SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 17, 2002
ENZON, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-12957 22-2372868
(State or other jurisdiction of (Commission (IRS Employer
incorporation) File Number) Identification)
20 Kingsbridge Road, Piscataway, New Jersey 08854
(Address of principal executive offices) (Zip Code)
(Registrant's telephone number, including area code: (732) 980-4500
NA
(Former name or former address, if changed since last report)
Item 5. Other Events
Stockholders' Rights Plan and Amendments to Bylaws
On May 17, 2002 the Board of Directors of Enzon, Inc. (the "Company"), declared
a dividend of one preferred share purchase right (a "Right") per share for each
outstanding share of Common Stock, par value $0.01 (the "Common Shares"), of the
Company. The dividend will be payable on June 3, 2002 (the "Record Date") to
holders of the Common Shares of record on that date.
Each Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series B Preferred Stock, par value $0.01 (the
"Preferred Shares"), of the Company at a price of $190.00 per one one-thousandth
of a Preferred Share (the "Purchase Price"), subject to adjustment; provided,
however, under the circumstances described below, holders may receive Common
Shares instead of Preferred Shares. The description and terms of the Rights are
set forth in the Rights Agreement, dated as of May 17, 2002 (the "Rights
Agreement"), between the Company and Continental Stock Transfer & Trust Company,
as Rights Agent (the "Rights Agent").
The following summary of the principal terms of the Rights Agreement is a
general description only and is subject to the detailed terms and conditions of
the Rights Agreement. A copy of the Rights Agreement is filed as an exhibit to
this Form 8-K and is incorporated herein by reference. Capitalized terms used
herein but not defined shall have the meaning assigned to them in the Rights
Agreement.
Initially, the Rights will attach to all certificates representing Common Shares
then outstanding and no separate Right Certificates (as defined herein) will be
distributed. The Rights will separate from the Common Shares, and a Distribution
Date for the Rights will occur upon the earlier of:
(i) the close of business on the day following a public announcement
that a person or group of affiliated or associated persons has become an
"Acquiring Person" (i.e., has become, subject to certain exceptions, the
Beneficial Owner of 15% (the "Threshold Percentage") or more of the
outstanding Common Shares); and
(ii) the close of business on the day following the commencement or
public announcement of the intention to commence a tender offer or
exchange offer, the consummation of which would result in a person or
group of affiliated or associated persons becoming, subject to certain
exceptions, the Beneficial Owner of the Threshold Percentage or more of
the outstanding Common Shares (or such later date as may be determined by
the Board of Directors of the Company prior to a person or group of
affiliated or associated persons becoming an Acquiring Person).
A Person will not be an Acquiring Person if the Board of Directors of the
Company determines that such Person became the Beneficial Owner of the Threshold
Percentage or more of the Common Shares of the Company then outstanding
inadvertently and such Person divests itself, within a reasonable period of time
as determined by the Board of Directors, of a sufficient number of Common Shares
so that such Person is no longer the Beneficial Owner of the Threshold
Percentage or more of the Common Shares of the Company then outstanding.
2
Until the Distribution Date,
(i) the Rights will be evidenced by the Common Share certificates
and will be transferred with and only with the Common Shares,
(ii) new Common Share certificates issued after the Record Date upon
transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any Common Share certificate,
even without such notation or a copy of the Summary of Rights distributed
to stockholders of record as of the Record Date, also will constitute the
transfer of the Rights associated with the Common Shares represented by
such certificate.
As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on May 16, 2012, unless extended or earlier redeemed or exchanged by the
Company as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable upon exercise of the Rights, are subject to
adjustment from time to time to prevent dilution:
(i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Shares,
(ii) upon the grant to holders of the Preferred Shares of certain
rights, options or warrants to subscribe for or purchase Preferred Shares
or securities convertible into Preferred Shares or preferred share
equivalents at less than the then current market price of the Preferred
Shares, or
(iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those described in clause (ii) of this
paragraph).
With certain exceptions, no adjustment in the Purchase Price will be required
until cumulative adjustments require an adjustment of at least 1% in the
Purchase Price. No fraction of a Preferred Share will be issued (other than
fractional shares which are integral multiples of one one-thousandth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts) if in lieu thereof, a payment in cash is made based on the
closing price (prorated for the fraction) of a Preferred Share on the last
trading date prior to the date of exercise.
The number of outstanding Rights and the number of one one-thousandths of a
Preferred Share issuable upon exercise of each Right also are subject to
adjustment in the event of a stock split of the Common Shares, a stock dividend
on the Common Shares payable in Common Shares, or
3
subdivisions, consolidations or combinations of the Common Shares occurring, in
any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be redeemable.
