EXHIBIT 4.4
ATHEROGENICS, INC., a Georgia corporation (the "Company"),
and
AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation,
as Rights Agent
Reload Common Stock Rights Agreement
Dated as of November 9, 2001
Patent pending. All rights reserved
William J. Carney and Leonard A. Silverstein
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions............................................................................1
Section 2. Appointment of Rights Agent....................................................................9
Section 3. Issue of Rights Certificates...................................................................9
Section 4. Form of Rights Certificates...................................................................13
Section 5. Countersignature and Registration.............................................................14
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates............................................................14
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.................................15
Section 8. Cancellation and Destruction of Rights Certificates...........................................18
Section 9. Reservation and Availability of Capital Stock.................................................18
Section 10. Common Stock Record Date......................................................................20
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights...................20
Section 12. Certificate of Adjusted Number of Shares......................................................27
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer of Assets or Earning Power..........27
Section 14. Fractional Rights and Fractional Shares.......................................................30
Section 15. Rights of Action..............................................................................31
Section 16. Agreement of Rights Holders...................................................................32
Section 17. Rights Certificate Holder Not Deemed a Shareholder............................................32
Section 18. Concerning the Rights Agent...................................................................33
Section 19. Merger or Consolidation or Change of Name of Rights Agent.....................................33
Section 20. Duties of Rights Agent........................................................................34
Section 21. Change of Rights Agent........................................................................36
Section 22. Issuance of New Rights Certificates...........................................................37
Section 23. Redemption and Termination....................................................................37
Section 24. Exchange......................................................................................38
Section 25. Notice of Certain Events......................................................................39
Section 26. Notices.......................................................................................40
Section 27. Supplements and Amendments....................................................................41
Section 28. Successors....................................................................................42
Section 29. Determinations and Actions by the Board of Directors, etc.....................................42
Section 30. Benefits of this Agreement....................................................................43
Section 31. Severability..................................................................................43
Section 32. Governing Law.................................................................................43
Section 33. Counterparts..................................................................................44
Section 34. Descriptive Headings..........................................................................44
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of November 9, 2001 (the "Agreement"),
between ATHEROGENICS, INC., a Georgia corporation (the "Company"), and AMERICAN
STOCK TRANSFER & TRUST COMPANY, a New York corporation (the "Rights Agent").
WITNESSETH
WHEREAS, on November 9, 2001 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of Common Stock of the Company
outstanding at the Close of Business on November 19, 2001 (the "Record Date"),
and has authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11(m) hereof), which includes
one Initial Right and Subsequent Rights (as provided herein), for each share of
Common Stock of the Company issued and outstanding between the Record Date
(whether originally issued or delivered from the Company's treasury) and a
Subsequent Distribution Date pursuant to the terms hereof. The dividend payment
date shall be November 20, 2001.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean:
(i) for purposes of all matters relating to the
Initial Rights, any Person (as such term is hereinafter
defined) who or which shall become, after the Rights Dividend
Declaration Date, the Beneficial Owner of 15% or more of the
shares of Common Stock (as such term is hereinafter defined)
then outstanding; and
(ii) for purposes of all matters relating to
Subsequent Rights (as such term is hereinafter defined), any
Person who or which shall become, following a Previous Stock
Acquisition Date (as such term is hereinafter defined), the
Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding;
but, for purposes of clauses (i) and (ii) of this Section 1(a), "Acquiring
Person" shall not include an Exempt Person (as such term is hereinafter
defined), or any Person who or which is the Beneficial Owner of 17% or more of
the shares of Common Stock of the Company outstanding as of the Rights Dividend
Declaration Date (a "Grandfathering Shareholder"); provided however, that any
Person who or which is the Beneficial Owner of 17% or more of the shares of
Common Stock outstanding as of the Rights Dividend Declaration Date and who
becomes the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding shall be deemed an Acquiring Person. Notwithstanding the foregoing,
no Person shall become an Acquiring Person
solely as the result of an acquisition of shares of Common Stock by the Company
or a recapitalization which, by reducing the number of shares of Common Stock
outstanding, increases the proportionate number of shares Beneficially Owned by
such Person; provided, however, that such Person shall be deemed to be an
Acquiring Person if such Person shall become the Beneficial Owner of additional
shares equal to or more than 1% of the then outstanding number of shares of
Common Stock or, in the case of a Grandfathering Shareholder, additional shares
equal to or more than 1% of the then outstanding number of shares of Common
Stock. A Person's status as an Acquiring Person or a Grandfathering Shareholder
shall terminate upon such Person's ceasing to be the Beneficial Owner of 15% or
more of the then outstanding Common Stock, whether from a sale or other
disposition to Persons not Affiliates or Associates (as each such term is
hereinafter defined), the exercise of Rights or the exercise or conversion of
other securities of the Company to purchase Common Stock.
(b) "Affiliate" shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and Regulations under the Exchange Act
(as hereinafter defined), as amended and in effect on the date of this
Agreement.
(c) "Associate" shall mean:
(i) any corporation or organization, or parent
or subsidiary of such corporation or organization, of which a
Person is an officer, director or partner or is, directly or
indirectly, the Beneficial Owner of 10% or more of any class
of equity securities;
(ii) any trust or other estate in which a Person
has a beneficial interest of 10% or more or as to which such
Person serves as trustee or in a similar fiduciary capacity;
and
(iii) any brother or sister (whether by whole or
half blood), ancestor, lineal descendant or spouse of a
Person, or any such relative of such spouse, who has the same
home as such person.
(d) A Person shall be deemed the "Beneficial Owner" of,
and shall be deemed to "Beneficially Own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not
in writing), or upon the exercise of conversion rights,
exchange rights, rights, warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own:"
(A) securities acquired by
participation in good faith in a firm commitment
underwriting by a Person engaged in business as an
underwriter of securities until the expiration of
forty days after the date of such acquisition, or
securities which such Person or any of such Person's
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Affiliates or Associates has the right to acquire
pursuant to customary agreements with and between
underwriters and selling group members with respect
to a bona fide public offering of securities, or
(B) securities tendered pursuant to a
tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange, or
(C) securities issuable upon exercise
of Rights at any time prior to the time a Person
becomes an Acquiring Person (as defined in this
section), or
(D) securities issuable upon exercise
of Rights from and after the time a Person becomes
an Acquiring Person which Rights were acquired by
such Person or any of such Person's Affiliates or
Associates prior to the respective Distribution
Dates (as hereinafter defined) or pursuant to
Section 3(a) and (b) or Section 22 hereof or
pursuant to Section 11(f) hereof in connection with
an adjustment made with respect to any Rights; or
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the
right to vote or dispose of or has "Beneficial Ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules
and Regulations under the Exchange Act (as hereinafter
defined)), including pursuant to any agreement, arrangement
or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "Beneficially Own," any security under this
subparagraph (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement,
arrangement or understanding:
(A) arises solely from a revocable
proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance
with, the applicable rules and regulations
promulgated under the Exchange Act (as hereinafter
defined), and
(B) would not also then be reportable
by such Person on Schedule 13D or Schedule 13G under
the Exchange Act (as hereinafter defined) (or any
comparable or successor report) if the Common Stock
were then registered under Section 12 of the
Exchange Act; or
(iii) which are Beneficially Owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person (or any of such
Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to
a revocable proxy as described in the proviso to clause (ii)
of this Section 1(d)) or disposing of any voting securities
of the Company.
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(e) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of
Georgia, or the State in which the principal office of the Rights Agent is
located, are authorized or obligated by law or executive order to close.
(f) "Close of Business" on any given date shall mean
5:00 p.m., Atlanta, Georgia time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 p.m., Atlanta, Georgia time, on
the next succeeding Business Day.
(g) "Common Stock", when used with reference to the
Company, shall mean the common stock, no par value, of the Company, except that
"Common Stock" when used with reference to any Person other than the Company
shall mean the capital stock of such Person with the greatest voting power, or
the equity securities or other equity interest of such Person having the power
to control or direct the management, of such Person or, if such other Person is
a subsidiary of another Person, the Person or Persons which ultimately control
such first mentioned Person.
(h) "Common Stock Equivalents" shall mean preferred
stock or other equity securities of the Company, including, without limitation,
shares, or units of shares, of preferred stock which the Board of Directors of
the Company has deemed to have substantially the same value as shares of Common
Stock.
(i) "Current Market Price" per share of Common Stock on
any date shall mean the average of the daily closing prices per share of such
Common Stock 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 Market Price per share of the Common Stock is
determined during a period:
(i) following the announcement by the issuer of
such Common Stock of:
(A) a dividend or distribution on such
Common Stock payable in shares of such Common Stock
or securities convertible into shares of such Common
Stock (other than the Rights), or
(B) any subdivision, combination or
reclassification of such Common Stock; and
(ii) prior to the expiration of the requisite
thirty (30) Trading Day period, as set forth above, 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 Market Price shall be properly
adjusted to take into account ex-dividend trading. The closing price (the
"Closing Price") for each Trading 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
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on the New York Stock Exchange or, if the shares of Common Stock are not listed
or admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national securities
exchange, last quoted price or, with respect to securities listed or admitted
to trading on an interdealer quotation system or other organized trading market
or exchange on which such securities are listed or traded or, if the shares of
Common Stock are not listed or admitted to trading on an interdealer quotation
system or other organized trading market or exchange, the last quoted price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the NASDAQ or such other system then in
use, or, if on any such date the shares of Common Stock 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 Common Stock selected by
the Board of Directors of the Company. If on any such date no market maker is
making a market in the Common Stock, the fair value of such shares on such date
as determined in good faith by the Board of Directors of the Company shall be
used. If the Common Stock is not publicly held or not so listed or traded,
Current Market Price per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(j) "Distribution Date" shall mean the Initial
Distribution Date (as hereinafter defined) and/or a Subsequent Distribution
Date (as hereinafter defined), as the case may be.
(k) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(l) "Exempt Person" shall mean the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any entity
or trustee holding Common Stock for or pursuant to the terms of any such plan
or for the purpose of funding any such plan or funding other employee benefits
for employees of the Company or of any Subsidiary of the Company.
(m) "Expiration Date" shall mean the earlier of the time
at which the Rights are redeemed as provided in Section 23 hereof or the "Final
Expiration Date" (as hereinafter defined in this section).
(n) "Final Expiration Date" shall mean the Close of
Business on November 8, 2011.
(o) "Initial Distribution Date" shall mean the earlier
of:
(i) the Close of Business on the tenth Business
Day after the Initial Stock Acquisition Date (as hereinafter
defined in this section) (or, if the tenth Business Day after
the first Stock Acquisition Date occurs before the Record
Date, the Close of Business on the Record Date); or
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(ii) the Close of Business on the tenth Business
Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes
an Acquiring Person) after the date of commencement by any
Person (other than an Exempt Person) of, or of the first
public announcement of the intention of such Person (other
than an Exempt Person) to commence, a tender or exchange
offer, if upon consummation thereof, such Person would become
an Acquiring Person.
