\nSECTION 30. BENEFITS OF THIS AGREEMENT………………………………………………………………..32<\/p>\nSECTION 31. SEVERABILITY…………………………………………………………………………….32<\/p>\n
SECTION 32. GOVERNING LAW……………………………………………………………………………33<\/p>\n
SECTION 33. COUNTERPARTS…………………………………………………………………………….33<\/p>\n
SECTION 34. DESCRIPTIVE HEADINGS……………………………………………………………………..33
\n<\/c><\/c><\/s><\/c><\/c><\/s><\/table>\n
ii.<\/p>\n
AMENDED AND RESTATED RIGHTS AGREEMENT<\/p>\n
THIS AMENDED AND RESTATED RIGHTS AGREEMENT (“Agreement”), dated as of
\nOctober 21, 1999, between Gilead Sciences, Inc., a Delaware corporation (the
\n“Company”), and ChaseMellon Shareholder Services, L.L.C. (“Rights Agent”).<\/p>\n
A. The Company previously entered into a Rights Agreement, dated as
\nof November 21, 1994, with First Interstate Bank, the predecessor entity to
\nChaseMellon Shareholder Services, L.L.C., as Rights Agent (the “Original
\nRights Agreement), pursuant to which the Company authorized and declared a
\ndividend of one preferred share purchase right (a “Right”) for each Common
\nShare (as such term is hereinafter defined) outstanding at the close of
\nbusiness on December 14, 1994 (the “Record Date”), each Right representing
\nthe right to purchase one one-hundredth of a Preferred Share (as such term is
\nhereinafter defined), upon the terms and subject to the conditions therein
\nset forth, and further authorized and directed the issuance of one Right with
\nrespect to each Common Share that shall become outstanding between the Record
\nDate and the earliest to occur of the Distribution Date, the Redemption Date
\nand the Final Expiration Date (as such terms are defined in the Original
\nRights Agreement); PROVIDED, HOWEVER, that Rights may be issued with respect
\nto Common Shares that shall become outstanding after the Distribution Date
\nand prior to the earlier of the Redemption Date and the Final Expiration Date
\nin accordance with the provisions of Section 22 hereof.<\/p>\n
B. The Company now wishes to amend and restate the Original Rights
\nAgreement as further set forth herein.<\/p>\n
Accordingly, in consideration of the premises and the mutual agreements
\nherein set forth, the Original Rights Agreement is hereby amended and restated
\nas follows:<\/p>\n
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the following
\nterms have the meanings indicated:<\/p>\n
(a) “ACQUIRING PERSON” shall mean any Person (as such term is
\nhereinafter defined) who or which, together with all Affiliates and
\nAssociates (as such terms are hereinafter defined) of such Person, shall be
\nthe Beneficial Owner (as such term is hereinafter defined) of 15% or more of
\nthe Common Shares then outstanding. Notwithstanding the foregoing, (A) the
\nterm Acquiring Person shall not include (i) the Company, (ii) any Subsidiary
\n(as such term is hereinafter defined) of the Company, (iii) any employee
\nbenefit or compensation plan of the Company or any Subsidiary of the Company,
\n(iv) any entity holding Common Shares for or pursuant to the terms of any
\nsuch employee benefit or compensation plan, and (B) no Person shall become an
\n“Acquiring Person” either (x) as the result of an acquisition of Common
\nShares by the Company which, by reducing the number of shares outstanding,
\nincreases the proportionate number of shares beneficially owned by such
\nPerson to 15% or more of the Common Shares then outstanding; PROVIDED,
\nHOWEVER, that if a Person shall become the Beneficial Owner of 15% or more of
\nthe Common Shares then outstanding by reason of share purchases by the
\nCompany and shall, following written notice from, or public disclosure by the<\/p>\n
1<\/p>\n
Company of such share purchases by the Company, become the Beneficial Owner
\nof any additional Common Shares without the prior consent of the Company and
\nshall then Beneficially Own more than 15% of the Common Shares then
\noutstanding, then such Person shall be deemed to be an “Acquiring Person,” or
\n(y) if the Board of Directors determines in good faith that a Person who
\nwould otherwise be an “Acquiring Person,” as defined pursuant to the
\nforegoing provisions of this paragraph (a), has become such inadvertently,
\nand such Person divests, as promptly as practicable (as determined in good
\nfaith by the Board of Directors), but in any event within five (5) Business
\nDays, following receipt of written notice from the Company of such event, of
\nBeneficial Ownership of a sufficient number of Common Shares so that such
\nPerson would no longer be an Acquiring Person, as defined pursuant to the
\nforegoing provisions of this paragraph (a), then such Person shall not be
\ndeemed to be an “Acquiring Person” for any purposes of this Agreement;
\nPROVIDED, HOWEVER, that if such Person shall again become the Beneficial
\nOwner of 15% or more of the Common Shares then outstanding, such Person shall
\nbe deemed an “Acquiring Person,” subject to the exceptions set forth in this
\nSection 1(a).<\/p>\n
(b) “AFFILIATE” and “ASSOCIATE” shall have the respective meanings
\nascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
\nthe Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in
\neffect on the date of this Agreement; PROVIDED, HOWEVER, that the limited
\npartners of a limited partnership shall not be deemed to be Associates of such
\nlimited partnership solely by virtue of their limited partnership interests.<\/p>\n
(c) A Person shall be deemed the “BENEFICIAL OWNER” of and shall be
\ndeemed to “beneficially own” any securities:<\/p>\n
(i) which such Person or any of such Person’s Affiliates or
\nAssociates is deemed to beneficially own, within the meaning of Rule 13d-3 of
\nthe General Rules and Regulations under Section 13(d) of the Exchange Act as in
\neffect on the date of this Agreement;<\/p>\n
(ii) which such Person or any of such Person’s Affiliates or
\nAssociates has (A) the right to acquire (whether such right is exercisable
\nimmediately or only after the passage of time) pursuant to any agreement,
\narrangement or understanding (other than customary agreements with and between
\nunderwriters and selling group members with respect to a bona fide public
\noffering of securities), or upon the exercise of conversion rights, exchange
\nrights, rights (other than these Rights), warrants or options, or otherwise;
\nPROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or
\nto beneficially own, securities tendered pursuant to a tender or exchange offer
\nmade by or on behalf of such Person or any of such Person’s Affiliates or
\nAssociates until such tendered securities are accepted for purchase or exchange;
\nor (B) the right to vote pursuant to any agreement, arrangement or
\nunderstanding; PROVIDED, HOWEVER, that a Person shall not be deemed the
\nBeneficial Owner of, or to beneficially own, any security if the agreement,
\narrangement or understanding to vote such security (1) arises solely from a
\nrevocable proxy or consent given to such Person in response to a public proxy or
\nconsent solicitation made pursuant to, and in accordance with, the applicable
\nrules and regulations promulgated under the Exchange Act and (2) is not also
\nthen reportable on Schedule 13D under the Exchange Act (or any comparable or
\nsuccessor report); or<\/p>\n
(iii) which are beneficially owned, directly or indirectly, by any
\nother Person with which such Person or any of such Person’s Affiliates or
\nAssociates has any agreement, <\/p>\n
2<\/p>\n
arrangement or understanding (other than customary agreements with and between
\nunderwriters and selling group members with respect to a bona fide public
\noffering of securities) for the purpose of acquiring, holding, voting (except to
\nthe extent contemplated by the proviso to Section 1(c)(ii)(B) hereof) or
\ndisposing of any securities of the Company.<\/p>\n
Notwithstanding anything in this definition of Beneficial Ownership to
\nthe contrary, the phrase, “then outstanding,” when used with reference to a
\nPerson’s Beneficial Ownership of securities of the Company, shall mean the
\nnumber of such securities then issued and outstanding together with the number
\nof such securities not then actually issued and outstanding which such Person
\nwould be deemed to own beneficially hereunder.<\/p>\n
(d) “BUSINESS DAY” shall mean any day other than a Saturday, a Sunday,
\nor a day on which banking institutions in the State of New York are authorized
\nor obligated by law or executive order to close.<\/p>\n
(e) “CLOSE OF BUSINESS” on any given date shall mean 5:00 p.m., Pacific
\nTime, on such date; PROVIDED, HOWEVER, that if such date is not a Business Day
\nit shall mean 5:00 p.m., Pacific Time, on the next succeeding Business Day.<\/p>\n
(f) “COMMON SHARES” shall mean the shares of common stock, par value
\n$.001 per share, of the Company; PROVIDED, HOWEVER, that, “Common Shares,” when
\nused in this Agreement in connection with a specific reference to any Person
\nother than the Company, shall mean the capital stock (or equity interest) with
\nthe greatest voting power of such other Person or, if such other Person is a
\nSubsidiary of another Person, the Person or Persons which ultimately control
\nsuch first-mentioned Person.<\/p>\n
(g) “DISTRIBUTION DATE” shall have the meaning set forth in Section
\n3(a) hereof.<\/p>\n
(h) “FINAL EXPIRATION DATE” shall have the meaning set forth in Section
\n7(a) hereof.<\/p>\n
(i) “INTERESTED STOCKHOLDER” shall mean any Acquiring Person or any
\nAffiliate or Associate of an Acquiring Person or any other Person in which any
\nsuch Acquiring Person, Affiliate or Associate has an interest, or any other
\nPerson acting directly or indirectly on behalf of or in concert with any such
\nAcquiring Person, Affiliate or Associate.<\/p>\n
(j) “PERSON” shall mean any individual, firm, partnership, limited
\nliability company, corporation or other entity, and shall include any successor
\n(by merger or otherwise) of such entity.<\/p>\n
(k) “PREFERRED SHARES” shall mean shares of Series A Junior
\nParticipating Preferred Stock, par value $.001 per share, of the Company having
\nthe designations and the powers, preferences and rights, and the qualifications,
\nlimitations and restrictions set forth in the Certificate of Designation filed
\nwith the Delaware Secretary of State on November 30, 1994.<\/p>\n
(l) “PRINCIPAL PARTY” shall have the meaning set forth in Section 13(b)
\nhereof.<\/p>\n
(m) “PURCHASE PRICE” shall have the meaning set forth in Section 7(b)
\nhereof.<\/p>\n
3<\/p>\n
(n) “REDEMPTION DATE” shall have the meaning set forth in Section 7(a)
\nhereof.<\/p>\n
(o) “SHARES ACQUISITION DATE” shall mean the first date of public
\nannouncement by the Company or an Acquiring Person that an Acquiring Person has
\nbecome such; PROVIDED, HOWEVER that, if such Person is determined not to have
\nbecome an Acquiring Person pursuant to clause (y) of Subsection 1(a)(B) hereof,
\nthen no Shares Acquisition Date shall be deemed to have occurred.<\/p>\n
(p) “SUBSIDIARY” of any Person shall mean any corporation or other
\nentity of which a majority of the voting power of the voting equity securities
\nor equity interest is owned, directly or indirectly, by such Person.<\/p>\n
(q) “TRANSACTION” shall mean any merger, consolidation or sale of
\nassets described in Section 13(a) hereof or any acquisition of Common Shares
\nwhich would result in a Person becoming an Acquiring Person or a Principal Party
\n(as such term is hereinafter defined).<\/p>\n
(r) “TRANSACTION PERSON” with respect to a Transaction shall mean (i)
\nany Person who (x) is or will become an Acquiring Person or a Principal Party
\n(as such term is hereinafter defined) if the Transaction were to be consummated
\nand (y) directly or indirectly proposed or nominated a director of the Company
\nwhich director is in office at the time of consideration of the Transaction, or
\n(ii) an Affiliate or Associate of such a Person.<\/p>\n
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the Rights
\nAgent to act as agent for the Company in accordance with the terms and
\nconditions hereof, and the Rights Agent hereby accepts such appointment. The
\nCompany may from time to time appoint such co-Rights Agents as it may deem
\nnecessary or desirable.<\/p>\n
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.<\/p>\n
(a) Until the earlier of (i) the Close of Business on the Shares
\nAcquisition Date or (ii) the Close of Business on the tenth Business Day (or
\nsuch later date as may be determined by action of the Board of Directors prior
\nto such time as any Person becomes an Acquiring Person) after the date of the
\ncommencement (determined in accordance with Rule 14d-2 under the Exchange Act)
\nby any Person (other than the Company, any Subsidiary of the Company, any
\nemployee benefit plan of the Company or of any Subsidiary of the Company or any
\nentity holding Common Shares for or pursuant to the terms of any such plan) of,
\nor of the first public announcement of the intention of any Person (other than
\nthe Company, any Subsidiary of the Company, any employee benefit plan of the
\nCompany or of any Subsidiary of the Company or any entity holding Common Shares
\nfor or pursuant to the terms of any such plan) to commence, a tender or exchange
\noffer (which intention to commence remains in effect for five (5) Business Days
\nafter such announcement), the consummation of which would result in any Person
\nbecoming an Acquiring Person (including any such date which is after the date of
\nthis Agreement and prior to the issuance of the Rights, the earlier of such
\ndates being herein referred to as the “Distribution Date”), (x) the Rights will
\nbe evidenced by the certificates for Common Shares registered in the names of
\nthe holders thereof (which certificates shall also be deemed to be Rights
\nCertificates) and not by separate Rights Certificates, and (y) the Rights (and
\nthe right to receive Rights Certificates therefor) will be transferable only in
\nconnection with the transfer of <\/p>\n
4<\/p>\n
Common Shares. As soon as practicable after the Distribution Date, the Company
\nwill prepare and execute, the Rights Agent will countersign, and the Company
\nwill send or cause to be sent (and the Rights Agent will, if requested, send) by
\nfirst-class, insured, postage-prepaid mail, to each record holder of Common
\nShares as of the Close of Business on the Distribution Date, at the address of
\nsuch holder shown on the records of the Company, a Rights Certificate, in
\nsubstantially the form of Exhibit A hereto (a “Rights Certificate”), evidencing
\none Right for each Common Share so held, subject to the adjustment provisions of
\nSection 11 of this Agreement. As of the Distribution Date, the Rights will be
\nevidenced solely by such Rights Certificates.<\/p>\n
(b) With respect to certificates for Common Shares that were
\noutstanding as of the Record Date, until the Distribution Date, the Rights will
\nbe evidenced by such certificates registered in the names of the holders
\nthereof. Until the Distribution Date (or the earlier of the Redemption Date and
\nthe Final Expiration Date), the surrender for transfer of any certificate for
\nCommon Shares that were outstanding on the Record Date shall also constitute the
\ntransfer of the Rights associated with the Common Shares represented thereby.<\/p>\n
(c) Certificates for Common Shares which become outstanding (including,
\nwithout limitation, reacquired Common Shares referred to in the last sentence of
\nthis paragraph (c)) after the effective date of this Agreement but prior to the
\nearliest of the Distribution Date, the Redemption Date or the Final Expiration
\nDate shall have impressed on, printed on, written on or otherwise affixed to
\nthem the following legend:<\/p>\n
This certificate also evidences and entitles the
\n holder hereof to certain rights as set forth in an Amended
\n and Restated Rights Agreement between Gilead Sciences, Inc.
