RIGHTS AGREEMENT
This Agreement, dated as of September 24, 1987, between PFIZER
INC., a Delaware corporation (the "Company"), and THE CHASE MANHATTAN BANK,
N.A., a national banking association (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on September 24, 1987, the Board of Directors of the
Company authorized the issuance of, and declared a dividend payable in, one
right (a "Right") for each share of Common Stock, $0.10 par value per share, of
the Company outstanding as of the close of business on October 5, 1987 (the
"Record Date"), each such Right representing the right to purchase one
one-hundredth of a share of Series A Junior Participating Preferred Stock
("Preferred Stock") of the Company having the rights and preferences set forth
in the form of Certificate of Designations attached hereto as Exhibit A, upon
the terms and subject to the conditions hereinafter set forth: and
WHEREAS, the Board of Directors of the Company presently
intends to authorize the issuance of one Right with respect to each share of
Common Stock which may be issued between the Record Date and the Expiration Date
(as such terms are hereinafter defined);
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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 shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as
such term is hereinafter defined) and Associates (as such term is
hereinafter defined) of such Person, shall be the Beneficial Owner as
such term is hereinafter defined) of 20% or more of the shares of
Common Stock of the Company then outstanding; provided, however, that
an Acquiring Person shall not include an Exempt Person (as such term is
hereinafter defined).
(b) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended ("Exchange Act"), as in effect on the
date hereof.
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(c) "Associate" of a Person (as such term is hereinafter
defined) shall mean (i) with respect to a corporation, any officer or
director thereof or of any Sub-sidiary (as such term is hereinafter
defined) thereof, or any Beneficial Owner (as such term is hereinafter
defined) of 10% or more of any class of equity security thereof, (ii)
with respect to an association, any officer or director thereof or of a
Subsidiary thereof, (iii) with respect to a partnership, any general
partner thereof or any limited partner thereof who is directly or
indirectly, the Beneficial Owner of a 10% ownership interest therein,
(iv) with respect to a business trust, any officer or trustee thereof
or of any Subsidiary thereof, (v) with respect to any other trust or an
estate, any trustee, executor or similar fiduciary or any Person who
has a 20% or greater interest as a beneficiary in the income from or
principal of such trust or estate or who otherwise has a substantial
beneficial interest in such trust or estate, (vi) with respect to a
natural person, any relative or spouse of such person, or any relative
of such spouse, who has the same home as such person, and (vii) any
Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purpose of Section 13(d) of the Exchange Act
and Regulation 13D-G thereunder (or any comparable or
successor law or regulation), in each case as in effect on the
date hereof; and
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(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time or the fulfillment of a condition or both)
pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, other
rights (other than these Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "Beneficially Own",
securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange or (B) the right to vote, alone or in
concert with others, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided, however,
that a Person shall not be deemed the "Beneficial Owner" of,
or to "Beneficially Own", any securities if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to
a proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under
the Exchange Act and (2) is not at the time reportable by such
Person on a Schedule 13D report under the Exchange Act (or any
comparable or successor report), other than by reference to a
proxy or consent solicitation being conducted by such Person;
or
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(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as described
in clause B of subparagraph (ii) of this paragraph (d)) or
disposing of any securities of the Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., New York time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., New York time, on the
next succeeding Business Day.
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(g) "Common Stock" shall mean the Common Stock (presently
$0.10 par value) of the Company. "Common Stock" when used with
reference to the Principal Party (as such term is hereinafter defined)
shall mean the capital stock or other equity security with the greatest
voting power of the Principal Party and, when used with reference to
any Person other than the Company or the Principal Party, shall mean
the capital stock or other equity security with the greatest voting
power of such Person or, if such Person is a Subsidiary of or is
controlled by another Person, the Person which ultimately controls such
first mentioned Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3(b) hereof.
(i) "Exchange Act" shall have the meaning set forth in Section
l(b) hereof.
(j) "Exempt Person" shall mean the Company, any Subsidiary of
the Company, any employee benefit plan or employee stock plan of the
Company or of any Subsidiary of the Company, or any trust or other
entity organized, appointed, established or holding Common Stock for or
pursuant to the terms of any such plan.
(k) "Exercise Price" shall have the meaning set forth in
Sections 4 and 7(b) hereof.
(1) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(m) "Fair Market Value" of any property shall mean the fair
market value of such property as determined in accordance with Section
ll(b) hereof.
(n) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
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(o) "Person" shall mean any individual, firm, corporation or
other entity.
(p) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(q) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(r) "Right Certificate" shall have the meaning set forth in
Section 3(b) hereof.
(s) "Stock Acquisition Date" shall mean the first date by
which both (i) an Acquiring Person has become such and (ii) a public
announcement of such fact has been made by either the Company or such
Acquiring Person.
(t) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having
voting power sufficient to elect a majority of the board of directors
or other persons performing similar functions are beneficially owned,
directly or indirectly, by such Person or by any corporation or other
entity that is otherwise controlled by such Person.
(u) "Summary of Rights" shall have the meaning set forth in
Section 3(a) hereof.
(v) "Trading Day" shall have the meaning set forth in Section
ll(b) hereof.
(w) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or
regulatory authority in respect of any transfer of any security,
instrument or right, including Rights, shares of Common Stock and
shares of Preferred Stock.
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Any determination required to be made by the Board of Directors of the Company
for purposes of applying the definitions contained in this Section 1 shall be
made by the Board of Directors in its good faith judgment, which determination
shall be binding on the Rights Agent and the holders of the Rights.
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable.
Section 3. Issuance of Right Certificates.
(a) On the Record Date (or as soon as practicable thereafter),
the Company or the Rights Agent shall send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit C (the "Summary of Rights"),
by first class mail, postage prepaid, to each record holder of the 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.
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(b) Until the close of business on the tenth day after the
earlier to occur of (i) the Stock Acquisition Date or (ii) the date of the
commencement by any Person (other than an Exempt Person) of, or the first public
announcement of the intent of any Person (other than an Exempt Person) to
commence. a tender or exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 30% or more of the then outstanding shares of Common Stock
of the Company (irrespective of whether any shares are actually purchased
pursuant to any such offer) (the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights shall be evidenced (subject to the
provisions of Section 3(a)) by the certificates for Common Stock registered in
the name of the holders of the Common Stock (which certificates for Common Stock
shall also constitute certificates for Rights) and not by separate Right
certificates and the record holders of such certificates for Common Stock shall
be the record holders of the Rights represented thereby and (y) each Right shall
be transferable only simultaneously and together with the transfer of a share of
Common Stock (subject to adjustment as hereinafter provided). Until the
Distribution Date (or, if earlier, the Expiration Date or Final Expiration
Date), the surrender for transfer of any certificate for Common Stock shall
constitute the surrender for transfer of the Right of Rights associated with the
Common Stock evidenced thereby, whether or not a copy of the Summary of Rights
is transferred simultaneously with such share certificate.