Each Preferred Share will be entitled to a minimum preferential quarterly
dividend payment of the greater of (a) $1.00 or (b) subject to the provision for
adjustment, 1,000 times the aggregate per share amount of all cash dividends,
and 1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions declared on the Common Shares since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of the Preferred Shares. In the event of liquidation, the
holders of the Preferred Shares would be entitled to receive a preferential
liquidation payment of the greater of (i) $1,000 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, or (ii) an aggregate amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount to be distributed per share to holders of Common
Shares, or to the holders of shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Preferred
Shares. Each Preferred Share will have 1,000 votes, voting together with the
Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 1,000 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and voting
rights, the value of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
If any person or group of affiliated or associated persons becomes an Acquiring
Person (unless the event by which such Person became an Acquiring Person is a
Permitted Offer described in the following paragraph), then each holder of a
Right, other than Rights beneficially owned by the Acquiring Person and certain
transferees thereof (which will thereafter be void), will thereafter have the
right to receive, upon exercise thereof at the then current Purchase Price of
the Right, that number of Common Shares having a market value of two times such
Purchase Price of the Right, subject to certain possible adjustments.
If, at any time after there is an Acquiring Person, the Company is acquired in
certain mergers or other business combination transactions (other than certain
transactions with a subsidiary of the Company or a transaction with a person who
acquired Common Shares through a tender offer or exchange offer for all
outstanding Common Shares of the Company determined by the Board of Directors to
be in the best interests of the Company and its stockholders (a "Permitted
Offer") or 50% or more of the assets or earning power of the Company and its
subsidiaries (taken as a whole) are sold, each holder of a Right (other than
Rights which have become void under the terms of the Rights Agreement) will
thereafter have the right to receive, upon exercise thereof at the then current
Purchase Price of the Right, that number of Common Shares of the acquiring
company (or, in certain cases, one of its affiliates) having a market value of
two times such Purchase Price of the Right.
In certain events specified in the Rights Agreement, the Company is permitted
temporarily to suspend the exercisability of the Rights.
4
At any time after a person or group of affiliated or associated persons becomes
an Acquiring Person, and prior to the acquisition by a person or group of
affiliated or associated persons of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange all or part of the
Rights (other than Rights which have become void under the terms of the Rights
Agreement) for Common Shares at an exchange ratio of one Common Share per Right,
subject to adjustment.
At any time prior to such time as any Person becomes an Acquiring Person, the
Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment, payable in cash,
Common Shares or any other form of consideration deemed appropriate by the Board
of Directors. The period of time during which the Rights may be redeemed may be
extended if no person has become an Acquiring Person. The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Until a Right is exercised, the holder thereof, as such, will have no rights as
a stockholder of the Company, including without limitation, the right to vote or
to receive dividends. In addition, the Company will have no liability to holders
of Rights or of the Common Shares for any failure to comply with the Rights
Agreement during any period the Board of Directors is unaware of the existence
of the Acquiring Person.
Takeover attempts frequently include coercive tactics to deprive the Company's
Board of Directors and its stockholders of any real opportunity to determine the
destiny of the Company. The Rights have been declared by the Board in order to
deter such tactics which do not maximize stockholder value, including a gradual
accumulation of shares in the open market of 15% or greater position to be
followed by a merger or a partial or two-tier tender offer that does not treat
all stockholders equally. These tactics unfairly pressure stockholders, squeeze
them out of their investment without giving them any real choice and deprive
them of the full value of their shares.
The Rights approved by the Board of Directors are designed to protect and
maximize the value of the outstanding equity interests in the Company in the
event of an unsolicited attempt by an acquirer to take over the Company in a
manner or on terms not approved by the Board of Directors. Subject to the
restrictions described above, the Rights may be redeemed by the Company at $0.01
per Right at any time prior to such time as any Person becomes an Acquiring
Person. Accordingly, the Rights should not interfere with any merger or business
combination approved by the Board of Directors.
However, the Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board of
Directors. The Rights may cause substantial dilution to a person or group that
attempts to acquire the Company on terms or in a manner not approved by the
Company's Board of Directors, except pursuant to an offer conditioned upon the
negation, purchase or redemption of the Rights.
Issuance of the Rights does not in any way weaken the financial strength of the
Company or interfere with its business plans. The issuance of the Rights
themselves has no dilutive effect, will not affect reported earnings per share,
should not be taxable to the Company or to its stockholders, and will not change
the way in which the Company's Common Shares are presently traded.
5
Additionally, the Company's Board of Directors approved and adopted several
amendments to the Company's bylaws providing for: (a) advance notice of
stockholder proposals and stockholder nominations for the election of directors;
(b) a mandate that the board of directors determine a record date for any action
taken by a written consent of the stockholders; and (c) verification of
stockholder consents. A copy of the Company's bylaws, as amended on May 17,
2002, is filed as an exhibit to this Form 8-K and is incorporated herein by
reference.
A copy of the press release issued by the Company on May 21, 2002 announcing the
Board of Directors' adoption of the Rights Agreement and the amendments to the
bylaws described above is filed as an exhibit to this Form 8-K.
Clinical Studies of PEG-INTRON(R) and REBETOL(R) Combination Therapy for
Hepatitis C
On May 21, 2002, the Company announced that Schering-Plough Corporation
("Schering Plough") reported results of several clinical studies presented at
the 2002 Digestive Disease Week conference in San Francisco, involving
PEG-INTRON(R) (peginterferon alfa-2b) Powder for Injection in combination with
REBETOL(R) (ribavirin, USP) Capsules for the treatment of chronic hepatitis C.