\n and ChaseMellon Shareholder Services, L.L.C., dated as of
\n October 21, 1999, as amended from time to time (the “Rights
\n Agreement”), the terms of which are hereby incorporated
\n herein by reference and a copy of which is on file at the
\n principal executive offices of Gilead Sciences, Inc. Under
\n certain circumstances, as set forth in the Rights Agreement,
\n such Rights will be evidenced by separate certificates and
\n will no longer be evidenced by this certificate. Gilead
\n Sciences, Inc. will mail to the holder of this certificate a
\n copy of the Rights Agreement without charge after receipt of
\n a written request therefor. As described in the Rights
\n Agreement, Rights issued to any Person who becomes an
\n Acquiring Person (as defined in the Agreement) shall become
\n null and void.<\/p>\n
With respect to such certificates containing the foregoing legend,
\nuntil the Distribution Date, the Rights associated with the Common Shares
\nrepresented by such certificates shall be evidenced by such certificates alone,
\nand the surrender for transfer of any such certificate shall also constitute the
\ntransfer of the Rights associated with the Common Shares represented thereby. In
\nthe event that the Company purchases or acquires any Common Shares after the
\nRecord Date but prior to the Distribution Date, any Rights associated with such
\nCommon Shares shall be deemed canceled and retired so that the Company shall not
\nbe entitled to exercise any Rights associated with the Common Shares which are
\nno longer outstanding. Notwithstanding this Section 3(c), the omission of a
\nlegend shall not affect the enforceability of any part of this Agreement or the
\nrights of any holder of the Rights.<\/p>\n
5<\/p>\n
SECTION 4. FORM OF RIGHTS CERTIFICATES.<\/p>\n
(a) The Rights Certificates (and the form of election to purchase
\nPreferred Shares, the form of assignment and the form of certification to be
\nprinted on the reverse thereof) shall be substantially the same as Exhibit A
\nhereto and may have such marks of identification or designation and such
\nlegends, summaries or endorsements printed thereon as the Company may deem
\nappropriate which do not affect the duties or responsibilities of the Rights
\nAgent and as are not inconsistent with the provisions of this Agreement, or as
\nmay be required to comply with any applicable law or with any rule or regulation
\nmade pursuant thereto or with any rule or regulation of any stock exchange or
\nquotation system on which the Rights may from time to time be listed, or to
\nconform to usage. Subject to the provisions of Sections 7, 11 and 22 hereof, the
\nRights Certificates shall entitle the holders thereof to purchase such number of
\none one-hundredths of a Preferred Share as shall be set forth therein at the
\nprice per one one-hundredth of a Preferred Share set forth therein (the
\n“Purchase Price”), but the number of such one one-hundredths of a Preferred
\nShare and the Purchase Price shall be subject to adjustment as provided herein.<\/p>\n
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
\n22 hereof that represents Rights which are null and void pursuant to Section
\n11(a)(ii) hereof and any Rights Certificate issued pursuant to Section 6 or
\nSection 11 hereof upon transfer, exchange, replacement or adjustment of any
\nother Rights Certificate referred to in this sentence, shall contain (to the
\nextent feasible) the following legend:<\/p>\n
The Rights represented by this Rights Certificate are
\n or were beneficially owned by a Person who was or became an
\n Acquiring Person or an Affiliate or Associate of an Acquiring
\n Person (as such terms are defined in the Amended and Restated
\n Rights Agreement between Gilead Sciences, Inc. and ChaseMellon
\n Shareholder Services, L.L.C.). Accordingly, this Rights
\n Certificate and the Rights represented hereby are null and void.<\/p>\n
The provisions of Section 11(a)(ii) hereof shall be operative
\nwhether or not the foregoing legend is contained on any such Rights
\nCertificate.<\/p>\n
SECTION 5. COUNTERSIGNATURE AND REGISTRATION. The Rights Certificates shall
\nbe executed on behalf of the Company by its Chairman of the Board, its Chief
\nExecutive Officer, its President, its Vice Chairman of the Board, its Chief
\nFinancial Officer, or any of its Vice Presidents, either manually or by
\nfacsimile signature, shall have affixed thereto the Company’s seal or a
\nfacsimile thereof, and shall be attested by the Secretary or an Assistant
\nSecretary of the Company, either manually or by facsimile signature. The
\nRights Certificates shall be manually countersigned by the Rights Agent and
\nshall not be valid for any purpose unless countersigned. In case any officer
\nof the Company who shall have signed any of the Rights Certificates shall
\ncease to be such officer of the Company before countersignature by the Rights
\nAgent and issuance and delivery by the Company, such Rights Certificates,
\nnevertheless, may be countersigned by the Rights Agent and issued and
\ndelivered by the Company with the same force and effect as though the person
\nwho signed such Rights Certificates had not ceased to be such officer of the
\nCompany; and any Rights Certificate may be signed on behalf of the Company by
\nany person who, at the actual date of the execution of such Rights
\nCertificate, shall be a proper<\/p>\n
6<\/p>\n
officer of the Company to sign such Rights Certificate, although at the date of
\nthe execution of this Agreement any such person was not such an officer.<\/p>\n
Following the Distribution Date and receipt by the Rights Agent of the
\nnotice and list of record holders of Rights referred to in Section 3(a), the
\nRights Agent will keep or cause to be kept, at its office designated pursuant to
\nSection 26 hereof for such purpose, books for registration and transfer of the
\nRights Certificates issued hereunder. Such books shall show the names and
\naddresses of the respective holders of the Rights Certificates, the number of
\nRights evidenced on its face by each of the Rights Certificates and the date of
\neach of the Rights Certificates.<\/p>\n
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
\nCERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
\nSubject to the provisions of Section 11(a)(ii), Section 14 and Section 24
\nhereof, at any time after the Close of Business on the Distribution Date, and
\nat or prior to the Close of Business on the earlier of the Redemption Date or
\nthe Final Expiration Date, any Rights Certificate or Rights Certificates may
\nbe transferred, split up, combined or exchanged for another Rights
\nCertificate or Rights Certificates, entitling the registered holder to
\npurchase a like number of one one-hundredths of a Preferred Share as the
\nRights Certificate or Rights Certificates surrendered then entitled such
\nholder to purchase. Any registered holder desiring to transfer, split up,
\ncombine or exchange any Rights Certificate or Rights Certificates shall make
\nsuch request in writing delivered to the Rights Agent, and shall surrender
\nthe Rights Certificate or Rights Certificates to be transferred, split up,
\ncombined or exchanged at the office of the Rights Agent designated for such
\npurpose. Neither the Rights Agent nor the Company shall be obligated to take
\nany action whatsoever with respect to the transfer of any such surrendered
\nRights Certificate until the registered holder shall have completed and
\nsigned the certificate contained in the form of assignment on the reverse
\nside of such Rights Certificate and shall have provided such additional
\nevidence of the identity of the Beneficial Owner (or former Beneficial Owner)
\nor Affiliates or Associates thereof as the Company or the Rights Agent shall
\nreasonably request. Thereupon the Rights Agent shall, subject to Section
\n11(a)(ii), Section 14 and Section 24 hereof, countersign and deliver to the
\nperson entitled thereto a Rights Certificate or Rights Certificates, as the
\ncase may be, as so requested. The Company may require payment of a sum
\nsufficient to cover any tax or governmental charge that may be imposed in
\nconnection with any transfer, split up, combination or exchange of Rights
\nCertificates. The Rights Agent shall not be required to process the
\ntransaction unless and until it receives evidence that all taxes and charges
\nhave been paid.<\/p>\n
Upon receipt by the Company and the Rights Agent of evidence
\nreasonably satisfactory to them of the loss, theft, destruction or mutilation
\nof a Rights Certificate, and, in case of loss, theft or destruction, of
\nindemnity or security satisfactory to them, and, at the Company’s request,
\nreimbursement to the Company and the Rights Agent of all reasonable expenses
\nincidental thereto, and upon surrender to the Rights Agent and cancellation
\nof the Rights Certificate if mutilated, the Company will issue, execute and
\ndeliver a new Rights Certificate of like tenor to the Rights Agent for
\ncountersignature and delivery to the registered holder in lieu of the Rights
\nCertificate so lost, stolen, destroyed or mutilated.<\/p>\n
7<\/p>\n
Notwithstanding any other provisions hereof, the Company and the Rights
\nAgent may amend this Agreement to provide for uncertificated Rights in addition
\nto or in place of Rights evidenced by Rights Certificates.<\/p>\n
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.<\/p>\n
(a) The registered holder of any Rights Certificate may exercise the
\nRights evidenced thereby (except as otherwise provided herein) in whole or in
\npart at any time after the Distribution Date upon surrender of the Rights
\nCertificate, with the form of election to purchase on the reverse side thereof
\nduly executed, to the Rights Agent at the office or offices of the Rights Agent
\ndesignated for such purpose, together with payment of the Purchase Price for
\neach one one-hundredth of a Preferred Share (or such other number of shares or
\nother securities) as to which the Rights are exercised, at or prior to the
\nearliest of (i) the Close of Business on October 20, 2009 (the “Final Expiration
\nDate”), (ii) the time at which the Rights are redeemed as provided in Section 23
\nhereof (the “Redemption Date”), or (iii) the time at which such Rights are
\nexchanged as provided in Section 24 hereof.<\/p>\n
(b) The purchase price (the “Purchase Price”) for each one
\none-hundredth of a Preferred Share pursuant to the exercise of a Right shall
\ninitially be $400 and shall be subject to adjustment from time to time as
\nprovided in Sections 11 and 13 hereof and shall be payable in lawful money of
\nthe United States of America in accordance with paragraph (c) below.<\/p>\n
(c) Upon receipt of a Rights Certificate representing exercisable
\nRights, with the form of election to purchase duly executed, accompanied by
\npayment of the Purchase Price for the shares to be purchased and an amount
\nequal to any applicable tax or governmental charge required to be paid by the
\nholder of such Rights Certificate in accordance with Section 9 hereof by
\ncertified check, cashier’s check, bank draft or money order payable to the
\norder of the Company, the Rights Agent shall thereupon promptly (i) (A)
\nrequisition from any transfer agent for the Preferred Shares certificates for
\nthe number of Preferred Shares to be purchased and the Company hereby
\nirrevocably authorizes its transfer agent to comply with all such requests,
\nor (B) if the Company, in its sole discretion, shall have elected to deposit
\nthe Preferred Shares issuable upon exercise of the Rights hereunder into a
\ndepository, requisition from the depositary agent depositary receipts
\nrepresenting such number of one one-hundredths of a Preferred Share as are to
\nbe purchased (in which case certificates for the Preferred Shares represented
\nby such receipts shall be deposited by the transfer agent with the depositary
\nagent) and the Company hereby directs the depositary agent to comply with
\nsuch request, (ii) when appropriate, requisition from the Company the amount
\nof cash to be paid in lieu of issuance of fractional shares in accordance
\nwith Section 14 hereof, (iii) after receipt of such certificates or
\ndepositary receipts, cause the same to be delivered to or upon the order of
\nthe registered holder of such Rights Certificate, registered in such name or
\nnames as may be designated by such holder and (iv) when appropriate, after
\nreceipt, deliver such cash to or upon the order of the registered holder of
\nsuch Rights Certificate. In the event that the Company is obligated to issue
\nsecurities of the Company other than Preferred Shares (including Common
\nShares) of the Company pursuant to Section 11(a) hereof, the Company will
\nmake all arrangements necessary so that such other securities are available
\nfor distribution by the Rights Agent, if and when necessary to comply with
\nthis Agreement.<\/p>\n
8<\/p>\n
In addition, in the case of an exercise of the Rights by a holder
\npursuant to Section 11(a)(ii) hereof, the Rights Agent shall return such Rights
\nCertificate to the registered holder thereof after imprinting, stamping or
\notherwise indicating thereon that the rights represented by such Rights
\nCertificate no longer include the rights provided by Section 11(a)(ii) hereof,
\nand, if fewer than all the Rights represented by such Rights Certificate were so
\nexercised, the Rights Agent shall indicate on the Rights Certificate the number
\nof Rights represented thereby which continue to include the rights provided by
\nSection 11(a)(ii) hereof.<\/p>\n
(d) In case the registered holder of any Rights Certificate shall
\nexercise fewer than all the Rights evidenced thereby, a new Rights Certificate
\nevidencing Rights equivalent to the Rights remaining unexercised shall be issued
\nby the Rights Agent to the registered holder of such Rights Certificate or to
\nhis duly authorized assigns, subject to the provisions of Section 6 and Section
\n14 hereof.<\/p>\n
(e) The Company covenants and agrees that it will cause to be reserved
\nand kept available out of its authorized and unissued Preferred Shares or any
\nPreferred Shares held in its treasury, the number of Preferred Shares that will
\nbe sufficient to permit the exercise in full of all outstanding Rights in
\naccordance with this Section 7.<\/p>\n
(f) Notwithstanding anything in this Agreement to the contrary, neither
\nthe Rights Agent nor the Company shall be obligated to undertake any action with
\nrespect to a registered holder upon the occurrence of any purported exercise as
\nset forth in this Section 7 unless such registered holder shall have (i)
\nproperly completed and signed the certification following the form of election
\nto purchase set forth on the reverse side of the Rights Certificate surrendered
\nfor such exercise and (ii) provided such additional evidence of the identity of
\nthe Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
\nthereof as the Company or the Rights Agent shall reasonably request.<\/p>\n
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES. All Rights
\nCertificates surrendered for the purpose of exercise, transfer, split up,
\ncombination or exchange shall, if surrendered to the Company or to any of its
\nagents, be delivered to the Rights Agent for cancellation or in canceled form,
\nor, if delivered or surrendered to the Rights Agent, shall be canceled by it,
\nand no Rights Certificates shall be issued in lieu thereof except as expressly
\npermitted by any of the provisions of this Agreement. The Company shall deliver
\nto the Rights Agent for cancellation and retirement, and the Rights Agent shall
\nso cancel and retire, any other Rights Certificate purchased or acquired by the
\nCompany otherwise than upon the exercise thereof. The Rights Agent shall deliver
\nall canceled Rights Certificates to the Company approximately one and one-half
\nyears after the cancellation date, or shall, at the written request of the
\nCompany, destroy such canceled Rights Certificates, and in such case shall
\ndeliver a certificate of destruction thereof to the Company.<\/p>\n
SECTION 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants and agrees
\nthat so long as the Preferred Shares (and, after the time a person becomes an
\nAcquiring Person, Common Shares or any other securities) issuable upon the
\nexercise of the Rights may be listed on any stock exchange or quotation system,
\nthe Company shall use its best efforts to cause, from and after such time as the
\nRights become exercisable, all shares reserved for such issuance to be listed on
\nsuch exchange or quotation system upon official notice of issuance upon such
\nexercise.<\/p>\n
9<\/p>\n
The Company covenants and agrees that it will take all such action as
\nmay be necessary to ensure that all Preferred Shares (or Common Shares and other
\nsecurities, as the case may be) delivered upon exercise of Rights shall, at the
\ntime of delivery of the certificates for such Preferred Shares (subject to
\npayment of the Purchase Price), be duly and validly authorized and issued and
\nfully paid and nonassessable shares or other securities.<\/p>\n
The Company further covenants and agrees that it will pay when due and
\npayable any and all taxes and governmental charges which may be payable in
\nrespect of the issuance or delivery of the Rights Certificates or of any
\nPreferred Shares upon the exercise of Rights. The Company shall not, HOWEVER, be
\nrequired to pay any tax or governmental charges which may be payable in respect
\nof any transfer or delivery of Rights Certificates to a person other than, or
\nthe issuance or delivery of certificates or depositary receipts for the
\nPreferred Shares in a name other than that of, the registered holder of the
\nRights Certificate evidencing Rights surrendered for exercise or to issue or to
\ndeliver any certificates or depositary receipts for Preferred Shares upon the
\nexercise of any Rights until any such tax shall have been paid (any such tax
\nbeing payable by the holder of such Rights Certificate at the time of surrender)
\nor until it has been established to the Company’s reasonable satisfaction that
\nno such tax is due.<\/p>\n
As soon as practicable after the Distribution Date, the Company shall
\nuse its best efforts to:<\/p>\n
(i) prepare and file a registration statement under the Securities
\nAct of 1933, as amended (the “Act”), with respect to the Rights and the
\nsecurities purchasable upon exercise of the Rights on an appropriate form, will
\nuse its best efforts to cause such registration statement to become effective as
\nsoon as practicable after such filing and will use its best efforts to cause
\nsuch registration statement to remain effective (with a prospectus at all times
\nmeeting the requirements of the Act) until the Final Expiration Date; and<\/p>\n
(ii) use its best efforts to qualify or register the Rights and
\nthe securities purchasable upon exercise of the Rights under the blue sky laws
\nof such jurisdictions as may be necessary or appropriate.<\/p>\n
The Company shall notify the Rights Agent whenever it makes a public
\nannouncement pursuant to this Section 9 and shall provide the Rights Agent with
\na copy of any such announcement.<\/p>\n
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
\ncertificate for Preferred Shares or other securities is issued upon the exercise
\nof Rights shall for all purposes be deemed to have become the holder of record
\nof the Preferred Shares or other securities represented thereby on, and such
\ncertificate shall be dated, the date upon which the Rights Certificate
\nevidencing such Rights was duly surrendered with the forms of election and
\ncertification duly executed and payment of the Purchase Price (and any
\napplicable taxes and governmental charges) was made; PROVIDED, HOWEVER, that if
\nthe date of such surrender and payment is a date upon which the Preferred Shares
\nor other securities transfer books of the Company are closed, such person shall
\nbe deemed to have become the record holder of such shares on, and such
\ncertificate shall be dated, the next succeeding Business Day on which the
\nPreferred Shares or other securities transfer books of the Company are open.
