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ALPHARMA INC.
and
Computershare Trust Company, N.A.
as Agent
Public Shareholder Protection Plan
Dated as of November 22, 2006
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PUBLIC SHAREHOLDER PROTECTION PLAN
This Public Shareholder Protection Plan (this "PLAN"), dated as of
November 22, 2006, between Alpharma Inc., a Delaware corporation (the
"COMPANY"), and Computershare Trust Company, N.A. as Agent (the "AGENT").
RECITALS
WHEREAS, the Board of Directors of the Company has appointed a Special
Committee of the Board of Directors (the "SPECIAL COMMITTEE") to evaluate a
possible transaction between the Company and A.L. Industrier ASA, the holder of
all of the outstanding Shares of Class B common stock of the Company, or a
possible transaction that results in a significant change to the Company's
capitalization.
WHEREAS, the Board of Directors at such meeting also authorized the Special
Committee to recommend the Board of Directors to take such steps as the Special
Committee deemed appropriate to protect the Company's shareholders in connection
with such possible transactions.
WHEREAS, on November 20, 2006, the Special Committee recommended to the
Board of Directors of the Company that the Board of Directors adopt a Public
Shareholder Protection Plan.
WHEREAS, on November 22, 2006, the Board of Directors of the Company
adopted this Plan, and has authorized and declared a dividend of one preferred
share purchase right (a "RIGHT") for each Class A Common Share (as defined in
Section 1.7) and each Class B Common Share (as defined in Section 1.8)
outstanding at the close of business on December 5, 2006 (the "RECORD DATE") and
has authorized and directed the issuance of one Right (subject to adjustment as
provided herein) with respect to each Common Share (as defined in Section 1.11)
that shall become outstanding between the Record Date and the earliest of the
Distribution Date and the Expiration Date (as such terms are defined in Sections
3.1 and 7.1), each Right initially representing the right to purchase one
one-thousandth (subject to adjustment) of a share of Series A Junior
Participating Preferred Stock (the "PREFERRED SHARES") of the Company having the
rights, powers 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; provided, however, that Rights may be issued
with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with Section
22.
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 Plan, the following
terms have the meanings indicated:
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1.1. "ACQUIRING PERSON" shall mean any Class B Holder who
takes an action that results in a Trigger Event occurring.
1.2. "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this Plan.
1.3. "AFFILIATE TRANSACTION" shall mean a merger or
combination of the Company with, or sale of a material portion of the
Company's and its Subsidiaries' assets to, or any other similar transaction
with, a Class B Holder or an Affiliate or Associate of a Class B Holder.
1.4. A Person shall be deemed the "BENEFICIAL OWNER" of and
shall be deemed to "BENEFICIALLY OWN" and have "BENEFICIAL OWNERSHIP" of
any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Plan);
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately, or only after the
passage of time, compliance with regulatory requirements, fulfillment
of a condition or otherwise) pursuant to any agreement, arrangement or
understanding, whether or not in writing (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights, warrants
or options, or otherwise; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own securities
which such Person or any of such Person's Affiliates or Associates may
acquire, does or do acquire or may be deemed to acquire or may be
deemed to have the right to acquire, pursuant to any merger or other
acquisition agreement between the Company and such Person (or one or
more of such Person's Affiliates or Associates) if prior to such
Person becoming an Acquiring Person both (1) the affirmative vote of a
majority of the members of the Board Committee, and (2) the
affirmative vote of a majority of the votes cast thereon by the
holders of Common Shares (other than the Acquiring Person or any of
its Affiliates or Associates) at a duly held meeting of such
shareholders have approved such agreement and determined that such
Person shall not be or be deemed to be the Beneficial Owner of such
securities within the meaning of this Section 1.4; or (B) the right to
vote pursuant to any agreement, arrangement or understanding (whether
or not in writing); provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any security
under this clause (B) if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then
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reportable on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) and with
respect to which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities),
whether or not in writing, for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy or consent as described
in the proviso to Section 1.4(ii)(B)) or disposing of any securities
of the Company;
provided, however, that no Person who is an officer, director or employee
of an Exempt Person shall be deemed, solely by reason of such Person's
status or authority as such, to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of or to "beneficially own" any securities that are
"beneficially owned" (as defined in this Section 1.4), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other
such officer, director or employee of an Exempt Person; and provided,
further, no Person shall be deemed to be the "Beneficial Owner" of, to have
"Beneficial Ownership" of or to "beneficially own" any securities that are
"beneficially owned" pursuant to the ownership or exercise of options
issued by the Company to acquire Class A Common Shares.
1.5. "BOARD COMMITTEE" shall mean a committee of the Board
of Directors of the Company comprised solely of disinterested directors
independent of the Class B Holder and any of its Affiliates and Associates;
provided, however, that any director of such committee shall not be deemed
interested and not independent of the Class B Holder and any of its
Affiliates and Associates solely by virtue of the fact that that director
was nominated and/or elected by the Class B Holder.
1.6. "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.
1.7. "CLASS A COMMON SHARES" shall mean the shares of Class
A Common Stock, par value $.20 per share, of the Company.
1.8. "CLASS B COMMON SHARES" shall mean the shares of Class
B Common Stock, par value $.20 per share, of the Company.
1.9. "CLASS B HOLDER" shall mean any Person which, together
with such Person's Affiliates and Associates, is the Beneficial Owner of
50% or more of the Class B Common Shares then outstanding, but shall not
include an Exempt Person (as such term is hereinafter defined). For all
purposes of this Plan, any calculation of the number of Class B Common
Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Class B Common
Shares of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), as in effect on the date of this Plan.
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1.10. "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.
1.11. "COMMON SHARES" when used with reference to the
Company shall mean, collectively, the Class A Common Shares and the Class B
Common Shares. "COMMON SHARES" when used with reference to any Person other
than the Company shall mean the capital stock with the greatest voting
power, or the equity securities or other equity interest having power to
control or direct the management, of such other Person or, if such Person
is a Subsidiary (as such term is hereinafter defined) of another Person,
the Person or Persons which ultimately control such first-mentioned Person,
and which has issued and outstanding such capital stock, equity securities
or equity interest.
1.12. "EXEMPT PERSON" shall mean the Company and any
Subsidiary of the Company, in each case including, without limitation, in
its fiduciary capacity, or any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity or trustee holding shares of
capital stock of the Company for or pursuant to the terms of any such plan,
or for the purpose of funding other employee benefits for employees of the
Company or any Subsidiary of the Company.
1.13. "PERSON" shall mean any individual, partnership, joint
venture, limited liability company, firm, corporation, unincorporated
association, trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
1.14. "SUBSIDIARY" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the voting
equity securities or equity interests is owned, of record or beneficially,
directly or indirectly, by such Person.
1.15. A "TRIGGER EVENT" shall be deemed to have occurred
upon the earliest of (i) a Class B Holder acquiring Beneficial Ownership of
more than 1% of the outstanding Class A Common Shares (other than through
ownership or conversion of the Class B Common Shares) on or after the date
the Class B Holder first becomes a Class B Holder; (ii) a Class B Holder
publicly announcing (by press release, filing with the Securities and
Exchange Commission or otherwise) its intent to acquire Beneficial
Ownership of more than 1% of the outstanding Class A Common Shares (other
than through ownership or conversion of the Class B Common Shares),
including, without limitation, in a tender or exchange offer, on or after
the date the Class B Holder first becomes a Class B Holder; and (iii) a
Class B Holder announcing its intent to cause the Company to effect an
Affiliate Transaction.
1.16. The following terms shall have the meanings defined
for such terms in the Sections set forth below:
Term Section
- ---- -------
Agent Preamble
Adjustment Shares 11.1.2
common stock equivalent 11.1.3
Company Preamble
current per share market price 11.4.1
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Current Value 11.1.3
Distribution Date 3.1
equivalent preferred stock 11.2
Exchange Act 1.9
Exchange Consideration 27.1
Expiration Date 7.1
Final Expiration Date 7.1
NYSE 9
Plan Preamble
Preferred Shares Recitals
Principal Party 13.2
Purchase Price 4
Record Date Recitals
Redemption Date 7.1
Redemption Price 23.1
Right Recitals
Right Certificate 3.1
Agent Recitals
SEC 1.15
Security 11.4.1
Special Committee Recitals
Spread 11.1.3
Substitution Period 11.1.3
Summary of Rights 3.2
Trading Day 11.4.1
Trigger Event Announcement Date 3.1
Section 2. Appointment of Agent.
2.1. The Company hereby appoints the Agent to act as agent
for the Company and the holders of the Rights (who, in accordance with
Section 3, shall prior to the Distribution Date also be the holders of the
Common Shares) in accordance with the terms and conditions hereof, and the
Agent hereby accepts such appointment. The Company may from time to time
appoint such co-Agents as it may deem necessary or desirable, upon ten (10)
days' prior written notice to the Agent. The Agent shall have no duty to
supervise, and in no event be liable for, the acts or omissions of any such
co-Agents.
2.2. In the event the Company appoints one or more
co-Agents, the respective duties of the Agent and any co-Agent shall be as
the Company shall determine. Contemporaneously with such appointment, if
any, the Company shall notify the Agent thereof.
Section 3. Issuance of Right Certificates.