(c) Certificates for Common Stock issued after the Record
Date but prior to the earliest of the Distribution Date, the Expiration Date, or
the Final Expiration Date shall' have impressed, printed, written or stamped
thereon or otherwise affixed thereto the following legend:
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This certificate also evidences and entitles the
holder hereof to the same number of Rights as the number of
shares of Common Stock represented by this certificate, such
Rights being on the terms provided under the Rights Agreement
between Pfizer Inc. and The Chase Manhattan Bank, N.A. (the
"Rights Agent"), dated as of September 24, 1987 (the "Rights
Agreement"), the terms of which are incorporated herein by
reference and a copy) of which is on file at the principal
executive offices of Pfizer Inc. Under certain circumstances,
as set forth in the Rights Agreement, such Rights shall be
evidenced by separate certificates and shall no longer be
evidenced by this certificate. Pfizer, Inc. shall mail to the
registered holder of this certificate a copy of the Rights
Agreement without charge within five days after receipt of a
written request therefor. Under certain circumstances as
provided in the Rights Agreement, Rights issued to or owned by
Acquiring Persons or their Affiliates or Associates (as
defined in the Rights Agreement) and any subsequent holder of
such Rights shall be null and void.
(d) As promptly as practicable after the Distribution Date,
the Rights Agent shall send, by first class mail, postage prepaid, to each
record holder of the Common Stock as of the close of business on the
Distribution Date, as shown by the records of the Company, at the address of
such holder shown on such records, a certificate in the form provided by Section
4 hereof (a "Right Certificate"), evidencing one Right for each share of Common
Stock so held. As of and after the Distribution Date, the Rights shall be
evidenced solely by Right Certificates and may be transferred by the transfer of
the Right Certificate as permitted hereby, separately and apart from any
transfer of one or more shares of Common Stock.
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Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase shares, certificate and assignment to be printed on the reverse
thereof), when, as and if issued, shall be substantially in the form set forth
in Exhibit B hereto and may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange on which the Common Stock or the
Rights may from time to time be listed or as the Company may deem appropriate to
conform to usage or otherwise and as are not inconsistent with the provisions of
this Rights Agreement. Subject to the provisions of Section 22 hereof, Right
Certificates evidencing Rights whenever issued, (i) shall be dated as of the
date of issuance of the Rights they represent and (ii) subject to adjustment
from time to time as provided herein, on their face shall entitle the holders
thereof to purchase such number of shares (including fractional shares which are
integral multiples of one-hundredth of a share) of Preferred Stock as shall be
set forth therein at the price payable upon exercise of a Right provided by
Section 7(b) hereof as the same may from time to time be adjusted as provided
herein, (the "Exercise Price").
(b) Notwithstanding any other provision of this Rights
Agreement, any Right Certificate that represents Rights beneficially owned by an
Acquiring Person or any Affiliate or Associate thereof shall have impressed on,
printed on, written on or otherwise affixed to it (if the Company or the Rights
Agent has knowledge that such Person is an Acquiring Person or an Associate or
Affiliate or a nominee of any of the foregoing) the following legend:
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The Beneficial Owner of the Rights represented by
this Right Certificate is an Acquiring Person or an Affiliate
or an Associate of an Acquiring Person. Accordingly, this
Right Certificate and the Rights represented hereby may be or
become void in the circumstances specified in Section 7(e) of
the Rights Agreement.
Section 5. Countersignature and Registration.
(a) Each Right Certificate shall be executed on behalf of the
Company by its Chairman of the Board of Directors, President or any Vice
President, either manually or by facsimile signature, and have affixed thereto
the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. Each Right Certificate shall be countersigned by the Rights
Agent either manually or by facsimile signature and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who shall
have signed any Right Certificate shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery of the
certificate by the Company, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company. Any Right Certificate may be signed on
behalf of the Company by any person who, on the date of the execution of such
Right Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
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(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its Shareholder Services Office or offices
designated in such state as the appropriate place for surrender of certificates
upon exercise or transfer books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
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(a) Subject to the provisions of Section 14(b) hereof, at any
time after the close of business on the Distribution Date, and at or prior to
the close of business on the earlier of the Expiration Date or the Final
Expiration Date, any Right Certificate, may be (i) transferred or (ii) split up,
combined or exchanged for one or more other Right Certificates, entitling the
registered holder to purchase a like number of shares of Preferred Stock as the
Right Certificate surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer any Right Certificate shall surrender the
Right Certificate at the shareholder services office of the Rights Agent with
the form of certificate and assignment on the reverse side thereof endorsed (or
with a written instrument of transfer in form satisfactory to the Company and
the Rights Agent enclosed with such Right Certificate), executed by the
registered holder thereof or his attorney authorized in writing, and with such
signature guaranteed by a commercial bank or brokerage firm registered with the
New York Stock Exchange. Any registered holder desiring to split up, combine or
exchange any Right Certificate shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificate to be split up,
combined or exchanged at the office of the Rights Agent designated for such
purpose. Thereupon, the Rights Agent shall countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may be,
as so requested. The Company may require payment of a sum sufficient to cover
any Transfer Tax that may be imposed in connection with any transfer, split up,
combination or exchange of any Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them and, if requested by
the Company, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, or upon surrender to the Rights Agent and
cancellation of a mutilated Right Certificate, the Company shall issue and
deliver a new Right Certificate of like tenor to the Rights Agent for delivery
to the registered owner in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
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Section 7. Exercise of Rights: Exercise Price; Expiration Date
of Rights.
(a) The Rights shall not be exercisable until, and shall
become exercisable on, the Distribution Date. The Rights may be exercised, in
whole or in part, at any time commencing with the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase and
certificate on the reverse side thereof duly executed (with signatures duly
guaranteed), to the Rights Agent at the office of the Rights Agent designated
for such purpose, together with payment of the Exercise Price with respect to
each Right exercised, subject to adjustment as hereinafter provided, at or prior
to the close of business on the earlier of (i) October 5, 1997 (the "Final
Expiration Date") or (ii) the date on which the Rights are redeemed as provided
in Section 23 hereof (such earlier date being herein referred to as the
"Expiration Date").
(b) The Exercise Price of $300 shall initially be for each one
one-hundredth (1/100) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of shares of Preferred
Stock or other securities to be acquired upon exercise of a Right shall be
subject to adjustment from time to time as provided in Sections 11 and 13
hereof. The Exercise Price shall be payable in lawful money of the United States
of America, in accordance with paragraph (c) below.