In all, 33 studies with PEG-INTRON were presented by clinical investigators.
PEG-INTRON is a longer-acting form of INTRON(R) A (interferon alfa-2b,
recombinant) Injection that uses proprietary PEG technology developed by the
Company. Under the Company's licensing agreement with Schering-Plough, the
Company is entitled to royalties on worldwide sales of PEG-INTRON.
Schering-Plough holds an exclusive worldwide license to PEG-INTRON.
PEG-INTRON and REBETOL combination therapy received U.S. Food and Drug
Administration (FDA) approval in August 2001 for the treatment of chronic
hepatitis C in patients with compensated liver disease who have not been
previously treated with interferon alpha and are at least 18 years of age.
In an oral presentation, investigators reported clinical data from one of the
largest clinical trials studying African Americans with hepatitis C. The study
indicated that the commonly lower response rate to treatment among African
Americans is not related to genotype, as previously believed. Researchers have
attributed lower treatment response rates in African Americans to the fact that
this patient population predominantly contracts genotype 1 virus, which is the
most difficult to treat. In this study, which compared the treatment response
rate of African Americans to response rates of non-Hispanic whites, 98 percent
of all patients studied had genotype 1. In the African American patient group,
28% had a virologic response after 12 weeks of therapy compared to a 58%
response rate in the non-Hispanic white patient group. At week 24 of treatment,
25% of African Americans tested negative for the virus vs. 62% of non-Hispanic
whites, indicating that factors other than genotype were affecting response to
therapy.
Researchers enrolled 100 African Americans and 100 non-Hispanic whites who had
not been previously treated with alpha interferon therapy into each group. All
patients received PEG-
6
INTRON (1.5 mcg/kg/week) for 48 weeks plus REBETOL (1,000 mg/day) for 12 weeks
followed by 800 mg/day for 36 weeks. Patients with decompensated liver disease
were excluded from the study.
Preliminary data from the WIN-R trial, the largest ongoing prospective study to
evaluate the safety and efficacy of weight-based dosing with PEG-INTRON and
REBETOL combination therapy, indicated that patients receiving daily REBETOL
dosages (800-1,400 mg) according to their body weight may not have any
difference in the rate of significant adverse events than patients receiving a
flat daily dose (800 mg) of REBETOL. Both groups were given REBETOL in
combination with once-weekly PEG-INTRON (1.5 mcg/kg). Although patients
receiving the weight-based dose of REBETOL experienced a moderate increase in
anemia, there was no incremental anemia in patients receiving 1,400 mg of
REBETOL daily compared to the other doses of REBETOL received in weight-based
dosing. Researchers also found no clinically important differences or platelet
decreases in neutropenia or loss of white blood cells at the higher ribavirin
doses. In addition, patients dosed according to body weight had less severe
platelet decreases and similar serious-adverse-event and discontinuation rates
than those who had been given the standard 800 mg daily REBETOL dose.
The results of the COPILOT (Colchicine versus PEG-INTRON Long-Term) study, which
investigated maintenance therapy with PEG-INTRON in patients with advanced
cirrhosis, were also presented. In this study, 250 patients with advanced
cirrhosis who had previously failed interferon-based therapy were randomized to
two groups: 130 patients received once-weekly PEG-INTRON (0.5 mcg/kg) and 120
patients received colchicine (0.6 mg twice-daily). At the end of one year of
treatment, the PEG-INTRON group had a reduction in detectable(1) virus (HCV
RNA), while the virus levels in the colchicine group remained the same. These
findings may be important for patients who have not responded to previous
therapy.
PEG-INTRON, which is approved for dosing according to patient body weight, is
the first and only pegylated interferon product approved for marketing in the
United States. PEG-INTRON, recombinant interferon alfa-2b linked to a 12,000
dalton polyethylene glycol (PEG) molecule, is a once-weekly therapy designed to
optimize the balance between antiviral activity and elimination half-life.
- ----------
(1) Defined as HCV-RNA below limit of detection using a research-based RT-PCR
assay.
7
Item 7. Exhibits
- --------------------------------------------------------------------------------
3(ii) Bylaws, as amended on May 17, 2002
- --------------------------------------------------------------------------------
3(iv) Certificate of Elimination, as filed with the Secretary of State of
the State of Delaware on May 22, 2002
- --------------------------------------------------------------------------------
3(v) Certificate of Designation with respect to the Series B
Preferred Stock, par value $.01 per share, of the Company,
as filed with the Secretary of State of the
State of Delaware on May 22, 2002
- --------------------------------------------------------------------------------
4.3 Rights Agreement dated as of May 17, 2002 ("Rights
Agreement") between the Company and Continental Stock Transfer &
Trust Company, as Rights Agent
- --------------------------------------------------------------------------------
4.5 Form of Right Certificate (filed as Exhibit B to the Rights
Agreement). Pursuant to the Rights Agreement, printed Right
Certificates will not be mailed until the
Distribution Date (as defined in the Rights Agreement)
- --------------------------------------------------------------------------------
4.6 Summary of Rights (filed as Exhibit C to the Rights Agreement)
- --------------------------------------------------------------------------------
99.1 Press Release, dated May 22, 2002
- --------------------------------------------------------------------------------
Except for the historical information herein, the matters discussed in
this filing include forward-looking statements that may involve a number of
risks and uncertainties. Actual results may vary significantly based upon a
number of factors, which are described in the Company's Form 10-K, Form 10-Q's
and Form 8-K's on file with the SEC, including without limitation, regulatory
risks such as risks in obtaining and maintaining regulatory approval for
indications and expanded indications, risks that Enzon will not outperform the
sector, risks related to research and development costs and capabilities, market
acceptance of and continuing demand for Enzon's products and the impact of
competitive products and pricing.