3.1. Rights Evidenced by Share Certificates. Until the
Distribution Date, (x) the Rights (unless earlier expired, redeemed or
terminated) will be evidenced (subject to the provisions of Section 3.2) by
the certificates for Common Shares registered in the names of the holders
thereof (which certificates for Common Shares shall also be deemed to be
Right
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Certificates) and not by separate certificates, and (y) the Rights (and the
right to receive certificates therefor) will be transferable only in
connection with the transfer of the underlying Common Shares. A
"DISTRIBUTION DATE" shall mean the earliest date on which a Trigger Event
occurs, but shall be suspended if the Acquiring Person enters into an
agreement with the Company not to consummate the underlying transaction
without approval of both (i) the affirmative vote of a majority of the
members of the Board Committee, and (ii) the affirmative vote of a majority
of the votes cast thereon by the holders of Common Shares (other than the
Acquiring Person or any of its Affiliates or Associates) at a duly held
meeting of such shareholders; provided, however, if such transaction is not
so approved, but the Class B Holder nevertheless continues to pursue such
transaction, the Distribution Date shall be deemed to have occurred on the
date of the original announcement (such date, the "TRIGGER EVENT
ANNOUNCEMENT DATE") of such transaction. Upon the occurrence of a Trigger
Event Announcement Date, the Company shall send notice to the Agent that a
Trigger Event Announcement Date has occurred and the Agent will provide to
the Company a list of all record holders of Common Shares as of the close
of business on the Trigger Event Announcement Date. As soon as practicable
after the Distribution Date, the Company will prepare and execute, the
Agent will countersign and the Company (or, if requested, the Agent) will
send, by first-class, postage-prepaid mail, to each record holder of Common
Shares as of the close of business on the Distribution Date (other than any
Acquiring Person or any Associate or Affiliate of an Acquiring Person), at
the address of such holder shown on the records of the Company, one or more
certificates for Rights, in substantially the form of Exhibit B hereto (a
"RIGHT CERTIFICATE"), evidencing one Right (subject to adjustment as
provided herein) for each Common Share so held. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
3.2. Summary of Rights. On the Record Date or as soon as
practicable thereafter, the Company will send or cause to be sent a copy of
a Summary of Rights to Purchase Preferred Shares, in substantially the form
attached hereto as Exhibit C (the "SUMMARY OF RIGHTS"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the
close of business on the Record Date at the address of such holder shown on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the close of business on the Record Date, until the
Distribution Date (or the earlier Expiration Date), the Rights will be
evidenced by such certificates for Common Shares registered in the names of
the holders thereof together with a copy of the Summary of Rights and the
registered holders of the Common Shares shall also be registered holders of
the associated Rights. Until the Distribution Date (or the earlier
Expiration Date), the surrender for transfer of any certificate for Common
Shares outstanding at the close of business on the Record Date, with or
without a copy of the Summary of Rights, shall also constitute the transfer
of the Rights associated with the Common Shares represented thereby.
3.3. New Certificates After Record Date. Certificates for
Common Shares which become outstanding (whether upon issuance out of
authorized but unissued Common Shares, disposition out of treasury or
transfer or
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exchange of outstanding Common Shares) after the Record Date, but prior to
the earliest of the Distribution Date or the Expiration Date, shall have
impressed, printed, stamped, written or otherwise affixed onto them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain rights (the "RIGHTS") as set forth in the Public Shareholder
Protection Plan between Alpharma Inc. (the "COMPANY") and
Computershare Trust Company, N.A. as Agent, as the same may be amended
from time to time (the "PLAN"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain
circumstances, as set forth in the Plan, such Rights will be evidenced
by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a
copy of the Plan without charge after receipt of a written request
therefor. AS DESCRIBED IN THE PLAN, RIGHTS WHICH ARE OWNED BY,
TRANSFERRED TO OR HAVE BEEN OWNED BY ACQUIRING PERSONS OR ASSOCIATES
OR AFFILIATES THEREOF (AS DEFINED IN THE PLAN) SHALL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.
With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier Expiration Date), the Rights associated with
the Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificates,
except as otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event that
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer
outstanding.
Notwithstanding this Section 3.3, the omission of a legend shall not affect
the enforceability of any part of this Plan or the rights of any holder of the
Rights.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase shares, certification and assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Plan, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or trading system
on which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the terms and conditions hereof, the Right Certificates,
whenever issued, shall be dated as of the Record Date, and shall show the date
of countersignature by the Agent, and on their face shall entitle the holders
thereof to purchase such number of one one-thousandths of a Preferred Share as
shall be set forth therein at the price per one one-thousandth of a Preferred
Share set forth therein (the "PURCHASE PRICE"), but the number of such one
one-thousandths of a Preferred Share and the Purchase Price shall be subject to
adjustment as provided herein.
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Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by any member of the Board, its President
or any of its Vice Presidents, either manually or by facsimile signature. The
Right Certificates shall be countersigned, either manually or by facsimile
signature, by an authorized signatory of the Agent, but it shall not be
necessary for the same signatory to countersign all of the Right Certificates
hereunder. No Right Certificate shall be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Agent and issuance and delivery by the Company, such
Right Certificates, nevertheless, may be countersigned by the Agent, and issued
and delivered by the Company with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer of the
Company; and any Right Certificate may be signed on behalf of the Company by any
person who, at the actual date of the execution of such Right Certificate, shall
be a proper officer of the Company to sign such Right Certificate, although at
the date of the execution of this Plan any such person was not such an officer.
Following the Distribution Date, the Agent will keep or cause to be kept,
at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates, the certificate number of 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. Subject
to the provisions of Section 11.1.2 and Section 14, at any time after the close
of business on the Distribution Date, and at or prior to the close of business
on the Expiration Date, any Right Certificate or Right Certificates (other than
Right Certificates representing Rights that have become void pursuant to Section
11.1.2 or that have been exchanged pursuant to Section 27) may be transferred,
split up or combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of one
one-thousandths of a Preferred Share as the Right Certificate or Right
Certificates surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up or combine or exchange any Right
Certificate shall make such request in writing delivered to the Agent, and shall
surrender, together with any required form of assignment and certificate duly
completed, the Right Certificate or Right Certificates to be transferred, split
up or combined or exchanged at the office of the Agent designated for such
purpose. Neither the Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate or Right Certificates until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate or Right Certificates and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the 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 from the holders
of Right Certificates of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up or
combination or exchange of such Right Certificates.
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Subject to the provisions of Section 11.1.2, at any time after the
Distribution Date and prior to the Expiration Date, upon receipt by the Company
and the Agent of evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and, at
the Company's request, reimbursement to the Company and the Agent of all
reasonable expenses incidental thereto, and upon surrender to the Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Agent for countersignature
and delivery to the registered owner in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
7.1. Exercise of Rights. Subject to Section 11.1.2 and
except as otherwise provided herein, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby in whole or in part
at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase and certification on the
reverse side thereof duly executed, to the Agent at the office of the Agent
designated for such purpose, together with payment of the aggregate
Purchase Price for the total number of one one-thousandths of a Preferred
Share (or other securities, cash or other assets) as to which the Rights
are exercised, at or prior to the time (the "EXPIRATION DATE") that is the
earliest of (i) the close of business on November 22, 2016 (the "FINAL
EXPIRATION DATE"), (ii) the time at which the Rights are redeemed as
provided in Section 23 (the "REDEMPTION DATE"), (iii) the closing of any
merger or other acquisition transaction involving the Company pursuant to
an agreement of the type described in Section 13.3 at which time the Rights
are deemed terminated, or (iv) the time at which the Rights are exchanged
as provided in Section 27.
7.2. Purchase. The Purchase Price for each one
one-thousandth of a Preferred Share pursuant to the exercise of a Right
shall be initially $120.00, shall be subject to adjustment from time to
time as provided in Sections 11, 13 and 26 and shall be payable in lawful
money of the United States of America in accordance with Section 7.3.
7.3. Payment Procedures. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase and
certification duly executed, accompanied by payment of the aggregate
Purchase Price for the total number of one one-thousandths of a Preferred
Share to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance
with Section 9, in cash or by certified or cashier's check or money order
payable to the order of the Company, the Agent shall thereupon promptly
(i)(A) requisition from any transfer agent of the Preferred Shares (or make
available, if the Agent is the transfer agent) certificates for the number
of Preferred Shares to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if
the Company shall have elected to deposit the total number of Preferred
Shares issuable upon exercise of the Rights hereunder with a depository
agent, requisition from the depositary agent
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depositary receipts representing interests in such number of one
one-thousandths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with all such requests, (ii)
when appropriate, requisition from the Company the amount of cash to be
paid in lieu of the issuance of fractional shares in accordance with
Section 14 or otherwise in accordance with Section 11.1.3, (iii) promptly
after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver such cash
to or upon the order of the registered holder of such Right Certificate. In
the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to Section
11.1.3, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by
the Agent, if and when appropriate.
7.4. Partial Exercise. 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 Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14.
7.5. Full Information Concerning Ownership. Notwithstanding
anything in this Plan to the contrary, neither the Agent nor the Company
shall be obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported exercise as set forth
in this Section 7 unless the certificate contained in the form of election
to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise shall have been duly completed and signed by
the registered holder thereof and the Company shall have been provided with
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.
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 Agent for cancellation or in canceled form, or, if
surrendered to the 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 Plan. The Company shall deliver to the Agent for cancellation
and retirement, and the Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The 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.
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Section 9. Reservation and Availability of Capital Stock. The Company
covenants and agrees that from and after the Distribution Date it will cause to
be reserved and kept available out of its authorized and unissued Preferred
Shares (and, following the occurrence of a Trigger Event, out of its authorized
and unissued Class A Common Shares or other securities or out of its shares held
in its treasury) the number of Preferred Shares (and, following the occurrence
of a Trigger Event, Class A Common Shares and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding Rights.
So long as the Preferred Shares (and, following the occurrence of a Trigger
Event, Class A Common Shares and/or other securities) issuable upon the exercise
of Rights may be listed on any national securities exchange or traded in the
over-the-counter market and quoted on the New York Stock Exchange, Inc. (the
"NYSE"), the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed or admitted to trading on such exchange or quoted on the NYSE upon
official notice of issuance upon such exercise.
The Company covenants and agrees that it will take all such action as may
be necessary to ensure that all Preferred Shares (and, following the occurrence
of a Trigger Event, Class A Common Shares and/or other securities) delivered
upon exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
From and after such time as the Rights become exercisable, the Company
shall use its best efforts, if then necessary to permit the issuance of
Preferred Shares upon the exercise of Rights, to register and qualify such
Preferred Shares under the Securities Act and any applicable state securities or
"Blue Sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no longer
exercisable for such securities and the Expiration Date. The Board Committee may
cause the Company to temporarily suspend, for a period of time not to exceed
ninety (90) days, the exercisability of the Rights in order to prepare and file
a registration statement under the Securities Act and permit it to become
effective. Upon any such suspension, the Board Committee shall cause the Company
to issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this Plan to
the contrary, the Rights shall not be exercisable in any jurisdiction unless the
requisite qualification in such jurisdiction shall have been obtained and until
a registration statement under the Securities Act (if required) shall have been
declared effective.
