combination thereof) that may be
acquired from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of Units of Preferred
Stock (calculated to the nearest one ten-thousandth of a Unit) obtained by (i)
multiplying (x) the number of Units of Preferred Stock covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of Units of Preferred Stock that may be acquired upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of Units of Preferred Stock for which
a Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall
21
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This record
date may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be at least
ten days later than the date of such public announcement. If Rights Certificates
have been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of Units 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 Unit and the number of Units of Preferred Stock
that were expressed in the Initial Rights Certificates issued hereunder without
prejudice to any such adjustment or change.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then-par value of the number of Units of Preferred
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue such fully paid and non-assessable number
of Units of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of that number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of Units of Preferred Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment a majority of the Company's Board
of Directors shall determine to be advisable in order that any
22
(i) consolidation or subdivision of the Preferred Stock, (ii) issuance wholly
for cash of shares of Preferred Stock at less than the current market price,
(iii) issuance wholly for cash of shares of Preferred Stock or securities that
by their terms are convertible into or exchangeable for shares of Preferred
Stock, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of its
Preferred Stock, shall not be taxable to such holders or shall reduce the taxes
payable by such holders.
(n) The Company shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(o)), (ii) merge with or into any other
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o)), or (iii) sell or transfer (or permit any Subsidiary to sell
or transfer), in one transaction, or a series of transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more transactions each
of which complies with Section 11(o), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the Person that constitutes, or would
constitute, the "Principal Party" for purposes of Section 13(a) shall have
distributed or otherwise transferred to its stockholders or other Persons
holding an equity interest in such Person Rights previously owned by such Person
or any of its Affiliates and Associates; provided, however, that this Section
11(n) shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or earning
power to, any other Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except as
permitted by Section 23, Section 26 or Section 34, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
Date and prior to the Distribution Date (i) declare a dividend on the
outstanding shares of Company Common Stock payable in shares of Company Common
Stock, (ii) subdivide the outstanding shares of Company Common Stock, (iii)
combine or consolidate the outstanding shares of Company Common Stock into a
smaller number of shares, or (iv) issue any shares of its capital stock in a
reclassification of Company 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
Company Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Company Common Stock
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Company Common Stock immediately
prior to such event by a fraction the numerator of which shall be the total
number of shares of Company Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall
23
be the total number of shares of Company Common Stock outstanding immediately
following the occurrence of such event.
SECTION 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Preferred Stock
and the Company Common Stock, a copy of such certificate, and (c) mail a brief
summary thereof to each holder of a Rights Certificate (or, if prior to the
Distribution Date, to each holder of a certificate evidencing shares of Company
Common Stock) in accordance with Section 25. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained, and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
SECTION 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event that, following the Stock Acquisition Date,
directly or indirectly, either (x) 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(o)), and the Company shall not be the
continuing or surviving corporation of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(o)) shall consolidate with, or merge with or 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 shares of Company Common Stock shall be converted
into or exchanged for stock or other securities of any other Person or cash or
any other property, or (z) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer) to any Person or
Persons (other than the Company or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), in one or more
transactions, assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries, taken as a whole (any such
event described in clause (x), (y) or (z) being a "Section 13 Event"), then, and
in each such case, proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof at the then current Purchase Price, such
number of validly authorized and issued, fully paid and non-assessable shares of
Common Stock of the Principal Party, which shares shall not be subject to any
liens, encumbrances, rights of first refusal, transfer restrictions or other
adverse claims, as shall be equal to the result obtained by (1) multiplying the
then current Purchase Price by the number of Units of Preferred Stock for which
a Right is exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such Units for which
a Right would be exercisable hereunder but for the occurrence of such Section
11(a)(ii) Event by the Purchase Price that would be in effect hereunder but for
such first occurrence) and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be the "Purchase Price" for all purposes
of this Agreement) by 50% of the current market price (determined pursuant to
Section 11(d)) per share of the Common Stock of such Principal Party on the date
of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13 Event,
all the obligations and duties of the Company pursuant to this Agreement; (iii)
the term "Company" shall, for all purposes of this
24
Agreement, thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 shall apply only to such
Principal Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in connection
with the consummation of any such transaction as may be necessary to ensure that
the provisions of this Agreement shall thereafter be applicable to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) shall be of no further effect following the
first occurrence of any Section 13 Event.
If, in the case of a transaction of the kind described in clause (z) of
this Section 13(a), the Person or Persons to whom assets or earning power are
sold or otherwise transferred are individuals, then (i) through (iv) of this
Section 13(a) shall be inapplicable, and the Company shall require as a
condition to such sale or transfer that such Person or Persons pay to each
holder of a Right Certificate, upon its surrender to the Rights Agent and in
exchange therefor (without requiring payment by such holder), cash in the amount
determined by multiplying the then current Purchase Price by the number of Units
of Preferred Stock for which a Right is then exercisable.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a), (A) the Person that is the
issuer of any securities into which shares of Company Common Stock are
converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer of Common Stock that has the highest
aggregate current market price (determined pursuant to Section 11(d))
and (B) if no securities are so issued, the Person that is the other
party to such merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the highest
aggregate current market price (determined pursuant to Section 11(d));
and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the largest 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
market price (determined pursuant to Section 11(d)); provided, however,
that in any such case, (1) if the Common Stock of such Person is not at
such time and has not been continuously over the preceding twelve-month
period registered under Section 12 of the Exchange Act ("Registered
Common Stock"), or such Person is not a corporation, and such Person is
a direct or indirect Subsidiary of another Person that has Registered
Common Stock outstanding, "Principal Party" shall refer to such other
Person; (2) if the Common Stock of such Person is not Registered Common
Stock or such Person is not a corporation, and such Person is a direct
or indirect Subsidiary of another Person but is not a direct or
indirect Subsidiary of another Person that has Registered Common Stock
outstanding, "Principal Party" shall refer to the ultimate parent
entity of such first-mentioned Person; (3) if the Common Stock of such
Person is not Registered Common
25
Stock or such Person is not a corporation, and such Person is directly
or indirectly controlled by more than one Person, and one or more of
such other Persons has Registered Common Stock outstanding, "Principal
Party" shall refer to whichever of such other Persons is the issuer of
the Registered Common Stock having the highest aggregate current market
price (determined pursuant to Section 11(d)); and (4) if the Common
Stock of such Person is not Registered Common Stock or such Person is
not a corporation, and such Person is directly or indirectly controlled
by more than one Person, and none of such other Persons have Registered
Common Stock outstanding, "Principal Party" shall refer to whichever
ultimate parent entity is the corporation having the greatest
stockholders' 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.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock that have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13, and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that the Principal Party will:
(i) (A) file on an appropriate form, as soon as practicable
following the execution of such agreement, a registration statement
under the Securities Act with respect to the Common Stock that may be
acquired upon exercise of the Rights, (B) cause such registration
statement to remain effective (and to include a prospectus complying
with the requirements of the Securities Act) until the Expiration Date,
and (C) as soon as practicable following the execution of such
agreement take such action as may be required to ensure that any
acquisition of such Common Stock upon the exercise of the Rights
complies with any applicable state securities or "blue sky" laws; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
(d) In case the Principal Party that 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 Certificate of Incorporation or By-laws 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 market price
per share (determined pursuant to Section 11(d)) or securities exercisable for,
or convertible into, Common Stock of such Principal Party at less than such
then-current 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 Common Stock of such Principal Party
pursuant to the provisions of this 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 cancelled, waived or amended,
26
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 occurrence of a
Section 11(a)(ii) Event, the Rights that have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
SECTION 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates that evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market Consolidated
Quotations Service 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 a majority of the Company's Board of Directors. If on any
such date no such market maker is making a market in the Rights, the fair value
of the Rights on such date as determined in good faith by a majority of the
Company's Board of Directors shall be used and such determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for
all purposes.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions that are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence such fractional shares of Preferred Stock
(other than fractions that are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of such fractional shares of Preferred Stock
that are not integral multiples of one one-hundredth of a share, 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 the
then-current market price of a share of Preferred Stock on the day of exercise,
determined in accordance with Section 11(d).