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c) Upon receipt of a Right Certificate with the form of
election to purchase and certificate duly executed, accompanied by payment by
check or money order payable to the order of the Company or the Rights Agent of
the Exercise Price or so much thereof as is necessary for the purchase of shares
or other securities to be purchased upon exercise of the Rights and an amount
equal to any applicable Transfer Tax, the Rights Agent shall thereupon promptly
(i) requisition from the Company, as transfer agent of the Preferred Stock, (or
such other transfer agent, if applicable) one or more certificates representing
the number of shares of Preferred Stock to be so purchased, which requests the
Company hereby authorizes and directs itself, as transfer agent, (or such other
transfer agent, if applicable) to comply with, (ii) as provided in Section
14(b), at the election of the Company, cause depository receipts to be issued in
lieu of fractional shares of Preferred Stock, (iii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuing
fractional shares in accordance with Section 14(b) hereof and (iv) cause such
Preferred Stock certificates and/or depository receipts or cash payments to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and, when appropriate, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities, other than Preferred
Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly take the
appropriate action corresponding in such case to that referred to in the
foregoing clauses (i) through (iv)of this section 7(c). Notwithstanding the
foregoing provisions of this Section 7(c), the Company may suspend the issuance
of shares of Preferred Stock upon exercise of a Right for a reasonable period,
not in excess of 90 days, during which the Company seeks to register under the
Securities Act of 1933, as amended, and any applicable securities law of any
other jurisdiction the shares of Preferred Stock to be issued pursuant to the
Rights; provided, however, that nothing contained in this Section 7(c) shall
relieve the Company of its obligations under Section 9(c) hereof.
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(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or his assign, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights Agreement to
the contrary, upon the occurrence of any of the events described in subparagraph
(A) or (B) of Section 11(a)(ii) hereof, any Rights that are at the time of the
occurrence of such event Beneficially Owned by an Acquiring Person or by any
Associate or Affiliate of such Acquiring Person (which Acquiring Person or
Affiliate or Associate engages in, or realizes any benefit of, one or more of
the transactions described in subparagraph (A) of Section 11(a)(ii) hereof or
realizes any of the benefits referred to in subparagraph (B) of Section
11(a)(ii) hereof, as the case may be) shall become null and void and no holder
of such Rights shall have any right with respect to such Rights under any
provision of this Rights Agreement from and after the occurrence of such event
nor may any Person subsequently become a holder of such Rights.
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(f) The Company shall not effect any amendment to the
Certificate of Designations for the Preferred Stock which would materially
affect the rights, privileges or powers of the Preferred Stock, without the
prior approval of the holders of two-thirds or more of the then outstanding
shares of Preferred Stock and the prior written consent of the holders of
two-thirds or more of the then outstanding Rights.
(g) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate following the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
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Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall
cancel and retire, any Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Preferred
Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
preferred stock or out of authorized and issued shares of Preferred Stock held
in its treasury, such number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding Rights. The
Company shall take such action as may be required for it to comply with the
foregoing sentence of this Section 9(a).
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(b) The Company shall use its best efforts to cause, from and
after such time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance in accordance with this Rights Agreement to be
listed, upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation in the National Association of Securities Dealers'
Automated Quotation System or any successor thereto or other comparable
quotation system.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state Transfer Taxes which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock issued or delivered upon the exercise of Rights.
The Company shall not, however, be required to pay any Transfer Tax which may be
payable in respect of any transfer or delivery of a Right Certificate to a
Person other than, or the issuance or delivery of certificates for Preferred
Stock upon exercise of Rights in a name other than that of, the registered
holder of the Right Certificate, and the Company shall not be required to issue
or deliver a Right Certificate or certificate for Preferred Stock to a person
other than such registered holder until any such Transfer Tax shall have been
paid (any such Transfer Tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such Transfer Tax is due.
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Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for shares of Preferred Stock is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Preferred Stock represented thereby on, and such certificate shall be
dated as of, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Exercise Price (and any applicable
Transfer Taxes) was made; provided, however, that, if the date of such surrender
and payment is a date upon which the Preferred Stock transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated as of, the next
succeeding Business Day on which the Preferred Stock transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate, as such shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
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Section 11. Adjustment of Exercise Price or Number of Shares.
The Exercise Price, the number of shares which may be purchased upon exercise of
a Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Rights Agreement (A) declare or pay any dividend
on Common Stock payable in shares of Common Stock, (B)
subdivide or split the outstanding shares of Common Stock into
a greater number of shares or (C) combine or consolidate the
outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of
Common Stock, then and in each such event the number of shares
of preferred Stock issuable upon the exercise of a Right after
the record date for such event (if one shall have established
or, if not, after the date of such event) shall be the number
of shares of Preferred Stock issuable immediately prior to
such event multiplied by a fraction the numerator of which is
the number of Rights outstanding immediately prior to such
event and the denominator of which is the number of Rights
outstanding immediately after such event and the Exercise
Price after such event shall be the Exercise Price in effect
immediately prior to such event multiplied by such fraction.
If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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).
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(ii) In the event that
(A) any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, at any time after the date
of this Agreement, shall, directly or indirectly, (1)
consolidate with or merge with and into the Company or any of
its Subsidiaries or otherwise combine with the Company or any
of its Subsidiaries and the Company or such Subsidiary shall
be the continuing or surviving corporation of such
consolidation, merger or combination and the Common Stock of
the Company shall remain outstanding and no shares thereof
shall be changed into or exchanged for stock or other
securities of the Company or of any other Person or cash or
any other property, or (2) in one or more transactions, other
than in connection with the exercise of a Right or Rights and
other than in connection with the exchange or conversion of
securities exchangeable for or convertible into securities of
the Company or of any Subsidiary of the Company, transfer any
assets or property to the Company or any of its Subsidiaries
in exchange (in whole or in part) for any shares of any class
of capital stock of the Company or any of its Subsidiaries or
any securities exchangeable for or convertible into shares of
any class of capital stock of the Company or any Subsidiary of
the Company, or otherwise obtain from the Company or any of
its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Company
or any of its Subsidiaries or any securities exchangeable for
or convertible into shares of any class of capital stock of
the Company or any Subsidiary of the Company (other than as
part of a pro rata distribution by the Company or such
Subsidiary to all holders of such shares), or (3) sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, to, from or with, as the case may be,
the Company or any of its Subsidiaries, assets (including
securities) on terms and conditions less favorable to the
Company or such Subsidiary than the Company or such Subsidiary
would be able to obtain in arm's length negotiation with an
unaffiliated third party, or (4) receive any compensation from
the Company or any of the Company's Subsidiaries for services,
other than compensation for employment as a regular employee
or fees for serving as a director at rates in accordance with
the Company's (or its Subsidiary's) past practices, or (5)
receive the benefit (except proportionately as a stockholder)
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
23
(B) during such time as there is an
Acquiring Person, there shall be any reclassification of
securities (including any reverse stock split), or any
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 (whether or not with or
into or otherwise involving an Acquiring Person or any
Affiliate or Associate of such Acquiring Person) which has the
effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any class
of equity securities of the Company or any of its Subsidiaries
or securities exercisable for or convertible into equity
securities of the Company or any of its Subsidiaries which is
directly or indirectly beneficially owned by any Acquiring
Person or any Affiliate and/or Associate of any Acquiring
Person, then, on the first occurrence of any such event
referred to in Sections 11(a)(ii)(A) or (B) hereof, proper
provision shall be made so that each holder of a Right, except
as provided in Section 7(e) hereof, shall thereafter have a
right to receive for each Right, upon exercise thereof in
accordance with the terms of this Rights Agreement and payment
of the Exercise Price, the greater of (1) the number of shares
of Preferred Stock for which such Right was exercisable
immediately prior to such event or (2) such number of shares
of Preferred Stock as, based on the Fair Market Value of the
Preferred Stock (determined pursuant to Section 11(b) hereof)
on the date of the occurrence of such event, have a value
equal to twice the Exercise Price; provided, however, that if
the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of
Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to
this Section 11(a)(ii).