(p) "Initial Rights" shall have the meaning set forth in
Section 3(b) hereof.
(q) "Initial Rights Certificates" shall have the meaning
set forth in Section 3(b) hereof.
(r) "Initial Stock Acquisition Date" shall mean the
first Stock Acquisition Date occurring after the Record Date.
(s) "NASDAQ" shall mean the Nasdaq Stock Market, Inc.
(t) "Person" shall mean any individual, firm,
corporation, partnership, limited partnership, limited liability company,
limited liability partnership, or other entity, and shall include any successor
(by merger or otherwise) of such entity.
(u) "Previous Distribution Date" shall mean the latest
of the Initial Distribution Date or a Subsequent Distribution Date occurring
before the date in question.
(v) "Previous Rights" shall mean Rights distributed upon
a Distribution Date (whether Initial Rights or Subsequent Rights), that
occurred prior to the occurrence of a Subsequent Stock Acquisition Date (as
hereinafter defined).
(w) "Previous Rights Certificates" shall mean Rights
Certificates evidencing Previous Rights.
(x) "Previous Stock Acquisition Date" shall mean a Stock
Acquisition Date that occurred prior to a Subsequent Stock Acquisition Date.
(y) "Principal Party" shall mean
(i) in the case of any transaction described in
clauses (i) or (ii) of the first sentence of Section 13(a)
hereof,
(A) the Person that is the issuer of
any securities into which shares of Common Stock of
the Company are converted in such merger,
consolidation, or share exchange or, if there is
more than one such issuer, the issuer the shares of
Common Stock of which have the greatest aggregate
market value of shares outstanding, or
(B) if no securities are so issued,
the Person that is the other party to such merger,
consolidation, or share exchange, or, if there is
more
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than one such Person, the Person the shares of
Common Stock of which have the greatest aggregate
market value of shares outstanding, or
(C) 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
(D) the Person resulting from the
consolidation; and
(ii) in the case of any transaction described in
clause (iii) of the first sentence of Section 13(a) hereof,
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
that is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding; provided,
however, that in any such case described in the foregoing
Section 1(y)(i) or 1(y)(ii),
(A) if the Common Stock of such Person
is not at such time and has not been continuously
over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has
been so registered, "Principal Party" shall refer to
such other Person, and
(B) in case such Person is a
Subsidiary, directly or indirectly, of more than one
Person, the Common Stocks of two or more of which
are and have been so registered, "Principal Party"
shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest
aggregate market value of shares outstanding, and
(C) 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 (A) and (B) 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 case shall bear the
obligation set forth in Section 13 hereof in the
same ratio as its interest in such Person bears to
the total of such interests.
(z) "Purchase Price" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(aa) "Record Date" shall, with respect to the Initial
Rights, mean the Close of Business on November 19, 2001. With respect to
Subsequent Rights it shall mean the Subsequent Distribution Date for each set
of Subsequent Rights.
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(bb) "Redemption Price" shall have the meaning set forth
in Section 23(a) hereof.
(cc) "Rights" shall mean the Initial Rights and
Subsequent Rights.
(dd) "Rights Certificates" shall mean the Initial Rights
Certificates and Subsequent Rights Certificates.
(ee) "Section 13 Event" shall mean any event described in
clauses (i), (ii) or (iii) of Section 13(a) hereof.
(ff) "Securities Act" shall mean the Securities Act of
1933, as amended.
(gg) "Spread" shall have the meaning set forth in Section
11(b)(ii)(A) hereof.
(hh) "Stock Acquisition Date" shall mean the earlier of
(i) the first date of public announcement (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to
Section 13(d) or 13(g) under the Exchange Act) by an Acquiring Person that an
Acquiring Person has become such or (ii) such earlier date on which a majority
of the Board of Directors first learns that an Acquiring Person has become
such.
(ii) "Subsequent Distribution Date" shall mean the
earlier of:
(i) The Close of Business on the tenth Business
Day after a Subsequent Stock Acquisition Date; or
(ii) The Close of Business on the tenth Business
Day (or such later date as may be determined by action of the
Board of Directors prior to such time as any Person becomes
an Acquiring Person) after the date of commencement by any
Person (other than an Exempt Person) of, or of the first
public announcement of the intention of such Person (other
than an Exempt Person) to commence, a tender or exchange
offer, if upon consummation thereof, such Person would become
an Acquiring Person on or after the Initial Distribution
Date.
(jj) "Subsequent Rights" shall have the meaning set forth
in Section 3(d) hereof.
(kk) "Subsequent Rights Certificates" shall have the
meaning set forth in Section 3(d) hereof.
(ll) "Subsequent Stock Acquisition Date" shall mean:
(i) any Stock Acquisition Date occurring after
the Initial Stock Acquisition Date; and
(ii) any date upon which an Acquiring Person
becomes the Beneficial Owner of an additional number of
shares of Common Stock that exceeds the number of shares of
Common Stock Beneficially Owned on the Previous Stock
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Acquisition Date by an amount equal to 10% or more of the
then outstanding shares of Common Stock.
(mm) "Subsidiary" shall mean, with reference to any
Person, any corporation of which an amount of voting securities sufficient to
elect at least a majority of the directors of such corporation is Beneficially
Owned, directly or indirectly, by such Person, or otherwise controlled by such
Person.
(nn) "Substitution Period" shall have the meaning set
forth in Section 11(b) hereof.
(oo) "Summary of Rights" shall have the meaning set forth
in Section 3(g) hereof.
(pp) "Trading Day" shall mean a day on which the
principal national securities exchange or automated quotation system on which
the shares of Common Stock are listed or admitted to trading is open for the
transaction of business during normal trading hours (excluding aftermarket
trading) or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or automated quotation system, a
Business Day.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3
hereof, shall prior to the Initial Distribution Date also be the holders of the
Common Stock) in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Company may from time to time
appoint such Co-Rights Agents or successor Rights Agent(s) as it may deem
necessary or desirable.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the Initial Distribution Date:
(i) the Initial Rights will be evidenced
(subject to the provisions of paragraphs (g), (h) and (i) of
this Section 3) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock
(which certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate certificates;
and
(ii) the Initial Rights will be transferable
only in connection with the transfer of the shares of Common
Stock to which the Rights attach (including a transfer to the
Company).
(b) As soon as practicable after the Initial
Distribution Date, the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Initial Distribution Date, at the address of such holder shown
on the records of the Company, one or more rights certificates, in
substantially the form of Exhibit A hereto (the "Initial Rights Certificates"),
evidencing one Right to purchase eight
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shares of Common Stock for each share of Common Stock so held, subject to
adjustment as provided herein (the "Initial Rights"). In the event that an
adjustment in the number of Initial Rights per share of Common Stock has been
made pursuant to Section 11(f) hereof, at the time of distribution of the
Initial Rights Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a) hereof) so
that Initial Rights Certificates representing only whole numbers of Initial
Rights are distributed and cash is paid in lieu of any fractional Initial
Rights. As of and after the Initial Distribution Date, the Initial Rights will
be evidenced solely by such Initial Rights Certificates.
(c) Until a Subsequent Distribution Date:
(i) Subsequent Rights will be evidenced
(subject to the provisions of paragraphs (g), (h) and (i) of
this Section 3):
(A) by the certificates for the Common
Stock registered in the names of the holders of the
Common Stock (which certificates for Common Stock
shall be deemed also to be certificates for
Subsequent Rights) and not by separate certificates,
and
(B) By Previous Rights Certificates,
with respect to those Previous Rights that remain
unexercised as of the Close of Business on a
Subsequent Distribution Date; and
(ii) Subsequent Rights will be transferable only
in connection with the transfer of the shares of Common Stock
to which the Subsequent Rights attach or with the transfer of
Previous Rights Certificates that remain unexercised
(including, in either event, a transfer to the Company).
(d) As soon as practicable after a Subsequent
Distribution Date, the Rights Agent will send by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock and each record holder
of Previous Rights that remain unexercised as of the Close of Business on a
Subsequent Distribution Date, at the address of each such holder shown on the
records of the Company, one or more rights certificates (the "Subsequent Rights
Certificates"), evidencing one Right to purchase eight shares of Common Stock
for each share of Common Stock so held and one Right to purchase eight shares
of Common Stock for each share of Common Stock issuable upon exercise of the
unexercised Previous Rights, subject to adjustment as provided herein (the
"Subsequent Rights"). Subsequent Rights Certificates:
(i) shall, in the case of Subsequent Rights
Certificates issued with respect to issued and outstanding
shares of Common Stock, be substantially in the form of
Exhibit B hereto; and
(ii) shall, in the case of Subsequent Rights
Certificates issued with respect to outstanding and
unexercised Previous Rights represented by Previous Rights
Certificates, be substantially in the form of Exhibit B
hereto, and shall indicate that such rights may not be
exercised until the Previous Rights with
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respect to which they are issued have first been exercised,
or have been exercised concurrently with the newly
distributed Subsequent Rights Certificate.
(e) In the event that a holder of a Rights Certificate
exercises Rights pursuant to Section 7 of this Agreement that represent, in
addition to the Rights indicated in the certificate, Subsequent Rights for
which no separate Subsequent Rights Certificate has been issued, the Rights
Agent shall send to such exercising holder by first-class, insured, postage
prepaid mail, the appropriate number and kind of Subsequent Rights Certificates
representing the unexercised Subsequent Rights.
(f) In the event that an adjustment in the number of
Subsequent Rights per share of Common Stock has been made pursuant to Section
11(f) hereof, at the time of distribution of Subsequent Rights Certificates,
the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Subsequent Rights Certificates
representing only whole numbers of Subsequent Rights are distributed and cash
is paid in lieu of any fractional Subsequent Rights. As of and after a
Subsequent Distribution Date, Subsequent Rights will be evidenced solely by
such Subsequent Rights Certificates.
(g) As promptly as practicable following the Record
Date, the Company will send a copy of a Summary of Rights, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the Close
of Business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for the Common Stock
outstanding as of the Record Date, until the Initial Distribution Date in the
case of the Initial Rights, the Rights will be evidenced by such certificates
for the Common Stock and the registered holders of the Common Stock shall also
be the registered holders of the associated Rights. With respect to Subsequent
Rights, until the Subsequent Distribution Date the Subsequent Rights will be
evidenced by such certificates of Common Stock, and, in addition, will be
represented by Previous Rights Certificates that remain unexercised, and the
registered holders of the Common Stock and the Previous Rights Certificates, as
the case may be, shall also be the registered holders of the associated Rights.
Until the earlier of the Initial Distribution Date or the Expiration Date in
the case of the Initial Rights and a Subsequent Distribution Date or the
Expiration Date in the case of Subsequent Rights, the transfer of any
certificates representing shares of Common Stock in respect of which Rights
have been issued shall also constitute the transfer of the Rights associated
with such shares of Common Stock, and the transfer of Previous Rights
Certificates that have not been exercised shall also constitute the transfer of
the Subsequent Rights associated with such Previous Rights Certificates.