(c) The holder of a Right by the acceptance of such Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
SECTION 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent, are vested in
the respective
27
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of certificates evidencing shares of Company Common
Stock); and any registered holder of a Rights Certificate (or, prior to the
Distribution Date, of a certificate evidencing shares of Company Common Stock),
without the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of a certificate evidencing
shares of Company Common Stock), may, on such registered holder's own behalf and
for such registered holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company or any other Person
to enforce, or otherwise act in respect of, such registered holder's 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 shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
SECTION 16. Agreement of Rights Holders. Every 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 Company 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
purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates duly executed;
(c) subject to Section 6(a) and Section 7(f), the Company and
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Company
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 Rights Certificates or the associated
Company Common Stock certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent, subject to the last sentence of Section
7(e), 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 any other Person as a result of
its inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree, judgment 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, that the Company must use its best efforts to have any such
order, decree, judgment or ruling lifted or otherwise overturned as
promptly as practicable.
28
SECTION 17. Rights Certificate Holder Not Deemed a Stockholder. 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 shares of
Preferred Stock or any other securities of the Company that may at any time be
issuable on the exercise of the Rights evidenced 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 stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, except as provided in Section 24, to
receive notice of meetings or other actions affecting stockholders, or to
receive dividends or subscription rights, or otherwise.
SECTION 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses, including reasonable fees and disbursements of its counsel, incurred
in connection with the preparation, delivery, execution, administration and
amendment of this Agreement and the exercise and performance of its duties
hereunder. The Company shall indemnify the Rights Agent for, and hold it
harmless against, any loss, liability, claim or expense ("Loss") arising out of
or in connection with its duties under this Agreement or this appointment,
including the costs and expenses of defending itself against any Loss or
enforcing this Agreement, except to the extent that such Loss shall have been
determined by a court of competent jurisdiction to be a result of the Rights
Agent gross negligence or intentional misconduct. In the absence of gross
negligence or intentional misconduct on its part, the Rights Agent shall not be
liable for any action taken, suffered, or omitted by it or for any error of
judgment made by it in the performance of its duties under this Agreement. In no
event will the Rights Agent be liable for special, indirect, incidental or
consequential loss or damages of any kind whatsoever (including but not limited
to lost profits), even if the Rights Agent has been advised of the possibility
of such damages. Any liability of the Rights Agent will be limited in the
aggregate to an amount equal to one million dollars ($1,000,000).
(b) Subject to Section 20(c), the Rights Agent shall be authorized to
rely on, shall be protected and shall incur no liability for or in respect of
any action taken, suffered or omitted by it in connection with its
administration of this Agreement or the exercise or performance of its duties
hereunder in reliance upon any Rights Certificate or certificate or depositary
receipt for Preferred Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to have been signed, executed and, where
necessary, verified or acknowledged by the proper Person or Persons.
(c) The indemnity provided in this Section 18 shall survive the
expiration of the Rights, the resignation or removal of the Rights Agent and the
termination of this Agreement.
SECTION 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation, limited liability company or association into which the
Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any corporation, limited liability company or association
resulting from any merger or consolidation
29
to which the Rights Agent or any successor Rights Agent shall be a party, or any
corporation, limited liability company or association succeeding to the
corporate trust or shareholder services business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any document or any further act on
the part of any of the parties hereto; provided that such corporation, limited
liability company or association 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 a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor 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.
SECTION 20. Duties of Rights Agent. The Rights Agent undertakes only
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the legal advice or opinion of
such counsel shall be full and complete authorization and protection to
the Rights Agent and the Rights Agent shall incur no liability for or
in respect of any action taken, suffered or omitted by it in good faith
and in accordance with such legal 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 (including, without limitation, the identity of any
Acquiring Person and the determination of "current market price") be
proved or established by the Company prior to taking, suffering or
omitting any action hereunder, such fact or matter (unless other
evidence in respect thereof be specified herein) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company and delivered to the Rights Agent and such
certificate shall be full authorization to the Rights Agent for, and
the Rights Agent shall incur no liability for or in respect of any
action taken, suffered or omitted by it under the provisions of this
Agreement in reliance upon such certificate.
30
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Rights Certificates or be required to verify the same (except
as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not have any responsibility for the
validity of this Agreement or the execution and delivery hereof (except
the due execution and delivery hereof by the Rights Agent) or for the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be liable or responsible for
any breach by the Company of any covenant or failure by the Company to
satisfy conditions contained in this Agreement or in any Rights
Certificate; nor shall it be liable or responsible for any adjustment
required under the provisions of Section 11 or Section 13 or for the
manner, method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates
after receipt by the Rights Agent of the certificate describing any
such adjustment contemplated by Section 12); 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 any
other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock or any other
securities will, when so issued, be validly authorized and issued,
fully paid and non-assessable.