24
(iii) In the event that the Company does not have
available sufficient authorized but unissued Preferred Stock
to permit the adjustments required pursuant to the foregoing
subparagraph (i) or the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Company
shall take all such action as may be necessary to authorize
and reserve for issuance such number of additional shares of
Preferred Stock as may from time to time be required to be
issued upon the exercise in full of all Rights from time to
time outstanding and, if necessary, shall use its best efforts
to obtain stockholder approval thereof.
(b) For the purpose of this Rights Agreement, the "Fair Market
Value" of any share of Preferred Stock, Common Stock or any other stock
or any Right or other security or any other property on any date shall
be determined as provided in this Section 11(b). In the case of a
publicly-traded stock or other security, the Fair Market Value on any
date shall be deemed to be the average of the daily closing prices per
share of such stock or per unit of such other security for the 30
consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided, however, that in the event
that the Fair Market Value per share of any share of common stock is
determined during a period which includes any date that is within 30
Trading Days after (i) the ex-dividend date for a dividend or
distribution on such stock payable in shares of Common Stock or
securities convertible into shares of Common Stock, or (ii) the
effective date of any subdivision, split, combination, consolidation,
reverse stock split or reclassification of such stock, then, and in
each such case, the Fair Market Value shall be appropriately adjusted
by the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. The closing price for any
day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way (in either case, as reported in the applicable
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange), or, if the
securities are not listed or admitted to trading on the New York Stock
Exchange, as reported in the applicable transaction reporting system
with respect to securities listed on the principal national securities
exchange on which such security is listed or admitted to trading; or,
if not listed or admitted to trading on any national securities
exchange, the last quoted price (or, if not so quoted, the average of
the high bid and low asked prices) in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system then in use;
or, if no bids for such security are 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 security selected by
the Board of Directors of the Company. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which
such security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed or admitted
to trading on any national securities exchange, a Business Day. If a
security is not publicly held or not so listed or traded, "Fair Market
Value" shall mean the fair value per share of stock or per other unit
of such other security, as determined by an independent investment
banking firm experienced in the valuation of securities selected in
good faith by the Board of Directors of the Company, or, if no such
investment banking firm is, in the good faith judgment of the Board of
Directors, available to make such determination, in good faith by the
Board of Directors of the Company; provided, however, that for purposes
of making the adjustment provided for by Section 11(a)(ii) hereof, the
Fair Market Value of a share of Preferred Stock shall not be less than
100% of the product of the Fair Market Value of a share of Common Stock
multiplied by the higher of the then Dividend Multiple or Vote Multiple
applicable to the Preferred Stock (as defined in the Certificate of
Designations relating to the Preferred Stock) and shall not exceed 105%
of the product of the then Fair Market Value of a share of Common Stock
multiplied by the higher of the then Dividend Multiple or Vote Multiple
applicable to the Preferred Stock. In the case of property other than
securities, the "Fair Market Value" thereof shall be determined in good
faith by the Board of Directors of the Company based upon such
appraisals or valuation reports of such independent experts as the
Board of Directors of the Company shall in good faith determine to be
appropriate in accordance with good business practices and the
interests of the holders of Rights. Any such determination of Fair
Market Value shall be described in a statement filed with the Rights
Agent and shall be binding upon the Rights Agent.
25
(c) All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one-thousandth of a share, as the
case may be.
(d) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the Exercise Price and the
number of shares to be issued upon exercise of the Rights as in the
initial Right Certificates issued hereunder but, nevertheless, shall
represent the Rights as so adjusted.
(e) Anything in this Section 11 to the contrary
notwithstanding, in the event of any reclassification of stock of the
Company or any recapitalization, reorganization or partial liquidation
of the Company or similar transaction, the Company shall be entitled to
make such further adjustments in the number of shares of Preferred
Stock which may be acquired upon exercise of the Rights, and such
adjustments in the purchase price per share therefor, in addition to
those adjustments expressly required by the other paragraphs of this
Section 11, as the Board of Directors of the Company shall determine to
be necessary or appropriate in order for the holders of the Rights in
such event to be treated equitably and n accordance with the purpose
and intent of this Rights Agreement or in order that any such event
shall not, but for such adjustment, in the opinion of counsel to the
Company, result in the stockholders of the Company being subject to any
United States federal income tax liability by reason thereof.
26
(f) In the event the Company shall at any time after the
Record Date make any distribution on the shares of Common Stock of the
Company, whether by way of a dividend or a reclassification of stock, a
recapitalization, reorganization or partial liquidation of the Company
or otherwise, in cash or any debt security, debt instrument, real or
personal property or any other property (other than any shares of
Common Stock or other capital stock of the Company and other than any
right or warrant to acquire any such shares, including any debt
security convertible into or exchangeable for any such share, at less
than the Fair Market Value of such shares) and the amount of such cash
dividend or the Fair Market Value of such debt security, debt
instrument or property exceeds 150% of the aggregate amount of the cash
dividends declared or paid on the Common Stock of the Company in the
15-month period immediately preceding such distribution, then and in
each such event, unless such distribution is part of or is made in
connection with a transaction to which Section 11(a)(ii) or Section 13
hereof applies, the Exercise Price shall be reduced by an amount equal
to the cash or the Fair Market Value of such distribution, as the case
may be, per share of Common Stock of the Company. For purposes hereof,
the Fair Market Value of any property distributed to the holder of
shares of Common Stock of the Company shall be the fair market value of
such property as determined by an independent investment banking firm
experienced in the valuation of securities or the other property so
distributed, as the case may be, selected in good faith by the Board of
Directors of the Company, or, if no such investment banking firm is in
the good faith judgment of the Board of Directors available to make
such determination, in good faith by the Board of Directors of the
Company, whose determination shall be final and binding on the Company,
the Rights Agent and the holders of Rights.