The Company further covenants and agrees that it will pay when due and
payable any and all Federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares (or Class A Common Shares and/or other securities, as the
case may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Right Certificates to a person other than, or the issuance or
delivery of certificates for the Preferred Shares (or Class A Common Shares
and/or other securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate
11
evidencing Rights surrendered for exercise or to issue or deliver any
certificates for Preferred Shares (or Class A Common Shares and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until any such tax shall have been paid
(any such tax being payable by the holder of such Right Certificate at the time
of surrender) or until it has been established to the Company's satisfaction
that no such tax is due.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares (or Class A Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Class A Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Preferred Shares (or Class A Common Shares and/or other securities, as the case
may be) transfer books of the Company are closed, such person shall be deemed to
have become the record holder of such shares (fractional or otherwise) on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares (or Class A Common Shares and/or other securities, as the case
may be) transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right to vote or to
receive dividends or other distributions, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares or other securities
or property purchasable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
11.1. Post-Execution Events.
11.1.1. Corporate Dividends, Reclassifications, Etc. In the event
the Company shall at any time after the date of this Plan (A) declare
and pay a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11.1, the Purchase Price in effect
at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had
been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he would
have owned upon such exercise and been entitled to receive by virtue
of
12
such dividend, subdivision, combination or reclassification; provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one
Right. If an event occurs which would require an adjustment under both
Section 11.1.1 and Section 11.1.2, the adjustment provided for in this
Section 11.1.1 shall be in addition to, and shall be made prior to,
the adjustment required pursuant to, Section 11.1.2.
11.1.2. Acquiring Person Events; Triggering Events. Subject to
Sections 23.1 and 27, from and after the Distribution Date, each
holder of a Right, except as provided below, shall thereafter have a
right to receive, upon exercise thereof at a price per Right equal to
the then current Purchase Price multiplied by the number of one
one-thousandths of a Preferred Share for which a Right is then
exercisable (without giving effect to this Section 11.1.2), in
accordance with the terms of this Plan and in lieu of Preferred
Shares, such number of Class A Common Shares as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
then number of one one-thousandths of a Preferred Share for which a
Right is then exercisable (without giving effect to this Section
11.1.2) and (y) dividing that product by 50% of the current per share
market price of the Class A Common Shares (determined pursuant to
Section 11.4) on the first of the date of the occurrence of, or the
date of the first public announcement of, a Trigger Event (the
"ADJUSTMENT SHARES"); provided that the Purchase Price and the number
of Adjustment Shares shall thereafter be subject to further adjustment
as appropriate in accordance with Section 11.6. Notwithstanding the
foregoing, upon the occurrence of a Trigger Event, any Rights that are
or were acquired or beneficially owned by (1) any Acquiring Person or
any Associate or Affiliate thereof, (2) a transferee of any Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (3) a
transferee of any Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a Board Committee has
determined is part of a plan, arrangement or understanding which has
as a primary purpose or effect avoidance of this Section 11.1.2, and
subsequent transferees, shall become void without any further action,
and any holder (whether or not such holder is an Acquiring Person or
an Associate or Affiliate of an Acquiring Person) of such Rights shall
thereafter have no right to exercise such Rights under any provision
of this Plan (including, without limitation, Section 7.1 or this
Section 11.1.2) or otherwise. From and after the Trigger Event, no
Right Certificate shall be issued pursuant to Section 3 or Section 6
that represents Rights that are or have become void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to
the Agent that represents Rights that are or have become void pursuant
to the provisions of this paragraph shall be canceled.
13
The Company shall use all reasonable efforts to ensure that the
provisions of this Section 11.1.2 are complied with but shall have no
liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to any
Acquiring Person or its Affiliates, Associates or transferees
hereunder.
From and after the occurrence of an event specified in Section
13.1, any Rights that theretofore have not been exercised pursuant to
this Section 11.1.2 shall thereafter be exercisable only in accordance
with Section 13 and not pursuant to this Section 11.1.2.
11.1.3. Insufficient Shares. The Board Committee may at its
option cause the Company to substitute for a Class A Common Share
issuable upon the exercise of Rights in accordance with the foregoing
Section 11.1.2 a number of Preferred Shares or fraction thereof such
that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current per
share market price of one Class A Common Share. In the event that upon
the occurrence of a Trigger Event there shall not be sufficient Class
A Common Shares authorized but unissued, or held by the Company as
treasury shares, to permit the exercise in full of the Rights in
accordance with the foregoing Section 11.1.2, the Company shall take
all such action as may be necessary to authorize additional Class A
Common Shares for issuance upon exercise of the Rights, provided,
however, that if the Board Committee determines that the Company is
unable to cause the authorization of a sufficient number of additional
Class A Common Shares, then, in the event the Rights become
exercisable, the Board Committee, with respect to each Right and to
the extent necessary and permitted by applicable law and any
agreements or instruments in effect on the date hereof to which it is
a party, shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the "CURRENT
VALUE"), over (2) the Purchase Price (such excess, the "SPREAD") and
(B) with respect to each Right (other than Rights which have become
void pursuant to Section 11.1.2), cause the Company to make adequate
provision to substitute for the Adjustment Shares, upon payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Preferred Shares or other equity securities of the Company
(including, without limitation, shares, or fractions of shares, of
preferred stock which, by virtue of having dividend and liquidation
rights substantially comparable to those of the Class A Common Shares,
the Board Committee has deemed in good faith to have substantially the
same value as Class A Common Shares) (each such share of preferred
stock or fractions of shares of preferred stock constituting a "COMMON
STOCK EQUIVALENT"), (4) debt securities of the Company, (5) other
assets or (6) any combination of the foregoing having an aggregate
value equal to the Current Value, where such aggregate value has been
determined by the (Board Committee based upon the advice of a
nationally recognized investment banking firm selected in good faith
by the Board Committee; provided, however, that if the Company shall
not have made adequate provision to deliver value pursuant to clause
(B) above within thirty (30) days following the
14
occurrence of a Trigger Event, then the Company shall be obligated to
deliver, to the extent necessary and permitted by applicable law and
any agreements or instruments in effect on the date hereof to which it
is a party, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Class A Common Shares (to the
extent available) and then, if necessary, such number or fractions of
Preferred Shares (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board Committee of the Company shall determine in good
faith that it is unlikely that sufficient additional Class A Common
Shares could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended and
re-extended to the extent necessary, but not more than ninety (90)
days following the occurrence of a Trigger Event, in order that the
Company may seek stockholder approval for the authorization of such
additional shares (such period as may be extended, the "SUBSTITUTION
PERIOD"). To the extent that the Board Committee determines that some
action need be taken pursuant to the second and/or third sentences of
this Section 11.1.3, the Company (x) shall provide that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights
has been temporarily suspended as well as a public announcement at
such time as the suspension is no longer in effect. For purposes of
this Section 11.1.3, the value of a Class A Common Share shall be the
current per share market price (as determined pursuant to Section
11.4) on the date of the occurrence of a Trigger Event and the value
of any "common stock equivalent" shall be deemed to have the same
value as the Class A Common Shares on such date. The Board Committee
may, but shall not be required to, establish procedures to allocate
the right to receive Class A Common Shares upon the exercise of the
Rights among holders of Rights pursuant to this Section 11.1.3.
11.2. Dilutive Rights Offering. In case the Company shall
fix a record date for the issuance of rights, options or warrants to all
holders of Preferred Shares entitling them (for a period expiring within
forty-five (45) calendar days after such record date) to subscribe for or
purchase Preferred Shares (or securities having the same rights, privileges
and preferences as the Preferred Shares ("EQUIVALENT PREFERRED STOCK")) or
securities convertible into Preferred Shares or equivalent preferred stock
at a price per Preferred Share or per share of equivalent preferred stock
(or having a conversion or exercise price per share, if a security
convertible into or exercisable for Preferred Shares or equivalent
preferred stock) less than the current per share market price of the
Preferred Shares (as determined pursuant to Section 11.4) on such record
date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the number
of Preferred Shares and shares of equivalent preferred stock outstanding on
such record date plus the number of Preferred Shares and shares of
equivalent preferred stock
15
which the aggregate offering price of the total number of Preferred Shares
and/or shares of equivalent preferred stock to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current per share market price and the
denominator of which shall be the number of Preferred Shares and shares of
equivalent preferred stock outstanding on such record date plus the number
of additional Preferred Shares and/or shares of equivalent preferred stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided, however,
that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board Committee of the Company, whose
determination shall be described in a statement filed with the Agent and
shall be binding on the Agent and the holders of the Rights. Preferred
Shares and shares of equivalent preferred stock owned by or held for the
account of the Company or any Subsidiary of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event
that such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
11.3. Distributions. In case the Company shall fix a record
date for the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, cash, securities or assets
(other than a regular periodic cash dividend at a rate not in excess of
125% of the rate of the last regular periodic cash dividend theretofore
paid or, in case regular periodic cash dividends have not theretofore been
paid, at a rate not in excess of 50% of the average net income per share of
the Company for the four quarters ended immediately prior to the payment of
such dividend, or a dividend payable in Preferred Shares (which dividend,
for purposes of this Plan, shall be subject to the provisions of Section
11.1.1(A))) or convertible securities, or subscription rights or warrants
(excluding those referred to in Section 11.2), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current per share market
price of the Preferred Shares (as determined pursuant to Section 11.4) on
such record date, less the fair market value (as determined in good faith
by the Board Committee of the Company, whose determination shall be
described in a statement filed with the Agent) of the portion of the cash,
assets, securities or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one Preferred Share and
the denominator of which shall be such current per share market price of
the Preferred Shares (as determined pursuant to Section 11.4); provided,
however, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively
16
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had
not been fixed.