(f) The Company shall perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further acts, instruments and assurances as may reasonably be
required by the Rights Agent for the performance by the Rights Agent of
its duties under this Agreement.
(g) Subject to Section 20(c), the Rights Agent is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder from the Chairman of the Board, the
President, any Vice President, the Secretary, any Assistant Secretary,
the Treasurer or any Assistant Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its
duties and such advice or instructions shall be full authorization and
protection of the Rights Agent and the Rights Agent shall incur no
liability for or in respect of any action taken, suffered or omitted in
accordance with the advice or instructions of such officers. Any
application by the Rights 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 or omitted by the Rights Agent under
this Rights Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken, suffered or omitted 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
31
in writing to an earlier date) unless, prior to taking any such action
(or the effective date 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 or omitted.
(h) The Rights Agent and any stockholder, director, Affiliate,
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 resulting from any such act, default, neglect or
misconduct; provided that reasonable care was exercised in the
selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the exercise of
its rights hereunder if the Rights Agent shall have reasonable grounds
for believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has either not been completed, not signed 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. If such
certificate has been completed and signed and shows a negative response
to clauses 1 and 2 of such certificate, unless previously instructed
otherwise in writing by the Company (which instructions may impose on
the Rights Agent additional ministerial responsibilities, but no
discretionary responsibilities), the Rights Agent may assume without
further inquiry that the Rights Certificate is not owned by a person
described in Section 4(b) or Section 7(e) and shall not be charged with
any knowledge to the contrary.
SECTION 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' prior notice in writing mailed to the Company, and to each
transfer agent of the Preferred Stock and the Company Common Stock, by
registered or certified mail, and to the holders of the Rights Certificates (or
certificates for the Company Common Stock prior to the Distribution Date) by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days' prior notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Preferred Stock and the Company Common Stock, by registered or certified
mail, and to the holders of the Rights Certificates (or
32
certificates for the Company Common Stock prior to the Distribution Date) by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of thirty 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 or, prior to
the Distribution Date, the holder of a certificate for the Company Common Stock
(who shall, with such notice, submit such holder's Rights Certificate or
certificate for Company Common Stock, as the case may be, for inspection by the
Company), then any registered holder of any Rights Certificate or, prior to the
Distribution Date, the holder of a certificate for the Company Common Stock 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 corporation, limited liability company or association
organized and doing business under the laws of the United States or any state of
the United States in good standing, shall be authorized to do business as a
banking institution in the United States or any State in good standing, shall be
authorized under such laws to conduct the shareholder services business,
exercise corporate trust or stock transfer powers, shall be subject to
supervision or examination by federal or state authorities and shall have at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000 or (b) an Affiliate of a corporation, limited liability
company or association described in clause (a). 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 Preferred Stock and the Company Common Stock, and
mail a notice thereof in writing to the registered holders of the Rights
Certificates (or certificates for the Company Common Stock prior to the
Distribution Date). 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.
SECTION 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or 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 a majority of the Company's Board of Directors to reflect any
adjustment or change made in accordance with the provisions of this Agreement in
the Purchase Price or the number or kind or class of shares or other securities
or property that may be acquired upon exercise of the Rights. In addition, in
connection with the issuance or sale of shares of Company Common Stock following
the Distribution Date and prior to the Expiration Date, the Company (a) shall,
with respect to shares of Company Common Stock 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 hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by a
majority of the Company's Board of Directors, issue Rights Certificates
evidencing 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
33
tax consequences to the Company or the Person to whom such Rights Certificate
would be issued and (ii) no such Rights Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.
SECTION 23. Redemption and Termination. (a) Subject to Section 28, the
Company may, at its option, by action of a majority of the Company's Board of
Directors, at any time prior to the earlier of (i) the Close of Business on the
tenth Day following the Stock Acquisition Date or (ii) the Final Expiration
Date, redeem all but not less than all of the then-outstanding Rights at a
redemption price of $.01 per Right, as such amount may be appropriately adjusted
to reflect any stock split, share consolidation, subdivision, stock dividend or
similar transaction occurring after the date hereof (such redemption price being
the "Redemption Price"), and the Company may, at its option, by action of a
majority of the Company's Board of Directors, pay the Redemption Price either in
shares of Company Common Stock (based on the current market price, determined in
accordance with Section 11(d), of the shares of Company Common Stock at the time
of redemption), cash or any other form of consideration deemed appropriate by
the Company's Board of Directors. Subject to the foregoing, the redemption of
the Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of a majority of the Company's Board of
Directors ordering the redemption of the Rights, evidence of which shall be
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of a majority of the Company's
Board of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for
Company Common Stock. Any notice that 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.
SECTION 24. Notice of Certain Events. (a) In case the Company shall
propose, at any time after the Distribution Date, (i) to pay any dividend
payable in stock of any class to the holders of Preferred Stock or to make any
other distribution to the holders of Preferred Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company),
(ii) to offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of stock
of any class or any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Stock (other than a reclassification involving
only the subdivision of outstanding shares of Preferred Stock), (iv) to effect
any consolidation or merger into or with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)), or
to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)) or (v) to effect the liquidation, dissolution or
winding up of the Company, then, in each such case,
34
the Company shall give to each holder of a Rights Certificate (or, prior to the
Distribution Date, to each holder of certificates for Company Common Stock), 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, distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of the shares of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by
clause (i) or (ii) above at least 20 days prior to the record date for
determining holders of the shares of Preferred 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 shares of Preferred Stock, whichever shall be the earlier;
provided, however, that no such notice shall be required pursuant to this
Section 24 if any Subsidiary of the Company effects a consolidation or merger
with or into, or effects a sale or other transfer of assets or earning power to,
any other Subsidiary of the Company.
(b) In case any of the events set forth in Section 11(a)(ii) shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the extent feasible
and 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).