27
Section 12. Certification of Adjusted Exercise Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11, 13, or
23(c), the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with the Company as transfer agent
for the Preferred Stock (or such other transfer agent, if applicable) a copy of
such certificate and (c) mail a brief statement of the effect of such adjustment
to each holder of a Right Certificate in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of or the force
or effect of the requirement for such adjustment, and any adjustment to be made
pursuant to Sections 11, 13 or 23(c) of this Rights Agreement shall be effective
as of the date of the event giving rise to such adjustment. 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
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, at any time on or after the
Distribution Date, (x) the Company shall, directly or indirectly, consolidate
with, or merge with and into; any other Person or Persons and the Company shall
not be the surviving or continuing corporation of such consolidation or merger,
or (y) any Person or Persons shall, directly or indirectly, consolidate with, or
merge with and into, the Company, and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection with
such consolidation or merger, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for stock or other securities of any
other Person or of the Company or cash or any other property, or (z) the Company
or one or more of its Subsidiaries shall, directly or indirectly, sell or
otherwise transfer to any other Person or any Affiliate or Associate of such
Person, in one or more transactions, or the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any Persons in one or a series
of related 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), then, on the first occurrence of any such event, proper provision shall
be made so that (i) each holder of record of a Right shall thereafter have the
right to receive, upon the exercise thereof and payment of the Exercise Price in
accordance with the terms of this Rights Agreement, such number of shares of
validly issued, fully paid and non-assessable Common Stock of the Principal
Party (as defined herein) as shall, based on the Fair Market Value of the Common
Stock of the Principal Party on the date of consummation of such consolidation,
merger, sale or transfer equal twice the Exercise Price; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Rights Agreement; (iii) the term "Company" for all
purposes of this Rights Agreement shall thereafter be deemed to refer to such
Principal Party; and (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 accordance with the provisions of Section 9 hereof applicable to
the reservation of Preferred Stock) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; provided, however,
that, upon the subsequent occurrence of any merger, consolidation, sale of all
or substantially all of the assets, recapitalization, reclassification of
shares, reorganization or other extraordinary transaction in respect of such
Principal Party, each holder of a Right shall thereupon be entitled to receive,
upon exercise of a Right and payment of the Exercise Price, such cash, shares,
rights, warrants and other property which such holder would have been entitled
to receive had it, at the time of such transaction, owned the shares of Common
Stock of the Principal Party purchasable upon the exercise of a Right, and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stack) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
28
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a) hereof: (A) the Person that is the issuer of
the securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, or, if there is more than one such issuer, the
issuer the Common Stock of which has the greatest market value or (B) if no
securities are so issued, (x) the Person that is the other party to the merger
or consolidation and that survives such merger or consolidation, or, if there is
more than one such Person, the Person the Common Stock of which has the greatest
market value or (y) if the Person that is the other party to the merger or
consolidation does not survive the merger or consolidation, the Person that does
survive the merger or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z) of the
first sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest market value of shares
outstanding; provided, however, that in any such case, if the Common Stock of
such Person is not at such time and has not been continuously over the preceding
12-month period registered under Section 12 of the Exchange Act and such Person
is a direct or indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, the term "Principal Party" shall refer to such
other Person, or if such Person is a Subsidiary, directly or indirectly, of more
than one person, the Common Stocks of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest market value of shares
outstanding.
29
(c) The Company shall not consummate any consolidation, merger
or sale or transfer of assets or earning power referred to in Section 13(a)
unless prior thereto the Company and the Principal Party involved therein shall
have executed and delivered to the Rights Agent an agreement confirming that the
Principal Party shall, upon consummation of such consolidation, merger or sale
or transfer of assets or earning power, assume this Rights Agreement in
accordance with Sections 13(a) and (b) hereof and that all rights of first
refusal or preemptive rights in respect of the issuance of shares of Common
Stock of the Principal Party upon exercise of outstanding Rights have been
waived and that such transaction shall not result in a default by the Principal
Party under this Rights Agreement, and further providing that, as soon as
practicable after the date of any consolidation, merger or sale or transfer of
assets or earning power referred to in Section 13(a) hereof, the Principal Party
will
(i) prepare and file a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use its best
efforts to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act) until
the date of expiration of the Rights, and similarly comply with applicable state
securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ; and
30
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been exercised
shall, subject to the provisions of Section 7(e) hereof, thereafter be
exercisable in the manner described in Section 13(a) (without taking into
account any prior adjustment required by Section 11(a)(ii)).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights
(i.e., Rights to acquire less than one one-hundredth of a share of Preferred
Stock), unless such fractional Rights result from a transaction referred to in
Section 11(a)(i) hereof. If the Company shall determine not to issue such
fractional Rights, then, in lieu of such fractional Rights, there shall be paid
to the holders of record of the Right Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the Fair Market Value of a whole Right.
31
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of one-hundredth of a share). In lieu of issuing fractions of
shares of Preferred Stock, the Company may, at its election, issue depository
receipts evidencing fractions of shares pursuant to an appropriate agreement
between the Company and a depository selected by it, provided that such
agreement shall provide that the holders of such depository receipts shall have
all of the rights, privileges and preferences to which they would be entitled as
owners of the Preferred Stock. With respect to fractional shares that are not
integral multiples of one-hundredth of a share, if the Company does not issue
such fractional shares or depository receipts in lieu thereof, there shall be
paid to the holders of record of Right Certificates at the time such Right
Certificates are exercised as herein provided an amount in cash equal to the
same fraction of the Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares (other than fractions which are integral multiples of one-hundredth of a
share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Rights Agreement, except the rights of action given to the Rights Agent
in Section 18 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the hold-ers of record
of the Common Stock); and any holder of record of any Right Certificate (or,
prior to the Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Rights Agreement and will be entitled to specific
performance of the obligations under, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this Rights
Agreement.
32
Section 16. Agreement of Right Holders. Each 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 shall be
evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Stock registered in the name of the holders of
the Common Stock (which certificates for Common Stock shall also
constitute certificates for Rights) and not by separate Right
Certificates, and each Right shall be transferable only simultaneously
and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by
anyone to other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock or any
other securities which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof (except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in Section 7(f)
hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
33
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this Rights
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or omitted
to be done by the Rights Agent in connection with the acceptance and
administration of this Rights Agreement, including the cost and expenses of
defending against any claim of liability relating to the Rights or this Rights
Agreement.