11.4. Current Per Share Market Value.
11.4.1. General. For the purpose of any computation hereunder,
the "CURRENT PER SHARE MARKET PRICE" of any security (a "SECURITY" for
the purpose of this Section 11.4.1) on any date shall be deemed to be
the average of the daily closing prices per share of such Security for
the thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in
the event that the current per share market price of the Security is
determined during any period following the announcement by the issuer
of such Security of (i) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such
shares or (ii) any subdivision, combination or reclassification of
such Security, and prior to the expiration of thirty (30) Trading Days
after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification,
then, and in each such case, the "current per share market price"
shall be appropriately adjusted to reflect the current market price
per share equivalent of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the NYSE or, if the Security is not
listed or admitted to trading on the NYSE, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on
which the Security is listed or admitted to trading or, if the
Security is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use, or, if
on any such date the Security is not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by
the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Security, the fair value of the
Security on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "TRADING DAY" shall
mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted
to trading on any national securities exchange, a Business Day. If the
Security is not publicly held or not so listed or traded, or if on any
such date the Security is not so quoted and no such market maker is
making a market in the Security, "current per share market price"
shall mean the fair value per share as determined in good faith by the
Board Committee of the Company or, if at the time of such
determination there is an Acquiring Person, by a nationally recognized
investment banking firm selected by the Board Committee, which shall
have the duty to make
17
such determination in a reasonable and objective manner, whose
determination shall be described in a statement filed with the Agent
and shall be conclusive for all purposes.
11.4.2. Preferred Shares. Notwithstanding Section 11.4.1, for the
purpose of any computation hereunder, the "current per share market
price" of the Preferred Shares shall be determined in the same manner
as set forth above in Section 11.4.1 (other than the last sentence
thereof). If the current per share market price of the Preferred
Shares cannot be determined in the manner described in Section 11.4.1,
the "current per share market price" of the Preferred Shares shall be
conclusively deemed to be an amount equal to 1,000 (as such number may
be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Shares
occurring after the date of this Plan) multiplied by the current per
share market price of the Common Shares (as determined pursuant to
Section 11.4.1). If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, or if on any such date
neither the Common Shares nor the Preferred Shares are so quoted and
no such market maker is making a market in either the Common Shares or
the Preferred Shares, "current per share market price" of the
Preferred Shares shall mean the fair value per share as determined in
good faith by the Board Committee of the Company, or, if at the time
of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board Committee of
the Company, which shall have the duty to make such determination in a
reasonable and objective manner, which determination shall be
described in a statement filed with the Agent and shall be conclusive
for all purposes. For purposes of this Plan, the "current per share
market price" of one one-thousandth of a Preferred Share shall be
equal to the "current per share market price" of one Preferred Share
divided by 1,000.
18
11.5. Insignificant Changes. No adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price. Any adjustments which by
reason of this Section 11.5 are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest one-hundred thousandth of a Preferred Share or the nearest
one-thousandth of a Common Share or other share or security, as the case
may be.
11.6. Shares Other Than Preferred Shares. If as a result of
an adjustment made pursuant to Section 11.1, the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital
stock of the Company other than Preferred Shares, thereafter the number of
such other shares so receivable upon exercise of any Right shall be subject
to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred
Shares contained in Sections 11.1, 11.2, 11.3, 11.5, 11.8, 11.9 and 11.13,
and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares shall apply on like terms to any such other shares.
11.7. Rights Issued Prior to Adjustment. All Rights
originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-thousandths of a Preferred
Share purchasable from time to time hereunder upon exercise of the Rights,
all subject to further adjustment as provided herein.
11.8. Effect of Adjustments. Unless the Board Committee
shall have caused the Company to have exercised its election as provided in
Section 11.9, upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11.2 and 11.3, each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number
of one one-thousandths of a Preferred Share (calculated to the nearest
one-thousand thousandth of a Preferred Share) obtained by (i) multiplying
(x) the number of one one-thousandths of a Preferred Share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
11.9. Adjustment in Number of Rights. The Board Committee
may cause the Company to elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a Preferred Share
issuable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number
of one one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one-thousandth) obtained by dividing
the Purchase
19
Price in effect immediately prior to adjustment of the Purchase Price by
the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of the election to
adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made. This
record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11.9, the Company may, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Board Committee,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the
date of adjustment, and upon surrender thereof, if required by the Company,
new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Right Certificates on the record date specified in the
public announcement.
11.10. Right Certificates Unchanged. Irrespective of any
adjustment or change in the Purchase Price or the number of one
one-thousandths of a Preferred Share issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of one
one-thousandths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
11.11. Par Value Limitations. Before taking any action that
would cause an adjustment reducing the Purchase Price below one
one-thousandth of the then par value, if any, of the Preferred Shares or
other shares of capital stock issuable upon exercise of the Rights, the
Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares or other such shares at
such adjusted Purchase Price.
11.12. Deferred Issuance. In any case in which this Section
11 shall require that an adjustment in the Purchase Price be made effective
as of a record date for a specified event, the Board Committee may cause
the Company to elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of
that number of Preferred Shares and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and
above the Preferred Shares and shares of other capital stock or other
securities, assets or cash of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument
20
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
11.13. Reduction in Purchase Price. Anything in this Section
11 to the contrary notwithstanding, the Board Committee shall be entitled
to cause the Company to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any of the Preferred Shares at less
than the current market price, issuance wholly for cash of Preferred Shares
or securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such stockholders.
11.14. Company Not to Diminish Benefits of Rights. The
Company covenants and agrees that after the Distribution Date it will not,
except as permitted by Section 23, Section 26 or Section 27, take (or
permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights.
11.15. Adjustment of Rights Associated with Common Shares.
Notwithstanding anything contained in this Plan to the contrary, in the
event that the Company shall at any time after the date hereof and prior to
the Distribution Date (i) declare or pay any dividend on the outstanding
Common Shares payable in Common Shares, (ii) effect a subdivision or
consolidation of the outstanding Common Shares (by reclassification or
otherwise than by the payment of dividends payable in Common Shares), or
(iii) combine the outstanding Common Shares into a greater or lesser number
of Common Shares, then in any such case, the number of Rights associated
with each Common Share then outstanding, or issued or delivered thereafter
but prior to the Distribution Date or in accordance with Section 22 shall
be proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall equal the
result obtained by multiplying the number of Rights associated with each
Common Share immediately prior to such event by a fraction, the numerator
of which shall be the total number of Common Shares outstanding immediately
prior to the occurrence of the event and the denominator of which shall be
the total number of Common Shares outstanding immediately following the
occurrence of such event. The adjustments provided for in this Section
11.15 shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 or 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) promptly file
with the Agent and with each transfer agent for the Common
21
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25. The Agent shall be fully protected in relying on any such certificate and on
any adjustment therein contained and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
13.1. Certain Transactions. In the event that, from and
after the Distribution Date, directly or indirectly, (A) the Company shall
consolidate with, or merge with and into, any other Person and the Company
shall not be the continuing or surviving corporation, (B) any Person shall
consolidate with the Company, or merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger
and, in connection with such merger, all or part of either the Class A
Common Shares or Class B Common Shares shall be changed into or exchanged
for stock or other securities of the Company or any other Person or cash or
any other property, or (C) the Company shall sell, exchange, mortgage or
otherwise transfer (or one or more of its Subsidiaries shall sell,
exchange, mortgage or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company or one or more wholly-owned
Subsidiaries of the Company in one or more transactions each of which
complies with Section 11.14), then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (other than Rights which
have become void pursuant to Section 11.1.2) shall thereafter have the
right to receive, upon the exercise thereof at a price per Right equal to
the then current Purchase Price multiplied by the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Trigger Event (as
subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3, 11.8, 11.9
and 11.12), in accordance with the terms of this Plan and in lieu of
Preferred Shares or Class A Common Shares, such number of validly
authorized and issued, fully paid, non-assessable and freely tradable
Common Shares of the Principal Party (as such term is hereinafter defined)
not subject to any liens, encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the result obtained by (x) multiplying
the then current Purchase Price by the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to the
first occurrence of a Trigger Event (as subsequently adjusted pursuant to
Sections 11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12) and (y) dividing that
product by 50% of the then current per share market price of the Common
Shares of such Principal Party (determined pursuant to Section 11.4) on the
date of consummation of such consolidation, merger, sale or transfer;
provided that the price per Right so payable and the number of Common
Shares of such Principal Party so receivable upon exercise of a Right shall
thereafter be subject to further adjustment as appropriate in accordance
with Section 11.6 to reflect any events covered thereby occurring in
respect of the Common Shares of such Principal Party after the occurrence
of such consolidation, merger, sale or transfer; (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
22
the Company pursuant to this Plan; (iii) the term "Company" 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 its Common Shares in accordance with
Section 9) 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 Common Shares thereafter
deliverable upon the exercise of the Rights; provided that, upon the
subsequent occurrence of any consolidation, merger, sale or transfer of
assets 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 Purchase Price as provided in this
Section 13.1, such cash, shares, rights, warrants and other property which
such holder would have been entitled to receive had such holder, at the
time of such transaction, owned the Common Shares of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13.1, and
such Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) 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. The Company shall
not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Agent a supplemental agreement confirming that the
requirements of this Section 13.1 and Section 13.2 shall promptly be
performed in accordance with their terms and that such consolidation,
merger, sale or transfer of assets shall not result in a default by the
Principal Party under this Plan as the same shall have been assumed by the
Principal Party pursuant to this Section 13.1 and Section 13.2 and
providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party, at its own expense,
shall:
(1) prepare and file a registration statement under the
Securities Act, if necessary, 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 Expiration Date and similarly comply with
applicable state securities laws;
(2) use its best efforts, if the Common Shares of the Principal
Party shall be listed or admitted to trading on the NYSE or on another
national securities exchange, to list or admit to trading (or continue
the listing of) the Rights and the securities purchasable upon
exercise of the Rights on the NYSE or such securities exchange, or, if
the Common Shares of the Principal Party shall not be listed or
admitted to trading on the NYSE or a national securities exchange, to
cause the Rights and the securities receivable upon exercise of the
Rights to be authorized for quotation on Nasdaq or on such other
system then in use;
(3) 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; and
23
(4) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Shares of the Principal Party subject
to purchase upon exercise of outstanding Rights.