SECTION 25. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing and mailed or
sent or delivered (including by facsimile transmission), if to the Company, at
its address at:
AmerisourceBergen Corporation
1300 Morris Drive
Suite 100
Chesterbrook, PA 19087-5594
Attention: Secretary
Facsimile No.: (610) 727-3602
and if to the Rights Agent, at its address at:
Mellon Investor Services LLC
One Mellon Center
500 Grant St. Room 2122
Pittsburgh, PA 15258-0001
Attention: Anita Landreau
Facsimile No.: (412) 236-8157
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Rights Certificate (or,
if prior to the Distribution Date, to the holder of certificates evidencing
shares of Company Common Stock) 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 Rights Agent or, prior
35
to the Distribution Date, on the registry books of the transfer agent for the
Company Common Stock.
SECTION 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement without the approval of any holders of certificates evidencing
shares of Company Common Stock (including supplements or amendments that may be
deemed to affect the interests of the holders of Rights Certificates adversely).
From and after the Distribution Date and subject to the penultimate sentence of
this Section 26, and, provided such supplement or amendment does not adversely,
as reasonably determined in good faith by the Rights Agent, change or increase
the duties, liabilities or obligations of the Rights Agent, the Company and the
Rights Agent shall, if the Company so directs, supplement or amend this
Agreement without the approval of any holders of Rights Certificates in order
(a) to cure any ambiguity, (b) to correct or supplement any provision contained
herein that may be defective or inconsistent with any other provisions herein,
(c) to shorten or lengthen any time period hereunder or (d) 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 interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, however, that this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (c) of this
sentence, (i) subject to Section 30, a time period relating to when the Rights
may be redeemed at such time as the Rights are not then redeemable or (ii) any
other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of, and/or the benefits to, the holders of
Rights. Upon the delivery of a certificate from an appropriate officer of the
Company or, so long as any Person is an Acquiring Person hereunder, from the
majority of the Company's Board of Directors, that states that the proposed
supplement or amendment is in compliance with the terms of this Section 26, the
Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Company Common Stock.
SECTION 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 28. Determinations and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of shares of
Company Common Stock outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding shares of Company
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 Exchange Act
Regulations as in effect on the date hereof. Except as otherwise specifically
provided herein, 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 (i) to interpret
the provisions of this Agreement and (ii) to 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 (y) below, all
36
omissions with respect to the foregoing) that are done or made by the Board of
Directors in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board of Directors of the Company or any member thereof to
any liability to the holders of the Rights.
SECTION 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of shares of Company Common Stock) any
legal or equitable right, remedy or claim under this Agreement. 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, registered holders of shares of Company Common Stock).
SECTION 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and a majority of the
Company's Board of Directors determines in its good faith judgment that severing
the invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement and the Rights shall not then be redeemable, the right
of redemption set forth in Section 23 shall be reinstated and shall not expire
until the Close of Business on the tenth Business Day following the date of such
determination by a majority of the Company's Board of Directors.
SECTION 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be governed by, and construed in accordance
with, the laws of the State of Delaware.
SECTION 32. Counterparts. This Agreement may be executed (including by
facsimile) in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument.
SECTION 33. Descriptive Headings. The headings contained in this
Agreement are for descriptive purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
SECTION 34. Exchange. (a) (i) The Company may, at its option, at any
time after any person becomes an Acquiring Person, upon resolution adopted by a
majority of the Company's Board of Directors, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become null and void pursuant to Section 7(e)) for Units of Preferred Stock at
an exchange ratio of one Unit of Preferred Stock per Right, appropriately
adjusted to reflect any stock split, share consolidation or subdivision, stock
dividend or similar transaction occurring after the date hereof (such exchange
ratio being hereinafter referred to as the "Section 34(a)(i) Exchange Ratio").
Notwithstanding the foregoing,
37
the Company may not effect the exchange described in this Section 34(a)(i) at
any time after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries, or any trustee or fiduciary with respect to such plan acting in
such capacity), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the shares of Company Common
Stock then outstanding.
(ii) The Company may, at its option, at any time after any person
becomes an Acquiring Person, upon resolution adopted by a majority of the
Company's Board of Directors, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to Section 7(e)) for Units of Preferred Stock at an exchange ratio
specified in the following sentence, as appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof. Subject to such adjustment, each Right may be exchanged for that number
of Units of Preferred Stock obtained by dividing the Adjustment Spread (as
defined below) by the then-current market price (determined pursuant to Section
11(d)) per Unit of Preferred Stock on the earlier of (i) the date on which any
Person becomes an Acquiring Person and (ii) the date on which a tender or
exchange offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan maintained by the Company or any of its
Subsidiaries or any trustee or fiduciary with respect to such plan acting in
such capacity) is commenced within the meaning of Rule 14d-2 of the Exchange Act
Regulations or any successor rule, if upon consummation thereof such Person
would become an Acquiring Person (such exchange ratio being the "Section
34(a)(ii) Exchange Ratio"). The "Adjustment Spread" shall equal (x) the
aggregate market price on the date of such event of the number of Adjustment
Shares determined pursuant to Section 11(a)(ii), minus (y) the Purchase Price.
(b) Immediately upon the action of a majority of the Company's Board of
Directors ordering the exchange of any Rights pursuant to Section 34(a) 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 Units of Preferred Stock equal to the number
of such Rights held by such holder multiplied by the Section 34(a)(i) Exchange
Ratio or Section 34(a)(ii) Exchange Ratio, as the case may be. 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 all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice that is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
shall state the method by which the exchange of Units of Preferred Stock for
Rights will be effected and, in the event of any partial exchange, the number of
Rights that will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights that have become null and void
pursuant to Section 7(e)) held by each holder of Rights.
(c) In the event that the number of shares of Preferred Stock that are
authorized by the Company's Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit any exchange of Rights as contemplated in accordance
with this Section 34, the Company shall take
38
all such action as may be necessary to authorize additional shares of Preferred
Stock for issuance upon exchange of the Rights or make adequate provision to
substitute (1) cash, (2) Company Common Stock or other equity securities of the
Company, (3) debt securities of the Company, (4) other assets or (5) any
combination of the foregoing, having an aggregate value equal to the Adjustment
Spread, where such aggregate value has been determined by a majority of the
Company's Board of Directors.
(d) The Company shall not be required to issue fractions of Units of
Preferred Stock or to distribute certificates that evidence fractional Units. In
lieu of fractional Units, the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exchanged as herein provided an
amount in cash equal to the same fraction of the current market price
(determined pursuant to Section 11(d)) of one Unit of Preferred Stock.
39
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on their behalf as of the date first above written.