\nPrior to the <\/p>\n
10<\/p>\n
exercise of the Rights evidenced thereby, the holder of a Rights Certificate, as
\nsuch, shall not be entitled to any rights of a holder of Preferred Shares for
\nwhich the Rights shall be exercisable, including, without limitation, the right
\nto vote, to receive dividends or other distributions or to exercise any
\npreemptive rights, and shall not be entitled to receive any notice of any
\nproceedings of the Company, except as provided herein.<\/p>\n
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF RIGHTS.
\nThe Purchase Price, the number of Preferred Shares covered by each Right and the
\nnumber of Rights outstanding are subject to adjustment from time to time as
\nprovided in this Section 11.<\/p>\n
(a)<\/p>\n
(i) In the event the Company shall at any time after the date of
\nthis Agreement (A) declare a dividend on the Preferred Shares payable in
\nPreferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
\nthe outstanding Preferred Shares into a smaller number of Preferred Shares or
\n(D) issue any shares of its capital stock in a reclassification of the Preferred
\nShares (including any such reclassification in connection with a consolidation
\nor merger in which the Company is the continuing or surviving corporation),
\nexcept as otherwise provided in this Section 11(a), the Purchase Price in effect
\nat the time of the record date for such dividend or of the effective date of
\nsuch subdivision, combination or reclassification, and the number and kind of
\nshares of capital stock issuable on such date, shall be proportionately adjusted
\nso that the holder of any Right exercised after such time shall be entitled to
\nreceive the aggregate number and kind of shares of capital stock which, if such
\nRight had been exercised immediately prior to such date and at a time when the
\nPreferred Shares transfer books of the Company were open, such holder would have
\nowned upon such exercise and been entitled to receive by virtue of such
\ndividend, subdivision, combination or reclassification; PROVIDED, HOWEVER, that
\nin no event shall the consideration to be paid upon the exercise of one Right be
\nless than the aggregate par value of the shares of capital stock of the Company
\nissuable upon exercise of one Right. If an event occurs which would require an
\nadjustment under both Section 11(a)(i) and Section 11(a)(ii) hereof, the
\nadjustment provided for in this Section 11(a)(i) shall be in addition to, and
\nshall be made prior to any adjustment required pursuant to Section 11(a)(ii)
\nhereof.<\/p>\n
(ii) Subject to Section 24 hereof and the provisions of the
\nnext paragraph of this Section 11(a)(ii), in the event any Person shall
\nbecome an Acquiring Person, each holder of a Right shall, for a period of 60
\ndays after the later of such time any Person becomes an Acquiring Person or
\nthe effective date of an appropriate registration statement under the Act
\npursuant to Section 9 hereof (provided, however that, if at any time prior to
\nthe expiration or termination of the Rights there shall be a temporary
\nrestraining order, a preliminary injunction, an injunction, or temporary
\nsuspension by the Board of Directors, or similar obstacle to exercise of the
\nRights (the “Injunction”) which prevents exercise of the Rights, a new 60-day
\nperiod shall commence on the date the Injunction is removed), have a right to
\nreceive, upon exercise thereof at a price equal to the then current Purchase
\nPrice multiplied by the number of one one-hundredths of a Preferred Share for
\nwhich a Right is then exercisable, in accordance with the terms of this
\nAgreement and in lieu of Preferred Shares, such number of Common Shares as
\nshall equal the result obtained by (A) multiplying the then current Purchase
\nPrice by the number of one one-hundredths of a <\/p>\n
11<\/p>\n
Preferred Share for which a Right is then exercisable and dividing that
\nproduct by (B) 50% of the then current per share market price of the Common
\nShares (determined pursuant to Section 11(d) hereof) on the date such Person
\nbecame an Acquiring Person; PROVIDED, HOWEVER, that if the transaction that
\nwould otherwise give rise to the foregoing adjustment is also subject to the
\nprovisions of Section 13 hereof, then only the provisions of Section 13
\nhereof shall apply and no adjustment shall be made pursuant to this Section
\n11(a)(ii). In the event that any Person shall become an Acquiring Person and
\nthe Rights shall then be outstanding, the Company shall not take any action
\nwhich would eliminate or diminish the benefits intended to be afforded by the
\nRights.<\/p>\n
Notwithstanding anything in this Agreement to the contrary, from and
\nafter the time any Person becomes an Acquiring Person, any Rights beneficially
\nowned by (i) such Acquiring Person or an Associate or Affiliate of such
\nAcquiring Person, (ii) a transferee of such Acquiring Person (or of any such
\nAssociate or Affiliate) who becomes a transferee after the Acquiring Person
\nbecame such, or (iii) a transferee of such Acquiring Person (or of any such
\nAssociate or Affiliate) who becomes a transferee prior to or concurrently with
\nthe Acquiring Person’s becoming such and receives such Rights pursuant to either
\n(A) a transfer (whether or not for consideration) from the Acquiring Person to
\nholders of equity interests in such Acquiring Person or to any Person with whom
\nthe Acquiring Person has any continuing agreement, arrangement or understanding
\nregarding the transferred Rights or (B) a transfer which the Board of Directors
\nof the Company has determined is part of a plan, arrangement or understanding
\nwhich has as a primary purpose or effect the avoidance of this Section
\n11(a)(ii), shall become null and void without any further action and no holder
\nof such Rights shall have any rights whatsoever with respect to such Rights,
\nwhether under any provision of this Agreement or otherwise. The Company shall
\nuse all reasonable efforts to insure that the provisions of this Section
\n11(a)(ii) and Section 4(b) hereof are complied with, but shall have no liability
\nto any holder of Rights Certificates or other Person as a result of its failure
\nto make any determinations with respect to an Acquiring Person or its
\nAffiliates, Associates or transferees hereunder. No Rights Certificate shall be
\nissued at any time upon the transfer of any Rights to an Acquiring Person whose
\nRights would be void pursuant to the preceding sentence or any Associate or
\nAffiliate thereof or to any nominee of such Acquiring Person, Associate or
\nAffiliate; and any Rights Certificate delivered to the Rights Agent for transfer
\nto an Acquiring Person whose Rights would be void pursuant to the preceding
\nsentence shall be canceled.<\/p>\n
(iii) In lieu of issuing Common Shares in accordance with Section
\n11(a)(ii) hereof, the Company may, if a majority of the Board of Directors then
\nin office determines that such action is necessary or appropriate and not
\ncontrary to the interests of holders of Rights, elect to (and, in the event that
\nthe Board of Directors has not exercised the exchange right contained in Section
\n24(c) hereof and there are not sufficient treasury shares and authorized but
\nunissued Common Shares to permit the exercise in full of the Rights in
\naccordance with the foregoing subparagraph (ii), the Company shall) take all
\nsuch action as may be necessary to authorize, issue or pay, upon the exercise of
\nthe Rights, cash (including by way of a reduction of the Purchase Price),
\nproperty, Common Shares, other securities or any combination thereof having an
\naggregate value equal to the value of the Common Shares which otherwise would
\nhave been issuable pursuant to Section 11(a)(ii) hereof, which aggregate value
\nshall be determined by a nationally recognized investment banking firm selected
\nby a majority of the Board of Directors then in office. For purposes of the
\npreceding sentence, the value of the Common Shares shall be <\/p>\n
12<\/p>\n
determined pursuant to Section 11(d) hereof. Any such election by the Board of
\nDirectors must be made within 60 days following the date on which the event
\ndescribed in Section 11(a)(ii) hereof shall have occurred. Following the
\noccurrence of the event described in Section 11(a)(ii) hereof, a majority of the
\nBoard of Directors then in office may suspend the exercisability of the Rights
\nfor a period of up to 60 days following the date on which the event described in
\nSection 11(a)(ii) hereof shall have occurred to the extent that such directors
\nhave not determined whether to exercise their rights of election under this
\nSection 11(a)(iii). In the event of any such suspension, the Company shall issue
\na public announcement stating that the exercisability of the Rights has been
\ntemporarily suspended.<\/p>\n
(b) In case the Company shall fix a record date for the issuance of
\nrights, options or warrants to all holders of Preferred Shares entitling them
\n(for a period expiring within 45 calendar days after such record date) to
\nsubscribe for or purchase Preferred Shares (or shares having the same
\ndesignations and the powers, preferences and rights, and the qualifications,
\nlimitations and restrictions as the Preferred Shares (“equivalent preferred
\nshares”)) or securities convertible into Preferred Shares or equivalent
\npreferred shares at a price per Preferred Share or equivalent preferred share
\n(or having a conversion price per share, if a security convertible into
\nPreferred Shares or equivalent preferred shares) less than the then current per
\nshare market price of the Preferred Shares (as such term is hereinafter defined)
\non such record date, the Purchase Price to be in effect after such record date
\nshall be determined by multiplying the Purchase Price in effect immediately
\nprior to such record date by a fraction, the numerator of which shall be the
\nnumber of Preferred Shares outstanding on such record date plus the number of
\nPreferred Shares which the aggregate offering price of the total number of
\nPreferred Shares and\/or equivalent preferred shares so to be offered (and\/or the
\naggregate initial conversion price of the convertible securities so to be
\noffered) would purchase at such current market price and the denominator of
\nwhich shall be the number of Preferred Shares outstanding on such record date
\nplus the number of additional Preferred Shares and\/or equivalent preferred
\nshares to be offered for subscription or purchase (or into which the convertible
\nsecurities so to be offered are initially convertible); PROVIDED, HOWEVER, that
\nin no event shall the consideration to be paid upon the exercise of one Right be
\nless than the aggregate par value of the shares of capital stock of the Company
\nissuable upon exercise of one Right. In case such subscription price may be paid
\nin a consideration part or all of which shall be in a form other than cash, the
\nvalue of such consideration shall be as determined in good faith by the Board of
\nDirectors of the Company, whose determination shall be described in a statement
\nfiled with the Rights Agent. Preferred Shares owned by or held for the account
\nof the Company shall not be deemed outstanding for the purpose of any such
\ncomputation. Such adjustment shall be made successively whenever such a record
\ndate is fixed; and in the event that such rights, options or warrants are not so
\nissued, the Purchase Price shall be adjusted to be the Purchase Price which
\nwould then be in effect if such record date had not been fixed.<\/p>\n
(c) In case the Company shall fix a record date for the making of a
\ndistribution to all holders of the Preferred Shares (including any such
\ndistribution made in connection with a consolidation or merger in which the
\nCompany is the continuing or surviving corporation) of evidences of indebtedness
\nor assets (other than a regular quarterly cash dividend or a dividend payable in
\nPreferred Shares) or subscription rights or warrants (excluding those referred
\nto in Section 11(b) hereof), the Purchase Price to be in effect after such
\nrecord date shall be determined by multiplying the Purchase Price in effect
\nimmediately prior to such record date by <\/p>\n
13<\/p>\n
a fraction, the numerator of which shall be the then current per share market
\nprice of the Preferred Shares (as such term is hereinafter defined) on such
\nrecord date, less the fair market value (as determined in good faith by the
\nBoard of Directors of the Company, whose determination shall be described in a
\nstatement filed with the Rights Agent) of the portion of the assets or evidences
\nof indebtedness so to be distributed or of such subscription rights or warrants
\napplicable to one Preferred Share and the denominator of which shall be such
\ncurrent per share market price of the Preferred Shares; PROVIDED, HOWEVER, that
\nin no event shall the consideration to be paid upon the exercise of one Right be
\nless than the aggregate par value of the shares of capital stock of the Company
\nto be issued upon exercise of one Right. Such adjustments shall be made
\nsuccessively whenever such a record date is fixed; and in the event that such
\ndistribution is not so made, the Purchase Price shall again be adjusted to be
\nthe Purchase Price which would then be in effect if such record date had not
\nbeen fixed.<\/p>\n
(d)<\/p>\n
(i) For the purpose of any computation hereunder, the “current per
\nshare market price” of any security (a “Security” for the purpose of this
\nSection 11(d)(i)) on any date shall be deemed to be the average of the daily
\nclosing prices per share of such Security for the 30 consecutive Trading Days
\n(as such term is hereinafter defined) immediately prior to and not including
\nsuch date; PROVIDED, HOWEVER, that in the event that the current per share
\nmarket price of the Security is determined during a period following the
\nannouncement by the issuer of such Security of (A) a dividend or distribution on
\nsuch Security payable in shares of such Security or securities convertible into
\nsuch shares, or (B) any subdivision, combination or reclassification of such
\nSecurity or securities convertible into such shares, or (C) any subdivision,
\ncombination or reclassification of such Security and prior to the expiration of
\n30 Trading Days after the ex-dividend date for such dividend or distribution, or
\nthe record date for such subdivision, combination or reclassification, then, and
\nin each such case, the current per share market price shall be appropriately
\nadjusted to reflect the current market price per share equivalent of such
\nSecurity. The closing price for each day shall be the last sale price, regular
\nway, or, in case no such sale takes place on such day, the average of the
\nclosing bid and asked prices, regular way, in either case as reported in the
\nprincipal consolidated transaction reporting system with respect to securities
\nlisted or admitted to trading on the New York Stock Exchange or, if the Security
\nis not listed or admitted to trading on the New York Stock Exchange, as reported
\nin the principal consolidated transaction reporting system with respect to
\nsecurities listed on the principal national securities exchange on which the
\nSecurity is listed or admitted to trading or as reported on the Nasdaq National
\nMarket or, if the Security is not listed or admitted to trading on any national
\nsecurities exchange or reported on the Nasdaq National Market, the last quoted
\nprice or, if not so quoted, the average of the high bid and low asked prices in
\nthe over-the-counter market, as reported by the National Association of
\nSecurities Dealers, Inc. Automated Quotations System (“Nasdaq”) or such other
\nsystem then in use, or, if on any such date the Security is not quoted by any
\nsuch organization, the average of the closing bid and asked prices as furnished
\nby a professional market maker making a market in the Security selected by the
\nBoard of Directors of the Company or, if on any such date no professional market
\nmaker is making a market in the Security, the price as determined in good faith
\nby the Board of Directors. The term “Trading Day” shall mean a day on which the
\nprincipal national securities exchange on which the Security is listed or
\nadmitted to trading is open for the transaction of business or, if the Security
\nis not listed or admitted to trading on any national securities exchange, a
\nBusiness Day.<\/p>\n
14<\/p>\n
(ii) For the purpose of any computation hereunder, the “current
\nper share market price” of the Preferred Shares shall be determined in
\naccordance with the method set forth in Section 11(d)(i) hereof. If the
\nPreferred Shares are not publicly traded, the “current per share market price”
\nof the Preferred Shares shall be conclusively deemed to be the current per share
\nmarket price of the Common Shares as determined pursuant to Section 11(d)(i)
\nhereof (appropriately adjusted to reflect any stock split, stock dividend or
\nsimilar transaction occurring after the date hereof) multiplied by one hundred.