In case the Principal Party has provision in any of its authorized
securities or in its certificate of incorporation or by-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders
of Rights pursuant to this Section 13), in connection with, or as a
consequence of, the consummation of a transaction referred to in this
Section 13, Common Shares or common stock equivalents of such Principal
Party at less than the then current market price per share thereof
(determined pursuant to Section 11.4) or securities exercisable for, or
convertible into, Common Shares or common stock equivalents of such
Principal Party at less than such then current market price (other than to
holders of Rights pursuant to this Section 13), or (ii) providing for any
special payment, taxes or similar provision in connection with the issuance
of the Common Shares of such Principal Party pursuant to the provision of
Section 13, then, in such event, the Company hereby agrees with each holder
of Rights that it shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and
delivered to the Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been canceled,
waived or amended, or that the authorized securities shall be redeemed, so
that the applicable provision will have no effect in connection with, or as
a consequence of, the consummation of the proposed transaction.
The Company covenants and agrees that it shall not, at any time after the
Trigger Event, enter into any transaction of the type described in clauses
(A) through (C) of this Section 13.1 if (i) at the time of or immediately
after such consolidation, merger, sale, transfer or other transaction there
are any rights, warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights, (ii) prior
to, simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of
Section 13.2 shall have received a distribution of Rights previously owned
by such Person or any of its Affiliates or Associates or (iii) the form or
nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights. The provisions of this Section 13 shall
similarly apply to successive transactions of the type described in clauses
(A) through (C) of this Section 13.1.
13.2. Principal Party. "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in (A) or (B)
of the first sentence of Section 13.1: (i) the Person that is the
issuer of the securities into which either the Class A Common Shares
or the Class B Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer
the Common Shares of which have the greatest aggregate market value of
shares outstanding, or (ii) if no securities are so issued, (x) the
Person
24
that is the other party to the merger, if such Person survives said
merger, or, if there is more than one such Person, the Person the
Common Shares of which have the greatest aggregate market value of
shares outstanding or (y) if the Person that is the other party to the
merger does not survive the merger, the Person that does survive the
merger (including the Company if it survives) or (z) the Person
resulting from the consolidation; and
(ii) in the case of any transaction described in (C) of the
first sentence in Section 13.1, 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 is the issuer of Common
Shares having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case described in the
foregoing clause (i) or (ii) of this Section 13.2, if the Common
Shares of such Person are not at such time or have not been
continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, then (1) if such Person is a direct or
indirect Subsidiary of another Person the Common Shares of which are
and have been so registered, the term "Principal Party" shall refer to
such other Person, or (2) if such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common Shares 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 Common Shares
having the greatest aggregate market value of shares outstanding, or
(3) if such Person is owned, directly or indirectly, by a joint
venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and
(2) above shall apply to each of the owners having an interest in the
venture as if the Person owned by the joint venture was a Subsidiary
of both or all of such joint venturers, and the Principal Party in
each such case shall bear the obligations set forth in this Section 13
in the same ratio as its interest in such Person bears to the total of
such interests.
25
13.3. Approved Acquisitions. Notwithstanding anything
contained herein to the contrary, this Plan and the rights of holders of
Rights hereunder shall be terminated in accordance with Section 7.1 upon
the consummation of any merger or other acquisition transaction of the type
described in clause (A), (B) or (C) of Section 13.1 involving the Company
pursuant to a merger or other acquisition agreement between the Company and
any Person (or one or more of such Person's Affiliates or Associates) which
agreement has, prior to any Person becoming an Acquiring Person, been
approved by both (i) the affirmative vote of a majority of the members of
the Board Committee, and (ii) the affirmative vote of a majority of the
votes cast thereon by the holders of Common Shares (other than the
Acquiring Person or any of its Affiliates or Associates) at a duly held
meeting of such shareholders.
Section 14. Fractional Rights and Fractional Shares.
14.1. Cash in Lieu of Fractional Rights. The Company shall
not be required to issue fractions of Rights or to distribute Right
Certificates which evidence fractional Rights (except prior to the
Distribution Date in accordance with Section 11.15). In lieu of such
fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would
otherwise be issuable an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section
14.1, the current market value of a whole Right shall be the closing price
of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the NYSE or, if the Rights are not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading
on any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by
the Board Committee of the Company. If on any such date no such market
maker is making a market in the Rights, the current market value of the
Rights on such date shall be the fair value of the Rights as determined in
good faith by the Board Committee of the Company, or, if at the time of
such determination there is an Acquiring Person, by a nationally recognized
investment banking firm selected by the Board Committee of the Company,
which shall have the duty to make such determination in a reasonable and
objective manner, which determination shall be described in a statement
filed with the Agent and shall be conclusive for all purposes.
14.2. Cash in Lieu of Fractional Preferred Shares. The
Company shall not be required to issue fractions of Preferred Shares (other
than fractions which
26
are integral multiples of one one-thousandth of a Preferred Share) upon
exercise or exchange of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share). Interests
in fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it; provided that such
agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled
as beneficial owners of the Preferred Shares represented by such depositary
receipts. In lieu of fractional Preferred Shares that are not integral
multiples of one one-thousandth of a Preferred Share, the Company shall pay
to the registered holders of Right Certificates at the time such Rights are
exercised or exchanged as herein provided an amount in cash equal to the
same fraction of the current per share market price of one Preferred Share
(as determined in accordance with Section 14.1) for the Trading Day
immediately prior to the date of such exercise or exchange.
14.3. Cash in Lieu of Fractional Common Shares. The Company
shall not be required to issue fractions of Class A Common Shares or to
distribute certificates which evidence fractional Class A Common Shares
upon the exercise or exchange of Rights. In lieu of such fractional Class A
Common Shares, the Company shall pay to the registered holders of the Right
Certificates with regard to which such fractional Class A Common Shares
would otherwise be issuable an amount in cash equal to the same fraction of
the current market value of a whole Class A Common Share (as determined in
accordance with Section 14.1) for the Trading Day immediately prior to the
date of such exercise or exchange.
14.4. Waiver of Right to Receive Fractional Rights or
Shares. The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise or exchange of a Right, except as permitted by this Section
14.
Section 15. Rights of Action. All rights of action in respect of this Plan,
except the rights of action given to the Agent under Section 18, are vested in
the respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his own behalf and for his own benefit, enforce this Plan, and
may institute and maintain any suit, action or proceeding against the Company to
enforce this Plan, or otherwise enforce or 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 Plan. 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 Plan and shall be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person (including, without limitation, the Company)
subject to this Plan.
27
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Agent and with
every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) as of and after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Agent if surrendered at the
office of the Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer with all required
certifications completed; and
(c) the Company and the Agent may deem and treat the Person in whose
name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the associated Common
Shares certificate made by anyone other than the Company or the Agent) for
all purposes whatsoever, and neither the Company nor the Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Right Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the Preferred Shares or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), 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.
Section 18. Concerning the Agent. The Company agrees to pay to the Agent
reasonable compensation for all services rendered by it hereunder in accordance
with a fee schedule to be mutually agreed upon and, from time to time, on demand
of the Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Plan and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
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 Agent, for anything done or omitted by the Agent in connection with the
acceptance and administration of this Plan, including the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly.
The Agent shall be protected and shall incur no liability for or in respect
of any action taken, suffered or omitted by it in connection with its
administration of this Plan in reliance upon any Right Certificate or
certificate for the Preferred Shares or the Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement,
28
affidavit, letter, notice, instruction, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Agent. Any
corporation or limited liability company into which the Agent or any successor
Agent may be merged or with which it may be consolidated, or any corporation or
limited liability company resulting from any merger or consolidation to which
the Agent or any successor Agent shall be a party, or any corporation or limited
liability company succeeding to the corporate trust or stock transfer business
of the Agent or any successor Agent, shall be the successor to the Agent under
this Plan 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 or limited
liability company would be eligible for appointment as a successor Agent under
the provisions of Section 21. In case at the time such successor Agent shall
succeed to the agency created by this Plan, any of the Right Certificates shall
have been countersigned but not delivered, any such successor Agent may adopt
the countersignature of the predecessor 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 Agent may
countersign such Right Certificates either in the name of the predecessor Agent
or in the name of the successor Agent; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Plan.
In case at any time the name of the Agent shall be changed and at such time
any of the Right Certificates shall have been countersigned but not delivered,
the Agent may adopt the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Agent may countersign such
Right Certificates either in its prior name or in its changed name; and in all
such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Plan.
Section 20. Duties of Agent. The Agent undertakes the duties and
obligations imposed by this Plan 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:
20.1. Legal Counsel. The Agent may consult with legal
counsel selected by it (who may be legal counsel for the Company), and the
opinion of such counsel shall be full and complete authorization and
protection to the Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
20.2. Certificates as to Facts or Matters. Whenever in the
performance of its duties under this Plan the Agent shall deem it necessary
or desirable that any fact or matter be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board of Directors,
the President, the Chief Financial Officer, any Vice President, the
Treasurer, the Secretary or any Assistant Treasurer or Assistant Secretary
of the Company and delivered to the Agent; and such certificate shall be
full authorization
29
to the Agent for any action taken or suffered in good faith by it under the
provisions of this Plan in reliance upon such certificate.
20.3. Standard of Care. The Agent shall be liable hereunder
only for its own gross negligence, bad faith or willful misconduct.
20.4. Reliance on Plan and Right Certificates. The Agent
shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Plan or in the Right Certificates (except as to
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.
20.5. No Responsibility as to Certain Matters. The Agent
shall not be under any responsibility in respect of the validity of this
Plan or the execution and delivery hereof (except the due execution hereof
by the 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 Plan or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including
the Rights becoming void pursuant to Section 11.1.2) or any adjustment
required under the provisions of Sections 3, 11, 13, 23 or 27 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 actual notice of any such change or adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
other securities to be issued pursuant to this Plan or any Right
Certificate or as to whether any Preferred Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
20.6. Further Assurance by Company. 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 Agent for
the carrying out or performing by the Agent of the provisions of this Plan.