AMERISOURCEBERGEN CORPORATION
By /s/ William D. Sprague
--------------------------
Name: William D. Sprague
Title: Secretary
Countersigned:
MELLON INVESTOR SERVICES LLC
By /s/ Anita Landreau
--------------------------------
Name: Anita Landreau
Title: Assistant Vice President
EXHIBIT A
---------
Certificate No. _______ _______Rights
NOT EXERCISABLE AFTER THE EXPIRATION DATE (AS DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES (SPECIFIED IN THE RIGHTS AGREEMENT), RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD
BY, ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BECOME NULL AND VOID. [THE RIGHTS evidenced BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF such AGREEMENT.]*
RIGHTS CERTIFICATE
------------------
AMERISOURCEBERGEN CORPORATION
This certifies that ___________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms and conditions of
the Rights Agreement dated as of August 27, 2001 (the "Rights Agreement"; terms
defined therein are used herein with the same meaning unless otherwise defined
herein) between AmerisourceBergen Corporation, a Delaware corporation (the
"Company"), and Mellon Investor Services LLC, as Rights Agent (which term shall
include any successor Rights Agent under the Rights Agreement), to purchase from
the Company at any time after the Distribution Date and prior to the Expiration
Date at the office of the Rights Agent, one one-hundreth of a fully paid and
non-assessable share of Series A Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), of the Company at the Purchase Price initially of $275 per
one one-hundreth share (each such one one-hundreth of a share being a "Unit") of
Preferred Stock, upon presentation and surrender of this Rights Certificate with
the Election to Purchase and related Certificate duly executed. The number of
Rights evidenced by this Rights Certificate (and the number of Units that may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
Unit set forth above shall be subject to adjustment in certain events as
provided in the Rights Agreement.
- --------
* The portion of the legend in brackets shall be inserted only if
applicable and shall replace the preceding sentence.
Upon the occurrence of a Triggering Event, if the Rights evidenced by
this Rights Certificate are beneficially owned by an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person or, under certain
circumstances described in the Rights Agreement, a transferee of any such
Acquiring Person or Associate or Affiliate of such 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 Triggering Event.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase capital
stock of an entity other than the Company or to receive common stock, cash or
other assets, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms and conditions
of the Rights Agreement, which terms and conditions are hereby incorporated
herein by reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Rights Agent, the
Company and the holders of the Rights Certificates. Copies of the Rights
Agreement are on file at the principal office of the Company and are available
from the Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor and date evidencing an aggregate number of Rights equal to the aggregate
number of Rights evidenced by the Rights Certificate or Rights Certificates
surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company under certain circumstances
at its option at a redemption price of $0.01 per Right, payable at the Company's
option in cash or in common stock of the Company, subject to adjustment in
certain events as provided in the Rights Agreement.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions that are
integral multiples of one one-hundreth of a share of Preferred Stock), 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 or receive dividends or be deemed for any purpose the holder of Preferred
Stock or of any other securities that may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
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 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__
AMERISOURCEBERGEN ATTEST:
CORPORATION
By: By:
---------------------------- --------------------------------
Name: Name:
Title: Title:
Countersigned:
MELLON INVESTOR SERVICES LLC
By:
----------------------------
Name:
Title:
[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 any such Acquiring Person (as such terms are defined
pursuant to the Rights Agreement); and
(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:
--------------------------------------------------------------
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
ELECTION TO PURCHASE
--------------------
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
To: AMERISOURCEBERGEN CORPORATION
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Rights Certificate to purchase the Units of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person or other property that may be issuable upon the
exercise of the Rights) and requests that certificates for such Units 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:
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
beneficially owned by an Acquiring Person or an Affiliate or an Associate
thereof (as defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] 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 thereof.
Dated: ____________ __, 20__ ___________________________
Signature
Signature Guaranteed:
--------------------------------------------------------------
NOTICE
------
The signature in the foregoing Election to Purchase and Certificate
must conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above is not completed, the
Company will deem the beneficial owner of the Rights evidenced by this Rights
Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and, in the case of an Assignment, will affix a
legend to that effect on any Rights Certificates issued in exchange for this
Rights Certificate.
EXHIBIT B
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
On August 27, 2001 the Board of Directors of AmerisourceBergen
Corporation (the "Company") declared a distribution of one right to purchase
preferred stock (each, a "Right") for each outstanding share of Common Stock,
par value $0.01 per share (the "Company Common Stock"), to stockholders of
record at the close of business on August 27, 2001 (the "Record Date") and for
each share of Company Common Stock issued (including shares distributed from
Treasury) by the Company thereafter and prior to the Distribution Date. Each
Right entitles the registered holder, subject to the terms of the Rights
Agreement (as defined below), to purchase from the Company one one-hundredth of
a share (a "Unit") of Series A Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), at a Purchase Price of $275 per Unit, subject to adjustment.
The Purchase Price is payable in cash or by certified or bank check payable to
the order of the Company or by wire transfer to the account of the Company
(provided a notice of such wire transfer is given by the holder of the related
Right to the Rights Agent). The description and terms of the Rights are set
forth in a Rights Agreement between the Company and Mellon Investor Services LLC
as Rights Agent (the "Rights Agreement").
Copies of the Rights Agreement and the Certificate of Designation for
the Preferred Stock have been filed with the Securities and Exchange Commission
as exhibits to a Registration Statement on Form 8-A and a Current Report on Form
8-K dated August 27, 2001 (the "Form 8-A" and the "Form 8-K" respectively).
Copies of the Rights Agreement and the Certificate of Designation are available
free of charge from the Company. This summary description of the Rights and the
Preferred Stock does not purport to be complete and is qualified in its entirety
by reference to all the provisions of the Rights Agreement and the Certificate
of Designation, including the definitions therein of certain terms, which Rights
Agreement and Certificate of Designation are incorporated herein by reference.