# # #
8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 22, 2002
/s/ Arthur J. Higgins
------------------------------------
By: Arthur J. Higgins
Title: Chairman, President and Chief
Executive Officer
Exhibit 3(ii)
BY-LAWS
OF
ENZON, INC.
AS AMENDED
(A Delaware Corporation)
ARTICLE I.
DEFINITION
As used in these By-laws as amended, unless the context otherwise
requires, the term:
Section 1.1 "Assistant Secretary" means an Assistant Secretary of the
Corporation.
Section 1.2 "Assistant Treasurer" means an Assistant Treasurer of the
Corporation.
Section 1.3 "Board" means the Board of Directors of the Corporation.
Section 1.4 "By-laws" means the initial by-laws of the Corporation, as
amended from time to time.
Section 1.5 "Certificate of Incorporation" means the initial certificate
of incorporation of the Corporation, as amended, supplemented or restated from
time to time.
Section 1.6 "Corporation" means Enzon Inc.
Section 1.7 "Directors" means directors of the Corporation.
Section 1.8 "General Corporation Law" means the General Corporation Law of
the State of Delaware, as amended from time to time.
Section 1.9 "Office of the Corporation" means the executive office of the
Corporation, anything in Section 131 of the General Corporation law to the
contrary notwithstanding.
Section 1.10 "President" means the President of the Corporation.
Section 1.11 "Secretary" means the Secretary of the Corporation.
Section 1.12 "Stockholders" means stockholders of the Corporation.
Section 1.13 "Treasurer" means the Treasurer of the Corporation.
Section 1.14 "Vice President" means a Vice President of the Corporation.
ARTICLE II.
STOCKHOLDERS
Section 2.1 Place of Meetings.
Every meeting of the Stockholders shall be held at the office of the
Corporation or at such other place within or without the State of Delaware as
shall be specified or fixed in the notice of such meeting or in the waiver of
notice hereof.
Section 2.2 Annual Meeting.
A meeting of Stockholders shall be held annually for the election of
directors or the transaction of other business at such hour and on such business
day as may be determined by the Board and designated in the notice of meeting.
Section 2.3 Deferred Meeting for Election of Directors, Etc.
If the annual meeting of Stockholders for the election of directors and
the transaction of other business is not held on the date fixed in Section 2.2,
the Board shall call a meeting of Stockholders for the election of directors and
the transaction of other business as soon thereafter as convenient.
Section 2.4 Other Special Meetings.
A special meeting of Stockholders (other than a special meeting for the
election of directors), unless otherwise prescribed by statute, may be called at
any time by the Board of by the President or by the Secretary. At any special
meeting of Stockholders only such business may be transacted which is related to
the purpose or purposes of such meeting set forth in the notice thereof given
pursuant to Section 2.6 of the By-laws or in any waiver of notice thereof given
pursuant to Section 2.7 of the By-laws.
Section 2.5 Fixing Record Date.
For the purpose of determining the Stockholders entitled to notice of or
to vote at any meeting of Stockholders or any adjournment thereof, or to express
consent to corporate action in writing without a meeting, or for the purpose of
determining Stockholders entitled to receive payment of any dividend or the
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock, or for the purpose of any other lawful
action, the Board may fix, in advance, a date as the record date for any such
determination of Stockholders. Such date shall not be more than sixty nor less
then ten days before the date of such meeting, nor more than sixty days prior to
any other action.
2.5.1 If no such record date is fixed, the record date for
determining Stockholders entitled to notice of or to vote at a meeting of
Stockholders shall be at the close of business on the day next preceding
the day on which notice is given, or, if notice is waived, at the close of
business on the day next preceding the day on which the meeting is held;
2.5.2 Without limiting the foregoing, in order that the Corporation
may determine the Stockholders entitled to consent to corporate action in
writing without a meeting, the Board may fix a record date, which record
date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board, and which date shall not be more than
ten (10) days after the date upon which the resolution fixing the record
date is adopted by the Board. Any Stockholder of record seeking to have
the Stockholders authorize or take corporate action by written consent
shall, by written notice
2
to the Secretary, request the Board to fix a record date. The Board shall
promptly, but in all events within ten (10) days after the date on which
such a request is received, adopt a resolution fixing the record date. If
no record date has been fixed by the Board within ten (10) days of the
date on which such a request is received, the record date for determining
Stockholders entitled to consent to corporate action in writing without a
meeting, when no prior action by the Board is required by applicable law,
shall be the first date on which a signed written consent setting forth
the action taken or proposed to be taken is delivered to the Corporation
by delivery to its registered office in the State of Delaware, its
principal place of business, or any officer or agent of the Corporation
having custody of the book in which proceedings of Stockholders meetings
are recorded, to the attention of the Secretary of the Corporation.