(h) Initial Rights shall be issued in respect of all
shares of Common Stock which are issued after the Record Date but prior to the
earlier of the Initial Distribution Date or the Expiration Date. Subsequent
Rights shall be issued:
(i) in respect of all shares of Common Stock
which are issued after the Record Date but prior to the
earlier of the Subsequent Distribution Date with respect to
such Rights or the Expiration Date; and
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(ii) in respect of all outstanding and
unexercised Previous Rights represented by Previous Rights
Certificates.
(i) (i) Certificates representing shares of Common
Stock issued after the Record Date and before the Expiration Date shall also be
deemed to be certificates for Rights. Rights Certificates issued after any
Distribution Date and before the Expiration Date shall also be deemed
Certificates for Subsequent Rights. The certificates representing shares of
Common Stock and the Rights Certificates shall bear a legend in substantially
the following form:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between AtheroGenics, Inc. (the "Company") and American Stock
Transfer & Trust Company (the "Rights Agent") dated as of
November 9, 2001 as amended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal offices of AtheroGenics. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no
longer be evidenced by this certificate. AtheroGenics will
mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor.
Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person, or any Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.
(ii) With respect to certificates for Common
Stock containing the substantially foregoing legend, until
the earlier of:
(A) the Initial Distribution Date in
the case of the Initial Rights and a Subsequent
Distribution Date in the case of Subsequent Rights,
or
(B) the Expiration Date,
the Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates.
(iii) With respect to such Subsequent Rights
Certificates containing the substantially foregoing legend,
until the earlier of:
(A) A Subsequent Distribution Date, or
(B) the Expiration Date,
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the Subsequent Rights associated with the Rights Certificates shall be
evidenced by such certificates alone and registered holders of Rights
Certificates shall also be the registered holders of the associated Subsequent
Rights, and the transfer of any of such Rights Certificates shall also
constitute the transfer of the Subsequent Rights associated with the Rights
Certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Initial Rights Certificates and Subsequent
Rights Certificates to be issued to holders of Previous Rights Certificates
(and the forms of election to purchase and of assignment to be printed on the
reverse thereof) shall each be substantially in the form set forth hereto in
Exhibit A and Exhibit B, respectively, and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or of NASDAQ or other system then in use, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
respective Rights Certificates, whenever distributed, shall be dated as of the
record date applicable thereto and on their face shall entitle the holders
thereof to purchase such number of shares of Common Stock as shall be set forth
therein at the Purchase Price determined in accordance with Section 11(a)(ii)
hereof, but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Rights Certificate issued pursuant to Section
3(a), Section 3(b) or Section 22 hereof that represents Rights Beneficially
Owned by any Person known to be:
(i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person;
(ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such; or
(iii) a transferee of an 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 such Acquiring Person has any
continuing agreement, arrangement or understanding
regarding the transferred Rights, or
(B) a transfer which the Board of
Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e)
hereof,
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and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent
feasible) the following legend, modified as applicable to such Person:
The Rights represented by this Rights Certificate are or were
Beneficially Owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Rights
Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any of
the Rights Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Rights Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and effect as
though the Person who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificates may be signed on behalf of
the Company by any Person who, at the actual date of the execution of such
Rights Certificate, shall be a proper officer of the Company to sign such
Rights Certificate, although at the date of the execution of this Rights
Agreement any such Person was not such an officer.
(b) Following the respective Distribution Dates, the
Rights Agent will keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of each
of the Rights Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section
7(e) and Section 14 hereof, at any time after the Close of Business on the
respective Distribution Dates, and prior to the Close of Business on the
Expiration Date, any Rights Certificate or Rights Certificates issued following
the respective Distribution Dates (other than Rights Certificates that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Rights Certificate or Rights Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock (or, pursuant to Section 11(b) hereof, other securities,
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cash or other assets, as the case may be) as the Rights Certificate or Rights
Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign and
deliver to the Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or destruction,
of indemnity or security reasonably satisfactory to them, and reimbursement to
the Company and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so lost, stolen,
destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS.
(a) Subject to Sections 7(e) and 11(a)(ii), hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(b) and
Section 23(a) hereof) in whole or in part at any time following the Close of
Business on the tenth Business Day after the Initial Stock Acquisition Date in
the case of the Initial Rights and following the Close of Business on the tenth
Business Day after a Subsequent Stock Acquisition Date in the case of
Subsequent Rights upon surrender of the respective Rights Certificate, with the
form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at the principal office or offices of the
Rights Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of shares (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each share of Common Stock
pursuant to the exercise of a Right shall be determined in the manner provided
in Section 11(a)(ii) hereof and shall be payable in accordance with paragraph
(c) below.
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(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price per share of Common Stock (or
other shares, securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable transfer
tax, the Rights Agent shall, subject to Section 20(j) hereof, thereupon
promptly
(i) (A) requisition from any transfer
agent of the shares of Common Stock (or make available, if
the Rights Agent is the transfer agent for such shares)
certificates for the total number of shares of Common Stock
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 shares of Common
Stock issuable upon exercise of the Rights hereunder
with a depositary agent, requisition from the
depositary agent depositary receipts representing
such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares
of Common Stock represented by such receipts shall
be deposited by the transfer agent with the
depositary agent) and the Company will direct the
depositary agent to comply with such request;
(ii) requisition from the Company the amount of
cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14 hereof;
(iii) requisition from the Company the amount of
other securities, cash or assets to be paid in lieu of shares
of Common Stock pursuant to an adjustment required under
Section 11(b) hereof;
(iv) requisition from the Company any Subsequent
Rights Certificates representing Subsequent Rights
represented by the surrendered Previous Rights Certificate by
reason of the occurrence of a Subsequent Distribution Date,
in accordance with Section 3 hereof;
(v) after receipt of such certificates,
depositary receipts, other securities, cash or assets, cause
the same to be delivered to, or upon the order of, the
registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder; and
(vi) after receipt thereof, deliver such cash,
if any, to, or upon the order of, the registered holder of
such Rights Certificate.
The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(b) hereof) shall be made in cash or by certified bank
check, bank draft or money order payable to the order of the Company. 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(b)
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hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights
Certificate shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or upon the
order of, the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, subject to the provisions of
Section 6 and Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first date on which any Person becomes an
Acquiring Person, any Rights Beneficially Owned by:
(i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person;
(ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such; or
(iii) a transferee of an 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 the Board of
Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this
Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any
holder of Rights Certificates or other Person as a result of its failure to
make any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have:
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(i) completed and signed the certificate
contained in the form of election to purchase set forth on
the reverse side of the Rights Certificate surrendered for
such exercise; and
(ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall
reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for cancellation
or in canceled form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and unissued shares of
Common Stock (and, following the determination that the number of authorized
but unissued shares of Common Stock are not sufficient to permit exercise in
full of the Rights in accordance with Section 11(a)(ii), and action by the
Company pursuant to Section 11(b) hereof, out of its other securities or out of
its authorized and issued shares held in its treasury), the number of shares of
Common Stock and other securities that, as provided in this Agreement including
Section 11(b) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) If the shares of Common Stock (and, following the
occurrence of action under Section 11(b) hereof, other securities) issuable and
deliverable upon the exercise of the Rights are listed on any national
securities exchange or NASDAQ or other system then in use, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all securities reserved for such issuance to be listed on such
exchange or NASDAQ or other system then in use upon official notice of issuance
upon such exercise.
(c) The Company shall use its best efforts to:
(i) file, as soon as practicable following the
earliest date after the first occurrence of a Distribution
Date on which the consideration to be delivered to the
Company upon exercise of the Rights has been determined in
accordance with Section 11(b) hereof, or as soon as is
required by law following a Distribution Date, as the case
may be, a registration statement under the Securities Act,
with
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respect to the securities purchasable upon exercise of the
Rights, on an appropriate form;
(ii) cause such registration statement to become
effective as soon as practicable after such filing; and
(iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of:
(A) the date as of which the Rights
are no longer exercisable for such securities, and
(B) the date of the expiration of the
Rights.
The Company will also take such action as may be appropriate under, or
to ensure compliance with, the securities ("Blue Sky") laws of the various
states in connection with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed one hundred twenty
(120) days after the date set forth in clause (i) of the first sentence of this
Section 9(c), the exercisability of the Rights in order to prepare and file
such registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and, if necessary, until a
registration statement has been declared effective.
(d) The Company covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of Common Stock
(and, following the occurrence of a determination under Section 11(b) hereof,
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (or other securities) (subject to
payment of the Purchase Price), be duly and validly authorized and issued.
(e) The Company further covenants and agrees that it
will pay when due and payable any and all federal and state transfer taxes
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of shares of Common Stock (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 Rights Certificates to a Person other
than, or the issuance or delivery of a number of shares of Common Stock (or
other securities, as the case may be) in respect of a name other than that of,
the registered holder of the Rights Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for a number of shares of
Common Stock (or any other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights until such tax
shall have been paid (any such tax being payable by the holder of such Rights
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
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SECTION 10. COMMON STOCK RECORD DATE.
Each Person in whose name any certificate for a number of shares of
Common Stock (or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder
of record of such shares of Common Stock (or other securities, as the case may
be) represented thereby on, and such certificate shall be dated, the date upon
which the Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the Common Stock (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 Common Stock (or
other securities, as the case may be) transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a shareholder of the Company
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company, except as provided
herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS.