The Rights Agreement
Initially, the Rights will attach to all certificates representing
shares of outstanding Company Common Stock, and no separate Rights Certificates
will be distributed. The Rights will separate from the Company Common Stock and
the "Distribution Date" will occur upon the earlier of (i) 10 days following a
public announcement (the date of such announcement being the "Stock Acquisition
Date") that a person or group of affiliated or associated persons (other than
the Company, any subsidiary of the Company or any employee benefit plan of the
Company or such subsidiary) (an "Acquiring Person") has acquired, obtained the
right to acquire, or otherwise obtained beneficial ownership of 15% or more of
the then outstanding
shares of Company Common Stock, and (ii) 10 business days (or such later date as
may be determined by action of the Board of Directors prior to such time as any
person becomes an Acquiring Person) following the commencement of a tender offer
or exchange offer that would result in a person or group beneficially owning 15%
or more of the then outstanding shares of Company Common Stock. Until the
Distribution Date, (i) the Rights will be evidenced by Company Common Stock
certificates and will be transferred with and only with such Company Common
Stock certificates, (ii) new Company Common Stock certificates issued after the
Record Date (also including shares distributed from Treasury) will contain a
notation incorporating the Rights Agreement by reference and (iii) the surrender
for transfer of any certificates representing outstanding Company Common Stock
will also constitute the transfer of the Rights associated with the Company
Common Stock represented by such certificates.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on the tenth anniversary of the Rights Agreement
unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of Company Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that (i) the Company is the surviving corporation in a
merger with an Acquiring Person and shares of Company Common Stock shall remain
outstanding, (ii) a Person becomes an Acquiring Person, (iii) an Acquiring
Person engages in one or more "self-dealing" transactions as set forth in the
Rights Agreement, or (iv) during such time as there is an Acquiring Person, an
event occurs that results in such Acquiring Person's ownership interest being
increased by more than 1% (e.g., by means of a recapitalization) (each such
event being a "Section 11(a)(ii) Event"), then, in each such case, each holder
of a Right will thereafter have the right to receive, upon exercise, Units of
Preferred Stock (or, in certain circumstances, Company Common Stock, cash,
property or other securities of the Company) having a value equal to two times
the exercise price of the Right. The exercise price is the Purchase Price
multiplied by the number of Units of Preferred Stock issuable upon exercise of a
Right prior to the events described in this paragraph. Notwithstanding any of
the foregoing, following the occurrence of any of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will be null
and void.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger (other than a merger described in the
preceding paragraph) or other business combination transaction and the Company
is not the surviving corporation, (ii) any Person consolidates or merges with
the Company and all or part of the Company Common Stock is converted or
exchanged for securities, cash or property of any other Person or (iii) 50% or
more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as described
above) shall thereafter have the right to receive, upon exercise, common stock
of the ultimate parent of the Acquiring Person having a value equal to two times
the exercise price of the Right.
The Purchase Price payable, and the number of Units of Preferred Stock
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Stock, (ii) if
holders of the Preferred Stock are granted certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less than the current
market price of the
Preferred Stock, or (iii) upon the distribution to the holders of the Preferred
Stock of evidences of indebtedness, cash 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 will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Units. In lieu thereof,
an adjustment in cash may be made based on the market price of the Preferred
Stock prior to the date of exercise.
At any time prior to the earlier of (i) ten business days following the
Stock Acquisition Date or (ii) August 27, 2011, a majority of the Company's
Board of Directors may redeem the Rights in whole, but not in part, at a price
of $0.01 per Right (subject to adjustment in certain events) (the "Redemption
Price"), payable, at the election of such majority of the Company's Board of
Directors, in cash or shares of Company Common Stock. Immediately upon the
action of a majority of the Company's Board of Directors ordering the redemption
of the Rights, the Rights will terminate and the only remaining right of the
holders of Rights will be to receive the Redemption Price.
The Board of Directors, at its option, may exchange each Right for (i)
one Unit of Preferred Stock or (ii) such number of Units of Preferred Stock as
will equal (x) the difference between the aggregate market price of the number
of Units of Preferred Stock to be received upon a Section 11(a)(ii) Event and
the purchase price set forth in the Rights Agreement, divided by (y) the market
price per Unit of Preferred Stock upon a Section 11(a)(ii) Event.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Units of Preferred Stock (or other consideration).
Any of the provisions of the Rights Agreement may be amended without
the approval of the holders of Company Common Stock at any time prior to the
Distribution Date. After the Distribution Date, the provisions of the Rights
Agreement may be amended in order to cure any ambiguity, defect or
inconsistency, to make changes that do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on a substantial number of Rights being acquired.
Accordingly, the existence of the Rights may deter certain acquirers from making
takeover proposals or tender offers. However, the Rights Plan helps ensure that
the Company's stockholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The adoption of the plan is not in response to
any specific takeover threat or proposal, but is a precaution taken to protect
the rights of the Company's stockholders.
Description of Preferred Stock
The Units of Preferred Stock that may be acquired upon exercise of the
Rights will be nonredeemable and subordinate to any other shares of preferred
stock that may be issued by the Company.
Each Unit of Preferred Stock will have a minimum preferential quarterly
dividend of $0.01 per Unit or any higher per share dividend declared on the
Company Common Stock.
In the event of liquidation, the holder of a Unit of Preferred Stock
will receive a preferred liquidation payment equal to the greater of $0.01 per
Unit and the per share amount paid in respect of a share of Company Common
Stock.
Each Unit of Preferred Stock will have one vote, voting together with
the Company Common Stock. The holders of Units of Preferred Stock, voting as a
separate class, shall be entitled to elect two directors if dividends on the
Preferred Stock are in arrears for six fiscal quarters.
In the event of any merger, consolidation or other transaction in which
shares of Company Common Stock are exchanged, each Unit of Preferred Stock will
be entitled to receive the per share amount paid in respect of each share of
Company Common Stock.
The rights of holders of the Preferred Stock to dividends, liquidation
and voting, and in the event of mergers and consolidations, are protected by
customary antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the economic value of one Unit of Preferred Stock that may be
acquired upon the exercise of each Right is expected to approximate the economic
value of one share of Company Common Stock.
EXHIBIT C
---------
CERTIFICATE OF DESIGNATION
OF THE VOTING POWERS, DESIGNATION,
PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
LIMITATIONS AND RESTRICTIONS OF THE
SERIES A PREFERRED STOCK
----------
Pursuant to Section 151 of the
General Corporation Law of
the State of Delaware
----------
I, R. David Yost, Chief Executive Officer of AmerisourceBergen
Corporation, a corporation organized and existing under the General Corporation
Law of the State of Delaware (the "Corporation"), DO HEREBY CERTIFY:
that, pursuant to authority conferred upon the Board of Directors of
the Corporation by its Amended and Restated Certificate of Incorporation (the
"Certificate"), and, pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, said Board of Directors, by unanimous
written resolution dated August 27, 2001, adopted the following resolutions,
which resolutions remain in full force and effect on the date hereof, creating a
series of 3,000,000 shares of Preferred Stock having a par value of $0.01 per
share, designated as Series A Preferred Stock (the "Series A Preferred Stock")
out of the class of 10,000,000 shares of preferred stock, par value of $0.01 per
share (the "Preferred Stock"):
RESOLVED, that pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Certificate, the Board of
Directors does hereby create, authorize and provide for the issuance of the
Series A Preferred Stock having the voting powers, designation, relative,
participating, optional and other special rights, preferences, and
qualifications, limitations and restrictions thereof that are set forth as
follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Preferred Stock" and the number of shares constituting
such series shall be 3,000,000.
