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Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
The Board of Directors of Orbital Sciences Corporation has
(the "Company") declared a dividend distribution of one right ("Right") for
each outstanding share of common stock (the "Common Stock") of the Company.
The distribution is payable to stockholders of record on November 13, 1998.
Each Right, when exercisable, entitles the registered holder to purchase from
the Company one-one thousandth of a share of Series B Junior Participating
Preferred Stock ("Preferred Stock") at a price of $210 per one-one thousandth
share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and BankBoston, N.A., as Rights Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no separate
certificates evidencing the Rights will be distributed. The Rights will
separate from the Common Stock and a distribution of Rights Certificates (as
defined below) will occur upon the earlier to occur of (i) 10 days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 15% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date") or (ii) 10 business days (or such later date as
the Directors may determine) following the commencement of a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person of 15% or more of the outstanding shares of Common Stock
(the earlier of such dates being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be evidenced
by the Common Stock certificates, and will be transferred with and only with
the Common Stock certificates, (ii) new Common Stock certificates issued after
November 13, 1998 upon transfer or new issuance of the Common Stock will
contain a notation incorporating the Rights Agreement by reference, and (iii)
the surrender for transfer of any certificates for Common Stock outstanding
will also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and
will expire at the close of business on October 31, 2008, unless earlier
redeemed or exchanged by the Company as described below. The Rights will not
be exercisable by a holder in any jurisdiction where the requisite
qualification to the issuance to
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such holder, or the exercise by such holder, of the Rights has not been
obtained or is not obtainable.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights Certificates") will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates alone
will evidence the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the Distribution Date
will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15%
or more of the then outstanding shares of Common Stock, each holder of a Right
will, after the end of a redemption period referred to below, have the right to
exercise the Right by purchasing, for an amount equal to the Purchase Price,
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to two times such amount. Notwithstanding
any of the foregoing, following the occurrence of the events set forth in this
paragraph, all Rights that are, or (under certain circumstances specified in
the Rights Agreement) were, beneficially owned by any Acquiring Person will be
null and void. However, Rights are not exercisable following the occurrence of
the events set forth above until such time as the Rights are no longer
redeemable by the Company as set forth below.
For example, at a Purchase Price of $210 per Right, each Right
not owned by an Acquiring Person (or by certain related parties) following an
event set forth in the preceding paragraph would entitle its holder to purchase
$420 worth of Common Stock (or other consideration, as noted above) for $210.
Assuming that the Common Stock had a per share value of $30 at such time, the
holder of each valid Right would be entitled to purchase fourteen shares of
Common Stock for $210.
In the event that, at any time following the Stock Acquisition
Date, (i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation, or (ii) 50%
or more of the Company's assets or earning power is sold or transferred, each
holder of a Right (except Rights which previously have been voided as set forth
above) shall, after the expiration of the redemption period referred to below,
have the right to receive, upon exercise, common stock of the acquiring company
having a value equal to two times the Purchase Price of the Right (e.g., common
stock of the acquiring company having a value of $420 for the $210 Purchase
Price).
At any time after a person or group of affiliated or
associated persons becomes an Acquiring Person, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock per Right (subject to adjustment).
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The Purchase Price payable, and the number of one-one
thousandths of a share of Preferred Stock or other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution under certain circumstances.
With certain exceptions, 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 shares will be issued (other than
fractions which are integral multiples of one-one thousandth of a share of
Preferred Stock) and in lieu thereof, an adjustment in cash will be made based
on the market price of the Preferred Stock on the last trading date prior to
the date of exercise.
In general, the Board of Directors of the Company, may cause
the Company to redeem the Rights in whole, but not in part, at any time during
the period commencing on October 22, 1998, and ending on the tenth day
following the Stock Acquisition Date, as such period may be extended or
shortened by the Board of Directors (the "Redemption Period") at a price of
$0.005 per Right (payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). Under certain circumstances set forth
in the Rights Agreement, the decision to redeem the Rights will require the
concurrence of the two-thirds of Directors. After the Redemption Period has
expired, the Company's right of redemption may be reinstated if an Acquiring
Person reduces his beneficial ownership to 10% or less of the outstanding
shares of Common Stock in a transaction or series of transactions not involving
the Company and there are no other Acquiring Persons. Immediately upon the
action of the Board of Directors of the Company ordering redemption of the
Rights, the Rights will terminate and the only right of the holders of Rights
will be to receive the $0.005 redemption price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends. While the distribution of the
Rights will not be subject to federal taxation to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for Common Stock (or
other consideration) of the Company or for common stock of the acquiring
company as set forth above.
Other than those provisions relating to the principal economic
terms of the Rights (other than an increase in the Purchase Price), any of the
provisions of the Rights Agreement may be amended by the Board of Directors of
the Company prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, defect or inconsistency or to make changes which do not
adversely affect the interests of holders of Rights (excluding the interests of
any Acquiring Person), or to shorten or lengthen any time period under the
Rights Agreement; provided
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however, no amendment to adjust the time period governing redemption may be
made at such time as the Rights are not redeemable.
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