(b) The Rights Agent shall be protected against, and shall
incur no liability for or in respect of, any action taken, suffered or omitted
by it in connection with its administration of this Rights Agreement in reliance
upon any Right Certificate or certificate for 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 document or paper believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
Section 19. Merger or Consolidation of, or Change in Name of,
the Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Rights Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Rights Agreement any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.
34
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; in case at
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name or
in its changed name; in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other evidence in
respect thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the President or
any Vice President and by the Treasurer or any Assistant Treasurer or the
Secretary or any Assistant Secretary of the Company and delivered to the Rights
Agent. Any such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions of this
Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder 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 Rights Agreement or
in the Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be deemed
to have been made by the Company only.
35
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any covenant or
condition contained in this Rights Agreement or in any Right Certificate; nor
shall it be responsible for any adjustment required under the provisions of
Sections 11 or 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate describing any such
adjustment); 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 to be issued pursuant to this Rights Agreement or any Right
Certificate or as to whether any shares of Preferred Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of the Rights Agreement.
g) 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 of Directors, the President or any Vice President or
the Secretary or any Assistant Secretary or 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 it shall not be liable for any
action taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer. 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 with respect to its duties or obligations under this Rights Agreement and
the date on and/or after which such action shall be taken or omitted and the
Rights Agent shall not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after the date specified
therein (which date shall not be less than three business days after the date
any such officer actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior to taking or
omitting any such action, the Rights Agent has received written instructions in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Rights Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
36
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Company may remove the Rights Agent or any successor Rights
Agent (with or without cause) upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to the Company,
as transfer agent of the Common Stock, (or such other transfer agent or agents,
if applicable) and the Preferred Stock by registered or certified 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.
Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. If
the Company shall fail to make such appointment within a period of 30 days after
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the incumbent Rights Agent or the holder of
record of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of any state thereof,
in good standing, having its office in the State of New York, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination in the conduct of its corporate
trust or stock transfer business by federal or state authorities and which has
at the time of its appointment as Rights Agent a combined capital and surplus of
at least $50,000,000. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed, but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock and Preference Stock, and mail a notice thereof in writing by
mail to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provisions, in the event of resignation, removal
or incapacity of the Rights Agent, the Company shall have the authority to act
as the Rights Agent until a successor Rights Agent shall have assumed the duties
of the Rights Agent hereunder.
37
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect an adjustment or change in the Exercise Price per share and the number
or kind or class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Rights Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
redeem all but not less than all the then outstanding Rights, at any time prior
to the close of business on the earlier of (i) the tenth day following the Stock
Acquisition Date or (ii) the Final Expiration Date, at a redemption price of
$.05 per Right, subject to adjustments as provided in subsection (c) below (the
"Redemption Price").
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, 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. Within 10 days after the action of Board of Directors ordering
the redemption of the Rights, the Company shall give notice of such redemption
to the holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each notice of redemption will state the method by which the payment of
the Redemption Price will be made.
(c) In the event the Company shall at any time after the date
of this Rights Agreement (A) pay any dividend on Common Stock in shares of
Common Stock, (B) subdivide or split the outstanding shares of Common Stock into
a greater number of shares or (C) combine or consolidate the outstanding shares
of Common Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, then and in each such event the Redemption
Price shall be adjusted so that Redemption Price after such event shall equal
the Redemption Price immediately prior to such event multiplied by a fraction
the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock outstanding immediately prior to such event; provided,
however, that in each case such adjustment to the Redemption Price shall be made
only if the amount of the Redemption Price shall be reduced or increased by $.01
per Right.
38
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its Common Stock payable in
stock of any class or to make any other distribution to the holders of record of
its Common Stock (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last cash dividend theretofore paid), or (ii)
to offer to the holders of record of its Common Stock options, warrants, or
other rights to subscribe for or to purchase shares of Common Stock (including
any security convertible into or exchangeable for Common Stock) or shares of
stock of any class or any other securities, options, warrants, convertible or
exchangeable securities or other rights, or (iii) to effect any reclassification
of its Preferred Stock or Common Stock or any recapitalization or reorganization
of the Company, or (iv) to effect any consolidation or merger with or into, 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, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of record of a Right
Certificate, in accordance with Section 25, notice of such proposed action,
which shall specify the record date for the purposes of such transaction
referred to in Section 11(a)(i) or such dividend or distribution, or the date on
which such reclassification, recapitalization, reorganization, consolidation,
merger, sale or transfer of assets, liquidation, dissolution, or winding up is
to take place and the record date for determining participation therein by the
holders of record of Common Stock or 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 10 days prior to the record date for
determining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date or participation therein
by the holders of record of Common Stock or Preferred Stock, whichever shall be
the earlier. The failure to give notice required by this Section 24 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
(b) In case any of the transactions referred to in either
Section 11(a)(ii) or Section 13 of this Rights Agreement are proposed, then, in
any such case, the Company shall give to each holder of Rights, in accordance
with Section 25 hereof, notice of the proposal of such transaction at least 10
days prior to consummating such transaction, which notice shall specify the
proposed event and the consequences of the event to holders of Rights under
Section 11(a)(ii) or Section 13 hereof, as the case may be, and, upon
consummating such transaction, shall similarly give notice thereof to each
holder of Rights.
39
Section 25. Notices. Notices or demands authorized by this
Rights Agreement to be given or made by the Rights Agent or by the holder of
record of any Right Certificate or Right to or on the Company shall be
sufficiently given or made if sent by mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Chase Manhattan Bank
One New York Plaza
14th Floor
New York, New York 10081
Attn.: Vice President,
Shareholder Services Division
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of record
of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
Pfizer Inc.
225 East 42nd Street
New York, New York 10019
Attn.: Secretary
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or right shall be sufficiently given or made if sent by mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. Supplements and Amendments. The Company and the
Rights Agent, if the Company so directs, may from time to time supplement or
amend this Rights Agreement without the approval of any holders of Right
Certificates (i) in order to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) prior to the Distribution Date, to otherwise
amend or supplement in any respect any provision herein which the Company may
deem necessary or desirable, or (iv) subsequent to the Distribution Date, to
amend or supplement in any respect any provision herein which the Company may
deem necessary or desirable and which shall not adversely affect the interest of
the holders of Rights.
Section 27. Successors. All of 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 bene-fit of their respective successors and assigns
hereunder.
40
Section 28. Benefits of this Agreement. Nothing in this Rights
Agreement shall be construed to give to any person or corporation other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 29. Delaware Contract. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 30. Counterparts. This Rights Agreement may be
executed in any number of counterparts and each of such counterparts shall for
all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 31. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 32. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
41
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
PFIZER INC.
By: /s/ Edmund T. Pratt, Jr.