Section 2. Dividends and Distributions. (A) Subject to the prior and
superior rights of the holders of any shares of any other series of Preferred
Stock or any other shares of preferred stock of the Corporation ranking prior
and superior to the shares of Series A Preferred Stock with respect to
dividends, each holder of one one-hundredth of a share (a "Unit") of Series A
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for that purpose, (i)
quarterly dividends payable in cash on the last day of December, March, June and
September in each year (each such date being a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of such Unit of Series A Preferred Stock, in an amount
per Unit (rounded to the nearest cent) equal to the greater of (a) $0.01 or (b)
subject to the provision for adjustment hereinafter set forth, the aggregate per
share amount of all cash dividends declared on shares of the Common Stock since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of a Unit of
Series A Preferred Stock, and (ii) subject to the provision for adjustment
hereinafter set forth, quarterly distributions (payable in kind) on each
Quarterly Dividend Payment Date in an amount per Unit equal to the aggregate per
share amount of all non-cash dividends or other distributions (other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock, by reclassification or otherwise) declared on shares of
Common Stock since the immediately preceding Quarterly Dividend Payment Date, or
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of a Unit of Series A Preferred Stock. In the event that the
Corporation shall at any time after August 27, 2001 (the "Rights Declaration
Date") (i) declare any dividend on outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, then in each such case the amount to which the holder of a Unit of
Series A Preferred Stock was entitled immediately prior to such event pursuant
to the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on Units
of Series A Preferred Stock as provided in paragraph (A) above immediately after
it declares a dividend or distribution on the shares of Common Stock (other than
a dividend payable in shares of Common Stock); provided, however, that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per Unit on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and shall be cumulative on each
outstanding Unit of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issuance of such Unit of Series A Preferred
Stock, unless the date of issuance of such Unit is prior to the record date for
the first Quarterly Dividend Payment Date, in which case, dividends on such Unit
shall begin to accrue from the date of issuance of such Unit, or unless the date
of issuance is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of Units of Series A Preferred Stock
entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on Units of Series A Preferred Stock in an
amount less than the aggregate amount of all such dividends at the time accrued
and payable on such Units shall be allocated pro rata on a Unit-by-Unit basis
among all Units of Series A Preferred Stock at the time outstanding. The Board
of Directors may fix a record date for the determination of holders of Units of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of Units of Series A Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each Unit of Series A Preferred Stock shall entitle the holder
thereof to one vote on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on
outstanding shares of Common Stock payable in shares of Common Stock,
(ii) subdivide outstanding shares of Common Stock or (iii) combine the
outstanding shares of Common Stock into a smaller number of shares,
then in each such case the number of votes per Unit to which holders of
Units of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction
the numerator of which shall be the number of shares of Common Stock
outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders
of Units of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted
to a vote of stockholders of the Corporation.
(C)(i) If, at any time, dividends on any Units of Series A
Preferred Stock shall be in arrears in an amount equal to six quarterly
dividends thereon, then during the period (a "default period") from the
occurrence of such event until such time as all accrued and unpaid
dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all Units of Series A Preferred
Stock then outstanding shall have been declared and paid or set apart
for payment, all holders of Units of Series A Preferred Stock, voting
separately as a class, shall have the right to elect two Directors.
(ii) During any default period, such voting rights of the
holders of Units of Series A Preferred Stock may be exercised initially
at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter
at annual meetings of stockholders, provided that neither such voting
rights nor any right of the holders of Units of Series A Preferred
Stock to increase, in certain cases, the authorized number of Directors
may be exercised at any meeting unless one-third of the outstanding
Units of Preferred Stock shall be present at such meeting in person or
by proxy. The absence of a quorum of the holders of Common Stock shall
not affect the exercise by the holders of Units of Series A Preferred
Stock of such rights. At any meeting at which the holders of Units of
Series A Preferred Stock shall exercise such voting rights initially
during an existing default period, they shall have the right, voting
separately as a class, to elect Directors to fill up to two vacancies
in the Board of Directors, if any such vacancies may then exist, or, if
such right is exercised at an annual meeting, to elect two Directors.
If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Series A Preferred
Stock shall have the right to make such increase in the number of
Directors as shall be
necessary to permit the election by them of the required number. After
the holders of Units of Series A Preferred Stock shall have exercised
their right to elect Directors during any default period, the number of
Directors shall not be increased or decreased except as approved by a
vote of the holders of Units of Series A Preferred Stock as herein
provided or pursuant to the rights of any equity securities ranking
senior to the Series A Preferred Stock.
(iii) Unless the holders of Series A Preferred Stock shall,
during an existing default period, have previously exercised their
right to elect Directors, the Board of Directors may order, or any
stockholder or stockholders owning in the aggregate not less than 25%
of the total number of the Units of Series A Preferred Stock
outstanding may request, the calling of a special meeting of the
holders of Units of Series A Preferred Stock, which meeting shall
thereupon be called by the Chairman, President or Secretary of the
Corporation. Notice of such meeting and of any annual meeting at which
holders of Units of Series A Preferred Stock are entitled to vote
pursuant to this paragraph (C)(iii) shall be given to each holder of
record of Units of Series A Preferred Stock by mailing a copy of such
notice to him at his last address as the same appears on the books of
the Corporation. Such meeting shall be called for a time not earlier
than 20 days and not later than 60 days after such order or request,
or, if the Chairman, President or Secretary shall not have called such
meeting within 60 days after such order or request, such meeting may be
called on similar notice by any stockholder or stockholders owning in
the aggregate not less than 25% of the total number of outstanding
Units of Series A Preferred Stock. Notwithstanding the provisions of
this paragraph (C)(iii), no such special meeting shall be called during
the 60 days immediately preceding the date fixed for the next annual
meeting of the stockholders.