The Purchase Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) Subject to Section 11(b) hereof, in the
event that, at any time after the Close of Business on a Distribution Date and
prior to the Close of Business on the Expiration Date, the Company shall:
(A) declare or pay a dividend on the
Common Stock payable in shares of Common Stock,
(B) subdivide the outstanding shares
of Common Stock,
(C) combine the outstanding shares of
Common Stock into a smaller number of shares of
Common Stock,
(D) issue any shares of its capital
stock in a reclassification of its Common Stock
(including any such reclassification in connection
with a consolidation or merger in which the Company
is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and
Section 7(e) hereof,
then and in such event, the number of shares of Common Stock and the number and
kind of other securities or property, as the case may be, issuable upon the
exercise of a Right on such date shall be proportionately adjusted so that the
holder of any Right exercised on or after such date shall be entitled to
receive, upon the exercise thereof and payment of the Purchase Price, the
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aggregate number of shares of Common Stock and the number and kind of other
securities or property, as the case may be, that, if such Right had been
exercised immediately prior to such date and at a time when such Right was
exercisable and the transfer books of the Company were open, such holder would
have owned upon such exercise and would have been entitled to receive by virtue
of such dividend, subdivision, combination or reclassification; provided,
however, that if prohibited by law or, in the opinion of counsel for the
Company, controlling judicial decision, in no event shall the consideration to
be paid upon the exercise of a Right be less than the aggregate par value of
the shares of Common Stock or other securities of the Company issuable upon
exercise of a Right. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to, and shall be
made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in
the event that any Person, alone or together with its
Affiliates and Associates, shall, at any time after the
Record Date, become an Acquiring Person then, promptly
following the occurrence of each such Stock Acquisition Date,
proper provision shall be made so that each holder of a Right
(except as provided below in this clause (ii) and in Section
7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof, a number of shares of Common Stock equal to
eight shares of Common Stock multiplied by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding on the Initial Stock Acquisition Date, and the
denominator of which is the number of shares of Common Stock
outstanding on the Initial Stock Acquisition Date that are
not Beneficially Owned by the Acquiring Person or its
Affiliates or Associates. In the event that any Person, alone
or together with its Affiliates and Associates, shall, at any
time on or after the Initial Distribution Date, become an
Acquiring Person then, promptly following the occurrence of
each such Subsequent Stock Acquisition Date, proper provision
shall be made so that each holder of a Subsequent Right
(except as provided below and in Section 7(e) hereof) shall
thereafter have the right to receive, upon exercise thereof,
a number of shares of Common Stock equal to eight shares of
Common Stock multiplied by a fraction, the numerator of which
is the number of shares of Common Stock outstanding on the
Subsequent Stock Acquisition Date and the denominator of
which is the number of shares of Common Stock outstanding on
such Subsequent Acquisition Date that are not Beneficially
Owned by the Acquiring Person or its Affiliates or
Associates. The price (the "Purchase Price") for the exercise
of each Right shall be an amount equal to the product of (x)
20% of the then Current Market Price per share of the Common
Stock (determined pursuant to Section 1(i) hereof on the
Stock Acquisition Date), multiplied by (y) the number of
shares of Common Stock to be received upon exercise, as set
out in this clause (ii).
(b) In the event that the number of shares of Common
Stock which are authorized by the Company's articles of incorporation but not
outstanding or reserved for issuance for purposes other than upon exercise of
the Rights are not sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof following the respective Distribution
Dates, the Company, in the discretion of the Board of Directors, shall either:
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(i) Subject to any required shareholder
approval, effect a reverse stock split or otherwise combine
the outstanding shares of Common Stock such that, after
giving effect to such reverse split or combination, the
Company has a sufficient number of authorized but unissued
shares of Common Stock for issuance upon exercise of
outstanding and exercisable Rights; or
(ii) (A) Determine the excess of
a. the Current Market Price
of the shares of Common Stock issuable upon
the exercise of a Right over
b. the Purchase Price (such
excess called the "Spread"), and
(B) with respect to each Right (other
than Rights which have become void pursuant to
Section 7(e) hereof), make adequate provision to
substitute for such shares of Common Stock, upon
payment of the applicable Purchase Price,
a. cash,
b. a reduction in the
Purchase Price,
c. Common Stock Equivalents,
d. debt securities of the
Company,
e. other assets, or
f. any combination of the
foregoing,
having an aggregate value, when added to the value of the shares of Common
Stock actually issued upon exercise of such right, equal to the Current Market
Price (less the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board of Directors of the Company
based upon the advice of a recognized investment banking firm selected by the
Board of Directors of the Company; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (ii) above
within thirty (30) days following the Stock Acquisition Date, then the Company
shall be obligated to deliver, to the extent permitted by applicable law and
any material agreements in effect to which the Company is a party, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the Spread. If
the Board of Directors of the Company shall determine that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights or that the reverse stock split or other
combination of outstanding shares contemplated by Section 11(b)(i) hereof could
be authorized, the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days after the Stock
Acquisition Date, in order that the Company may seek shareholder approval for
the
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authorization of such additional shares or for authorization of the reverse
stock split or other combination of shares (such period, as it may be extended,
the "Substitution Period").
(iii) To the extent that the Company determines
that some action need be taken pursuant to subparagraphs (i)
or (ii) of this Section 11(b), the Company (x) shall provide,
subject to Section 7(e) hereof, that such action shall apply
uniformly to all outstanding Rights except as expressly
provided herein, 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 or a
reverse stock split or other combination of outstanding
shares and/or to decide the appropriate form of action to be
taken pursuant to such subparagraphs (i) and (ii) and to
determine the value of any distribution. 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 Section 11(b)(ii), the value of the
shares of Common Stock shall be the Current Market Price per
share of the Common Stock on the Stock Acquisition Date and
the value per share or fractional value of any Common Stock
Equivalent shall be deemed to have the same value as the
Common Stock on such date. The Board of Directors of the
Company may, but shall not be required to, establish
procedures to allocate the right to receive shares of Common
Stock upon the exercise of the Rights among the holders of
the Rights pursuant to this Section 11(b).
(c) Anything herein to the contrary notwithstanding, no
adjustment in the number of shares of Common Stock purchasable upon exercise of
a Right pursuant to Section 11(a)(ii) hereof or in the Purchase Price or Spread
pursuant to Section 11(b) hereof shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the aggregate
number of shares or in the Spread or Purchase Price; provided, however, that
any adjustments which by reason of this Section 11(c) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustments. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one-hundredth of a share of Common Stock.
Notwithstanding the first sentence of this Section 11(c), any adjustment
required by this Section 11 shall be made no later than the earlier of:
(i) three (3) years from the date of the
transaction which mandates such adjustment; or
(ii) the Expiration Date.
(d) If as a result of an adjustment made pursuant to
Section 11(b) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Common Stock, thereafter the number of such other shares so receivable
upon exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock contained in
Sections 11(a), (b), (c), (e), (f), (i) and (j), and the provisions of Sections
7, 9, 10, 13 and 14 hereof with respect to the Common Stock shall apply on like
terms to any such other shares.
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(e) All Rights originally issued by the Company
subsequent to any adjustment made to the number of shares of Common Stock
purchasable upon exercise of a Right pursuant to Section 11(a)(ii) hereof shall
evidence the right to purchase the number of shares of Common Stock purchasable
from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(f) In the event of a reverse stock split or other
combination of outstanding shares of Common Stock made subsequent to a
Distribution Date, then and in such event the number of Rights shall be
adjusted so that the holder of any Rights shall hold a number of Rights equal
to the number of shares of Common Stock that such Rights holder would own had
such Rights been distributed after completion of the reverse stock split or
other combination of outstanding shares of Common Stock. The Company may elect
on or after the date of any adjustment of the number of shares of Common Stock
purchasable upon exercise of a Right pursuant to Section 11(a)(ii) hereof to
adjust the number of Rights, in lieu of any adjustment in the number of shares
of Common Stock purchasable upon the exercise of a Right. The aggregate of the
Rights outstanding after the adjustment in the number of Rights shall be
exercisable for the number of shares of Common Stock for which the aggregate of
the Rights was exercisable immediately prior to such adjustment. Adjustments in
Rights shall be calculated to the nearest one-hundredth of a Right, and
payments shall be made in accordance with Section 3 of this Agreement. The
Company shall make a public announcement of its election to adjust the number
of Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the number of shares of Common Stock purchasable upon exercise is
adjusted or any day thereafter, but if the Rights Certificates have been issued
the record date shall be at least ten (10) days later than the date of the
public announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(f), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Rights Certificates held by such holders prior to the date
of adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights Certificates to be so distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted number of shares of Common
Stock purchasable upon exercise of a Right) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(g) Irrespective of any adjustment or change in the
number of shares of Common Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may continue to express
the number of shares which were expressed in the original Rights Certificates
issued hereunder.
(h) Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value, if any, of the
Common Stock or other shares of Common Stock Equivalents 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
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Company may validly and legally issue fully paid and nonassessable shares of
Common Stock or Common Stock Equivalents at such adjusted Purchase Price. In
the event that it appears that the issuance of shares of Common Stock at the
Purchase Price called for herein would result in issuance of shares of Common
Stock that were not validly issued, fully paid and nonassessable shares of
Common Stock, the Company may issue Common Stock Equivalents or other assets in
the manner provided in Section 11(b)(ii)(B) hereof.
(i) In any case in which this Section 11 shall require
that an adjustment in the number of shares of Common Stock or other capital
stock or securities of the Company, if any, issuable upon exercise of the
Rights shall be made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the number of shares
of Common Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the number of shares of Common Stock
and other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the number of shares of Common Stock purchasable
upon exercise of a Right in effect prior to such adjustment; provided, however,
that the Company shall deliver to such holder a due bill or other appropriate
instrument evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(j) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments in the
Purchase Price or number of shares of Common Stock purchasable upon exercise of
a Right, in addition to those adjustments expressly required by this Section
11, as and to the extent that in their judgment the Board of Directors of the
Company shall determine to be advisable in order that any:
(i) consolidation or subdivision of the Common
Stock;
(ii) issuance wholly for cash of any shares of
Common Stock at less than the Current Market Price;
(iii) issuance wholly for cash of shares of
preferred stock or other securities which by their terms are
convertible into or exchangeable for shares of Common Stock;
(iv) stock dividends; or
(v) issuance of rights, options or warrants
referred to in this Section 11;
hereafter made by the Company to holders of its Common Stock shall not be
taxable to such shareholders.
(k) The Company covenants and agrees that it shall not,
at any time on or after a Distribution Date:
(i) consolidate with any other Person;
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(ii) merge with or into any other Person;
(iii) engage in a share exchange with any other
Person; or
(iv) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of
related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any other Person
or Persons, if:
(A) at the time of or immediately
after such consolidation, merger, share exchange,
sale or transfer, 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, or
(B) prior to, simultaneously with or
immediately after such consolidation, merger, share
exchange, sale or transfer, the shareholders of the
Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a)
hereof shall have received a distribution of Rights
previously owned by such Person or any of its
Affiliates and Associates.
(l) The Company covenants and agrees that, after the
Initial Distribution Date, it will not, except as permitted by Section 11(b),
Section 23 or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at any time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Initial Rights or any Subsequent Rights.
(m) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Record Date and prior to the Initial Distribution Date in the case of the
Initial Rights and prior to a Subsequent Distribution Date in the case of
Subsequent Rights:
(i) declare or pay any dividend on the
outstanding shares of Common Stock payable in shares of
Common Stock;
(ii) subdivide the outstanding shares of Common
Stock; or
(iii) combine the outstanding shares of Common
Stock into a smaller number of shares;
then in any such case the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but prior to the
respective Distribution Dates, shall remain unchanged, so that the value of the
rights remaining shall represent the same proportion of the value of the
Company as before. Rights associated with shares eliminated by any combination
of outstanding shares of Common Stock shall be canceled by operation of such
combination.
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SECTION 12. CERTIFICATE OF ADJUSTED NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall promptly:
(a) prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent, and with each transfer
agent for the Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of
Rights in accordance with Section 26 hereof.
The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall not be deemed to
have knowledge of any adjustment unless and until it shall have received such
certificate.
SECTION 13. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER.