20.7. Authorized Company Officers. The Agent is hereby
authorized and directed to accept instructions with respect to the
performance of its duties hereunder from any one of the Chairman of the
Board of Directors, the President, the Chief Financial Officer, any Vice
President, the Treasurer, the Secretary or any Assistant Treasurer or
Assistant Secretary of the Company, and to apply to such officers for
advice or instructions in connection with its duties under this Plan, 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 or for
any delay in acting while waiting for these instructions. Any application
by the Agent for written instructions from the Company may, at the option
of the Agent, set forth in writing any action proposed to be taken or
omitted by the Agent with respect to its duties or obligations under this
Plan and the date on and/or after which such action shall be taken or such
30
omission shall be effective. The Agent shall not be liable to the Company
for any action taken by, or omission of, the Agent 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 (3) 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 of any such action (or the effective date in the case of
omission), the Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
20.8. Freedom to Trade in Company Securities. The Agent and
any stockholder, director, officer or employee of the 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 Agent under this Plan. Nothing
herein shall preclude the Agent from acting in any other capacity for the
Company or for any other legal entity.
20.9. Reliance on Attorneys and Agents. The 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 Agent shall not be answerable or accountable for any act,
omission, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company resulting from any such act, omission, default,
neglect or misconduct, provided that reasonable care was exercised in the
selection and continued employment thereof.
20.10. Incomplete Certificate. If, with respect to any
Rights Certificate surrendered to the Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an Affiliate
or Associate thereof), the Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting
with the Company.
20.11. Rights Holders List. At any time and from time to
time after the Distribution Date, upon the request of the Company, the
Agent shall promptly deliver to the Company a list, as of the most recent
practicable date (or as of such earlier date as may be specified by the
Company), of the holders of record of Rights.
Section 21. Change of Agent. The Agent or any successor Agent may resign
and be discharged from its duties under this Plan upon thirty (30) days' notice
in writing mailed to the Company and to each transfer agent of the Common Shares
and/or Preferred Shares, as applicable, by registered or certified mail. In the
event the transfer agency relationship in effect between the Company and the
Agent terminates, the Agent will be deemed to resign automatically on the
effective date of such termination; and any required notice will be sent by the
Company. Following the Distribution Date, the Company shall promptly notify the
holders of the Right Certificates by first-class mail of any such resignation.
The Company may remove the Agent or any successor Agent upon thirty (30) days'
notice in writing, mailed to the
31
Agent or successor Agent, as the case may be, and to each transfer agent of the
Common Shares and/or Preferred Shares, as applicable, by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If the
Agent shall resign or be removed or shall otherwise become incapable of acting,
the resigning, removed, or incapacitated Agent shall remit to the Company, or to
any successor Agent designated by the Company, all books, records, funds,
certificates or other documents or instruments of any kind then in its
possession which were acquired by such resigning, removed or incapacitated Agent
in connection with its services as Agent hereunder, and shall thereafter be
discharged from all duties and obligations hereunder. Following notice of such
removal, resignation or incapacity, the Company shall appoint a successor to
such Agent. If the Company shall fail to make such appointment within a period
of thirty (30) days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Agent or by the holder of a Right Certificate (who shall, with
such notice, submit his Right Certificate for inspection by the Company), then
the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Agent. Any successor Agent,
whether appointed by the Company or by such a court, shall be a corporation
organized and doing business under the laws of the United States or of the State
of New York (or any other state of the United States so long as such corporation
is authorized to do business as a banking institution in the State of New York)
in good standing, having an office in the State of New York, which is authorized
under such laws to exercise stock transfer or corporate trust powers and is
subject to supervision or examination by Federal or state authority and which
has at the time of its appointment as Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Agent shall be vested with
the same powers, rights, duties and responsibilities as if it had been
originally named as Agent without further act or deed; but the predecessor Agent
shall deliver and transfer to the successor 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 Agent and each transfer agent of the Common Shares and/or Preferred
Shares, as applicable, and, following the Distribution Date, mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Agent or the appointment of the successor Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Plan or of the Rights to the contrary, the Board Committee
may, at its option, cause the Company to issue new Right Certificates evidencing
Rights in such form as may be approved by its Board Committee to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Plan. In addition, in connection
with the issuance or sale of Common Shares following the Distribution Date and
prior to the Expiration Date, the Company shall, with respect to Common Shares
so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, granted or awarded, or upon exercise, conversion
or exchange of securities hereinafter issued by the Company, in each case
existing prior to the Distribution Date, issue Right Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Right Certificate shall be issued if, and to
the extent that, the
32
Board Committee shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption.
23.1. Right to Redeem. The Company may, upon approval of
both (i) the affirmative vote of a majority of the Board of Directors and
(ii) the affirmative vote of a majority of the Board Committee, at any time
prior to the Distribution Date, redeem all but not less than all of the
then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the "REDEMPTION
PRICE"), and the Company may, at its option, pay the Redemption Price in
Common Shares (based on the "current per share market price," determined
pursuant to Section 11.4, of the Common Shares at the time of redemption),
cash or any other form of consideration deemed appropriate by the Board of
Directors. The redemption of the Rights by the Company may be made
effective at such time, on such basis and subject to such conditions as the
Company in its sole discretion may establish; provided that any actions
taken by the Company pursuant to this Section 23.1 shall be taken by and at
the direction of the Board of Directors and a Board Committee.
23.2. Redemption Procedures. Immediately after both (i)
action of a Board of Directors ordering the redemption of the Rights and
(ii) action of a Board Committee ordering the redemption of the Rights (or
at such later time as the Company may establish for the effectiveness of
such redemption), and without any further action and without any notice,
the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right so held; provided, however, that the failure to give,
or any defect in, any such notice shall not affect the validity of such
redemption. The Company shall promptly give, or cause the Agent to 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 Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption shall state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time
in any manner other than that specifically set forth in this Section 23 or
in Section 27, and other than in connection with the purchase, acquisition
or redemption of Common Shares prior to the Distribution Date.
Section 24. Notice of Certain Events. In case the Company shall propose at
any time after the Distribution Date (a) to pay any dividend payable in stock of
any class to the holders of Preferred Shares or to make any other distribution
to the holders of Preferred Shares (other than a
33
regular periodic cash dividend at a rate not in excess of 125% of the rate of
the last regular periodic cash dividend theretofore paid or, in case regular
periodic cash dividends have not theretofore been paid, at a rate not in excess
of 50% of the average net income per share of the Company for the four quarters
ended immediately prior to the payment of such dividends, or a stock dividend
on, or a subdivision, combination or reclassification of the Common Shares), or
(b) to offer to the holders of Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares or shares of stock of any
class or any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), or (d) to
effect any consolidation or merger into or with, or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person, or (e) to effect the liquidation, dissolution or winding up of the
Company, or (f) to declare or pay any dividend on the Common Shares payable in
Common Shares or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give to the Agent and
to each holder of a Right Certificate, in accordance with Section 25, a notice
of such proposed action, which shall specify the record date for the purposes of
such stock dividend, distribution of rights or warrants, or the date on which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Preferred Shares and/or Common Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (a) or (b) above at least ten (10) days prior to the record
date for determining holders of the Preferred Shares for purposes of such
action, and in the case of any such other action, at least ten (10) days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Shares and/or Common Shares, whichever
shall be the earlier.
In case any event set forth in Section 11.1.2 or Section 13 shall occur,
then, in any such case, (i) the Company shall as soon as practicable thereafter
give to the Agent and to each holder of a Right Certificate, in accordance with
Section 25, a notice of the occurrence of such event, which notice shall
describe the event and the consequences of the event to holders of Rights under
Section 11.1.2 and Section 13, and (ii) all references in this Section 24 to
Preferred Shares shall be deemed thereafter to refer to Common Shares and/or, if
appropriate, other securities.
Notwithstanding anything in this Plan to the contrary, prior to the
Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Rights, for purposes of this Plan and no other notice
need be given.
Section 25. Notices. Notices or demands authorized by this Plan to be given
or made by the Agent or by the holder of any Right Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Agent) as
follows:
Alpharma Inc.
One Executive Drive
34
Fort Lee, NJ 07024
Attention: Secretary
with a copy to (such copy shall not constitute notice):
Charles M. Nathan, Esq.
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022
Subject to the provisions of Section 21 and Section 24, any notice or demand
authorized by this Plan to be given or made by the Company or by the holder of
any Right Certificate to or on the Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
Computershare Trust Company, N.A.
P.O. Box 43010
Providence, Rhode Island 02940-3010
Notices or demands authorized by this Plan to be given or made by the Company or
the Agent to the holder of any Right Certificate (or, prior to the Distribution
Date, to the holder of any certificate representing Common Shares) shall be
sufficiently given or made if sent by first-class mail, postage-prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 26. Supplements and Amendments. For so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the Agent
shall, if the Company so directs, supplement or amend any provision of this Plan
in any respect without the approval of any holders of Rights or Common Shares;
provided that any actions taken by the Company pursuant to this Section 26 shall
only be taken upon the approval of such action by both (a) the Board of
Directors and (b) the Board Committee. From and after the time that the Rights
are no longer redeemable, the Company may, and the Agent shall, if the Company
so directs, from time to time supplement or amend this Plan without the approval
of any holders of Rights (i) to cure any ambiguity or to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein or (ii) to make any other changes or provisions in
regard to matters or questions arising hereunder which the Board of Directors
and the Board Committee may deem necessary or desirable, including but not
limited to extending the Final Expiration Date; provided, however, that no such
supplement or amendment shall adversely affect the interests of the holders of
Rights as such (other than an Acquiring Person or an Affiliate or Associate of
an Acquiring Person), and no such supplement or amendment may cause the Rights
again to become redeemable or cause this Plan again to become amendable other
than in accordance with this sentence; provided further, any suspension of the
Distribution Date pursuant to Section 3.1 shall not require any amendment or
supplement hereunder. Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 26, the Agent shall execute such
supplement or amendment.
35
Section 27. Exchange.
27.1. Exchange of Class A Common Shares for Rights. The
Company may, at its option, upon approval of such action by both (a) the
Board of Directors and (b) the Board Committee at any time after the
occurrence of a Trigger Event, cause the Company to exchange Class A Common
Shares for all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 11.1.2) by exchanging at an exchange ratio of that
number of Class A Common Shares having an aggregate value equal to the
Spread (with such value being based on the current per share market price
(as determined pursuant to Section 11.4) on the date of the occurrence of a
Trigger Event) per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such amount per Right being hereinafter referred to as the
"EXCHANGE CONSIDERATION"). From and after the occurrence of an event
specified in Section 13.1, any Rights that theretofore have not been
exchanged pursuant to this Section 27.1 shall thereafter be exercisable
only in accordance with Section 13 and may not be exchanged pursuant to
this Section 27.1. The exchange of the Rights by the Company may be made
effective at such time, on such basis and with such conditions as both (a)
the Board of Directors and (b) the Board Committee may establish.