Delivery shall be by hand or by certified or registered mail, return
receipt requested. If no record date has been fixed by the Board and prior
action by the Board is required by applicable law, the record date for
determining Stockholders entitled to consent to corporate action in
writing without a meeting shall be at the close of business on the date on
which the Board adopts the resolution taking such prior action.
2.5.3 The record date for determining Stockholders for any purpose
other than that specified in Sections 2.5.1 and 2.5.2 shall be at the
close of business on the day on which the Board adopts the resolution
relating thereto.
When a determination of Stockholders entitled to notice of or to vote at any
meeting of Stockholders has been made as provided in this Section 2.5 such
determination shall apply to any adjournment thereof, unless the Board fixes a
new record date for the adjourned meeting.
Section 2.6 Notice of Meeting of Stockholders.
Except as otherwise provided in Sections 2.5 and 2.7 of the By-laws,
whenever under the General Corporation Law or the Certificate of Incorporation
or the By-laws, Stockholders are required or permitted to take any action at a
meeting, written notice shall be given stating the place, date and hour of the
meeting and, in the case of a special meeting, the purpose or purposes for which
the meeting is called. A copy of the notice of any meeting shall be given,
personally or by mail, not less than ten nor more than sixty days before the
date of the meeting, to each Stockholder entitled to notice of or to vote at
such meeting. If mailed, such notice shall be deemed to be given when deposited
in the United States mail, with postage prepaid, directed to the Stockholder at
his address as it appears on the records of the Corporation. An affidavit of the
Secretary or an Assistant Secretary or of the transfer agent of the Corporation
that the notice required by this section has been given shall, in the absence of
fraud, be prima facie evidence of the facts stated therein. When a meeting is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place thereof are announced at the meeting at which the
adjournment is taken, and at the adjourned meeting any business may be
transacted that might have been transacted at the meeting as originally called.
If, however, the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each Stockholder of record entitled to
vote at the meeting.
Section 2.7 Waivers of Notice.
Whenever notice is required to be given to any Stockholder under any
provision of the General Corporation Law or of the Certificate of Incorporation
or the By-laws, a written waiver thereof, signed by the Stockholder entitled to
3
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a Stockholder at a meeting shall constitute
a waiver of notice of such meeting, except when the Stockholder attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Stockholders need be specified in any written
waiver of notice.
Section 2.8 List of Stockholders.
The Secretary shall prepare and make, or cause to be prepared and made, at
least ten days before every meeting of Stockholders, a complete list of the
Stockholders entitled to vote at the meeting, arranged in alphabetical order,
and showing the address of each Stockholder and the number of shares registered
in the name of each Stockholder. Such list shall be open to the examination of
any Stockholder, for any purpose germane to the meeting, during ordinary
business hours, for a period of at least ten days prior to the meeting, either
at a place within the city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not so specified, at the place
where the meeting is to be held. The list shall also be produced and kept at the
time and place of the meeting during the whole time thereof, and may be
inspected by any Stockholder who is present.
Section 2.9 Quorum of Stockholders; Adjournment.
The holders of one-third of the shares of stock entitled to vote at any
meeting of Stockholders, present in person or represented by proxy, shall
constitute a quorum for the transaction of any business at such meeting. When a
quorum is once present to organize a meeting of Stockholders, it is not broken
by the subsequent withdrawal of any Stockholders. The holders of a majority of
the shares of stock present in person or represented by proxy at any meeting of
Stockholders, including an adjourned meeting, whether or not a quorum is
present, may adjourn such meeting to another time and place.
Section 2.10 Voting; Proxies.
Unless otherwise provided in the Certificate of Incorporation every
Stockholder of record shall be entitled at every meeting of Stockholders to one
vote for each share of capital stock standing in his name on the record of
Stockholders determined in accordance with Section 2.5 of the By-laws. If the
Certificate of Incorporation provides for more or less than one vote for any
share, on any matter, every reference in the By-laws or the Central Corporation
Law to a majority or other proportion of stock shall refer to such majority or
other proportion of the votes of such stock. The provisions of Sections 212 and
217 of the General Corporation Law shall apply in determining whether any shares
of capital stock may be voted and the persons, if any, entitled to vote such
shares; but the Corporation shall be protected in treating the persons in whose
names shares of capital stock stand on the record of Stockholders as owners
thereof for all purposes. At any meeting of Stockholders (at which a quorum was
present to organize the meeting), all matters, except as otherwise provided by
law or by the Certificate of Incorporation or by the By-laws, shall be decided
by a majority of the votes cast at such meeting by the holders of shares present
in person or represented by proxy and entitled to vote thereon, whether or not a
quorum is present when the vote is taken. All elections of directors shall be by
written ballot unless otherwise provided in the Certificate of Incorporation. In
voting on any other question on which a vote by ballot is required by law or is
demanded by any Stockholder entitled to vote, the voting shall be by ballot.