(a) In the event that, following the Initial
Distribution Date, directly or indirectly:
(i) the Company shall consolidate with, or
merge with and into, any other Person other than a
consolidation with, or merger with and into, a wholly-owned
Subsidiary, and the Company shall not be the continuing or
surviving corporation of such consolidation or merger;
(ii) any Person shall consolidate with, or merge
with or into, the Company, or engage in a share exchange with
the Company, and the Company shall be the continuing or
surviving corporation of such consolidation, merger or share
exchange and, in connection with such consolidation, merger
or share exchange, all or part of the outstanding shares of
Common Stock shall be changed into or exchanged for stock or
other securities of any other Person (or of the Company) or
cash or any other property; or
(iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of
related transactions, assets or earning power aggregating
more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or one or more of its
wholly-owned Subsidiaries);
then, and in each such case, promptly following the occurrence of each such
Section 13 Event, proper provision shall be made so that:
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(A) each holder of a Right, except as
provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof
at the then current Purchase Price in accordance
with the terms of this Agreement, such number of
validly issued, fully paid, non-assessable and
freely tradeable shares of Common Stock of the
Principal Party (as such term is defined in Section
1(y) hereof), not subject to any liens,
encumbrances, rights of first refusal or other
adverse claims, as shall be equal to the product of
eight times the result obtained by dividing the
Current Market Price of a share of Common Stock as
of the date immediately preceding the first public
announcement of such Section 13 Event by the Current
Market Price of a share of Common Stock of the
Principal Party on such announcement date multiplied
by a fraction the numerator of which is the number
of shares of Common Stock outstanding on the Stock
Acquisition Date with respect to such Right, and the
denominator of which is the number of shares of
Common Stock that are not Beneficially Owned by the
Acquiring Person or its Affiliates or Associates,
provided, however, that the Purchase Price and the
number of shares of Common Stock of such Principal
Party issuable upon the exercise of each Right shall
be further adjusted as provided in Section 11(d) of
this Agreement to reflect any events occurring in
respect of such Principal Party after the date of
such Section 13 Event;
(B) such Principal Party shall
thereafter be liable for, and shall assume, by
virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this
Agreement;
(C) the term "Company" shall
thereafter be deemed to refer to such Principal
Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to
such Principal Party following the first occurrence
of a Section 13 Event;
(D) such Principal Party shall take
such steps (including, but not limited to, the
reservation of a sufficient number of shares of its
Common Stock in accordance with Section 9 hereof) in
connection with the consummation of any such
transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as
nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon
the exercise of the Rights, provided that, upon the
subsequent occurrence of any merger, consolidation,
share exchange, 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(a), such cash, shares, rights,
dividends, 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 Stock of the Principal Party receivable upon
the exercise of a Right pursuant to this Section
13(a); and
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(E) the provisions of Section
11(a)(ii) hereof shall be of no effect following the
first occurrence of any Section 13 Event, except as
they apply to determination of the Purchase Price.
(b) The Company shall not consummate any such
consolidation, merger, share exchange, sale or transfer unless prior thereto
the Company and the Principal Party shall have exercised and delivered to the
Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms, that
the Principal Party has a sufficient number of authorized shares of its Common
Stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraph (a) of this Section 13 and further providing that, as
soon as practicable after the date of any consolidation, merger, share exchange
or sale of assets mentioned in paragraph (a) of this Section 13, the Principal
Party will:
(i) prepare and file a registration statement
under the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to:
(A) become effective as soon as
practicable after such filing, and
(B) remain effective (with a
prospectus at all times meeting the requirements of
the Securities Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register
the Rights and the securities purchasable upon exercise of
the Rights under the Blue Sky laws of such jurisdictions as
may be necessary or appropriate;
(iii) use its best efforts, if the Common Stock
of the Principal Party shall be listed or admitted to trading
on any national securities exchange or NASDAQ, to list or
admit to trading (or continue the listing of) the Rights and
the securities purchasable upon exercise of the Rights on
such securities exchange or NASDAQ, or, if the Common Stock
of the Principal Party shall not be listed or admitted to
trading on any such national securities exchange or NASDAQ,
to cause the Rights and the securities receivable upon
exercise of the Rights to be reported by such other system
then in use;
(iv) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act; and
(v) obtain waivers of any rights of first
refusal or preemptive rights in respect of the Common Stock
of the Principal Party subject to purchase upon exercise of
outstanding Rights.
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(c) The provisions of this Section 13 shall similarly
apply to successive mergers, consolidations, share exchanges or sales or other
transfers. In the event that a Section 13 Event shall occur at any time after
the occurrence of a Stock Acquisition Date, the Rights which have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a) hereof.
(d) In case the Principal Party has any provision in any
of its authorized securities or in its certificate or articles of incorporation
or bylaws or other instrument governing its corporate affairs, which provision
would have the effect of:
(i) causing such Principal Party to issue
(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,
shares of Common Stock of such Principal Party at less than
the then Current Market Price per share thereof (determined
pursuant to Section 1(i) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal
Party at less than such then Current Market Price; or
(ii) providing for any special payment, tax or
similar provision in connection with the issuance of the
Common Stock of such Principal Party pursuant to the
provisions of this Section 13;
then, in such event, the Company 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 Rights Agent
a supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not,
at any time after a Person becomes an Acquiring Person, enter into any
transaction of the type contemplated by (i) - (iii) of Section 13(a) hereof if
(x) at the time of or immediately after such consolidation, merger, share
exchange, 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, (y) prior to, simultaneously with or immediately after
such consolidation, merger, share exchange, sale, transfer or other
transaction, the shareholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (z) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Rights Certificates which evidence fractional
Rights. In lieu of such
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fractional Rights, there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights 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 on the principal national securities exchange
on which the Rights are listed or admitted to trading, or if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
(b) The Company shall not be required to issue fractions
of shares of Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
fractional shares of Common Stock, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the current market
value of one share of Common Stock. For purposes of this Section 14(b), the
current market value of one share of Common Stock shall be the Closing Price of
one share of Common Stock (as determined pursuant to Section 1(i) hereof) for
the Trading Day immediately prior to the date of such exercise.
(c) 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 of a Right, except as permitted by this Section
14.
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, other than rights
of action given to the Rights Agent pursuant to Section 18 hereof, are vested
in the respective registered holders of the Rights Certificates (and, prior to
the respective Distribution Dates, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to the
respective Distribution Dates, the registered holders of the Common Stock),
without the consent of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the respective Distribution Dates, the registered
holders of the Common Stock), in his own behalf and for his own benefit, may
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate (or, prior to the respective
Distribution Dates, such Common Stock) in the manner provided in such Rights
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and
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injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.
Every holder of a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Initial Distribution Date, the Initial
Rights will be transferable only in connection with the transfer of shares of
Common Stock to which the Initial Rights relate and prior to a Subsequent
Distribution Date, Subsequent Rights will be transferable only in connection
with the transfer of shares of Common Stock to which the Subsequent Rights
relate or Previous Rights that have not been exercised;
(b) after a Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if surrendered
at the office or agency of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the
Company and the Rights Agent may deem and treat the Person in whose name a
Rights Certificate (or, prior to the Initial Distribution Date with respect to
the Initial Rights and a Subsequent Distribution Date with respect to
Subsequent Rights, the associated Common Stock certificate) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificates or the
associated Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent, subject to Section 7(e) hereof, shall be required to be affected
by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the Company must
use its reasonable best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as practicable.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number
of shares of Common Stock or any other securities of the Company which may at
any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any Rights Certificate be construed to
confer upon the holder of any Rights Certificate, as such, any of the rights of
a shareholder of the Company or any right to vote for the election of directors
or upon any matter submitted to
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shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Rights or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay in a timely manner to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any losses, expenses, claims, damages or
liabilities, incurred without gross negligence, bad faith or willful misconduct
on the part of the Rights Agent, for anything done or omitted by the Rights
Agent in connection with the acceptance and administration of this Agreement
and performance hereunder, including, without limitation, the costs and
expenses of defending against any claim of liability arising therefrom,
directly or indirectly, and will promptly reimburse the Rights Agent for any
legal or other expenses reasonably incurred in investigating or defending any
such loss, expense, claim, damage or liability.
(b) The Rights Agent shall be protected by the indemnity
provided by this Section 18 and shall incur no liability for or in respect of
any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons or otherwise upon the
advice of counsel as set forth in Section 20 of this Agreement.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however, that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in
all
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such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Rights Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring Person
and the determination of Current Market Price) be proved or established by the
Company prior to taking 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, the President, the Chief Executive
Officer, any Vice President, the Treasurer, any Assistant Treasurer, the
Controller, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for a loss which is a result of or caused by
its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals maintained in this
Agreement or in the Rights Certificates or be required to verify the same
(except as to its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity or legality of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or legality or execution of any Rights
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach
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by the Company of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt of the
certificate described in Section 12 hereof setting forth any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock
to be issued pursuant to this Agreement or any Rights Certificate or as to
whether any shares of Common Stock will, when so issued, be validly authorized
and issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing
by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed
to accept instructions with respect to the performance of its duties hereunder
from any Person reasonably believed by the Rights Agent to be one of the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer or Controller of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable to the Company or the
holder of any Rights Certificate or any shareholder of the Company 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
those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent set forth
in writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable in
accordance with a proposal included in such application on or after the date
specified in such application (which date shall not be less than five Business
Days after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking any such action (or the effective date in
case of an omission), the Rights Agent shall have received written instructions
in response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or
lend money to the Company or its Subsidiaries or otherwise act as fully and
freely as though it were not the Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity for
the Company or its Subsidiaries or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any
-35-
such act, default, neglect or misconduct; provided, however, reasonable care
was exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to purchase, as the case
may be, has either not been completed to certify or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise of transfer without
first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) days' notice
in writing mailed to the Company, and to each transfer agent of the Common
Stock, by registered or certified mail, and, following any Distribution Date,
to the holders of the Rights Certificates then outstanding by first-class mail.
The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common
Stock, by registered or certified mail, and, following any Distribution Date,
to the holders of the Rights Certificates then outstanding by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
(30) days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall, with such
notice, submit his Rights Certificate for inspection by the Company), then any
registered holder of any Rights Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
of any state, in good standing, which is authorized under such laws to exercise
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 Rights Agent
a combined capital and surplus of at least $50,000,000 or (b) an affiliate of a
corporation described in clause (a) of this sentence. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and,
following any Distribution Date, mail a notice thereof in writing to the
registered holders of the then outstanding Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
-36-
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights Certificate to the contrary, the Company may, at its option, issue new
Rights Certificates evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the Purchase Price or
the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Initial Distribution Date in the
case of the Initial Rights and a Subsequent Distribution Date in the case of
Subsequent Rights and, in each case, prior to the earlier of the redemption or
expiration of the respective Rights, the Company:
(a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under any employee
plan or arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, or upon a contractual obligation of the
Company in each case existing prior to the Initial Distribution Date in the
case of the Initial Rights and a Subsequent Distribution Date in the case of
Subsequent Rights;
(b) shall, with respect to shares issuable upon exercise
of Previous Rights; and
(c) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that:
(i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued;
(ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustments shall
otherwise have been made in lieu of the issuance thereof; and
(iii) any Subsequent Rights Certificate issued
with respect to shares issuable upon exercise of Previous
Rights may provide that such Subsequent Rights are only
exercisable upon exercise of Previous Rights.