27.2. Exchange Procedures. Immediately upon the action of
the Company ordering the exchange for any Rights pursuant to Section 27.1
and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive the Exchange Consideration. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the Agent. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange
shall state the method by which the exchange of the Class A Common Shares
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than the Rights that
have become void pursuant to the provisions of Section 11.1.2) held by each
holder of Rights.
27.3. Insufficient Shares. The Board Committee, at its
option, may cause the Company to substitute, and, in the event that there
shall not be sufficient Class A Common Shares issued but not outstanding or
authorized but unissued to permit an exchange of Rights for Class A Common
Shares as contemplated in accordance with this Section 27, the Company
shall substitute to the extent of such insufficiency, for each Class A
Common Share that would otherwise be issuable upon exchange of a Right, a
number of Preferred Shares or fraction thereof (or equivalent preferred
stock, as such term is defined in Section 11.2) such that the current per
share market price (determined pursuant to Section 11.4) of one Preferred
Share (or equivalent preferred share) multiplied by such number or fraction
is equal to the
36
current per share market price of one Class A Common Share (determined
pursuant to Section 11.4) as of the date of such exchange.
Section 28. Successors. All the covenants and provisions of this Plan by or
for the benefit of the Company or the Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Benefits of this Plan. Nothing in this Plan shall be construed
to give to any Person or corporation other than the Company, the Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Plan; but this Plan shall be for the sole and exclusive benefit of the
Company, the Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, the Common Shares).
Section 30. Determination and Actions by the Board Committee. Except as
otherwise provided herein, the Board Committee shall have the exclusive power
and authority to administer this Plan and to exercise the rights and powers
specifically granted to the Board of Directors of the Company or to the Company,
or as may be necessary or advisable in the administration of this Plan,
including, without limitation, the right and power to (i) interpret the
provisions of this Plan and (ii) make all determinations deemed necessary or
advisable for the administration of this Plan (including, without limitation, a
determination to redeem or not redeem the Rights or amend this Plan). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board Committee in good faith shall (x) be final,
conclusive and binding on the Company, the Agent, the holders of the Rights, as
such, and all other parties, and (y) not subject the Board of Directors or Board
Committee to any liability to the holders of the Rights.
Section 31. Severability. If any term, provision, covenant or restriction
of this Plan 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 Plan shall remain in full force and effect
and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Plan 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 in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State.
Section 33. Counterparts. This Plan 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 34. Descriptive Heading. Descriptive headings of the several
Sections of this Plan are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
Section 35. Jurisdiction. For all purposes of this Agreement, and for all
purposes of any action or proceeding arising out of or relating to the
transactions contemplated hereby or for recognition or enforcement of any
judgment, each party hereto submits to the exclusive personal
37
jurisdiction of the courts of the State of Delaware and the federal courts of
the United States sitting in New Castle County, Delaware and hereby irrevocably
and unconditionally agrees that any such action or proceeding shall be heard and
determined in such Delaware court or, to the extent permitted by law, in such
federal court. Each party hereto irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so: (i) any objection which it
may now or hereafter have to the laying of venue of any action or proceeding
arising out of or relating to this Agreement or any related matter in any
Delaware state or federal court located in New Castle County, Delaware; and (ii)
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
Section 36. "Force Majeure." Notwithstanding anything to the contrary
contained herein, Agent shall not be liable for any delays or failures in
performance resulting from acts beyond its reasonable control including, without
limitation, acts of God, terrorist acts, shortage of supply, breakdowns or
malfunctions, interruptions or malfunction of computer facilities, or loss of
data due to power failures or mechanical difficulties with information storage
or retrieval systems, labor difficulties, war, or civil unrest.
[Signature page follows]
38
IN WITNESS WHEREOF, the parties hereto have caused this Plan to be duly
executed, as of the day and year first above written.
ALPHARMA INC.
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
COMPUTERSHARE TRUST COMPANY, N.A.
By
-------------------------------------
Name:
----------------------------------
Title:
---------------------------------
39
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
ALPHARMA INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
----------
Alpharma Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the "CORPORATION"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the General
Corporation Law at a meeting duly called and held on November 22, 2006.
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (hereinafter called the "BOARD OF DIRECTORS" or
the "BOARD") in accordance with the provisions of the Certificate of
Incorporation of this Corporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $.01 per share (the "PREFERRED STOCK"), of
the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, powers and preferences, and qualifications,
limitations and restrictions thereof as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Stock" (the "SERIES A
PREFERRED STOCK") and the number of shares constituting the Series A Preferred
Stock shall be 100,000. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Corporation convertible into Series A
Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of
any shares of any class or series of stock of this Corporation ranking
prior and superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock, in preference
to the holders of Class A Common Stock, par value $.20 per share
A-1
(the "CLASS A COMMON STOCK"), of the Corporation, the Class B Common Stock,
par value $.20 per share (the "CLASS B COMMON STOCK" and together with the
Class A Common Stock, the "COMMON STOCK") and of any other stock ranking
junior to the Series A Preferred Stock, shall be entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash on the first day of
March, June, September and December in each year (each such date being
referred to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $1.00 or
(b) subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000 times
the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
(b) of the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section 2
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$1.00 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of issue is a Quarterly Dividend Payment Date or is a date after the
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
A-2
Dividends paid on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than sixty (60) days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred Stock
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision, combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than
by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the number
of votes per share to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock,
the Certificate of Incorporation of the Corporation or by law, the holders
of shares of Series A Preferred Stock and the holders of shares of Common
Stock and any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation. Notwithstanding the foregoing, on all
matters on which the holders of shares of the Class A Common Stock and
holders of shares of the Class B Common Stock vote separately, the holders
of the shares of the Series A Preferred Stock shall vote together with the
holders of shares of the Class A Common Stock as one class.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on
A-3
shares of Series A Preferred Stock outstanding shall have been paid in
full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on the Series
A Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking
junior (both as to dividends and upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of
stock ranking on a parity with the Series A Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation, dissolution or winding up of the Corporation, voluntary or
otherwise no distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon
A-4
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received an amount per share (the "SERIES A LIQUIDATION PREFERENCE") equal to
$1,000 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that are outstanding immediately prior to such
event.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation Preference
and the liquidation preferences of all other classes and series of stock of
the Corporation, if any, that rank on a parity with the Series A Preferred
Stock in respect thereof, then the assets available for such distribution
shall be distributed ratably to the holders of the Series A Preferred Stock
and the holders of such parity shares in proportion to their respective
liquidation preferences.
(C) Neither the merger or consolidation of the Corporation into
or with another corporation nor the merger or consolidation of any other
corporation into or with the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth
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in the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall not
be redeemable by the Company.
Section 9. Rank. The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets upon liquidation,
dissolution or winding up, junior to all series of any other class of the
Corporation's Preferred Stock, except to the extent that any such other series
specifically provides that it shall rank on a parity with or junior to the
Series A Preferred Stock.
Section 10. Amendment. At any time any shares of Series A Preferred Stock
are outstanding, the Certificate of Incorporation of the Corporation shall not
be amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
separately as a single class.
Section 11. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share that shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.
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IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation by an Officer this 22nd day of November, 2006.
----------------------------------------
Officer
A-7
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- __________ _______ Rights
NOT EXERCISABLE AFTER NOVEMBER 22, 2016 OR EARLIER IF NOTICE OF REDEMPTION
OR EXCHANGE IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER
RIGHT, AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE AGREEMENT),
RIGHTS BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS
DEFINED IN THE AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL
BECOME NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
ALPHARMA INC.
This certifies that __________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Public
Shareholder Protection Plan, dated as of November 22, 2006, as the same may be
amended from time to time (the "AGREEMENT"), between Alpharma Inc., a Delaware
corporation (the "COMPANY"), and Computershare Trust Company, N.A. as Agent (the
"AGENT"), to purchase from the Company at any time after the Distribution Date
and prior to 5:00 P.M. (New York City time) on November 22, 2016, at the offices
of the Agent, or its successors as Agent, designated for such purpose, one
one-thousandth of a fully paid, nonassessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the "PREFERRED SHARES")
of the Company, at a purchase price of $120.00 per one one-thousandth of a
Preferred Share, subject to adjustment (the "PURCHASE PRICE"), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
and certification duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of November 22, 2006 based
on the Preferred Shares as constituted at such date. Capitalized terms used in
this Right Certificate without definition shall have the meanings ascribed to
them in the Agreement. As provided in the Agreement, the Purchase Price and the
number of Preferred Shares which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made a part hereof and to which Agreement
reference is hereby made for a full description of the rights, limitations of
rights, obligations, duties and immunities hereunder of the Agent, the
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Company and the holders of the Right Certificates. Copies of the Agreement are
on file at the principal offices of the Company and the Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the offices of the Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder to purchase a like aggregate number
of one one-thousandths of a Preferred Share as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Agreement, the Company may, at its option
and in accordance with the provisions of the Agreement, (i) redeem the Rights
evidenced by this Right Certificate at a redemption price of $.01 per Right or
(ii) exchange Class A Common Shares for the Rights evidenced by this
Certificate, in whole or in part.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions of Preferred Shares which
are integral multiples of one one-thousandth of a Preferred Share, which may, at
the election of the Company, be evidenced by depository receipts), but in lieu
thereof a cash payment will be made, as provided in the Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Agreement
or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Agreement.
If any term, provision, covenant or restriction of the 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 the Agreement shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
This Right Certificate shall not be valid or binding for any purpose until
it shall have been countersigned by the Agent.
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WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of _________.
Attest: ALPHARMA INC.
By By
---------------------------------- -------------------------------------
Title: Title:
------------------------------ ---------------------------------
Countersigned:
COMPUTERSHARE TRUST COMPANY, N.A.
as Agent
By
----------------------------------
Authorized Signature
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________________________________________________
hereby sells, assigns and transfers unto _______________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address
of transferee)
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint ___________
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
------------------
----------------------------------------
Signature
Signature Guaranteed:
- -------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
________________________________________________________________________________
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not beneficially
owned by and are not being assigned to an Acquiring Person or an Affiliate or an
Associate thereof; and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did not acquire the Rights evidenced by this Right Certificate from
any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated:
------------------
----------------------------------------
Signature
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: Alpharma Inc.