\nIf neither the Common Shares nor the Preferred Shares are publicly held or so
\nlisted or traded, “current per share market price” shall mean the fair value per
\nshare as determined in good faith by the Board of Directors of the Company,
\nwhose determination shall be described in a statement filed with the Rights
\nAgent.<\/p>\n
(e) No adjustment in the Purchase Price shall be required unless such
\nadjustment would require an increase or decrease of at least 1% in the Purchase
\nPrice; PROVIDED, HOWEVER, that any adjustments which by reason of this Section
\n11(e) are not required to be made shall be carried forward and taken into
\naccount in any subsequent adjustment. All calculations under this Section 11
\nshall be made to the nearest cent or to the nearest one one-hundredth of a
\nPreferred Share or one ten-thousandth of any other share or security as the case
\nmay be. Notwithstanding the first sentence of this Section 11(e), any adjustment
\nrequired by this Section 11 shall be made no later than the earlier of (i) three
\nyears from the date of the transaction which requires such adjustment or (ii)
\nthe date of the expiration of the right to exercise any Rights.<\/p>\n
(f) If as a result of an adjustment made pursuant to Section 11(a)
\nhereof, the holder of any Right thereafter exercised shall become entitled to
\nreceive any shares of capital stock of the Company other than Preferred Shares,
\nthereafter the number of such other shares so receivable upon exercise of any
\nRight shall be subject to adjustment from time to time in a manner and on terms
\nas nearly equivalent as practicable to the provisions with respect to the
\nPreferred Shares contained in Sections 11(a) through 11(c) hereof, inclusive,
\nand the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the
\nPreferred Shares shall apply on like terms to any such other shares.<\/p>\n
(g) All Rights originally issued by the Company subsequent to any
\nadjustment made to the Purchase Price hereunder shall evidence the right to
\npurchase, at the adjusted Purchase Price, the number of one one-hundredths of a
\nPreferred Share purchasable from time to time hereunder upon exercise of the
\nRights, all subject to further adjustment as provided herein.<\/p>\n
(h) Unless the Company shall have exercised its election as provided in
\nSection 11(i) hereof, upon each adjustment of the Purchase Price as a result of
\nthe calculations made in Section 11(b) and Section 11(c) hereof, each Right
\noutstanding immediately prior to the making of such adjustment shall thereafter
\nevidence the right to purchase, at the adjusted Purchase Price, that number of
\none one-hundredths of a Preferred Share (calculated to the nearest one
\none-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
\nof one one-hundredths of a Preferred Share covered by a Right immediately prior
\nto this adjustment by (y) the Purchase Price in effect immediately prior to such
\nadjustment of the Purchase Price and (ii) dividing the product so obtained by
\nthe Purchase Price in effect immediately after such adjustment of the Purchase
\nPrice.<\/p>\n
15<\/p>\n
(i) The Company may elect on or after the date of any adjustment of the
\nPurchase Price to adjust the number of Rights, in substitution for any
\nadjustment in the number of one one-hundredths of a Preferred Share purchasable
\nupon the exercise of a Right. Each of the Rights outstanding after such
\nadjustment of the number of Rights shall be exercisable for the number of one
\none-hundredths of a Preferred Share for which a Right was exercisable
\nimmediately prior to such adjustment. Each Right held of record prior to such
\nadjustment of the number of Rights shall become that number of Rights
\n(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
\nPrice in effect immediately prior to adjustment of the Purchase Price by the
\nPurchase Price in effect immediately after adjustment of the Purchase Price. The
\nCompany shall make a public announcement of its election to adjust the number of
\nRights, indicating the record date for the adjustment, and, if known at the
\ntime, the amount of the adjustment to be made and shall concurrently send
\nwritten notice of such election to the Rights Agent. This record date may be the
\ndate on which the Purchase Price is adjusted or any day thereafter, but, if the
\nRights Certificates have been issued, shall be at least 10 days later than the
\ndate of the public announcement. If Rights Certificates have been issued, upon
\neach adjustment of the number of Rights pursuant to this Section 11(i), the
\nCompany shall, as promptly as practicable, cause to be distributed to holders of
\nrecord of Rights Certificates on such record date Rights Certificates
\nevidencing, subject to Section 14 hereof, the additional Rights to which such
\nholders shall be entitled as a result of such adjustment, or, at the option of
\nthe Company, shall cause to be distributed to such holders of record in
\nsubstitution and replacement for the Rights Certificates held by such holders
\nprior to the date of adjustment, and upon surrender thereof, if required by the
\nCompany, new Rights Certificates evidencing all the Rights to which such holders
\nshall be entitled after such adjustment. Rights Certificates so to be
\ndistributed shall be issued, executed and countersigned in the manner provided
\nfor herein and shall be registered in the names of the holders of record of
\nRights Certificates on the record date specified in the public announcement.<\/p>\n
(j) Irrespective of any adjustment or change in the Purchase Price or
\nthe number of one one-hundredths of a Preferred Share issuable upon the exercise
\nof the Rights, the Rights Certificates theretofore and thereafter issued may
\ncontinue to express the Purchase Price and the number of one one-hundredths of a
\nPreferred Share which were expressed in the initial Rights Certificates issued
\nhereunder.<\/p>\n
(k) Before taking any action that would cause an adjustment reducing
\nthe Purchase Price below one one-hundredth of the then par value, if any, of the
\nPreferred Shares issuable upon exercise of the Rights, the Company shall take
\nany corporate action which may, in the opinion of its counsel, be necessary in
\norder that the Company may validly and legally issue fully paid and
\nnonassessable Preferred Shares at such adjusted Purchase Price.<\/p>\n
(l) In any case in which this Section 11 shall require that an
\nadjustment in the Purchase Price be made effective as of a record date for a
\nspecified event, the Company may elect to defer until the occurrence of such
\nevent the issuing to the holder of any Right exercised after such record date of
\nthe Preferred Shares and other capital stock or securities of the Company, if
\nany, issuable upon such exercise on the basis of the Purchase Price in effect
\nprior to such adjustment; PROVIDED, HOWEVER, that the Company shall deliver to
\nsuch holder a due bill or other appropriate instrument evidencing such holder’s
\nright to receive such additional shares upon the occurrence of the event
\nrequiring such adjustment. The Company shall send written notice to the Rights
\nAgent concerning any adjustment and election.<\/p>\n
16<\/p>\n
(m) The Company covenants and agrees that, after the Distribution Date,
\nit will not, except as permitted by Section 23 or Section 27 hereof, take (or
\npermit any Subsidiary to take) any action the purpose of which is to, or if at
\nthe time such action is taken it is reasonably foreseeable that the effect of
\nsuch action is to, materially diminish or eliminate the benefits intended to be
\nafforded by the Rights. Any such action taken by the Company during any period
\nafter any Person becomes an Acquiring Person but prior to the Distribution Date
\nshall be null and void unless such action could be taken under this Section
\n11(m) from and after the Distribution Date.<\/p>\n
(n) Anything in this Section 11 to the contrary notwithstanding, the
\nCompany shall be entitled to make such reductions in the Purchase Price, in
\naddition to those adjustments expressly required by this Section 11, as and to
\nthe extent that it in its sole discretion shall determine to be advisable in
\norder that any consolidation or subdivision of the Preferred Shares, issuance
\nwholly for cash of any Preferred Shares at less than the current market price,
\nissuance wholly for cash of Preferred Shares or securities which by their terms
\nare convertible into or exchangeable for Preferred Shares, dividends on
\nPreferred Shares payable in Preferred Shares or issuance of rights, options or
\nwarrants referred to hereinabove in Section 11(b), hereafter made by the Company
\nto holders of its Preferred Shares shall not be taxable to such stockholders.<\/p>\n
(o) In the event that at any time after the date of this Agreement and
\nprior to the Distribution Date, the Company shall (i) declare or pay any
\ndividend on the Common Shares payable in Common Shares or (ii) effect a
\nsubdivision, combination or consolidation of the Common Shares (by
\nreclassification or otherwise than by payment of dividends in Common Shares)
\ninto a greater or lesser number of Common Shares, then in any such case (A) the
\nnumber of one one-hundredths of a Preferred Share purchasable after such event
\nupon proper exercise of each Right shall be determined by multiplying the number
\nof one one-hundredths of a Preferred Share so purchasable immediately prior to
\nsuch event by a fraction, the numerator of which is the number of Common Shares
\noutstanding immediately before such event and the denominator of which is the
\nnumber of Common Shares outstanding immediately after such event, and (B) each
\nCommon Share outstanding immediately after such event shall have issued with
\nrespect to it that number of Rights which each Common Share outstanding
\nimmediately prior to such event had issued with respect to it. The adjustments
\nprovided for in this Section 11(o) shall be made successively whenever such a
\ndividend is declared or paid or such a subdivision, combination or consolidation
\nis effected.<\/p>\n
(p) The exercise of Rights under Section 11(a)(ii) hereof shall only
\nresult in the loss of rights under Section 11(a)(ii) hereof to the extent so
\nexercised and shall not otherwise affect the rights represented by the Rights
\nunder this Agreement, including the rights represented by Section 13 hereof.<\/p>\n
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES. Whenever
\nan adjustment is made as provided in Sections 11 and 13 hereof, the Company
\nshall promptly (a) prepare a certificate setting forth such adjustment, and a
\nbrief statement of the facts, computations and methodology accounting for such
\nadjustment, (b) file with the Rights Agent and with each transfer agent for the
\nCommon Shares or the Preferred Shares a copy of such certificate and (c) mail a
\nbrief and reasonably detailed summary thereof to each holder of a Rights
\nCertificate in accordance with Section 25 hereof. The Rights Agent shall be
\nfully <\/p>\n
17<\/p>\n
protected in relying on any such certificate and on any adjustment therein
\ncontained and shall not be deemed to have knowledge of any adjustment unless and
\nuntil it shall have received such certificate.<\/p>\n
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
\n POWER.<\/p>\n
(a) In the event that, following the Shares Acquisition Date or, if a
\nTransaction is proposed, the Distribution Date, directly or indirectly (x) the
\nCompany shall consolidate with, or merge with and into, any Interested
\nStockholder, or if in such merger or consolidation all holders of Common Stock
\nare not treated alike, any other Person, (y) any Interested Person, or if in
\nsuch merger or consolidation all holders of Common Stock are not treated alike,
\nany other Person shall consolidate with the Company, or merge with and into the
\nCompany, and the Company shall be the continuing or surviving corporation of
\nsuch merger (other than, in the case of either transaction described in (x) or
\n(y), a merger or consolidation which would result in all of the voting power
\nrepresented by the securities of the Company outstanding immediately prior
\nthereto continuing to represent (either by remaining outstanding or by being
\nconverted into securities of the surviving entity) all of the voting power
\nrepresented by the securities of the Company or such surviving entity
\noutstanding immediately after such merger or consolidation and the holders of
\nsuch securities not having changed as a result of such merger or consolidation),
\nor (z) the Company shall sell, mortgage or otherwise transfer (or one or more of
\nits subsidiaries shall sell, mortgage or otherwise transfer), in one or more
\ntransactions, assets or earning power aggregating more than 50% of the assets or
\nearning power of the Company and its subsidiaries (taken as a whole) to any
\nInterested Stockholder or Stockholders, or if in such transaction all holders of
\nCommon Stock are not treated alike, any other Person, (other than the Company or
\nany Subsidiary of the Company in one or more transactions each of which
\nindividually and the aggregate does not violate Section 13(d) hereof) then, and
\nin each such case, proper provision shall be made so that (i) each holder of a
\nRight, subject to Section 11(a)(ii) hereof, shall have the right to receive,
\nupon the exercise thereof at a price equal to the then current Purchase Price
\nmultiplied by the number of one one-hundredths of a Preferred Share for which a
\nRight is then exercisable in accordance with the terms of this Agreement and in
\nlieu of Preferred Shares, such number of freely tradeable Common Shares of the
\nPrincipal Party (as such term is hereinafter defined), free and clear of liens,
\nrights of call or first refusal, encumbrances or other adverse claims, as shall
\nbe equal to the result obtained by (A) multiplying the then current Purchase
\nPrice by the number of one one-hundredths of a Preferred Share for which a Right
\nis then exercisable (without taking into account any adjustment previously made
\npursuant to Section 11(a)(ii) hereof) and dividing that product by (B) 50% of
\nthe then current per share market price of the Common Shares of such Principal
\nParty (determined pursuant to Section 11(d) hereof) on the date of consummation
\nof such consolidation, merger, sale or transfer; (ii) such Principal Party shall
\nthereafter be liable for, and shall assume, by virtue of such consolidation,
\nmerger, sale or transfer, all the obligations and duties of the Company pursuant
\nto this Agreement; (iii) the term “Company” shall thereafter be deemed to refer
\nto such Principal Party, it being specifically intended that the provisions of
\nSection 11 hereof shall apply to such Principal Party; and (iv) such Principal
\nParty shall take such steps (including, but not limited to, the reservation of a
\nsufficient number of shares of its Common Shares in accordance with Section 9
\nhereof) in connection with such consummation as may be necessary to assure that
\nthe provisions hereof <\/p>\n
18<\/p>\n
shall thereafter be applicable, as nearly as reasonably may be, in relation to
\nits Common Shares thereafter deliverable upon the exercise of the Rights.<\/p>\n
(b) “Principal Party” shall mean:<\/p>\n
(i) in the case of any transaction described in clause (x) or (y)
\nof the first sentence of Section 13(a) hereof, the Person that is the issuer of
\nany securities into which Common Shares are converted in such merger or
\nconsolidation, and if no securities are so issued, the Person that is the other
\nparty to the merger or consolidation (or, if applicable, the Company, if it is
\nthe surviving corporation); and<\/p>\n
(ii) in the case of any transaction described in (z) of the first
\nsentence of Section 13(a) hereof, the Person that is the party receiving the
\ngreatest portion of the assets or earning power transferred pursuant to such
\ntransaction or transactions; PROVIDED, HOWEVER, that in any case, (1) if the
\nCommon Shares of such Person are not at such time and have not been continuously
\nover the preceding 12-month period registered under Section 12 of the Exchange
\nAct, and such Person is a direct or indirect subsidiary or Affiliate of another
\nPerson the Common Shares of which are and have been so registered, “Principal
\nParty” shall refer to such other Person; (2) if such Person is a subsidiary,
\ndirectly or indirectly, or Affiliate of more than one Person, the Common Shares
\nof two or more of which are and have been so registered, “Principal Party” shall
\nrefer to whichever of such Persons is the issuer of the Common Shares having the
\ngreatest aggregate market value; and (3) if such Person is owned, directly or
\nindirectly, by a joint venture formed by two or more Persons that are not owned,