SECTION 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the Close of Business on the tenth Business Day
following the Initial Stock Acquisition Date, redeem all but not less than all
of the then outstanding Initial Rights (other than Rights that have become void
pursuant to the provisions of Section 7(e) hereof) at a redemption price of
$.0001 per Right (the "Redemption Price"), as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof; and the Board of Directors may, at its option,
at any time prior to the Close of Business on the tenth Business Day following
a Subsequent Stock Acquisition Date redeem all but not less than all of
-37-
the then outstanding Subsequent Rights (other than Rights that have become void
pursuant to the provisions of Section 7(e) hereof) at the Redemption Price as
such amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof.
Notwithstanding anything contained in this Agreement to the contrary, Rights
shall not be exercisable until such time as the Company's right of redemption
therefor has expired.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights pursuant to
Paragraph (a) of this Section 23 (or at such later time as the Board of
Directors may establish for the effectiveness of such redemption), evidence of
which shall have been filed with the Rights Agent and without any further
action and without any notice, the right to exercise the Rights to be redeemed
will terminate and the only right thereafter of the holders of such Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Board of Directors ordering the redemption of Rights, the
Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights to be redeemed by mailing such notice to
all such holders at each holder's last address as it appears upon the registry
books of the Rights Agent and, where rights are represented by certificates for
Common Stock, on the registry books of the transfer agent for the Common Stock.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the number of Rights to be redeemed and the method by which the
payment of the Redemption Price will be made. The failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its
option, at any time and from time to time after any person first becomes an
Acquiring Person, exchange 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 7(e) hereof) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right or, if the Company does not have a
sufficient number of authorized and not outstanding shares of Common Stock for
issuance upon exchange at such ratio, such other exchange ratio as the Board of
Directors shall determine (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors
shall not be empowered to effect such exchange at any time after (i) any
Acquiring Person (other than an Exempt Person), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of shares of Common
Stock aggregating 50% or more of the shares of Common Stock then outstanding or
(ii) the occurrence of an event specified in Section 13(a) hereof.
(b) Immediately upon the action of the Board of
Directors of this Company ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24 and without any further notice, the right to
exercise such Rights shall terminate and the only right thereafter a holder of
such Rights shall have shall be to receive that number of shares of Common
Stock equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company shall
promptly mail a notice of any such exchange to all of the holders of the Rights
so
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exchanged at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange,
the number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Section 7(e) hereof) held by each
holder of Rights.
(c) In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, or that any regulatory actions or approvals are necessary in connection
therewith, the Company may, in its discretion, take such actions or seek such
approvals as may be necessary to authorize additional shares of Common Stock
for issuance upon exchange of the Rights. In the event that the Company shall,
after good faith effort, be unable to take such actions or obtain such
approvals as may be necessary to authorize such additional shares of Common
Stock, the Company shall substitute, to the extent of such insufficiency, for
each share of Common Stock that would otherwise be issuable upon exchange of a
Right, a number of units of Common Stock Equivalents as defined in Section 1(h)
hereof, cash or other assets of the Company equal to the Current Market Price
of one share of Common Stock (determined pursuant to Section 1(i) hereof) as of
the date of issuance of such Common Stock Equivalents or fractions thereof.
(d) The Company shall not, in connection with any
exchange pursuant to this Section 24, be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional shares
of Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Rights Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a
whole share of Common Stock. For the purposes of this paragraph (d), the
current market value of a whole share of Common Stock shall be the Closing
Price of a share of Common Stock (as determined pursuant to the second sentence
of Section 1(i) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after
the Initial Distribution Date:
(i) to pay any dividend payable in stock of any
class to the holders of the Common Stock;
(ii) to offer to the holders of Common Stock
rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any
class or any other securities, rights or options;
-39-
(iii) to effect any reclassification of its
Common Stock (other than a reclassification involving only
the subdivision of outstanding shares of Common Stock); or
(iv) to effect any liquidation, dissolution or
winding up of the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants,
reclassification or the date on which such liquidation, dissolution or winding
up is to take place and the date of participation therein by the holders of the
shares of Common Stock, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for determining holders of the
shares of Common Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Common Stock, whichever shall be the earlier.
(b) In case any of the events set forth in Section
11(a)(ii) or Section 13 hereof shall occur, then, in any such case, the Company
shall, as soon as practicable thereafter, give to each holder of a Rights
Certificate (or if occurring prior to the Initial Distribution Date in the case
of the Initial Rights and a Subsequent Distribution Date in the case of
Subsequent Rights, the holders of the Common Stock), to the extent feasible and
in accordance with Section 26 hereof, a notice of the occurrence of such event,
which shall specify the event and the consequences of the event to holders of
Rights under Sections 11(a)(ii) and 13 hereof.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Rights Agent) as follows:
AtheroGenics, Inc.
8995 Westside Parkway
Alpharetta, GA 30004
Attention: President and Chief Executive Officer
with a copy to:
Long Aldridge & Norman LLP
303 Peachtree Street, Suite 5300
Atlanta, GA 30308
Attention: Leonard A. Silverstein, Esq.
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Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be
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:
American Stock Transfer & Trust Company
59 Maiden Lane
New York, N.Y. 10038
Attention: Karen Lazar
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Initial Distribution Date in the case of the Initial Rights and a
Subsequent Distribution Date in the case of Subsequent Rights, to the holder of
certificates representing shares of Common Stock) shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of the Company, in
the case of Rights represented by certificates for Common Stock, and on the
registry books of the Rights Agent, in the case of Rights represented by Rights
Certificates.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Subject to the last sentence of this Section 27 and subject to the
next sentence herein, at any time prior to the Close of Business on the tenth
Business Day following the Initial Stock Acquisition Date and thereafter for so
long as the Initial Rights are redeemable, the Company may in its sole and
absolute discretion, and the Rights Agent shall if the Company so directs,
supplement or amend any provision of this Agreement in any respect without the
approval of the holders of any Rights. Subject to the last sentence of this
Section 27, at any time after the Close of Business on the tenth Business Day
following a Stock Acquisition Date, if no Person is a Beneficial Owner of 15%
or more of the then-outstanding Common Stock of the Company, then the Company
may in its sole and absolute discretion, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of this Agreement in any
respect without the approval of the holders of any Rights; provided, however,
that any such supplement or amendment approved after a Stock Acquisition Date
pursuant to this sentence shall apply only to Rights distributed thereafter.
Except as provided in the preceding sentence, at any time when the Rights are
no longer redeemable, and subject to the last sentence of this Section 27, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of Rights Certificates in order:
(a) to cure any ambiguity;
(b) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein;
(c) to shorten or lengthen any time period hereunder,
provided, however, that except as expressly provided in this Agreement, the
period during which the Company may redeem the Rights may not be extended; or
-41-
(d) to change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable and which shall
not adversely affect the interests of the holders of Rights Certificates (other
than an Acquiring Person, or an Affiliate or Associate of any such Acquiring
Person); provided, this Agreement may not be supplemented or amended to
lengthen:
(i) a time period relating to when the Rights
may be redeemed if at the time of such supplement or
amendment the respective Rights are not then redeemable; or
(ii) any other time period unless such
lengthening is for the purpose of (A) protecting, enhancing
or clarifying the rights of, and/or the benefits to, the
holders of the Rights (other than an Acquiring Person, or an
Affiliate or Associate of any such Acquiring Person) or (B)
protecting or enhancing the rights of, and/or the benefits
to, the holders of Common Stock (other than an Acquiring
Person, or an Affiliate or Associate of any such Acquiring
Person).
Upon the delivery of a certificate that is signed by an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, which certificate shall be
conclusive evidence of compliance with this Section 27, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything contained in
this Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act; provided, however, that such
calculation shall not include shares that the holder of Common Stock or a
Rights Certificate has the right to acquire. The Board of Directors of the
Company (or, where specifically provided for herein, certain specified members
thereof) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to:
(a) interpret the provisions of this Agreement; and
-42-
(b) make all determinations deemed necessary or
advisable for the administration of this Agreement (including, but not limited
to, a determination to redeem or not redeem the Rights or to amend the
Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (c) below, all omissions with respect to the foregoing)
which are done or made by the Board (or, where specifically provided for
herein, by certain specified members thereof) in good faith, shall:
(c) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties; and
(d) not subject the Board or such specified members
thereof to any liability to the holders of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Initial Distribution Date in the case of
the Initial Rights and a Subsequent Distribution Date in the case of Subsequent
Rights, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Initial Distribution Date
in the case of the Initial Rights and a Subsequent Distribution Date in the
case of Subsequent Rights, registered holders of the Common Stock).
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business of the twentieth day following the
date of such determination by the Board of Directors.
SECTION 32. GOVERNING LAW.
This Agreement, each Right and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Georgia 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 to be
performed entirely within such State.
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SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and
all such counterparts shall together constitute but one and the same
instrument.
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
(Signatures on next page.)
-44-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their respective corporate seals to be hereunto affixed
and attested, all as of the date and year first above written.
Attest: ATHEROGENICS, INC.
By: /s/ MARK P. COLONNESE By: /s/ RUSSELL M. MEDFORD
---------------------------------- ----------------------------------
Name: MARK P. COLONNESE Name: RUSSELL M. MEDFORD, M.D., PH.D.
-------------------------------- --------------------------------
Title Secretary Title: President and Chief Executive
-------------------------------- -------------------------------
Officer
-------------------------------
Attest: AMERICAN STOCK TRANSFER & TRUST
COMPANY
By: /s/ SUSAN SILBER By: /s/ HERBERT J. LEMMER
---------------------------------- ----------------------------------
Name: SUSAN SILBER Name: HERBERT J. LEMMER
-------------------------------- --------------------------------
Title Assistant Secretary Title: Vice President
-------------------------------- -------------------------------
-45-
EXHIBIT A
[Form of Initial Rights Certificate]
Certificate No. __ ____ Rights
NOT EXERCISABLE AFTER NOVEMBER 8, 2011 OR EARLIER IF REDEEMED BY ATHEROGENICS,
INC. (THE "COMPANY"). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.0001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT
BETWEEN ATHEROGENICS, INC. AND AMERICAN STOCK TRANSFER & TRUST COMPANY (THE
"RIGHTS AGENT") DATED AS OF NOVEMBER 9, 2001, AS AMENDED FROM TIME TO TIME (THE
"RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE
COMPANY. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
SUBSEQUENT RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE
EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF
THE RIGHTS AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE
PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY,
ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON, OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BECOME NULL AND VOID.
Initial Rights Certificate
AtheroGenics, Inc.