The undersigned hereby irrevocably elects to exercise __________________
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights (or such other securities or property
of the Company or of any other Person which may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be issued in the name
of:
- ------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- ------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------
Dated:
------------------
----------------------------------------
Signature
Signature Guaranteed:
- -------------------------------------
Signatures must be guaranteed by an "eligible guarantor institution" as
defined in Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934,
as amended.
B-5
The undersigned hereby certifies that:
(1) the Rights evidenced by this Right Certificate are not beneficially
owned by and are not being assigned to an Acquiring Person or an Affiliate or an
Associate thereof; and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned did not acquire the Rights evidenced by this Right Certificate from
any person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof.
Dated:
------------------
----------------------------------------
Signature
NOTICE
The signature in the foregoing Form of Assignment and Form of Election to
Purchase must conform to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of Assignment or
Form of Election to Purchase is not completed, the Company will deem the
beneficial owner of the Rights evidenced by this Right Certificate to be an
Acquiring Person or an Affiliate or Associate hereof and such Assignment or
Election to Purchase will not be honored.
B-6
EXHIBIT C
As described in the Agreement, Rights which are held by or have been held by an
Acquiring Person or Associates or Affiliates thereof (as defined in the
Agreement) and certain transferees thereof shall become null and void and will
no longer be transferable.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On November 22, 2006 the Board of Directors of Alpharma Inc. (the "COMPANY"
or "ALPHARMA") declared a dividend of one preferred share purchase right (a
"RIGHT") for each share of Class A Common Stock, $.20 par value (the "CLASS A
COMMON SHARES"), of the Company and for each share of Class B Common Stock, $.20
par value (the "CLASS B COMMON SHARE" and together with the Class A Common
Share, the "COMMON SHARE"), of the Company, in each case, as outstanding at the
close of business on December 5, 2006 (the "RECORD DATE"). As long as the Rights
are attached to the Common Shares, the Company will issue one Right (subject to
adjustment) with each new Common Share so that all such shares will have
attached Rights. When exercisable, each Right will entitle the registered holder
to purchase from the Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock (the "PREFERRED SHARES") at a price of $120.00 per
one one-thousandth of a Preferred Share, subject to adjustment (the "PURCHASE
PRICE"). The description and terms of the Rights are set forth in a Public
Shareholder Protection Plan, dated as of November 22, 2006, as the same may be
amended from time to time (the "AGREEMENT"), between the Company and
Computershare Trust Company, N.A. as Agent (the "AGENT"). Terms used below but
not defined shall have the meanings ascribed to them in the Agreement.
Until the Distribution Date, the Rights will be evidenced, with respect to
any of the Common Share certificates outstanding as of the Record Date, by such
Common Share certificate together with a copy of the Summary of Rights.
A "DISTRIBUTION DATE" shall mean the earliest date on which a Trigger Event
occurs, but shall be suspended if the Acquiring Person enters into an agreement
with the Company not to consummate the underlying transaction without both (i)
the affirmative vote of a majority of the members of the Board Committee (as
defined below), and (ii) the affirmative vote of a majority of the votes cast
thereon by the holders of Common Shares (other than the Acquiring Person or any
associate or affiliate of an Acquiring Person) at a duly held meeting of such
shareholders; provided, however, if such transaction is not so approved, but the
Class B Holder nevertheless continue to pursue such transaction, the
Distribution Date shall be deemed to have occurred on the date of the original
announcement of such transaction.
A "TRIGGER EVENT" shall be deemed to have occurred upon the earliest of (i)
a Class B Holder acquiring Beneficial Ownership of more than 1% of the
outstanding Class A Common Shares (other than through ownership or conversion of
the Class B Common Shares) on or after the date the Class B Holder first becomes
a Class B Holder; (ii) a Class B Holder publicly announcing (by press release,
filing with the Securities and Exchange Commission or otherwise) its intent to
acquire Beneficial Ownership of more than 1% of the outstanding Class A Common
Shares (other than through ownership or conversion of the Class B Common
Shares), including, without limitation, in a tender or exchange offer, on or
after the date the Class B Holder first becomes a Class B Holder; and (iii) a
Class B Holder announcing its intent to cause the Company to effect an Affiliate
Transaction.
"CLASS B HOLDER" shall mean any Person which, together with such Person's
Affiliates and Associates, is the Beneficial Owner of 50% or more of the Class
B Common Shares then outstanding, but shall not include an Exempt Person (as
such term is hereinafter defined). For all purposes of this Plan, any
calculation of the number of Class B Common Shares outstanding at any
particular time, including for purposes of determining the particular
percentage of such outstanding Class B Common Shares of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13D-3(d)(l)(i) of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), as in effect on the date
of this Plan.
"ACQUIRING PERSON" shall mean any Class B Holder (as such term is
hereinafter defined) who takes an action that results in a Trigger Event
occurring.
"AFFILIATE TRANSACTION" shall mean a merger or combination of the Company
with, or sale of a material portion of the Company's and its Subsidiaries'
assets to, or any other similar transaction with, a Class B Holder or an
Affiliate or Associate of a Class B Holder.
The Agreement provides that until the Distribution Date (or earlier
redemption, exchange, termination, or expiration of the Rights), the Rights will
be transferred with and only with the Common Shares. Until the Distribution Date
(or earlier redemption, exchange, termination or expiration of the Rights), new
Common Share certificates issued after the close of business on the Record Date
upon transfer or new issuance of the Common Shares will contain a notation
incorporating the Agreement by reference. Until the Distribution Date (or
earlier redemption, exchange, termination or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares, with or without
such notation or a copy of this Summary of Rights, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("RIGHT CERTIFICATES") will be mailed to
holders of record of the Common
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Shares as of the close of business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on November 22, 2016, subject to the Company's right to extend such date
(the "FINAL EXPIRATION DATE"), unless earlier redeemed or exchanged by the
Company or terminated.
Each Preferred Share purchasable upon exercise of the Rights will be
entitled, when, as and if declared, to a minimum preferential quarterly dividend
payment of $1.00 per share but will be entitled to an aggregate dividend of
1,000 times the dividend, if any, declared per Common Share. In the event of
liquidation, dissolution or winding up of the Company, the holders of the
Preferred Shares will be entitled to a minimum preferential liquidation payment
of $1,000 per share (plus any accrued but unpaid dividends) but will be entitled
to an aggregate payment of 1,000 times the payment made per Common Share. Each
Preferred Share will have 1,000 votes and will vote together with the Common
Shares. Finally, in the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, each Preferred Share will be entitled to
receive 1,000 times the amount received per Common Share. Preferred Shares will
not be redeemable. These rights are protected by customary antidilution
provisions. Because of the nature of the Preferred Share's dividend, liquidation
and voting rights, the value of one one-thousandth of a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares or convertible
securities at less than the current market price of the Preferred Shares or
(iii) upon the distribution to holders of the Preferred Shares of evidences of
indebtedness, cash, securities or assets (excluding regular periodic cash
dividends at a rate not in excess of 125% of the rate of the last regular
periodic cash dividend theretofore paid or, in case regular periodic cash
dividends have not theretofore been paid, at a rate not in excess of 50% of the
average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or dividends payable in
Preferred Shares (which dividends will be subject to the adjustment described in
clause (i) above)) or of subscription rights or warrants (other than those
referred to above).
From and after the Distribution Date, in the event that a Person becomes an
Acquiring Person or if the Company were the surviving corporation in a merger
with an Acquiring Person or any affiliate or associate of an Acquiring Person
and the Common Shares were not changed or exchanged, each holder of a Right,
other than Rights that are or were acquired or beneficially owned by the
Acquiring Person or any of its affiliates or associates (which Rights will
thereafter be void), will thereafter have the right to receive upon exercise
that number of Class A Common Shares having a market value of two times the then
current Purchase Price of the Right. In the event that, after a person has
become an Acquiring Person, the Company were acquired in a merger or other
business combination transaction or more than 50% of its assets or earning power
were sold, proper provision shall be made so that each holder of a Right (other
than as described above shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase
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Price of the Right, that number of shares of common stock of the acquiring
Company which at the time of such transaction would have a market value of two
times the then current Purchase Price of the Right.
In certain circumstances described in the Agreement, upon approval of both
(a) the Board of Directors and (b) a committee of the Board of Directors
comprised solely of members independent from the Class B Holder (the "BOARD
COMMITTEE") the Company may exchange the Rights (other than Rights owned by an
Acquiring Person or any of its affiliations or associates which will have become
void), in whole or in part, for Class A Common Shares at an exchange rate of one
Class A Common Share per Right (subject to adjustment).
No adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No
fractional Preferred Shares or Class A Common Shares will be issued (other than
fractions of Preferred Shares which are integral multiples of one one-thousandth
of a Preferred Share, which may, at the election of the Company, be evidenced by
depository receipts), and in lieu thereof, a payment in cash will be made based
on the market price of the Preferred Shares or Class A Common Shares on the last
trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part, at a price of $.01
per Right (the "REDEMPTION PRICE") upon approval of both (i) the affirmative
vote of a majority of the Board of Directors and (ii) the affirmative vote of a
majority of the Board Committee. The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Company in
its sole discretion may establish, provided that any redemption shall be taken
by and at the discretion of the Board of Directors and the Board Committee.
Immediately upon any redemption of the Rights, the right to exercise the Rights
will terminate and the only right of the holders of Rights will be to receive
the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company beyond those as an existing stockholder,
including, without limitation, the right to vote or to receive dividends.
Any of the provisions of the Agreement may be amended by approval of both
the Board of Directors and the Board Committee for so long as the Rights are
then redeemable, and after the Rights are no longer redeemable, the Company may
amend or supplement the Agreement in any manner that does not adversely affect
the interests of the holders of the Rights (other than an Acquiring Person or an
affiliate or associate of an Acquiring Person).
A copy of the Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Agreement, which is incorporated
herein by reference.
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