Each ballot shall be signed by the Stockholder voting or by his proxy, and shall
state the number of shares voted. On all other questions, the voting may be viva
voce. Every Stockholder entitled to vote at a meeting of Stockholders or to
express consent or dissent without a meeting
4
may authorize another person or persons to act for him by proxy. The validity
and enforceability of any proxy shall be determined in accordance with Section
212 of the General Corporation Law.
Section 2.11 Selection and Duties of Inspectors at Meetings of
Stockholders.
The Board, in advance of any meeting of Stockholders, may appoint one or
more inspectors to act at the meeting or any adjournment thereof. If inspectors
are not so appointed, the person presiding at such meeting may, and on the
request of any Stockholder entitled to vote thereat shall, appoint one or more
inspectors. In case any person appointed fails to appear or act, the vacancy may
be filled by appointment made by the Board in advance of the meeting or at the
meeting by the person presiding thereat. Each inspector, before entering upon
the discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and according
to the best of his ability. The inspector or inspectors shall determine the
number of shares outstanding and the voting power of each, the shares
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all Stockholders.
On request of the person presiding at the meeting or any Stockholder entitled to
vote thereat, the inspector or inspectors shall make a report in writing of any
challenge, question or matter determined by him or them and execute a
certificate of any fact found by him or them. Any report or certificate made by
the inspector or inspectors shall be prima facie evidence of the facts stated
and of the vote as certified by him or them.
Section 2.12 Organization.
At every meeting of Stockholders, the President, or in the absence of the
President a Vice President, and in case more than one Vice President shall be
present, that Vice President designated by the Board (or in the absence of any
such designation, the most senior Vice President, based on age, present), shall
act as chairman of the meeting. The Secretary, or in his absence one of the
Assistant Secretaries, shall act as secretary of the meeting. In case none of
the officers above designated to act as chairman or secretary of the meeting,
respectively, shall be present, a chairman or a secretary of the meeting, as the
case may be, shall be chosen by a majority of the votes cast at such meeting by
the holders of shares of capital stock present in person or represented by proxy
and entitled to vote at the meeting.
Section 2.13 Order of Business.
The order of business at all meetings of Stockholders shall be as
determined by the chairman of the meeting, but the order of business to be
followed at any meeting at which a quorum is present may be changed by a
majority of the votes cast at such meeting by the holders of shares of capital
stock present in person or represented by proxy and entitled to vote at the
meeting.
Section 2.14 Written Consent of Stockholders Without a Meeting.
Any action which could be taken at any annual or special meeting of
Stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall (a) be signed by the holders of outstanding stock entitled to vote thereon
(as determined in accordance with subsection 2.5.2 hereof) having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted and (b) be delivered to the Corporation
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by delivery to its registered office in the State of Delaware, its principal
place of business, or an officer or agent of the Corporation having custody of
the records of proceedings of meetings of Stockholders. Delivery made to the
Corporation's registered office shall be by hand or by certified mail or
registered mail, return receipt requested. Every written consent shall bear the
date of signature of each Stockholder who signs the consent and no written
consent shall be effective to take the corporate action referred to therein
unless written consents signed by the holders of outstanding stock entitled to
vote thereon (as determined in accordance with subsection 2.5.2 hereof) having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted, are delivered to the Corporation, in the manner required
by this Section, within sixty (60) days of the earliest dated consent delivered
to the Corporation in the manner required by this Section 2.14. The validity of
any consent executed by a proxy for a Stockholder pursuant to a telegram,
cablegram or other means of electronic transmission transmitted to such proxy
holder by or upon the authorization of the Stockholder shall be determined by or
at the direction of the Secretary. A written record of the information upon
which the person making such determination relied shall be made and kept in the
records of the proceedings of the Stockholders. Any such consent shall be
inserted in the minute book as if it were the minutes of a meeting of the
Stockholders.
2.15 Notifications of Nominations and Proposed Business.
Subject to the rights of holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation,
(a) nominations for the election of directors, and
(b) business proposed to be brought before any Stockholder meeting
may be made by the Board or proxy committee appointed by the Board of
Directors or by any Stockholder entitled to vote in the election of directors
generally. However, any such Stockholder may nominate one or more persons for
election as directors at a meeting or propose business to be brought before a
meeting, or both, only if such Stockholder has given timely notice in proper
written form of his intent to make such nomination or nominations or to propose
such business. To be timely, a Stockholder's notice must be delivered to or
mailed and received by the Secretary of the Corporation not later than one
hundred twenty (120) days prior to such meeting. To be in proper written form, a
Stockholder's notice to the Secretary shall set forth:
(i) the name and address of the Stockholder who intends to make the
nominations or propose the business and, as the case may be, of the person
or persons to be nominated or of the business to be proposed;
(ii) a representation that the Stockholder is a holder of record of stock
of the Corporation entitled to vote at such meeting and, if applicable,
intends to appear in person or by proxy at the meeting to nominate the
person or persons specified in the notice;
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(iii) if applicable, a description of all arrangements or understandings
between the Stockholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or
nominations are to be made by the Stockholder;
(iv) such other information regarding each nominee or each matter of
business to be proposed by such Stockholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had the nominee been nominated, or
intended to be nominated, or the matter been proposed, or intended to be
proposed by the Board; and
(v) if applicable, the consent of each nominee to serve as director of the
Corporation if so elected.