This certifies that ________________________________, or registered
assigns, is the registered owner of the number of Rights set forth set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of November 9, 2001
(the "Rights Agreement"), between AtheroGenics, Inc., a Georgia corporation
(the "Company"), and American Stock Transfer & Trust Company, a New York
corporation (the "Rights Agent"), to purchase from the Company at any time
prior to 5:00 P.M. (Atlanta, Georgia time) on November 8, 2011 at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, a number of shares of Common Stock (the "Common Stock") of the
Company equal to eight shares of Common Stock multiplied
- ---------
* The portion of the legend in brackets shall be inserted only if applicable,
shall be modified to apply to an Acquiring Person as applicable, and shall
replace the preceding sentence.
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding on the Stock Acquisition Date, and the denominator of which is the
number of shares of Common Stock outstanding on the Stock Acquisition Date that
are not beneficially owned by an Acquiring Person or its Affiliates or
Associates, at a purchase price per share equal to twenty percent (20%) of the
Current Market Price of the Common Stock on the Stock Acquisition Date (the
"Purchase Price"), as those terms are defined in Section 1 of the Rights
Agreement, upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed, and the
tender of the Purchase Price, which may be paid in cash or by certified bank
check or money order payable to the Company. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set forth
above, are the number and Purchase Price as of __________________________,
based upon the Common Stock as constituted at such date.
These rights shall only become exercisable after the Close of Business
on the tenth Business Day following the Initial Stock Acquisition Date, if the
Rights evidenced by this Certificate are beneficially owned by a person other
than (i) an Acquiring Person or an Affiliate or Associate of any such Person,
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person, an
Affiliate or Associate of any such Person. If the Rights are beneficially owned
by any of the Persons specified in clauses (i), (ii) or (iii) of the preceding
sentence, such Rights shall become null and void and no holder hereof shall
have any right with respect to such Rights from and after the Initial Stock
Acquisition Date.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Common Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are
subject to modification and adjustment upon the happening of certain events.
In accordance with Section 3 of the Rights Agreement, this Rights
Certificate may evidence and entitle the holder hereof to certain Subsequent
Rights. Such Subsequent Rights shall attach to this Rights Certificate, to the
extent the Rights represented herein are not exercised, until a Subsequent
Distribution Date, at which time the Subsequent Rights shall be evidenced by a
Subsequent Rights Certificate. Such Subsequent Rights cannot be exercised by
the holder thereof until such holder has exercised the Rights represented by
this Rights Certificate to which such Subsequent Rights were attached.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by this reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company, the members of the Board of Directors of the
Company, and the holders of the Rights Certificates, which limitations of
rights include the temporary suspension of the exercisability of such rights
under the specific circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available upon written request to the Company.
2
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of shares of Common Stock as the
Rights evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate may be redeemed by the Company at its
option at a redemption price of $.0001 per Right at any time prior to the
earlier of the Close of Business on (i) the tenth Business Day after the
Initial Stock Acquisition Date, and (ii) the Final Expiration Date. To the
extent that this Rights Certificate represents any Subsequent Rights, such
Subsequent Rights may be redeemed by the Company at its option at a redemption
price of $.0001 per Right at any time prior to the earlier of the Close of
Business on (i) the tenth Business Day after a Subsequent Stock Acquisition
Date and (ii) the Final Expiration Date.
No fractional shares of Common Stock will be issued upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Common Stock 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 Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
All capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
3
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of 20
------------- --, --
ATHEROGENICS, INC.
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
[CORPORATE SEAL]
ATTEST:
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
COUNTERSIGNED:
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
ATTEST:
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
4
[Form of Reverse Side of Initial Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate)
FOR VALUE RECEIVED _____________________________________________ hereby sells,
assigns and transfers unto ____________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ____________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: , 20
------------- ----
----------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person, an Affiliate or Associate of any such Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person, an Affiliate or Associate of any such Person.
Dated: , 20
------------- ---- ----------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate)
To: ATHEROGENICS, INC.
The undersigned hereby irrevocably elects to exercise _____ Rights
represented by this Rights Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other Person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
-------------------------------------------------
Please insert social security
or other identifying number:
-------------------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
-------------------------------------------------
Please insert social security
or other identifying number:
-------------------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
Dated: , 20
------------- ----
----------------------------------
Signature
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person, an Affiliate or Associate of any such Person (as such terms are defined
pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person, an Affiliate or Associate of any such Person.
Dated: , 20
------------- ----
----------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT B
[Form of Subsequent Rights Certificate]
Certificate No. __ ____ Rights
NOT EXERCISABLE AFTER NOVEMBER 8, 2011 OR EARLIER IF REDEEMED BY ATHEROGENICS,
INC. (THE "COMPANY"). THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.0001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT
BETWEEN ATHEROGENICS, INC. AND AMERICAN STOCK TRANSFER & TRUST COMPANY (THE
"RIGHTS AGENT") DATED AS OF NOVEMBER 9, 2001, AS AMENDED FROM TIME TO TIME (THE
"RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY INCORPORATED HEREIN BY
REFERENCE AND A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICES OF THE
COMPANY. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR
WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]*
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO CERTAIN
SUBSEQUENT RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL BE
EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED BY THIS
CERTIFICATE. THE COMPANY WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY OF
THE RIGHTS AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING, WITHOUT CHARGE
PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN
CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY,
ANY PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON, OR ANY AFFILIATE OR
ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), WHETHER
CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BECOME NULL AND VOID.
Subsequent Rights Certificate
AtheroGenics, Inc.
This certifies that ________________________________, or registered
assigns, is the registered owner of the number of Subsequent Rights set forth
set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Rights Agreement, dated as of November
9, 2001 (the "Rights Agreement"), between AtheroGenics, Inc., a Georgia
corporation (the "Company"), and American Stock Transfer & Trust Company, a New
York Corporation (the "Rights Agent"), to purchase from the Company at any time
prior to 5:00 P.M. (Atlanta, Georgia time) on November 8, 2011 at the office or
offices of the Rights Agent designated for such purpose, or its successors as
Rights Agent, a number of shares of Common Stock (the "Common Stock") of the
Company equal to eight shares of Common Stock multiplied by a fraction, the
numerator of which is the number of shares of Common Stock
- ---------
* The portion of the legend in brackets shall be inserted only if applicable,
shall be modified to apply to an Acquiring Person as applicable, and shall
replace the preceding sentence.
outstanding on the Subsequent Stock Acquisition Date, and the denominator of
which is the number of shares of Common Stock outstanding on such Subsequent
Stock Acquisition Date that are not beneficially owned by an Acquiring Person
or its Affiliates or Associates, at a purchase price per share equal to twenty
percent (20%) of the Current Market Price of the Common Stock on the Subsequent
Stock Acquisition Date (the "Purchase Price"), as those terms are defined in
Section 1 of the Rights Agreement, upon presentation and surrender of this
Subsequent Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed, and the tender of the Purchase Price; provided,
however, that if any of the Subsequent Rights represented by this Subsequent
Rights Certificate have been issued with respect to outstanding and unexercised
Previous Rights, the holder of such Subsequent Rights must exercise the
Previous Rights prior to or concurrently with the exercise of such Subsequent
Rights. The Purchase Price may be paid in cash or by certified bank check or
money order payable to the Company. The number of Subsequent Rights evidenced
by this Subsequent Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of
__________________________, based upon the Common Stock as constituted at such
date.
These rights shall only become exercisable after the Close of Business
on the tenth Business Day following a Subsequent Stock Acquisition Date, if the
Subsequent Rights evidenced by this Subsequent Rights Certificate are
beneficially owned by a person other than (i) an Acquiring Person or an
Affiliate or Associate of any such Person, (ii) a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, after such
transfer, became an Acquiring Person, an Affiliate or Associate of any such
Person. If the Subsequent Rights are beneficially owned by any of the Persons
specified in clauses (i), (ii) or (iii) of the preceding sentence, such Rights
shall become null and void and no holder hereof shall have any right with
respect to such Rights from and after the Subsequent Stock Acquisition Date.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Common Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Subsequent Rights Certificate
are subject to modification and adjustment upon the happening of certain
events.
In accordance with Section 3 of the Rights Agreement, this Subsequent
Rights Certificate may evidence and entitle the holder hereof to certain
additional Subsequent Rights. Such additional Subsequent Rights shall attach to
this Subsequent Rights Certificate, to the extent the Rights represented herein
are not exercised, until a new Subsequent Distribution Date, at which time the
additional Subsequent Rights shall be evidenced by a separate Subsequent Rights
Certificate. Such additional Subsequent Rights cannot be exercised by the
holder thereof until such holder has exercised the Subsequent Rights
represented by this Subsequent Rights Certificate to which such additional
Subsequent Rights were attached.
This Subsequent Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by this reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company, the members of the Board
of Directors of the Company, and the holders of the Rights Certificates, which
limitations of
2
rights include the temporary suspension of the exercisability of such rights
under the specific circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available upon written request to the Company.
This Subsequent Rights Certificate, with or without other Rights
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of Common
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Subsequent
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Rights Certificate or Rights Certificates
for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Subsequent
Rights evidenced by this Subsequent Rights Certificate may be redeemed by the
Company at its option at a redemption price of $.0001 per right at any time
prior to the earlier of the Close of Business on (i) the tenth Business Day
after the Subsequent Stock Acquisition Date with respect to such Subsequent
Rights, and (ii) the Final Expiration Date. To the extent that this Subsequent
Rights Certificate represents any additional Subsequent Rights, such additional
Subsequent Rights may be redeemed by the Company at its option at a redemption
price of $.0001 per Right at any time prior to the earlier of the Close of
Business on (i) the tenth Business Day after a new Subsequent Stock Acquisition
Date and (ii) the Final Expiration Date.
No fractional shares of Common Stock will be issued upon the exercise
of any Subsequent Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Subsequent Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of shares of Common Stock 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 Rights Agreement or herein be construed to confer upon the holder hereof,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Subsequent Right or Rights evidenced by this
Subsequent Rights Certificate shall have been exercised as provided in the
Rights Agreement.
All capitalized terms used and not otherwise defined herein shall have
the meanings ascribed to them in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
3
WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.
Dated as of , 20
------------ -- ----
ATHEROGENICS, INC.
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
[CORPORATE SEAL]
ATTEST:
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
COUNTERSIGNED:
AMERICAN STOCK TRANSFER &
TRUST COMPANY
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
ATTEST:
By:
-------------------------------
Name:
--------------------------
Title:
-------------------------
4
[Form of Reverse Side of Subsequent Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Subsequent Rights Certificate)
FOR VALUE RECEIVED _____________________________________________ hereby sells,
assigns and transfers unto ____________________________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Subsequent Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
_________________________ Attorney, to transfer the within Subsequent Rights
Certificate on the books of the within-named Company, with full power of
substitution.
Dated: , 20
------------- ----
----------------------------------
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Subsequent Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person, an Affiliate or Associate of any such Person (as such terms
are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Subsequent Rights evidenced by
this Subsequent Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person, an Affiliate or Associate of any such Person.
