EXHIBIT 4.17(b)
October 25, 1996
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
OF
NOVOSTE CORPORATION
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
AN AFFILIATE OR ASSOCIATE THEREOF (AS DEFINED IN THE RIGHTS AGREEMENT) AND
CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON
OR BY ANY SUBSEQUENT HOLDER, SHALL BECOME NULL AND VOID.
On October 25, 1996, the Board of Directors of Novoste Corporation, a
Florida corporation (the "Company"), declared a dividend of one preferred share
purchase right (a "Right") for each outstanding share of Common Stock, par value
$.01 per share (the "Common Shares"), of the Company. The dividend is payable to
the shareholders of record as of 5:00 P.M., New York, New York time, on November
25, 1996 (the "Record Date"), and is payable with respect to Common Shares
issued thereafter until the Distribution Date (as hereinafter defined) and, in
certain circumstances, is payable with respect to Common Shares issued after the
Distribution Date.
Except as set forth below, each Right, when it becomes exercisable,
entitles the registered holder to purchase from the Company one one-hundredth of
a share of Series A Participating Preferred Stock, par value $.01 per share (the
"Preferred Shares"), at a price of $85.00 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement, dated as of October 25, 1996
(the "Rights Agreement"), between the Company and American Stock Transfer &
Trust Company (the "Rights Agent").
Initially, the Rights will attach to all certificates representing Common
Shares then outstanding and no separate Right Certificates (as hereinafter
defined) will be distributed. The Rights will separate from the Common Shares
and a "Distribution Date" for the Rights will occur upon the earlier of:
(i) the first date of public announcement that a person or "group"
has acquired beneficial ownership of 15% of more of the outstanding Common
Shares (except (a) pursuant to a Permitted Offer, as hereinafter defined and (b)
beneficial ownership of Common Shares by the Hillman Entities (as defined in the
Rights Agreement), provided that the Hillman Entities together with all
Affiliates and Associates thereof are not the beneficial owners of 20% or more
of the then outstanding Common Shares); or
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(ii) ten business days (or such later date as the Board of Directors
of the Company may determine) following the commencement of, or announcement of
an intention to commence, a tender offer or exchange offer the consummation of
which would result in a person or group becoming an Acquiring Person (as
hereinafter defined).
A person or group whose acquisition of Common Shares causes a Distribution
Date pursuant to clause (i) above is an "Acquiring Person." The first date of
public announcement that a person or group has become an Acquiring Person is the
"Shares Acquisition Date."
The Rights Agreement provides that until the Distribution Date, the Rights
will be evidenced by the Common Share certificates and will be transferred with
and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation or a copy of this Summary of Rights
being attached thereto, will also constitute the transfer of the Rights
associated with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Shares as of the close of business on the Distribution Date (and to each
initial record holder of certain Common Shares issued after the Distribution
Date), and such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date and will expire
at 5:00 P.M., New York, New York time, on November 25, 2006, unless earlier
redeemed or exchanged by the Company as described below.
In the event that any person becomes an Acquiring Person (except pursuant
to a Permitted Offer), each holder of a Right will have (subject to the terms of
the Rights Agreement) the right (the "Flip-In Right") to receive upon exercise
the number of Common Shares, or, in the discretion of the Board of Directors of
the Company, of one one-hundredths of a Preferred Share (or, in certain
circumstances, other securities of the Company) having a value (immediately
prior to such triggering event) equal to two times the Purchase Price.
Notwithstanding the foregoing, following the occurrence of the event described
above, all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person or any
affiliate or associate thereof will be null and void.
A "Permitted Offer" is a tender or exchange offer for all outstanding
Common Shares which is at a price and on terms determined, prior to the purchase
of shares under such tender or exchange offer, by a majority of Disinterested
Directors (as hereinafter defined), to be adequate (taking into account all
factors that such Disinterested Directors deem relevant) and otherwise in the
best interests of the Company and its shareholders (other than the person, or
any affiliate or associate thereof, on whose basis the offer is being made),
taking into account all factors that such Disinterested Directors may deem
relevant. "Disinterested Directors" are directors of the Company who are not
employees of the Company and who are not Acquiring
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Persons or affiliates or associates thereof, or representatives of any of them,
or any person who was directly or indirectly proposed or nominated as a director
of the Company by a Transaction Person (as hereinafter defined).