(iv) During any default period, the holders of shares of
Common Stock and Units of Series A Preferred Stock, and other classes
or series of stock of the Corporation, if applicable, shall continue to
be entitled to elect all the Directors until holders of the Units of
Series A Preferred Stock shall have exercised their right to elect two
Directors voting as a separate class, after the exercise of which right
(x) the Directors so elected by the holders of Units of Series A
Preferred Stock shall continue in office until their successors shall
have been elected by such holders or until the expiration of the
default period, and (y) any vacancy in the Board of Directors may
(except as provided in paragraph (C)(ii) of this Section 3) be filled
by vote of a majority of the remaining Directors theretofore elected by
the holders of the class of capital stock that elected the Director
whose office shall have become vacant. References in this paragraph (C)
to Directors elected by the holders of a particular class of capital
stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Units of Series A Preferred Stock as a
separate class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Units of Series A Preferred Stock
as a separate class shall terminate, and (z) the number of Directors
shall be such number as may be provided for in the Certificate or
by-laws irrespective of any increase made pursuant to the provisions of
paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or
in the Certificate or by-laws). Any vacancies in the Board of Directors
effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining Directors.
(vi) The provisions of this paragraph (C) shall govern the
election of Directors by holders of Units of Series A Preferred Stock
during any default period notwithstanding any provisions of the
Certificate to the contrary, including, without limitation, the
provisions of Article V of the Certificate.
(D) Except as set forth herein, holders of Units of Series A
Preferred Stock shall have no special voting rights and their consents
shall not be required (except to the extent they are entitled to vote
with holders of shares of Common Stock as set forth herein) for taking
any corporate action.
Section 4. Certain Restrictions. (A) Whenever quarterly dividends or
other dividends or distributions payable on Units of Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on outstanding
Units of Series A Preferred Stock shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of junior stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of parity stock, except dividends paid
ratably on Units of Series A Preferred Stock and shares of all such
parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of such Units and all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any parity stock; provided, however, that the
Corporation may at any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange for shares of any junior
stock; or
(iv) purchase or otherwise acquire for consideration any Units
of Series A 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 Units.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any Units of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
Units shall, upon their cancellation, become authorized but unissued Units of
Preferred Stock and may be reissued as part of a new
series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on issuance set
forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of
junior stock unless the holders of Units of Series A Preferred Stock shall have
received, subject to adjustment as hereinafter provided in paragraph (B), the
greater of either (a) $0.01 per Unit plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not earned or declared, to the
date of such payment, or (b) the amount equal to the aggregate per share amount
to be distributed to holders of shares of Common Stock, or (ii) to the holders
of shares of parity stock, unless simultaneously therewith distributions are
made ratably on Units of Series A Preferred Stock and all other shares of such
parity stock in proportion to the total amounts to which the holders of Units of
Series A Preferred Stock are entitled under clause (i)(a) of this sentence and
to which the holders of shares of such parity stock are entitled, in each case
upon such liquidation, dissolution or winding up.
(B) In the event the Corporation shall, at any time after the Rights
Declaration Date, (i) declare any dividend on outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, or (iii) combine outstanding shares of Common Stock into a smaller number
of shares, then in each such case the aggregate amount to which holders of Units
of Series A Preferred Stock were entitled immediately prior to such event
pursuant to clause (i)(b) of paragraph (A) of this Section 6 shall be adjusted
by multiplying such amount by a fraction the numerator of which shall be the
number of shares of Common Stock that are outstanding immediately after such
event and the denominator of which shall be the number of shares of Common Stock
that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of common stock are exchanged for or converted into other stock or
securities, cash and/or any other property, then in any such case Units of
Series A Preferred Stock shall at the same time be similarly exchanged for or
converted into an amount per Unit (subject to the provision for adjustment
hereinafter set forth) equal to 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 converted or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any
dividend on outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide outstanding shares of Common Stock, or (iii) combine
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the immediately preceding sentence with respect to the
exchange or conversion of Units of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which shall be the number
of shares of Common Stock that are outstanding immediately after such event and
the denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Redemption. The Units of Series A Preferred Stock shall not
be redeemable.
Section 9. Ranking. The Units of Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock and to any other class of
preferred stock that hereafter may be issued by the Corporation as to the
payment of dividends and the distribution of assets, unless the terms of any
such series or class shall provide otherwise.
Section 10. Amendment. The Certificate, including, without limitation,
this resolution, shall not hereafter be amended, either directly or indirectly,
or through merger or consolidation with any other corporation or corporations in
any manner that would alter or change the powers, preferences or special rights
of the Series A Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the outstanding Units
of Series A Preferred Stock, voting separately as a class.
Section 11. Fractional Shares. The Series A Preferred Stock may be
issued in Units or other fractions of a share, which Units or fractions shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.
Section 12. Certain Definitions. As used herein with respect to the
Series A Preferred Stock, the following terms shall have the following meanings:
(A) The term "Common Stock" shall mean the class of stock
designated as the common stock, par value $0.01 per share, of the
Corporation at the date hereof or any other class of stock resulting
from successive changes or reclassification of such common stock.
(B) The term "junior stock" (i) as used in Section 4, shall
mean the Common Stock and any other class or series of capital stock of
the Corporation hereafter authorized or issued over which the Series A
Preferred Stock has preference or priority as to the payment of
dividends and (ii) as used in Section 6, shall mean the Common Stock
and any other class or series of capital stock of the Corporation over
which the Series A Preferred Stock has preference or priority in the
distribution of assets upon any liquidation, dissolution or winding up
of the Corporation.
(C) The term "parity stock" (i) as used in Section 4, shall
mean any class or series of stock of the Corporation hereafter
authorized or issued ranking pari passu with the Series A Preferred
Stock as to the payment of dividends and (ii) as used in Section 6,
shall mean any class or series of capital stock ranking pari passu with
the Series A Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation.
IN WITNESS WHEREOF, AmerisourceBergen Corporation has caused
this Certificate to be signed by its Chief Executive Officer and
attested by its Secretary this 27th day of August, 2001.
AMERISOURCEBERGEN CORPORATION
By /s/ R. David Yost
---------------------------------
Name: R. David Yost
Title: Chief Executive Officer
Attest:
By /s/ William D. Sprague
---------------------------------
Name: William D. Sprague
Title: Secretary