The chairman of the meeting may refuse to acknowledge the nomination of
any person or the proposal of any business not made in compliance with the
foregoing procedure.
ARTICLE III.
DIRECTORS
Section 3.1 General Powers.
Except as otherwise provided in the Certificate of Incorporation, the
business and affairs of the Corporation shall be managed by or under the
direction of Board. The Board may adopt such rules and regulations, not
inconsistent with the Certificate of Incorporation or the By-laws or applicable
laws, as it may deem proper for the conduct of its meetings and the management
of the Corporation. In addition to the powers expressly conferred by the
By-laws, the Board may exercise all powers and perform all acts which are not
required, by the By-laws or the Certificate of Incorporation or by law, to be
exercised and performed by the Stockholders.
Section 3.2 Number.
The Board shall consist of not less than three nor more than fifteen
directors, the exact number of directors to be determined from time to time by
resolution adopted by affirmative vote of a majority of the whole Board and such
exact number shall be four until otherwise determined by resolution adopted by
affirmative vote of a majority of the whole Board. As used in this Article 3,
the term "whole Board" means the total number of directors which the Corporation
would have if there were no vacancies.
Section 3.3 Classification.
The Board shall be divided into three classes and, when the number of
directors is changed, the Board shall determine the class or classes to which
the increased or decreased number of directors shall be apportioned; provided,
that no decrease in the number of directors shall affect the term of any
director then in office.
Section 3.4 Election.
Notwithstanding the foregoing, and except as otherwise required by law,
whenever the holders of any one or more series of Preferred Stock shall have the
right, voting separately as a class, to elect one or more directors of the
Corporation, the terms of the
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director or directors elected by such holders shall expire at the next
succeeding annual meeting of Stockholders.
Section 3.5 Term.
The term of office of directors elected at the 1986 Annual Meeting of
Stockholders held on January 20, 1987, shall be as follows: the term of office
of directors of the first class shall expire at the first annual meeting of
Stockholders after their election; the term of office of directors of the second
class shall expire at the second annual meeting of Stockholders after their
election; and the term of office of directors of the third class shall expire at
the third annual meeting of Stockholders after their election; and as to
directors of each class, when their respective successors are elected and
qualified. At each annual meeting of Stockholders subsequent to the 1986 Annual
Meeting of Stockholders, directors elected to succeed those whose terms are
expiring shall be elected for a term of office to expire at the third succeeding
annual meeting of Stockholders and when their respective successors are elected
and qualified.
Section 3.6 New Vacancies.
Vacancies in the Board, however, caused, and newly created directorships
shall be filled solely by a majority vote of the directors then in office,
whether or not a quorum, and any director so chosen shall hold office for a term
expiring at the annual meeting of Stockholders at which the term of the class to
which the director has been chosen expires and when the director's successor is
elected and qualified.
Section 3.7 Resignations.
Any director may resign at any time by written notice to the Corporation.
Such resignation shall take effect at the time therein specified, and unless
otherwise specified, the acceptance of such resignation shall not be necessary
to make it effective.
Section 3.8 Removal of Directors.
Except as otherwise provided by law, any or all of the directors may be
removed only for cause, by vote of the holders of a majority of the shares then
entitled to vote at an election of directors.
Section 3.9 Compensation.
Each director, in consideration of his service as such, shall be entitled
to receive from the Corporation such amount per annum or such fees for
attendance at directors' meetings, or both, as the Board may from time to time
determine, together with reimbursement for the reasonable expenses incurred by
him in connection with the performance of his duties. Each director who shall
serve as a member of any committee of directors in consideration of his serving
as such shall be entitled to such additional amount per annum or such fees for
attendance at committee meetings, or both, as the Board may from time to time
determine, together with reimbursement for the reasonable expenses incurred by
him in the performance of his duties. Nothing in this section contained shall
preclude any director from serving the Corporation or its subsidiaries in any
other capacity and receiving proper compensation therefor.
Section 3.10 Place and Time of Meetings of the Board.
Meetings of the Board, regular or special, may be held at any place within
or without the State of Delaware. The times and places for holding meetings of
the Board may be fixed from time to time by resolution of the Board or (unless
contrary to resolution of the Board) in the notice of the meeting.
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Section 3.11 Annual Meetings.
On the day when and at the place where the annual meeting of Stockholders
for the election of directors is held, and as soon as practicable thereafter,
the Board may hold its annual meeting without notice of such meeting, for the
purpose of organization, the election of officers and the transaction of other
business. The annual meeting of the Board may be held at any other time and
place specified in a notice given as provided in Section 3.11 of the By-laws for
special meetings of the Board or in a waiver of notice thereof.