In the event that, at any time following the Shares Acquisition Date, (i)
the Company is acquired in certain mergers or other business combination
transactions in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power, (ii) 50% or more of the
Company's assets or earning power are sold or transferred, in either case with
or to an Acquiring Person or any affiliate or associate thereof, or any other
person in which such Acquiring Person, affiliate or associate has an interest,
or any person acting on behalf of or in concert with such Acquiring Person,
affiliate or associate, or, if in such transaction all holders of Common Shares
are not treated alike, any other person, or (iii) the Company shall effect a
statutory share exchange with outstanding Common Shares of the Company exchanged
for stock or other securities of any other person, money or other property, then
in each case the holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right (the "Flip-Over
Right") to receive, upon exercise, common shares of the acquiring company having
a value equal to two times the Purchase Price.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person (subject to certain exceptions) and prior to the
acquisition by a person or group of affiliated or associated persons of 50% or
more of the outstanding Common Shares, the Board of Directors of the Company may
exchange all or part of the then outstanding and exercisable Rights (other than
Rights which have become void under the terms of the Rights Agreement) for
Common Shares at an exchange ratio of one Common Share per Right, subject to
adjustment.
The Purchase Price payable, and the number of one-hundredths of a
Preferred Share or other securities issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution: (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights, options or warrants to subscribe for or purchase Preferred
Shares at a price, or securities convertible into Preferred Shares with a
conversion price, less than the then current market price of the Preferred
Shares, or (iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular quarterly cash dividends)
or of subscription rights or warrants (other than those referred to in clause
(ii) above).
The Purchase Price is also subject to adjustment in the event of a stock
split of the Common Shares, or a stock dividend on the Common Shares payable in
Common Shares, or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional one-hundredths of a Preferred Share will be
issued, and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
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At any time prior to the earlier to occur of (i) a person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), which redemption shall be effective upon the action of the
Board of Directors of the Company. Additionally, the Company may redeem the then
outstanding Rights in whole, but not in part, at the Redemption Price after the
triggering of the Flip-In Right and before the expiration of any period during
which the Flip-In Right may be exercised in connection with a merger or other
business combination transaction or series of transactions involving the Company
in which all holders of Common Shares are treated alike but not involving a
Transaction Person (as hereinafter defined). Upon the effective date of the
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
If any term, provision, covenant or restriction of the Rights Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of the Rights Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated; provided, however, that 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, at a time when a majority of the directors then serving
are Disinterested Directors, in their good faith judgment that severing the
invalid language from the Rights Agreement would adversely affect the purpose or
effect thereof, the Company's right of redemption described in the preceding
paragraph shall be reinstated (if such right has expired or been terminated) and
shall not expire until the close of business on the tenth day following the date
of such determination by the Board of Directors.
The Board of Directors and the Company shall not have any liability to any
person as a result of the redemption or exchange of the Rights pursuant to the
provisions of the Rights Agreement.
In the event that a majority of the directors serving on the Board
following a meeting of shareholders or shareholder action by written consent are
not nominated by the Board of Directors of the Company serving immediately prior
to such meeting or action, then for 365 days following such meeting or action
the Rights may not be redeemed if such redemption is reasonably likely to
facilitate a combination or sale of assets or earning power (a "Transaction")
with an Acquiring Person or affiliate or associate thereof who has directly or
indirectly proposed or nominated a member of the Board of Directors of the
Company who is in office at the time the Transaction is being considered (a
"Transaction Person"). The Rights may not be redeemed thereafter if during such
365-day period the Company enters into any agreement reasonably likely to
facilitate a Transaction with a Transaction Person and the redemption is
reasonably likely to facilitate a Transaction with a Transaction Person.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income should the Rights become exercisable
or upon the occurrence of certain events thereafter.
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A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
October 25, 1996. A copy of the Rights Agreement is available free of charge
from the Company by contacting the Corporate Secretary at Novoste Corporation,
4350-C International Boulevard, Norcross, Georgia 30093. This summary
description of the Rights does not purport to be complete and is qualified
entirely by reference to the Rights Agreement, which is hereby incorporated
herein by reference.
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