\ndirectly or indirectly, by the same Person, the rules set forth in (1) and (2)
\nabove shall apply to each of the chains of ownership having an interest in such
\njoint venture as if such party were a “subsidiary” of both or all of such joint
\nventurers and the Principal Parties in each such chain shall bear the
\nobligations set forth in this Section 13 in the same ratio as their direct or
\nindirect interests in such Person bear to the total of such interests.<\/p>\n
(c) The Company shall not consummate any such consolidation, merger,
\nsale or transfer unless the Principal Party shall have a sufficient number of
\nauthorized Common Shares that have not been issued or reserved for issuance to
\npermit the exercise in full of the Rights in accordance with this Section 13 and
\nunless prior thereto the Company and each Principal Party and each other Person
\nwho may become a Principal Party as a result of such consolidation, merger, sale
\nor transfer shall have (i) executed and delivered to the Rights Agent a
\nsupplemental agreement providing for the terms set forth in paragraphs (a) and
\n(b) of this Section 13 and (ii) prepared, filed and had declared and remain
\neffective a registration statement under the Act on the appropriate form with
\nrespect to the Rights and the securities exercisable upon exercise of the Rights
\nand further providing that, as soon as practicable after the date of any
\nconsolidation, merger, sale or transfer of assets mentioned in paragraph (a) of
\nthis Section 13, the Principal Party at its own expense will:<\/p>\n
(i) cause the registration statement under the Act with respect to
\nthe Rights and the securities purchasable upon exercise of the Rights on an
\nappropriate form to remain effective (with a prospectus at all times meeting the
\nrequirements of the Act) until the Final Expiration Date;<\/p>\n
19<\/p>\n
(ii) use its best efforts to qualify or register the Rights and
\nthe securities purchasable upon exercise of the Rights under the blue sky laws
\nof such jurisdictions as may be necessary or appropriate;<\/p>\n
(iii) list the Rights and the securities purchasable upon exercise
\nof the Rights on each national securities exchange on which the Common Shares
\nwere listed prior to the consummation of such consolidation, merger, sale or
\ntransfer of assets or on the Nasdaq National Market if the Common Shares were
\nlisted on the Nasdaq National Market or, if the Common Shares were not listed on
\na national securities exchange or the Nasdaq National Market prior to the
\nconsummation of such consolidation, merger, sale or transfer of assets, on a
\nnational securities exchange or the Nasdaq National Market; and<\/p>\n
(iv) deliver to holders of the Rights historical financial
\nstatements for the Principal Party and each of its Affiliates which comply in
\nall material respects with the requirements for registration on Form 10 under
\nthe Exchange Act.<\/p>\n
The provisions of this Section 13 shall similarly apply to successive
\nmergers or consolidations or sales or other transfers.<\/p>\n
(d) After the Distribution Date, the Company covenants and agrees that
\nit shall not (i) consolidate with, (ii) merge with or into, or (iii) sell or
\ntransfer to, in one or more transactions, assets or earning power aggregating
\nmore than 50% of the assets or earning power of the Company and its subsidiaries
\ntaken as a whole, any other Person (other than a Subsidiary of the Company in a
\ntransaction which does not violate Section 11(m) hereof), if (x) at the time of
\nor after such consolidation, merger or sale there are any charter or bylaw
\nprovisions or any rights, warrants or other instruments or securities
\noutstanding, agreements in effect or any other action taken which would diminish
\nor otherwise eliminate the benefits intended to be afforded by the Rights or (y)
\nprior to, simultaneously with or immediately after such consolidation, merger or
\nsale, the stockholders of the Person who constitutes, or would constitute, the
\n“Principal Party” for purposes of Section 13(a) hereof shall have received a
\ndistribution of Rights previously owned by such Person or any of its Affiliates
\nand Associates. The Company shall not consummate any such consolidation, merger,
\nsale or transfer unless prior thereto the Company and such other Person shall
\nhave executed and delivered to the Rights Agent a supplemental agreement
\nevidencing compliance with this Section 13(d).<\/p>\n
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.<\/p>\n
(a) The Company shall not be required to issue fractions of Rights or
\nto distribute Rights Certificates which evidence fractional Rights. In lieu of
\nsuch fractional Rights, there shall be paid to the registered holders of the
\nRights Certificates with regard to which such fractional Rights would otherwise
\nbe issuable, an amount in cash equal to the same fraction of the current market
\nvalue of a whole Right. For the purposes of this Section 14(a), the current
\nmarket value of a whole Right shall be the closing price of the Rights for the
\nTrading Day immediately prior to the date on which such fractional Rights would
\nhave been otherwise issuable. The closing price for any day shall be the last
\nsale price, regular way, or, in case no such sale takes place on such day, the
\naverage of the closing bid and asked prices, regular way, in either case as
\nreported in the principal consolidated transaction reporting system with respect
\nto securities listed or admitted to <\/p>\n
20<\/p>\n
trading on the New York Stock Exchange or, if the Rights are not listed or
\nadmitted to trading on the New York Stock Exchange, as reported in the principal
\nconsolidated transaction reporting system with respect to securities listed on
\nthe principal national securities exchange on which the Rights are listed or
\nadmitted to trading or as reported on the Nasdaq National Market or, if the
\nRights are not listed or admitted to trading on any national securities exchange
\nor reported on the Nasdaq National Market, the last quoted price or, if not so
\nquoted, the average of the high bid and low asked prices in the over-the-counter
\nmarket, as reported by Nasdaq or such other system then in use or, if on any
\nsuch date the Rights are not quoted by any such organization, the average of the
\nclosing bid and asked prices as furnished by a professional market maker making
\na market in the Rights selected by the Board of Directors of the Company. If on
\nany such date no such market maker is making a market in the Rights, the fair
\nvalue of the Rights on such date as determined in good faith by the Board of
\nDirectors of the Company shall be used.<\/p>\n
(b) The Company shall not be required to issue fractions of Preferred
\nShares (other than fractions which are integral multiples of one one-hundredth
\nof a Preferred Share) upon exercise of the Rights or to distribute certificates
\nwhich evidence fractional Preferred Shares (other than fractions which are
\nintegral multiples of one one-hundredth of a Preferred Share). Fractions of
\nPreferred Shares in integral multiples of one one-hundredth of a Preferred Share
\nmay, at the election of the Company, be evidenced by depositary receipts;
\nPROVIDED, HOWEVER, that holders of such depositary receipts shall have all of
\nthe designations and the powers, preferences and rights, and the qualifications,
\nlimitations and restrictions to which they are entitled as beneficial owners of
\nthe Preferred Shares represented by such depositary receipts. In lieu of
\nfractional Preferred Shares that are not integral multiples of one one-hundredth
\nof a Preferred Share, the Company shall pay to the registered holders of Rights
\nCertificates at the time such Rights are exercised as herein provided an amount
\nin cash equal to the same fraction of the current market value of one Preferred
\nShare. For the purposes of this Section 14(b), the current market value of a
\nPreferred Share shall be the current per share market price of the Preferred
\nShares (as determined pursuant to the second sentence of Section 11(d)(i)
\nhereof) for the Trading Day immediately prior to the date of such exercise (or,
\nif not publicly traded, in accordance with Section 11(d)(ii) hereof).<\/p>\n
(c) Following the occurrence of one of the transactions or events
\nspecified in Section 11 hereof giving rise to the right to receive Common
\nShares, capital stock equivalents (other than Preferred Shares) or other
\nsecurities upon the exercise of a Right, the Company shall not be required to
\nissue fractions of Common Shares or units of such Common Shares, capital stock
\nequivalents or other securities upon exercise of the Rights or to distribute
\ncertificates which evidence fractional Common Shares, capital stock equivalents
\nor other securities. In lieu of fractional Common Shares, capital stock
\nequivalents or other securities, the Company shall pay to the registered holders
\nof Rights Certificates at the time such Rights are exercised as herein provided
\nan amount in cash equal to the same fraction of the current market value of one
\nCommon Share or unit of such Common Shares, capital stock equivalents or other
\nsecurities. For purposes of this Section 14(c), the current market value shall
\nbe the current per share market price (as determined pursuant to Section
\n11(d)(i) hereof) for the Trading Day immediately prior to the date of such
\nexercise and, if such capital stock equivalent is not traded, each such capital
\nstock equivalent shall have the value of one one-hundredth of a Preferred Share.<\/p>\n
21<\/p>\n
(d) The holder of a Right by the acceptance of the Right expressly
\nwaives his right to receive any fractional Rights or any fractional shares upon
\nexercise of a Right (except as provided above).<\/p>\n
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this Agreement,
\nexcepting the rights of action given to the Rights Agent under Sections 18 and
\n20 hereof, are vested in the respective registered holders of the Rights
\nCertificates (and, prior to the Distribution Date, the registered holders of the
\nCommon Shares) and any registered holder of any Rights Certificate (or, prior to
\nthe Distribution Date, of the Common Shares), without the consent of the Rights
\nAgent or of the holder of any other Rights Certificate (or, prior to the
\nDistribution Date, of the Common Shares), may, in his own behalf and for his own
\nbenefit, enforce, and may institute and maintain any suit, action or proceeding
\nagainst the Company to enforce, or otherwise act in respect of, his right to
\nexercise the Rights evidenced by such Rights Certificate in the manner provided
\nin such Rights Certificate and in this Agreement. Without limiting the foregoing
\nor any remedies available to the holders of Rights, it is specifically
\nacknowledged that the holders of Rights would not have an adequate remedy at law
\nfor any breach of this Agreement and will be entitled to specific performance of
\nthe obligations under, and injunctive relief against actual or threatened
\nviolations of the obligations of any Person subject to, this Agreement. Holders
\nof Rights shall be entitled to recover the reasonable costs and expenses,
\nincluding attorneys fees, incurred by them in any action to enforce the
\nprovisions of this Agreement.<\/p>\n
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by accepting
\nthe same, consents and agrees with the Company and the Rights Agent and with
\nevery other holder of a Right that:<\/p>\n
(a) prior to the Distribution Date, the Rights will be transferable
\nonly in connection with the transfer of the Common Shares;<\/p>\n
(b) after the Distribution Date, the Rights Certificates are
\ntransferable (subject to the provisions of this Agreement) only on the registry
\nbooks of the Rights Agent if surrendered at the principal office of the Rights
\nAgent, duly endorsed or accompanied by a proper instrument of transfer; and<\/p>\n
(c) the Company and the Rights Agent may deem and treat the Person in
\nwhose name the Rights Certificate (or, prior to the Distribution Date, the
\nassociated Common Shares certificate) is registered as the absolute owner
\nthereof and of the Rights evidenced thereby (notwithstanding any notations of
\nownership or writing on the Rights Certificates or the associated Common Shares
\ncertificate made by anyone other than the Company or the Rights Agent) for all
\npurposes whatsoever, and neither the Company nor the Rights Agent shall be
\naffected by any notice to the contrary.<\/p>\n
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder, as
\nsuch, of any Rights Certificate shall be entitled to vote, receive dividends or
\nbe deemed for any purpose the holder of the Preferred Shares or any other
\nsecurities of the Company which may at any time be issuable on the exercise of
\nthe Rights represented thereby, nor shall anything contained herein or in any
\nRights Certificate be construed to confer upon the <\/p>\n
22<\/p>\n
holder of any Rights Certificate, as such, any of the rights of a stockholder of
\nthe Company or any right to vote for the election of directors or upon any
\nmatter submitted to stockholders at any meeting thereof, or to give or withhold
\nconsent to any corporate action, or to receive notice of meetings or other
\nactions affecting stockholders (except as provided in Section 25 hereof), or to
\nreceive dividends or subscription rights, or otherwise, until the Right or
\nRights evidenced by such Rights Certificate shall have been exercised in
\naccordance with the provisions hereof.<\/p>\n
SECTION 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay to the Rights
\nAgent reasonable compensation for all services rendered by it hereunder and,
\nfrom time to time, on demand of the Rights Agent, its reasonable expenses and
\ncounsel fees and other disbursements incurred in the preparation, delivery,
\namendment, administration and execution of this Agreement and the exercise and
\nperformance of its duties hereunder. The Company also agrees to indemnify the
\nRights Agent for, and to hold it harmless against, any loss, liability, damage,
\njudgment, fine, penalty, claim, demand, settlement, cost or expense, incurred
\nwithout negligence, bad faith or willful misconduct on the part of the Rights
\nAgent, for anything done or omitted by the Rights Agent in connection with the
\nacceptance and administration of this Agreement, including, without limitation,
\nthe costs and expenses of defending against any claim of liability in the
\npremises. The indemnity provided herein shall survive termination and the
\nexpiration of the Rights and the termination of this Agreement. Anything to the
\ncontrary notwithstanding, in no event shall the Rights Agent be liable for
\nspecial, punitive, indirect, consequential or incidental loss or damage of any
\nkind whatsoever (including but not limited to lost profits), even if the Rights
\nAgent has been advised of the likelihood of such loss or damage. Any liability
\nof the Rights Agent under this Agreement will be limited to the amount of fees
\npaid by the Company to the Rights Agent.<\/p>\n
The Rights Agent may conclusively rely upon and shall be authorized and
\nprotected and shall incur no liability for, or in respect of any action taken,
\nsuffered or omitted by it in connection with, the acceptance and its
\nadministration of this Agreement in reliance upon any Rights Certificate or
\ncertificate for the Preferred Shares or Common Shares or for other securities of
\nthe Company, instrument of assignment or transfer, power of attorney,
\nendorsement, affidavit, letter, notice, direction, consent, certificate,
\nstatement, or other paper or document believed by it to be genuine and to be
\nsigned, executed and, where necessary, verified or acknowledged, by the proper
\nperson or persons, or otherwise upon the advice of counsel as set forth in
\nSection 20 hereof. In no case will the Rights Agent be liable for special,
\nindirect, incidental or consequential or consequential loss or damage at any
\nkind whatsoever (including but not limited to lost profits), even if the Rights
\nAgent has been advised of such loss or damage.<\/p>\n
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
\nPerson into which the Rights Agent or any successor Rights Agent may be merged
\nor with which it may be consolidated, or any Person resulting from any merger or
\nconsolidation to which the Rights Agent or any successor Rights Agent shall be a
\nparty, or any Person succeeding to the shareholder services or corporate trust
\nbusiness of the Rights Agent or any successor Rights Agent, shall be the
\nsuccessor to the Rights Agent under this Agreement without the execution or
\nfiling of any paper or any further act on the part of any of the parties hereto,