-------------------------------
Edmund T. Pratt, Jr.
Chairman and Chief Executive
Officer
Attest: /s/ Terence J. Gallagher
----------------------------
Assistant General Counsel
(seal)
THE CHASE MANHATTAN BANK, N.A.
By: /s/ John E. Strain
-----------------------------
John E. Strain
Vice President
Attest: /s/ Robert C. Devlin
-----------------------------
Vice President
(seal)
42
FIRST AMENDMENT
TO
RIGHTS AGREEMENT
First Amendment, dated as of May 25, 1989, to the Rights
Agreement, dated as of September 24, 1987 (the "Rights Agreement"), between
Pfizer Inc., a Delaware corporation (the "Company"), and The Chase Manhattan
Bank, N.A., a national banking association (the "Rights Agent").
W T T N E S S T H :
WHEREAS, the Company and the Rights Agent executed and
delivered the Rights Agreement specifying the terms of the Rights (as defined
therein); and
WHEREAS, the Board of Directors of the Company deems it
desirable to amend the Rights Agreement pursuant to the provisions of Section 26
of the Rights Agreement to make certain modifications to the Rights Agreement
and the terms of the Preferred Stock to be issued by the Company upon the
exercise of Rights, all upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
1
1. All references herein to the Rights Agreement shall mean
the copy thereof appearing as an exhibit to the Company's Registration Statement
on Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission on October 5, 1987 pursuant to the "EDGAR" system.
2. a. The definition of the term "Acquiring Person" set forth
in Section l(a) of the Rights Agreement hereby is amended to read in its
entirety as follows:
"'Acquiring Person' shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 15% or more of the shares of Voting Stock (as such term is hereinafter
defined) of the Company then outstanding; provided, however, that an Acquiring
Person shall not include an Exempt Person (as such term is hereinafter defined),
or any Person, together with all Affiliates and Associates of such Person, who
or which would be an Acquiring Person by reason of (i) being the Beneficial
Owner of shares of Voting Stock of the Company, the Beneficial Ownership of
which was acquired by such Person (or his or its predecessor) pursuant to a
transaction or series of related transactions approved by the Continuing
Directors (as such term is hereinafter defined) of the Company and effected
before such Person (or his or its predecessor) otherwise became an Acquiring
Person, (ii) a reduction in the number of issued and outstanding shares of
Voting Stock of the Company pursuant to a transaction or a series of related
transactions approved by the Continuing Directors of the Company, or (iii) any
action or transaction deemed by a resolution of the Continuing Directors of the
Company not to cause such Person to become an Acquiring Person which resolution
is passed prior to such Person (or his or its predecessor) otherwise becoming an
Acquiring Person; provided, further, however, that in the event such Person does
not become an Acquiring Person by reason of clause (i), (ii) or (iii) of this
Section l(a), such Person shall become an Acquiring Person in the event such
Person thereafter acquires Beneficial Ownership of an additional 1% of the
Voting Stock of the Company unless such Person would not become an Acquiring
Person by reason of any provision of this Agreement, including clause (i), (ii)
or (iii) of this Section l(a)."
b. The definition of the term "Beneficial Owner" set forth in
Section l(d) of the Rights Agreement hereby is amended by adding the following
at the end of clause (iii) thereof:
"; provided, however, that for purposes of determining beneficial
ownership of securities under this Rights Agreement, officers and directors of
the Company shall not constitute a group (notwithstanding that they may be
Associates of one another or may be deemed to constitute a group for purposes of
the Exchange Act) and shall not be deemed to own shares owned by another officer
or director of the Company."
c. The definition of the term "Right Certificate" set forth in
Section l(r) of the Rights Agreement hereby is amended by deleting the reference
therein to "Section 3(b)" and inserting in its place "Section 3(d)."
d. Section 1 of the Rights Agreement hereby is amended by the
insertion of the following new defined terms in the appropriate alphabetical
order:
"'Continuing Director' shall mean any member of the Board of
Directors, while such person is a member of the Board of Directors, who is not
an Acquiring Person, or an Affiliate or Associate of an Acquiring Person, or
representative or nominee of an Acquiring Person or of any such Affiliate or
Associate, and who either (i) was a member of the Board of Directors prior to
the Stock Acquisition Date, or (ii) subsequently became a member of the Board of
Directors, and whose nomination for election or election to the Board of
Directors was recommended or approved by a majority of the Continuing Directors
then on the Board of Directors."
2
"'Voting Stock' shall mean (i) the Common Stock of the Company
and (ii) any other shares of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with the
Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or windinq
up."
3. Section 3(b) of the Rights Agreement hereby is amended to
read in its entirety as follows:
"(b) Until the close of business on the earlier to occur of
(i) the tenth day after the Stock Acquisition Date or (ii) the tenth day (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) after the date of the
commencement by any Person (other than an Exempt Person) of, or the first public
announcement of the intent of any Person (other than an Exempt Person) to
commence, a tender or exchange offer upon the successful consummation of which
such Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 30% or more of the then outstanding shares of Voting Stock
of the Company (irrespective of whether any shares are actually purchased
pursuant to any such offer) (the earlier of such dates being herein referred to
as the 'Distribution Date'), (x) the Rights shall be evidenced (subject to the
provisions of Section 3(a)) by the certificates for Common Stock registered in
the name of the holders of the Common Stock (which certificates for Common Stock
shall also constitute certificates for Rights) and not by separate Right
certificates and the record holders of such certificates for Common Stock shall
be the record holders of the Rights represented thereby and (y) each Right shall
be transferable only simultaneously and together with the transfer of a share of
Common Stock (subject to adjustment as hereinafter provided). Until the
Distribution Date (or, if earlier, the Expiration Date or Final Expiration
date), the surrender for transfer of any certificate for Common Stock shall
constitute the surrender for transfer of the Right or Rights associated with the
Common Stock evidenced thereby, whether or not a copy of the Summary of Rights
is transferred simultaneously with such share certificate."
4. Section 3(c) of the Rights Agreement hereby is amended by
modifying the fifth line of the legend appearing therein to read in its entirety
as follows:
"Agent, dated as of September 24, 1987, as amended by the First
Amendment To Rights Agreement, dated as of May 25, 1989 (as amended, the "Rights
Agreement"), the terms"
5. Section 4(a) of the Rights Agreement hereby is amended by
deleting therefrom the parenthetical language appearing in lines 14 and 15
thereof.
3
6. Section 7(a) of the Rights Agreement hereby is amended by
deleting the period at the end of the first sentence thereof and inserting in
its place the following:
"(unless otherwise provided herein, including, without
limitation, the restrictions on exercisability set forth in Section 23(a)
hereof)."