Dated: , 20
------------- ----
----------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Subsequent Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Subsequent Rights
represented by the Subsequent Rights Certificate)
To: ATHEROGENICS, INC.
The undersigned hereby irrevocably elects to exercise _____ Rights
represented by this Subsequent Rights Certificate to purchase the shares of
Common Stock issuable upon the exercise of the Subsequent Rights (or such other
securities of the Company or of any other Person which may be issuable upon the
exercise of the Subsequent Rights) and requests that certificates for such
shares be issued in the name of and delivered to:
-------------------------------------------------
Please insert social security
or other identifying number:
-------------------------------------------------
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
If such number of Subsequent Rights shall not be all the Subsequent
Rights evidenced by this Subsequent Rights Certificate, a new Subsequent Rights
Certificate for the balance of such Subsequent 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: , 20
------------- ----
----------------------------------
Signature
Certificate
The undersigned hereby certifies that (check the box, where
appropriate):
(1) the Subsequent Rights evidenced by this Subsequent Rights
Certificate [ ] are [ ] are not being exercised by or on behalf of a Person who
is or was an Acquiring Person, an Affiliate or Associate of any such Person (as
such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Subsequent Rights evidenced by
this Subsequent Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person, an Affiliate or Associate of any such Person; and
(3) to the extent the Subsequent Rights being exercised were
issued with respect to Previous Rights, such Previous Rights have been and/or
are concurrently being exercised.
Dated: , 20
------------- ----
----------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Subsequent Rights
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On November 9, 2001, the Board of Directors of AtheroGenics declared a dividend
distribution of one "Right" for each outstanding share of common stock to
shareholders of record at the close of business on November 19, 2001. Each
"Right" includes an "Initial Right" and "Subsequent Rights," each of which
entitles the registered holder to purchase from AtheroGenics a number of shares
of common stock equal to eight shares of common stock multiplied by a fraction,
the numerator of which is the number of shares of common stock outstanding on
the "Initial Stock Acquisition Date" in the case of the Initial Rights and a
"Subsequent Stock Acquisition Date" in the case of Subsequent Rights, and the
denominator of which is the number of shares of common stock outstanding on the
respective Stock Acquisition Date that are not beneficially owned by an
"Acquiring Person" or its affiliates or associates. The purchase price for each
share of common stock is 20% of Current Market Price for such stock, measured
as of the respective Stock Acquisition Date. The description and terms of the
Rights are set forth in a Rights Agreement between AtheroGenics and American
Stock Transfer & Trust Company, as Rights Agent dated as of November 9, 2001.
Until the Rights are triggered, they are evidenced by the certificates
representing the shares of AtheroGenics common stock. Initial Rights are
triggered upon the earlier to occur of (i) 10 business days following a public
announcement that a person or a group of affiliated or associated persons has
acquired beneficial ownership of 15% or more of the outstanding shares of
AtheroGenics common stock, (ii) 10 business days following the date on which
the Board of Directors first learns that such a person or group has acquired
beneficial ownership of 15% or more of the outstanding common stock, or (iii)
10 business days following the commencement of a tender offer or an exchange
offer that would result in a person or group beneficially owning 15% or more of
such outstanding shares of common stock (the earlier of such dates being called
the "Initial Distribution Date"). Subsequent Rights are triggered after a
previous Distribution Date upon the earlier to occur of (i) 10 business days
following a public announcement that a person or a group of affiliated or
associated persons has acquired beneficial ownership of 15% or more of the
outstanding shares of AtheroGenics common stock, (ii) 10 business days
following the date on which the Board of Directors first learns that such a
person or group has acquired beneficial ownership of 15% or more of the
outstanding common stock, (iii) 10 business days following the commencement of
a new tender offer or exchange offer that would result in such a person or
group beneficially owning 15% or more of such outstanding shares of common
stock, or (iv) 10 business days following the date upon which a person or a
group of affiliated or associated persons who previously had acquired and still
retains beneficial ownership of 15% or more of the outstanding shares of common
stock of AtheroGenics acquires an additional 10% or more of the outstanding
shares of common stock (the earlier of such dates being called a "Subsequent
Distribution Date"). Subsequent Rights can be triggered any number of times
following previous Distribution Dates and prior to the redemption of the
Rights. The person or group triggering the Subsequent Rights need not be the
same person or group who triggered the previous Rights. Any person who is the
beneficial owner or 17% or more of our common stock on November 9, 2001,
however, will not be deemed an Acquiring Person and therefore will not
trigger the Rights unless that person subsequently becomes the beneficial owner
of an aggregate of 20% or more of our common stock.
Until the Initial Distribution Date, (i) the Rights will be evidenced by the
common stock certificates and will be transferred only with such common stock
certificates, (ii) new common stock certificates issued after November 19, 2001
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for common stock will also
constitute the transfer of the Rights associated with the common stock
represented by such certificate. Following the Initial Distribution Date and
until a Subsequent Distribution Date, (i) Subsequent Rights will be evidenced
by the common stock certificates and by previously issued Rights Certificates
with respect to those Rights that remain unexercised at a Subsequent
Distribution Date, and will be transferred only with such common stock
certificates or previously issued Rights Certificates, (ii) new common stock
certificates issued after November 19, 2001 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for common stock or previously issued Rights
Certificates will also constitute the transfer of the Rights associated with
the common stock represented by such certificate or with that previously issued
Rights Certificate.
The Rights are not exercisable until the Initial Stock Acquisition Date in the
case of the Initial Rights and a Subsequent Stock Acquisition Date in the case
of Subsequent Rights. The Rights will expire at the close of business on
November 8, 2011, unless earlier redeemed by the Board as described below.
As soon as practicable after the respective Distribution Date, we will mail
Rights Certificates evidencing the Initial Rights or the Subsequent Rights, as
the case may be, to holders of record of the common stock, and, in the case of
Subsequent Rights, holders of record of unexercised previously issued Rights
Certificates, as of the close of business on the respective Distribution Date.
Thereafter, the separate Rights Certificates alone will represent the
respective Rights. Except as otherwise determined by the Board of Directors,
only shares of common stock issued prior to the respective Distribution Date
will be issued with Rights, provided, however, that Subsequent Rights also will
be issued with the shares of common stock issuable upon exercise of Rights
evidenced by previously issued Rights Certificates. These Subsequent Rights may
not be exercised until the previous Rights are exercised.
If at any time a person causes an Initial Stock Acquisition Date or a
Subsequent Stock Acquisition Date to occur (the "Acquiring Person"), following
the close of business on the tenth business day after the respective Stock
Acquisition Date each holder of a Right will thereafter have the right to
receive, upon exercise, a number of shares of common stock equal to eight
shares of common stock multiplied by a fraction, the numerator of which is the
number of shares of common stock outstanding on the Stock Acquisition Date, and
the denominator of which is the number of shares of common stock outstanding on
the Stock Acquisition Date that are not beneficially owned by the Acquiring
Person or its affiliates or associates. The price for the exercise of each
Right shall be equal to (x) 20% of the Current Market Price of the common stock
on the Stock Acquisition Date, multiplied by (y) the number of shares of common
stock to be received upon exercise. Notwithstanding any of the foregoing,
following the occurrence of any event which causes a Stock Acquisition Date,
all Rights that are, or (under certain
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circumstances specified in the Rights Agreement) were, beneficially owned by
any Acquiring Person will be null and void.
In the event that, at any time following the respective Stock Acquisition Date,
(i) we are acquired in a merger or other business combination in which we are
not the surviving corporation, or (ii) all of our shares are acquired in a
share exchange or we engage in a merger or consolidation in which all or part
of our outstanding shares of common stock are changed into or exchanged for
stock, other securities or assets of any other person or (iii) 50% or more of
our assets or earning power is sold or transferred, each holder of a Right
(except Rights which previously have been voided as set forth above) will
thereafter have the right to receive, upon exercise, a number of shares of
common stock of the acquiring company equal to the product of eight times the
result obtained by dividing the current market price of our common stock by the
current market price of the common stock of the acquiring corporation or, if
such stock is not traded in public markets, of its parent corporation,
multiplied by a fraction, the numerator of which is the number of shares of
common stock outstanding on the Stock Acquisition Date with respect to the
exercised Right and the denominator of which is the number of shares of common
stock not owned by the Acquiring Person or its affiliates or associates. The
purchase price will be calculated on the same basis as if the Rights holder
were exercising a Right to purchase our common stock at that time.
With certain exceptions, the Rights Agreement does not require an adjustment in
the purchase price until cumulative adjustments amount to at least 1% of the
purchase price. We will not issue any fractional Rights, and, in lieu thereof,
we will make an adjustment in cash based on the market price of the Rights on
the last trading date prior to the date of adjustment. We will not issue
fractional shares upon exercise of the Rights, and, in lieu thereof, we will
make an adjustment in cash based on the market price of the common stock on the
last trading date prior to the date of exercise.
In general, the Board of Directors may redeem the Initial Rights or the
Subsequent Rights, at a price of $.0001 per Right, at any time before the close
of business on the tenth business day following a respective Stock Acquisition
Date with respect to the Rights (subject to extension under certain
circumstances). Immediately upon the action of the Board of Directors ordering
redemption of the Rights, the Rights will terminate and the holders of Rights
to be redeemed will only be entitled to receive the $.0001 per Right redemption
price.
Until a Right is exercised, the holder of that Right, as such, will have no
rights as a shareholder of AtheroGenics, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights
will not be taxable to shareholders or to AtheroGenics, shareholders may,
depending upon the circumstances, recognize taxable income in the event that
the Rights become exercisable for our common stock (or other consideration) or
for common stock of an acquiring company as set forth above.
The Board of Directors may amend the provisions of the Rights Agreement prior
to the close of business on the tenth business day following the Initial Stock
Acquisition Date, in the case of the Initial Rights, and a Subsequent Stock
Acquisition Date, in the case of Subsequent Rights. After such dates, the Board
of Directors may amend the provisions of the Rights Agreement in order to cure
any ambiguity, to make changes which do not adversely affect the interests of
holders of
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Rights, or to shorten or lengthen any time period under the Rights Agreement.
However, the Board may not amend the Rights Agreement to adjust the time period
governing redemption at any time that the Rights are not redeemable.
As of the close of business on November 9, 2001, 27,793,173 shares of our
common stock were outstanding, and options and warrants to purchase an
aggregate of 3,191,950 shares of our common stock were outstanding.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire AtheroGenics
in a manner which causes the Rights to become exercisable, unless the Board
first approves the terms of an offer for all shares and redeems the Rights. The
Rights, however, should not affect any prospective offeror willing to negotiate
with the Board or willing to make an offer at a fair price and otherwise in the
best interests of AtheroGenics and its shareholders, as determined by the
Board. The Rights should not interfere with any merger or other business
combination approved by the Board since the Board may, at its option, before
the merger or business combination, redeem all, but not less than all, of the
then-outstanding Rights at the redemption price or amend the Rights Agreement
to permit the transaction.
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