\nprovided that such corporation would be eligible for appointment as a successor
\nRights Agent under the provisions of Section 21 hereof.<\/p>\n
23<\/p>\n
In case at any time the name of the Rights Agent shall be changed and
\nat such time any of the Rights Certificates shall have been countersigned but
\nnot delivered, the Rights Agent may adopt the countersignature under its prior
\nname and deliver Rights Certificates so countersigned; and in case at that time
\nany of the Rights Certificates shall not have been countersigned, the Rights
\nAgent may countersign such Rights Certificates either in its prior name or in
\nits changed name; and in all such cases such Rights Certificates shall have the
\nfull force provided in the Rights Certificates and in this Agreement.<\/p>\n
SECTION 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the duties and
\nobligations expressly imposed by this Agreement upon the following terms and
\nconditions, by all of which the Company and the holders of Rights Certificates,
\nby their acceptance thereof, shall be bound:<\/p>\n
(a) The Rights Agent may consult with legal counsel of its choice (who
\nmay be legal counsel for the Company), and the opinion of such counsel shall be
\nfull and complete authorization and protection to the Rights Agent and the
\nRights Agent shall incur no liability for or in respect of any action taken or
\nomitted by it in good faith and in accordance with such opinion.<\/p>\n
(b) Whenever in the performance of its duties under this Agreement the
\nRights Agent shall deem it necessary or desirable that any fact or matter be
\nproved or established by the Company prior to taking or suffering any action
\nhereunder, such fact or matter (unless other evidence in respect thereof be
\nherein specifically prescribed) may be deemed to be conclusively proved and
\nestablished by a certificate signed by any one of the Chairman of the Board, the
\nChief Executive Officer, the President, the Chief Financial Officer, any Vice
\nPresident, the Treasurer or the Secretary of the Company and delivered to the
\nRights Agent; and such certificate shall be full authorization and protection to
\nthe Rights Agent and the Rights Agent shall incur no liability for or in respect
\nof any action taken or suffered in good faith by it under the provisions of this
\nAgreement in reliance upon such certificate.<\/p>\n
(c) The Rights Agent shall be liable hereunder to the Company and any
\nother Person only for its own negligence, bad faith or willful misconduct.<\/p>\n
(d) The Rights Agent shall not be liable for or by reason of any of the
\nstatements of fact or recitals contained in this Agreement or in the Rights
\nCertificates (except its countersignature thereof) or be required to verify the
\nsame, but all such statements and recitals are and shall be deemed to have been
\nmade by the Company only.<\/p>\n
(e) The Rights Agent shall not be under any responsibility in respect
\nof the validity of this Agreement or the execution and delivery hereof (except
\nthe due execution hereof by the Rights Agent) or in respect of the validity or
\nexecution of any Rights Certificate (except its countersignature thereof); nor
\nshall it be responsible for any breach by the Company of any covenant or
\ncondition contained in this Agreement or in any Rights Certificate; nor shall it
\nbe responsible for any change in the exercisability of the Rights (including the
\nRights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
\nthe terms of the Rights (including the manner, method or amount thereof)
\nprovided for in Sections 3, 11, 13, 23 or 24 hereof, or the ascertaining of the
\nexistence of facts that would require any such change or adjustment (except <\/p>\n
24<\/p>\n
with respect to the exercise of Rights evidenced by Rights Certificates after
\nreceipt of a certificate pursuant to Section 12 hereof describing such change
\nor adjustment); nor shall it by any act hereunder be deemed to make any
\nrepresentation or warranty as to the authorization or reservation of any
\nPreferred Shares to be issued pursuant to this Agreement or any Rights
\nCertificate or as to whether any Preferred Shares will, when issued, be
\nvalidly authorized and issued, fully paid and nonassessable.<\/p>\n
(f) The Company agrees that it will perform, execute, acknowledge and
\ndeliver or cause to be performed, executed, acknowledged and delivered all such
\nfurther and other acts, instruments and assurances as may reasonably be required
\nby the Rights Agent for the carrying out or performing by the Rights Agent of
\nthe provisions of this Agreement.<\/p>\n
(g) The Rights Agent may conclusively rely upon and is hereby
\nauthorized and directed to accept instructions with respect to the performance
\nof its duties hereunder from any one of the Chairman of the Board, the Chief
\nExecutive Officer, the President, the Chief Financial Officer, any Vice
\nPresident, the Secretary or the Treasurer of the Company, and to apply to such
\nofficers for advice or instructions in connection with its duties, and such
\ninstructions shall be full authorization and protection to the Rights Agent and
\nthe Rights Agent shall incur no liability for or in respect of any action taken
\nor suffered by it in good faith in accordance with instructions of any such
\nofficer or for any delay in acting while waiting for those instructions. Any
\napplication by the Rights Agent for written instructions from the Company may,
\nat the option of the Rights Agent, set forth in writing any action proposed to
\nbe taken or omitted by the Rights Agent with respect to its duties or
\nobligations under this Agreement and the date on and\/or after which such action
\nshall be taken or omitted and the Rights Agent shall not be liable for any
\naction taken or omitted in accordance with a proposal included in any such
\napplication on or after the date specified therein (which date shall not be less
\nthan three Business Days after the date indicated in such application unless any
\nsuch officer shall have consented in writing to an earlier date) unless, prior
\nto taking or omitting any such action, the Rights Agent has received written
\ninstructions in response to such application specifying the action to be taken
\nor omitted.<\/p>\n
(h) The Rights Agent and any stockholder, affiliate, director, officer
\nor employee of the Rights Agent may buy, sell or deal in any of the Rights or
\nother securities of the Company or become pecuniarily interested in any
\ntransaction in which the Company may be interested, or contract with or lend
\nmoney to the Company or otherwise act as fully and freely as though it were not
\nRights Agent under this Agreement. Nothing herein shall preclude the Rights
\nAgent from acting in any other capacity for the Company or for any other Person
\nor legal entity.<\/p>\n
(i) The Rights Agent may execute and exercise any of the rights or
\npowers hereby vested in it or perform any duty hereunder either itself or by or
\nthrough its attorneys or agents, and the Rights Agent shall not be answerable or
\naccountable for any act, default, neglect or misconduct of any such attorneys or
\nagents or for any loss to the Company resulting from any such act, default,
\nneglect or misconduct, absent gross negligence, bad faith or willful misconduct
\nin the selection and continued employment thereof.<\/p>\n
(j) No provision of this Agreement shall require the Rights Agent to
\nexpend or risk its own funds or otherwise incur any financial liability in the
\nperformance of any of its duties hereunder or in the exercise of its rights if
\nthere shall be reasonable grounds for believing that <\/p>\n
25<\/p>\n
repayment of such funds or adequate indemnification against such risk or
\nliability is not reasonably assured to it.<\/p>\n
(k) If, with respect to any Rights Certificate surrendered to the
\nRights Agent for exercise or transfer, the certificate attached to the form of
\nassignment or form of election to purchase, as the case may be, has not been
\nexecuted, the Rights Agent shall not take any further action with respect to
\nsuch requested exercise of transfer without first consulting with the Company.<\/p>\n
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor Rights
\nAgent may resign and be discharged from its duties under this Agreement upon 30
\ndays’ notice in writing mailed to the Company and to each transfer agent for the
\nCommon Shares or Preferred Shares by registered or certified mail, and to the
\nholders of the Rights Certificates by first-class mail. The Company may remove
\nthe Rights Agent or any successor Rights Agent upon 30 days’ notice in writing,
\nmailed to the Rights Agent or successor Rights Agent, as the case may be, and to
\neach transfer agent for the Common Shares or Preferred Shares by registered or
\ncertified mail, and to the holders of the Rights Certificates by first-class
\nmail. If the Rights Agent shall resign or be removed or shall otherwise become
\nincapable of acting, the Company shall appoint a successor to the Rights Agent.
\nIf the Company shall fail to make such appointment within a period of 30 days
\nafter giving notice of such removal or after it has been notified in writing of
\nsuch resignation or incapacity by the resigning or incapacitated Rights Agent or
\nby the holder of a Rights Certificate (who shall, with such notice, submit his
\nRights Certificate for inspection by the Company), then the registered holder of
\nany Rights Certificate may apply to any court of competent jurisdiction for the
\nappointment of a new Rights Agent. Any successor Rights Agent, whether appointed
\nby the Company or by such a court, shall be either (a) a Person organized and
\ndoing business under the laws of the United States or of any other state of the
\nUnited States which is subject to supervision or examination by federal or state
\nauthority and which has at the time of its appointment as Rights Agent a
\ncombined capital and surplus of at least $50 million or (b) a direct or indirect
\nwholly owned subsidiary of such an entity or its wholly-owning parent. After
\nappointment, the successor Rights Agent shall be vested with the same powers,
\nrights, duties and responsibilities as if it had been originally named as Rights
\nAgent without further act or deed; but the predecessor Rights Agent shall
\ndeliver and transfer to the successor Rights Agent any property at the time held
\nby it hereunder, and execute and deliver any further assurance, conveyance, act
\nor deed necessary for the purpose. Not later than the effective date of any such
\nappointment the Company shall file notice thereof in writing with the
\npredecessor Rights Agent and each transfer agent for the Common Shares or
\nPreferred Shares, and mail a notice thereof in writing to the registered holders
\nof the Rights Certificates. Failure to give any notice provided for in this
\nSection 21, HOWEVER, or any defect therein, shall not affect the legality or
\nvalidity of the resignation or removal of the Rights Agent or the appointment of
\nthe successor Rights Agent, as the case may be.<\/p>\n
In case at the time such successor Rights Agent shall succeed to the
\nagency created by this Agreement any of the Rights Certificates shall have been
\ncountersigned but not delivered, any such successor Rights Agent may adopt the
\ncountersignature of the predecessor Rights Agent and deliver such Rights
\nCertificates so countersigned; and in case at that time any of the Rights
\nCertificates shall not have been countersigned, any successor Rights Agent may
\ncountersign such Rights Certificates either in the name of the predecessor
\nRights Agent or in the <\/p>\n
26<\/p>\n
name of the successor Rights Agent; and in all such cases such Rights
\nCertificates shall have the full force provided in the Rights Certificates and
\nin this Agreement.<\/p>\n
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
\nprovisions of this Agreement or of the Rights to the contrary, the Company may,
\nat its option, issue new Rights Certificates evidencing Rights in such form as
\nmay be approved by its Board of Directors to reflect any adjustment or change in
\nthe Purchase Price and the number or kind or class of shares or other securities
\nor property purchasable under the Rights Certificates made in accordance with
\nthe provisions of this Agreement. In addition, in connection with the issuance
\nor sale of Common Shares following the Distribution Date and prior to the
\nearlier of the Redemption Date and the Final Expiration Date, the Company (a)
\nshall with respect to Common Shares so issued or sold pursuant to the exercise
\nof stock options or under any employee plan or arrangement in existence prior to
\nthe Distribution Date, or upon the exercise, conversion or exchange of
\nsecurities, notes or debentures issued by the Company and in existence prior to
\nthe Distribution Date, and (b) may, in any other case, if deemed necessary or
\nappropriate by the Board of Directors of the Company, issue Rights Certificates
\nrepresenting the appropriate number of Rights in connection with such issuance
\nor sale; PROVIDED, HOWEVER, that (i) the Company shall not be obligated to issue
\nany such Rights Certificates if, and to the extent that, the Company shall be
\nadvised by counsel that such issuance would create a significant risk of
\nmaterial adverse tax consequences to the Company or the Person to whom such
\nRights Certificate would be issued, and (ii) no Rights Certificate shall be
\nissued if, and to the extent that, appropriate adjustment shall otherwise have
\nbeen made in lieu of the issuance thereof.<\/p>\n
SECTION 23. REDEMPTION.<\/p>\n
(a) The Rights may be redeemed by action of the Board of Directors
\npursuant to Section 23(b) hereof and shall not be redeemed in any other manner.<\/p>\n
(b)<\/p>\n
(i) The Board of Directors of the Company may, at its option, at
\nany time prior to the earlier of such time as any Person becoming an Acquiring
\nPerson or the Close of Business on the Final Expiration Date, redeem all but not
\nless than all of the then outstanding Rights at a redemption price of $0.01 per
\nRight, appropriately adjusted to reflect any stock split, stock dividend or
\nsimilar transaction occurring after the date hereof (such redemption price being
\nhereinafter referred to as the “Redemption Price”), and the Company may, at its
\noption, pay the Redemption Price in Common Shares (based on the “current
\nper-share market price,” as such term is defined in Section 11(d) hereof, of the
\nCommon Shares at the time of redemption), cash or any other form of
\nconsideration deemed appropriate by the Board of Directors. The redemption of
\nthe Rights by the Board of Directors may be made effective at such time, on such
\nbasis and subject to such conditions as the Board of Directors in its sole
\ndiscretion may establish. Notwithstanding anything contained in this Agreement
\nto the contrary, the Rights shall not be exercisable pursuant to Section
\n11(a)(ii) hereof prior to the expiration or termination of the Company’s right
\nof redemption under this Section 23(b)(i).<\/p>\n
(ii) In addition, the Board of Directors of the Company may, at
\nits option, at any time after the time a Person becomes an Acquiring Person and
\nthe expiration of any period <\/p>\n
27<\/p>\n
during which the holder of Rights may exercise the rights under Section
\n11(a)(ii) hereof but prior to any event described in clause (x), (y) or (z) of
\nthe first sentence of Section 13 hereof, redeem all but not less than all of the
\nthen outstanding Rights at the Redemption Price (x) in connection with any
\nmerger, consolidation or sale or other transfer (in one transaction or in a
\nseries of related transactions) of assets or earning power aggregating 50% or
\nmore of the assets or earning power of the Company and its subsidiaries (taken
\nas a whole) in which all holders of Common Shares are treated alike and not
\ninvolving (other than as a holder of Common Shares being treated like all other
\nsuch holders) an Interested Stockholder or a Transaction Person or (y)(A) if and
\nfor so long as the Acquiring Person is not thereafter the Beneficial Owner of
\n15% or more of the then outstanding Common Shares, and (B) at the time of
\nredemption no other Persons are Acquiring Persons.<\/p>\n
(c) Immediately upon the action of the Board of Directors of the
\nCompany ordering the redemption of the Rights pursuant to Section 23(b) hereof,
\nand without any further action and without any notice, the right to exercise the
\nRights will terminate and the only right thereafter of the holders of Rights
\nshall be to receive the Redemption Price. The Company shall promptly give public
\nnotice of any such redemption; PROVIDED, HOWEVER, that the failure to give, or
\nany defect in, any such notice shall not affect the validity of such redemption.