7. Section 7(e) of the Rights Agreement hereby is amended to
read in its entirety as follows:
"(e) Notwithstanding any provision of this Rights Agreement to
the contrary, upon the occurrence of the event described in Section ll(a)(ii)
hereof, any Rights that are at the time of the occurrence of such event
Beneficially Owned by an Acquiring Person or by any Associate or Affiliate of
such Acquiring Person shall become null and void and no holder of such Rights
shall have any right with respect to such Rights under any provision of this
Rights Agreement from and after the occurrence of such event nor may any Person
subsequently become a holder of such Rights."
8. Section 7 of the Rights Agreement hereby is amended by
deleting subsection (f) thereof in its entirety, without redesignating the
remaining subsection of such Section 7.
9. Section ll(a)(ii) of the Rights Agreement hereby is amended
to read in its entiretY as follows:
"(ii) In the event that any Person, alone or together with its
Affiliates and Associates, shall become an Acquiring Person, except pursuant to
a transaction approved in advance by a majority of the Continuing Directors
provided the Continuing Directors constitute a majority of the Board of
Directors (the "Trigger Event"), then, within ten days after occurrence of the
Trigger Event, proper provision shall be made so that each holder of a Right,
except as provided in Section 7(e) hereof, shall thereafter have a right to
receive for each Right, upon exercise thereof in accordance with the terms of
this Rights Agreement and payment of the Exercise Price, the greater of (1) the
number of shares of Preferred Stock for which such Right was exercisable
immediately prior to such event or (2) such number of shares of Preferred Stock,
based on the Fair Market Value of the Preferred Stock (determined pursuant to
Section ll(b) hereof) on the date of the occurrence of such event, having a
value equal to twice the Exercise Price; provided, however, that if the
transaction that would otherwise give rise to the foregoing adjustment is also
subject to the provisions of Section 13 hereof, then only the provisions of
Section 13 hereof shall apply and no adjustment shall be made pursuant to this
Section ll(a)(ii)."
10. Section ll(a)(iii) of the Rights Agreement hereby is
amended by adding the following three new sentences at the end thereof:
4
"In lieu of issuing shares of Preferred Stock in accordance
with the foregoing subparagraphs (i) and (ii), the Company may, if a majority of
the Continuing Directors determines that such action is necessary or appropriate
and not contrary to the interests of holders of Rights, elect to issue or pay,
upon the exercise of the Rights, cash, property, shares of Preferred or Common
Stock, or any combination thereof, having an aggregate Fair Market Value equal
to the Fair Market Value of the shares of Preferred Stock which otherwise would
have been issuable pursuant to Section ll(a)(ii), which Fair Market Value shall
be determined by an investment banking firm selected by a majority of the
Continuing Directors. For purposes of the preceding sentence, the Fair Market
Value of the Preferred Stock shall be as determined pursuant to Section ll(b).
Subject to Section 23 hereof, any such election by a majority of the Continuing
Directors of the Company must be made and publicly announced within thirty (30)
days after the date on which the event described in Section ll(a)(ii) occurs."
11. Section 11 of the Rights Agreement hereby is further
amended by adding the following new subsection (g) thereto:
"(g) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock upon exercise of
the Rights below the then par value, if any, of the shares of Preferred Stock,
the Company shall use its best efforts to take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and non-assessable shares of such Preferred
Stock at such adjusted purchase price per share."
12. Section 13(a) hereby is amended by adding the following
words at the beginning thereof and changing the capital "I" in the word "In"
(formerly the first word there-of) to a lower case "i":
"Except pursuant to a transaction approved in advance by a
majority of the Continuing Directors,"
13. Section 14 of the Rights Agreement hereby is amended by
modifying subsections (b) and (c) thereof to read in their entirety as follows:
"(b) The Company shall not be required to issue fractions of
shares of Preferred Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares. In lieu of issuing fractions of
shares of Preferred Stock, the Company may, at its election, deposit the number
of whole shares of Preferred Stock which such fractional shares would aggregate
(rounded to the lowest near whole number) with a depositary selected by it
pursuant to an appropriate agreement between the Company and such depositary and
cause such depositary to issue depositary receipts representing interests in the
shares of Preferred Stock so deposited. If the Company does not cause depositary
receipts to be issued in lieu of fractional shares of Preferred Stock, or if
depositary receipts issued to one or more holders do not fully represent an
interest in the fraction of share that such a holder would have otherwise been
entitled to, there shall be paid to the holders of record of Right Certificates
at the time such Right Certificates are exercised as herein provided an amount
in cash equal to the product of (i)(A) the fraction of a share of Preferred
Stock which each such holder would otherwise have been entitled to upon the
exercise of his Rights (if no depository receipts are issued) or (B), if
depository receipts are issued, the fraction, if any, resulting from the
difference between the fraction in clause A and the fraction of a share
represented by the depository receipts issued to such holder and (ii) the Fair
Market Value of a share of Preferred Stock."
5
"(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares upon exercise of a Riqht."
14. Section 17 hereby is amended by deleting the parenthetical
language appearing in lines nine and ten and ten and eleven thereof.
15. Section 23(a) of the Rights Agreement hereby is amended by
inserting the following parenthetical language immediately after the word "Date"
in clause (i) thereof:
"(or such later date as a majority of the Continuing Directors
in office may determine)"
16. Section 23(a) of the Rights Agreement hereby is further
amended by adding the following new sentence at the end thereof:
"Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section ll(a)(ii)
prior to the expiration of the Company's right of redemption hereunder."
17. Section 26 of the Rights Agreement hereby is amended by
deleting the period at the end thereof and inserting in its place the following:
"(other than an Acquiring Person or any Affiliate or Associate of an
Acquiring Person), provided, however, that this Agreement may be amended or
supplemented following the Distribution Date only with the approval of a
majority of the Continuing Directors and only if the Continuing Directors
constitute a majority of the number of directors then in office."
18. Exhibits A and B to the Rights Agreement hereby are
amended to read in their entirety as set forth on Exhibits A-l and B-l attached
hereto, respectively. All references in the Rights Agreement to the "Series A
Junior Participating Preferred Stock" or the "Preferred Stock" shall be deemed
to refer to the Series A Junior Preferred Stock, the terms and provisions of
which are set forth in Exhibit A-1 hereto.
19. This First Amendment may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
20. Except as specifically provided in this First Amendment to
the Rights Agreement, the Rights Agreement shall remain in full force and effect
and shall in no way be amended, modified or affected.
6
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to the Rights Agreement to be duly executed, all as of the day and
year first above written.
PFIZER INC.
By:
------------------------------
Edmund T. Pratt, Jr.
Chairman of the Board
Attest:
---------------------------
(seal)
THE CHASE MANHATTAN BANK, N.A.
By:
-----------------------------
Attest:
---------------------------
(seal)
7