\nWithin 10 days after such action of the Board of Directors ordering the
\nredemption of the Rights pursuant to Section 23(b) hereof, the Company shall
\nmail a notice of redemption to all the holders of the then outstanding Rights at
\ntheir last addresses as they appear upon the registry books of the Rights Agent
\nor, prior to the Distribution Date, on the registry books of the transfer agent
\nfor the Common Shares, PROVIDED, HOWEVER, that failure to give, or any defect
\nin, any such notice shall not affect the validity of such redemption. Any notice
\nwhich is mailed in the manner herein provided shall be deemed given, whether or
\nnot the holder receives the notice. Each such notice of redemption will state
\nthe method by which the payment of the Redemption Price will be made. Neither
\nthe Company nor any of its Affiliates or Associates may redeem, acquire or
\npurchase for value any Rights at any time in any manner other than that
\nspecifically set forth in this Section 23 or in Section 24 hereof, and other
\nthan in connection with the purchase of Common Shares prior to the Distribution
\nDate.<\/p>\n
(d) The Company may, at its option, discharge all of its obligations
\nwith respect to any redemption of the Rights by (i) issuing a press release
\nannouncing the manner of redemption of the Rights and (ii) mailing payment of
\nthe Redemption Price to the registered holders of the Rights at their last
\naddresses as they appear on the registry books of the Rights Agent or, prior to
\nthe Distribution Date, on the registry books of the transfer agent for the
\nCommon Shares, and upon such action, all outstanding Rights Certificates shall
\nbe null and void without any further action by the Company.<\/p>\n
SECTION 24. EXCHANGE.<\/p>\n
(a) The Board of Directors of the Company may, at its option, at any
\ntime after any Person becomes an Acquiring Person, exchange all or part of the
\nthen outstanding and exercisable Rights (which shall not include Rights that
\nhave become null and void pursuant to the provisions of Section 11(a)(ii)
\nhereof) for Common Shares at an exchange ratio of one Common Share per Right,
\nappropriately adjusted to reflect any stock split, stock dividend or similar
\ntransaction occurring after the date hereof (such exchange ratio being
\nhereinafter referred <\/p>\n
28<\/p>\n
to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board of
\nDirectors shall not be empowered to effect such exchange at any time after any
\nPerson (other than the Company, any Subsidiary of the Company, any employee
\nbenefit plan of the Company or any such Subsidiary, or any entity holding Common
\nShares for or pursuant to the terms of any such plan), together with all
\nAffiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
\nmore of the Common Shares then outstanding.<\/p>\n
(b) Immediately upon the action of the Board of Directors of the
\nCompany ordering the exchange of any Rights pursuant to Section 24(a) hereof and
\nwithout any further action and without any notice, the right to exercise such
\nRights shall terminate and the only right thereafter of the holders of such
\nRights shall be to receive that number of Common Shares equal to the number of
\nsuch Rights held by such holder multiplied by the Exchange Ratio. The Company
\nshall promptly give public notice of any such exchange and written notice to the
\nRights Agent; PROVIDED, HOWEVER, that the failure to give, or any defect in,
\nsuch notice shall not affect the validity of such exchange and written notice to
\nthe Rights Agent. The Company promptly shall mail a notice of any such exchange
\nto all of the holders of such Rights at their last addresses as they appear upon
\nthe registry books of the Rights Agent; PROVIDED, HOWEVER, that the failure to
\ngive, or any defect in, such notice shall not affect the validity of such
\nexchange. Any notice which is mailed in the manner herein provided shall be
\ndeemed given, whether or not the holder receives the notice. Each such notice of
\nexchange will state the method by which the exchange of the Common Shares for
\nRights will be effected and, in the event of any partial exchange, the number of
\nRights which will be exchanged. Any partial exchange shall be effected pro rata
\nbased on the number of Rights (other than Rights which have become void pursuant
\nto the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.<\/p>\n
(c) In lieu of issuing Common Shares in accordance with Section 24(a)
\nhereof, the Company may, if a majority of the Board of Directors then in office
\ndetermines that such action is necessary or appropriate and not contrary to the
\ninterests of the holders of Rights, elect to (and, in the event that there are
\nnot sufficient treasury shares and authorized but unissued Common Shares to
\npermit any exchange of the Rights in accordance with Section 24(a) hereof, the
\nCompany shall) take all such action as may be necessary to authorize, issue or
\npay, upon the exchange of the Rights, cash (including by way of a reduction of
\nthe Purchase Price), property, Common Shares, other securities or any
\ncombination thereof having an aggregate value equal to the value of the Common
\nShares which otherwise would have been issuable pursuant to Section 24(a)
\nhereof, which aggregate value shall be determined by a nationally recognized
\ninvestment banking firm selected by a majority of the Board of Directors then in
\noffice. For purposes of the preceding sentence, the value of the Common Shares
\nshall be determined pursuant to Section 11(d) hereof. Any election pursuant to
\nthis Section 24(c) by the Board of Directors must be made within 60 days
\nfollowing the date on which the event described in Section 11(a)(ii) hereof
\nshall have occurred. Following the occurrence on the event described in Section
\n11(a)(ii) hereof, a majority of the Board of Directors then in office may
\nsuspend the exercisability of the Rights for a period of up to 60 days following
\nthe date on which the event described in Section 11(a)(ii) hereof shall have
\noccurred to the extent that such directors have not determined whether to
\nexercise their rights of election under this Section 24(c). In the event of any
\nsuch suspension, the Company shall issue a public announcement stating that the
\nexercisability of the Rights has been temporarily suspended.<\/p>\n
29<\/p>\n
(d) The Company shall not be required to issue fractions of Common
\nShares or to distribute certificates which evidence fractional Common Shares. In
\nlieu of such fractional Common Shares, the Company shall pay to the registered
\nholders of the Rights Certificates with regard to which such fractional Common
\nShares would otherwise be issuable an amount in cash equal to the same fraction
\nof the current market value of a whole Common Share. For the purposes of this
\nSection 24(d), the current market value of a whole Common Share shall be the
\nclosing price of a Common Share (as determined pursuant to the second sentence
\nof Section 11(d)(i) hereof) for the Trading Day immediately after the date of
\nthe first public announcement by the Company that an exchange is to be effected
\npursuant to this Section 24. <\/p>\n
(e) The Company shall not be required to issue fractions of
\nPreferred Shares (other than fractions which are integral multiples of one
\none-hundredth of a Preferred Share) upon exchange of the Rights or to
\ndistribute certificates which evidence fractional Preferred Shares (other
\nthan fractions which are integral multiples of one one-hundredth of a
\nPreferred Share). Fractions of Preferred Shares in integral multiples of one
\none-hundredth of a Preferred Share may, at the election of the Company, be
\nevidenced by depositary receipts; PROVIDED, HOWEVER, that holders of such
\ndepositary receipts shall have all of the designations and the powers,
\npreferences and rights, and the qualifications, limitations and restrictions
\nto which they are entitled as beneficial owners of the Preferred Shares
\nrepresented by such depositary receipts. In lieu of fractional Preferred
\nShares that are not integral multiples of one one-hundredth of a Preferred
\nShare, the Company shall pay to the registered holders of Rights Certificates
\nat the time such Rights are exercised as herein provided an amount in cash
\nequal to the same fraction of the current market value of one Preferred
\nShare. For the purposes of this Section 24(e), the current market value of a
\nPreferred Share shall be one hundred (100) times the closing price of a
\nCommon Share (as determined pursuant to the second sentence of Section
\n11(d)(i) hereof) for the Trading Day immediately after the date of the first
\npublic announcement by the Company that an exchange is to be effected
\npursuant to this Section 24.<\/p>\n
SECTION 25. NOTICE OF CERTAIN EVENTS.<\/p>\n
(a) In case the Company shall propose (i) to pay any dividend payable
\nin stock of any class to the holders of its Preferred Shares or to make any
\nother distribution to the holders of its Preferred Shares (other than a regular
\nquarterly cash dividend), (ii) to offer to the holders of its Preferred Shares
\nrights or warrants to subscribe for or to purchase any additional Preferred
\nShares or shares of stock of any class or any other securities, rights or
\noptions, (iii) to effect any reclassification of its Preferred Shares (other
\nthan a reclassification involving only the subdivision of outstanding Preferred
\nShares), (iv) to effect any consolidation or merger into or with, or to effect
\nany sale or other transfer (or to permit one or more of its Subsidiaries to
\neffect any sale or other transfer), in one or more transactions, of 50% or more
\nof the assets or earning power of the Company and its Subsidiaries (taken as a
\nwhole), to any other Person, (v) to effect the liquidation, dissolution or
\nwinding up of the Company, or (vi) to declare or pay any dividend on the Common
\nShares payable in Common Shares or to effect a subdivision, combination or
\nconsolidation of the Common Shares (by reclassification or otherwise than by
\npayment of dividends in Common Shares), then, in each such case, the Company
\nshall give to each holder of a Rights Certificate, in accordance with Section 26
\nhereof, a notice of such proposed action, which shall specify the record date
\nfor the purpose of such stock dividend, or distribution of rights or warrants,
\nor the date on which such reclassification, consolidation, merger, sale,<\/p>\n
30<\/p>\n
transfer, liquidation, dissolution, or winding up is to take place and the date
\nof participation therein by the holders of the Common Shares and\/or the
\nPreferred Shares, if any such date is to be fixed, and such notice shall be so
\ngiven in the case of any action covered by clause (i) or (ii) above at least 10
\ndays prior to the record date for determining holders of the Preferred Shares
\nfor purposes of such action, and in the case of any such other action, at least
\n10 days prior to the date of the taking of such proposed action or the date of
\nparticipation therein by the holders of the Common Shares and\/or the Preferred
\nShares, whichever shall be the earlier.<\/p>\n
(b) In case the event set forth in Section 11(a)(ii) hereof shall
\noccur, then the Company shall as soon as practicable thereafter give to each
\nholder of a Rights Certificate, in accordance with Section 26 hereof, a notice
\nof the occurrence of such event, which notice shall describe the event and the
\nconsequences of the event to holders of Rights under Section 11(a)(ii) hereof.<\/p>\n
SECTION 26. NOTICES. Notices or demands authorized by this Agreement to be
\ngiven or made by the Rights Agent or by the holder of any Rights Certificate
\nto or on the Company shall be sufficiently given or made if sent by
\nfirst-class mail, postage prepaid, addressed (until another address is filed
\nin writing with the Rights Agent) as follows:<\/p>\n
Gilead Sciences, Inc.
\n 333 Lakeside Drive
\n Foster City, CA 94404
\n Attn: General Counsel<\/p>\n
Subject to the provisions of Section 21 hereof, any notice or demand
\nauthorized by this Agreement to be given or made by the Company or by the holder
\nof any Rights Certificate to or on the Rights Agent shall be sufficiently given
\nor made if sent by first-class mail, postage prepaid, addressed (until another
\naddress is filed in writing with the Company) as follows:<\/p>\n
ChaseMellon Shareholder Services, L.L.C.
\n 85 Challenger Road
\n Ridgefield Park, N.J. 07660-2108
\n Attention: General Counsel<\/p>\n
Notices or demands authorized by this Agreement to be given or made by
\nthe Company or the Rights Agent to the holder of any Rights Certificate shall be
\nsufficiently given or made if sent by first-class mail, postage prepaid,
\naddressed to such holder at the address of such holder as shown on the registry
\nbooks of the Company.<\/p>\n
SECTION 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to time
\nsupplement or amend this Agreement without the approval of any holders of Rights
\nCertificates in order to cure any ambiguity, to correct or supplement any
\nprovision contained herein which may be defective or inconsistent with any other
\nprovisions herein, or to make any other provisions with respect to the Rights
\nwhich the Company may deem necessary or desirable, any such supplement or
\namendment to be evidenced by a writing signed by the Company and the Rights
\nAgent; PROVIDED, HOWEVER, that from and after such time as any Person becomes an
\nAcquiring Person, this Agreement shall not be amended in any manner which would
\nadversely <\/p>\n
31<\/p>\n
affect the interests of the holders of Rights. Without limiting the foregoing,
\nthe Company may at any time prior to such time as any Person becomes an
\nAcquiring Person amend this Agreement to lower the threshold set forth in
\nSections 1(a) and 3(a) hereof from 15% to any percentage which is (i) greater
\nthan the largest percentage of the outstanding Common Shares then known by the
\nCompany to be beneficially owned by any Person (other than the Company, any
\nSubsidiary of the Company, any employee benefit plan of the Company or any
\nSubsidiary, or any entity holding Common Shares for or pursuant to the terms of
\nany such plan) and (ii) not less than 10%. Upon delivery of a certificate from
\nan appropriate officer of the Company which states that the proposed supplement
\nor amendment is in compliance with the terms of this Section 27, the Rights
\nAgent shall execute such supplement or amendment unless the Rights Agent shall
\nhave determined in good faith that such supplement or amendment would adversely
\naffect its interest under this Agreement. Prior to the Distribution Date, the
\ninterests of the holders of Rights shall be deemed coincident with the interests
\nof the holders of Common Shares. The Rights Agent cannot be required to change
\nor increase its duties and obligations under this Agreement.<\/p>\n
SECTION 28. DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. For all
\npurposes of this Agreement, any calculation of the number of Common Shares
\noutstanding at any particular time, including for purposes of determining the
\nparticular percentage of such outstanding Common Shares or any other securities
\nof which any Person is the Beneficial Owner, shall be made in accordance with
\nthe last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
\nunder the Exchange Act as in effect on the date of this Agreement. The Board of
\nDirectors of the Company shall have the exclusive power and authority to
\nadminister this Agreement and to exercise all rights and powers specifically
\ngranted to the Board, or the Company, or as may be necessary or advisable in the
\nadministration of this Agreement, including without limitation, the right and
\npower to (i) interpret the provisions of this Agreement, and (ii) make all
\ndeterminations deemed necessary or advisable for the administration of this
\nAgreement (including a determination to redeem or not redeem the Rights or to
\namend the Agreement). All such actions, calculations, interpretations and
\ndeterminations (including, for purposes of clause (y) below, all omissions with
\nrespect to the foregoing) which are done or made by the Board in good faith,
\nshall (x) be final, conclusive and binding on the Rights Agent and the holders
\nof the Rights, and (y) not subject the Board to any liability to the holders of
\nthe Rights.<\/p>\n
SECTION 29. SUCCESSORS. All the covenants and provisions of this Agreement by or
\nfor the benefit of the Company or the Rights Agent shall bind and inure to the
\nbenefit of their respective successors and assigns hereunder.<\/p>\n
SECTION 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
\nconstrued to give to any person or corporation other than the Company, the
\nRights Agent and the registered holders of the Rights Certificates (and, prior
\nto the Distribution Date, the Common Shares) any legal or equitable right,
\nremedy or claim under this Agreement; but this Agreement shall be for the sole
\nand exclusive benefit of the Company, the Rights Agent and the registered
\nholders of the Rights Certificates (and, prior to the Distribution Date, the
\nCommon Shares).<\/p>\n
SECTION 31. SEVERABILITY. If any term, provision, covenant or restriction of
\nthis Agreement is held by a court of competent jurisdiction or other authority
\nto be invalid, void or <\/p>\n
32<\/p>\n
unenforceable, the remainder of the terms, provisions, covenants and
\nrestrictions of this Agreement shall remain in full force and effect and shall
\nin no way be affected, impaired or invalidated.<\/p>\n
SECTION 32. GOVERNING LAW. This Agreement and each Rights Certificate issued
\nhereunder shall be deemed to be a contract made under the laws of the State of
\nDelaware and for all purposes shall be governed by and construed in accordance
\nwith the laws of such State applicable to contracts to be made and performed
\nentirely within such State.<\/p>\n
SECTION 33. COUNTERPARTS. This Agreement may be executed in any number of
\ncounterparts and each of such counterparts shall for all purposes be deemed to
\nbe an original, and all such counterparts shall together constitute but one and
\nthe same instrument.<\/p>\n
SECTION 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several Sections
\nof this Agreement are inserted for convenience only and shall not control or
\naffect the meaning or construction of any of the provisions hereof.<\/p>\n
33<\/p>\n
IN WITNESS WHEREOF, parties whereto have caused this Agreement to be
\nduly executed, all as of the day and year first above written.<\/p>\n
ATTEST: GILEAD SCIENCES, INC.<\/p>\n
\/s\/ MARK L. PERRY \/s\/ JOHN C. MARTIN
\n———————————- ————————————-
\nMark L. Perry John C. Martin
\nSenior Vice President, Chief President and Chief Executive Officer
\nFinancial Officer, General Counsel
\nand Secretary<\/p>\n
ATTEST: CHASEMELLON SHAREHOLDER
\n SERVICES, L.L.C.<\/p>\n
By: \/s\/ GLORIA POUNCIL By: \/s\/ PAUL COLLINS
\n ——————————– ———————————
\nTitle: Relationship Manager Title: Assistant Vice President
\n —————————– ——————————<\/p>\n
34<\/p>\n
FORM OF RIGHTS CERTIFICATE
\n (EXHIBIT A TO RIGHTS AGREEMENT)<\/p>\n
CERTIFICATE NO. R- _____ RIGHTS<\/p>\n
NOT EXERCISABLE AFTER OCTOBER 20, 2009 OR EARLIER IF REDEMPTION OR
\n EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT
\n AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.<\/p>\n
RIGHTS CERTIFICATE<\/p>\n
GILEAD SCIENCES, INC.<\/p>\n
This certifies that ___________________ or registered assigns, is the registered
\nowner of the number of Rights set forth above, each of which entitles the owner
\nthereof, subject to the terms, provisions and conditions of the Rights
\nAgreement, dated as of October 21, 1999 (the “Agreement”), between Gilead
\nSciences, Inc., a Delaware corporation (the “Company”), and ChaseMellon
\nShareholder Services, L.L.C. (the “Rights Agent”), to purchase from the Company
\nat any time after the Distribution Date (as such term is defined in the
\nAgreement) and prior to 5 p.m., San Francisco on October 20, 2009 at the office
\nof the Rights Agent designated for such purpose, or at the office of its
\nsuccessor as Rights Agent, one one-hundredth of a fully paid non-assessable
\nshare of Series A Junior Participating Preferred Stock, par value $.001 per
\nshare (the “Preferred Shares”), of the Company, at a purchase price of $400 per
\none one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation
\nand surrender of this Rights Certificate with the Form of Election to Purchase
\nduly executed. The number of Rights evidenced by this Rights Certificate (and
\nthe number of one one-hundredths of a Preferred Share which may be purchased
\nupon exercise hereof) set forth above, and the Purchase Price set forth above,
\nare the number and Purchase Price as of October 21, 1999, based on the Preferred
\nShares as constituted at such date.<\/p>\n
From and after the time any Person becomes an Acquiring Person, (as such terms
\nare defined in the Agreement), if the Rights evidenced by this Rights
\nCertificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
\nAssociate of any such Acquiring Person (as such terms are defined in the
\nAgreement), (ii) a transferee of any such Acquiring Person, Associate or
\nAffiliate who becomes a transferee after the Acquiring Person becomes such, or
\n(iii) under certain circumstances specified in the Agreement, a transferee of
\nany such Acquiring Person, Associate or Affiliate who becomes a transferee prior
\nto or concurrently with the Acquiring Person becoming such, such Rights shall
\nbecome null and void without any further action and no holder hereof shall have
\nany right with respect to such Rights from and after the time any Person becomes
\nan Acquiring Person.<\/p>\n
A-1<\/p>\n
As provided in the Agreement, the Purchase Price and the number of one
\none-hundredths of a Preferred Share which may be purchased upon the exercise of
\nthe Rights evidenced by this Rights Certificate are subject to modification and
\nadjustment upon the happening of certain events.<\/p>\n
This Rights Certificate is subject to all of the terms, covenants and
\nrestrictions of the Agreement, as amended from time to time, which terms,
\ncovenants and restrictions are hereby incorporated herein by reference and made
\na part hereof and to which Agreement reference is hereby made for a full
\ndescription of the rights, limitations of rights, obligations, duties and
\nimmunities hereunder of the Rights Agent, the Company and the holders of the
\nRights Certificates, which limitations of rights include the temporary
\nsuspension of exercisability of such Rights under the specified circumstances
\nset forth in the Agreement. Copies of the Agreement are on file at the principal
\nexecutive offices of the Company and the above-mentioned offices of the Rights
\nAgent.<\/p>\n
This Rights Certificate, with or without other Rights Certificates, upon
\nsurrender at the office of the Rights Agent designated for such purpose, may be
\nexchanged for another Rights Certificate or Rights Certificates of like tenor
\nand date evidencing Rights entitling the holder to purchase a like aggregate
\nnumber of Preferred Shares as the Rights evidenced by the Rights Certificate or
\nRights Certificates surrendered shall have entitled such holder to purchase. If
\nthis Rights Certificate shall be exercised in part, the holder shall be entitled
\nto receive upon surrender hereof another Rights Certificate or Rights
\nCertificates for the number of whole Rights not exercised.<\/p>\n
Subject to the provisions of the Agreement, the Rights evidenced by this
\nCertificate (i) may be redeemed by the Company at a redemption price of $.01 per
\nRight or (ii) may be exchanged in whole or in part for shares of the Company’s
\nCommon Stock, par value $.001 per share, or, upon circumstances set forth in the
\nAgreement, cash, property or other securities of the Company, including
\nfractions of a share of Preferred Stock.<\/p>\n
No fractional Preferred Shares will be issued upon the exercise of any Right or
\nRights evidenced hereby (other than fractions which are integral multiples of
\none one-hundredth of a Preferred Share, which may, at the election of the
\nCompany, be evidenced by depositary receipts) but in lieu thereof a cash payment
\nwill be made, as provided in the Agreement.<\/p>\n
No holder of this Rights Certificate shall be entitled to vote or receive
\ndividends or be deemed for any purpose the holder of Common Stock or of the
\nPreferred Shares or of any other securities of the Company which may at any time
\nbe issuable on the exercise hereof, nor shall anything contained in the
\nAgreement or herein be construed to confer upon the holder hereof, as such, any
\nof the rights of a stockholder of the Company or any right to vote for the
\nelection of directors or upon any matter submitted to stockholders at any
\nmeeting thereof, or to give or withhold consent to any corporate action, or to
\nreceive notice of meetings or other actions affecting stockholders (except as
\nprovided in the Agreement), or to receive dividends or subscription rights, or
\notherwise, until the Right or Rights evidenced by this Rights Certificate shall
\nhave been exercised as provided in the Agreement.<\/p>\n
This Rights Certificate shall not be valid or obligatory for any purpose until
\nit shall have been countersigned by the Rights Agent.<\/p>\n
A-2<\/p>\n
IN WITNESS the facsimile signature of the proper officers of the
\nCompany and its corporate seal. Dated as of __________.<\/p>\n
ATTEST: GILEAD SCIENCES, INC.<\/p>\n
By:
\n———————————- ———————————-<\/p>\n
COUNTERSIGNED:<\/p>\n
ChaseMellon Shareholder Services, L.L.C.
\nas Rights Agent<\/p>\n
By:
\n ———————————–
\nAUTHORIZED SIGNATURE<\/p>\n
A-3<\/p>\n
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE<\/p>\n
FORM OF ASSIGNMENT<\/p>\n
(TO BE EXECUTED BY THE REGISTERED HOLDER IF SUCH HOLDER DESIRES
\n TO TRANSFER THE RIGHTS CERTIFICATE.)<\/p>\n
FOR VALUE RECEIVED ______________________________________ hereby sells, assigns
\nand transfers unto<\/p>\n
_______________________________________________________________________________
\n (Please print name and address of transferee)<\/p>\n
______________________________________________________________ this Right
\nCertificate, together with all right, title and interest therein, and does
\nhereby irrevocably constitute and appoint ________________________ Attorney, to
\ntransfer the within Rights Certificate on the books of the within-named Company,
\nwith full power of substitution.<\/p>\n
Dated: ____________________<\/p>\n
_________________________
\n Signature<\/p>\n
A-4<\/p>\n
SIGNATURE GUARANTEED:<\/p>\n
Signatures must be guaranteed by an “eligible guarantor institution” as defined
\nin Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
\namended.<\/p>\n
—————————————————————<\/p>\n
The undersigned hereby certifies that (1) the Rights evidenced by this Rights
\nCertificate are not being sold, assigned or transferred by or on behalf of a
\nPerson who is or was an Acquiring Person, an Interested Stockholder or an
\nAffiliate or Associate thereof (as such terms are defined in the Agreement); and
\n(2) after due inquiry and to the best of the knowledge of the undersigned, the
\nundersigned did not acquire the Rights evidenced by this Rights Certificate from
\nany Person who is or was an Acquiring Person, an Interested Stockholder, or an
\nAffiliate or Associate thereof.<\/p>\n
————————
\n Signature<\/p>\n
A-5<\/p>\n
FORM OF ELECTION TO PURCHASE<\/p>\n
(TO BE EXECUTED IF HOLDER DESIRES TO EXERCISE RIGHTS
\n REPRESENTED BY THE RIGHTS CERTIFICATE.)<\/p>\n
To ChaseMellon Shareholder Services, L.L.C.<\/p>\n
The undersigned hereby irrevocably elects to exercise ________________________
\nRights represented by this Rights Certificate to purchase the Preferred
\nShares issuable upon the exercise of such Rights and requests that
\ncertificates for such Preferred Shares be issued in the name of:<\/p>\n
Please insert social security
\nor other taxpayer identifying number: ______________<\/p>\n
_______________________________________________________________________________
\n (Please print name and address)<\/p>\n
_______________________________________________________________________________<\/p>\n
If such number of Rights shall not be all the Rights evidenced by this Rights
\nCertificate, a new Rights Certificate for the balance remaining of such Rights
\nshall be registered in the name of and delivered to:<\/p>\n
Please insert social security
\nor other identifying number: ______________<\/p>\n
_______________________________________________________________________________
\n (Please print name and address)<\/p>\n
_______________________________________________________________________________<\/p>\n
Dated: _________________<\/p>\n
______________________
\n Signature<\/p>\n
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE — CONTINUED
\n A-6<\/p>\n
SIGNATURE GUARANTEED:<\/p>\n
Signatures must be guaranteed by an “eligible guarantor institution” as defined
\nin Rule 17Ad-15 promulgated under the Securities Exchange Act of 1934, as
\namended.<\/p>\n
_______________________________________________________________<\/p>\n
The undersigned hereby certifies that (1) the Rights evidenced by this Rights
\nCertificate are not beneficially owned by nor are they being exercised on behalf
\nof an Acquiring Person, an Interested Stockholder or an Affiliate or Associate
\nthereof (as such terms are defined in the Agreement); and (2) after due inquiry
\nand to the best of the knowledge of the undersigned, the undersigned did not
\nacquire the Rights evidenced by this Rights Certificate from any Person who is
\nor was an Acquiring Person, an Interested Stockholder, or an Affiliate or
\nAssociate thereof.<\/p>\n
__________________________
\n Signature<\/p>\n
______________________________________________________________<\/p>\n
NOTICE<\/p>\n
The signature in the Form of Assignment or Form of Election to Purchase, as the
\ncase may be, must conform to the name as written upon the face of this Rights
\nCertificate in every particular, without alteration or enlargement or any change
\nwhatsoever.<\/p>\n
In the event the certification set forth above in the Form of Assignment or the
\nForm of Election to Purchase, as the case may be, is not completed, the Company
\nand the Rights Agent will deem the beneficial owner of the Rights evidenced by
\nthis Rights Certificate to be an Acquiring Person or an Affiliate or Associate
\nthereof (as defined in the Agreement) and such Assignment or Election to
\nPurchase will not be honored.<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7639],"corporate_contracts_industries":[9405],"corporate_contracts_types":[9630,9629],"class_list":["post-43905","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-gilead-sciences-inc","corporate_contracts_industries-drugs__biotech","corporate_contracts_types-securities__invest","corporate_contracts_types-securities"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43905","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43905"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43905"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43905"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43905"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}