Section 3.12 Regular Meetings.
Regular meetings of the Board may be held at such times and places as may
be fixed from time to time by the Board. Unless otherwise required by the Board,
regular meetings of the Board may be held without notice. If any day fixed for a
regular meeting of the Board shall be a Saturday or Sunday or a legal holiday at
the place where such meeting is to be held, then such meeting shall be held at
the same hour at the same place on the first business day thereafter which is
not a Saturday, Sunday or legal holiday.
Section 3.13 Special Meetings.
Special meetings of the Board shall be held whenever called by the
President or the Secretary or by any two or more directors. Notice of each
special meeting of the Board shall, if mailed, be addressed to each director at
the address designated by him for that purpose or, if none is designated, at his
last known address at least two days before the date on which the meeting is to
be held; or such notice shall be sent to each director at such address by
telegraph cable or wireless, or be delivered to him personally, not later than
the day before the date on which such meeting is to be held. Every such notice
shall state the time and place of the meeting but need not state the purposes of
the meeting, except to the extent required by law. If mailed, each notice shall
be deemed given when deposited, with postage thereon prepaid, in a post office
or official depository under the exclusive care and custody of the United States
Postal Service. Such mailing shall be by first class mail.
Section 3.14 Adjourned Meetings.
A majority of the directors present at any meeting of the Board, including
an adjourned meeting, whether or not a quorum is present, may adjourn such
meeting to another time and place. Notice of any adjourned meeting of the Board
need not be given to any director whether or not present at the time of the
adjournment. Any business may be transacted at any adjourned meeting that might
have been transacted at the meeting as originally called.
Section 3.15 Waiver of Notice.
Whenever notice is required to be given to any director or member of a
committee of directors under any provision of the General Corporation Law or of
the Certificate of Incorporation or By-laws, a written waiver thereof, signed by
the person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the directors, or members of a committee of
directors, need be specified in any written waiver of notice.
Section 3.16 Organization.
At each meeting of the Board, the President of the Corporation, or in the
absence of the President, a chairman chosen by the majority of the
9
directors present, shall preside. The Secretary shall act as secretary at each
meeting of the Board. In case the Secretary shall be absent from any meeting of
the Board, an Assistant Secretary shall perform the duties of secretary at such
meeting; and in the absence from any such meeting of the Secretary and Assistant
Secretaries, the person presiding at the meeting may appoint any person to act
as secretary of the meeting.
Section 3.17 Quorum of Directors.
One-third of the directors then in office shall constitute a quorum for
the transaction of business or of any specified item of business at any meeting
of the Board.
Section 3.18 Action by the Board.
All corporate action taken by the Board or any committee thereof shall be
taken at a meeting of the Board, or of such committee, as the case may be,
except that any action required or permitted to be taken at any meeting of the
Board, or of any committee thereof, may be taken without a meeting if all
members of the Board or Committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee. Members of the Board, or any committee designated by
the Board, may participate in a meeting of the Board, or of such committee, as
the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 3.16 shall
constitute presence in person at such meeting. Except as otherwise provided by
the Certificate of Incorporation or by law, the vote of a majority of the
directors present (including those who participate by means of conference
telephone or similar communications equipment) at the time of the vote, if a
quorum is present at such time, shall be the act of the Board.
ARTICLE IV.
COMMITTEES OF THE BOARD
The Board may, by resolution passed by a majority of the whole Board,
designate one or more committees, each committee to consist of one or more of
the directors of the corporation. The Board may designate one or more directors
as alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. In the absence or
disqualification of a member of a committee, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board to
act at the meeting in the place of any such absent or disqualified member. Any
such committee, to the extent provided in the resolution of the Board, shall
have and may exercise all the powers and authority of the Board in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation, adopting on agreement of merger or consolidation,
recommending to the Stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
Stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-laws of the Corporation; and, unless the resolution
designating it expressly so provides, no such Committee shall have the power or
authority to declare a dividend or to authorize the issuance of stock.
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ARTICLE V.
OFFICERS
Section 5.1 Officers.
The Board shall elect a President, a Secretary and a Treasurer, and may
elect or appoint one or more Vice Presidents and such other officers as it may
determine. The Board may designate one or more Vice Presidents as Executive Vice
President and may use descriptive words or phrases to designate the standing,
seniority or area of special competence of the Vice Presidents elected or
appointed by it. Each officer shall hold his office until his successor is
elected and qualified or until his earlier death, resignation or removal in the
manner provided in Section 5.2 of the By-laws. Any two or more offices may be
held by the same person. The Board may require any officer to give a bond or
other security for the faithful performance of his duties, in such amount and
with such sureties as the Board may determine. All officers as between
themselves and the Corporation shall have such authority and perform such duties
in the management of the Corporation as may be provided in the By-laws or as the
Board may from time to time determine.
Section 5.2 Removal of Officers.
Any officers elected or appointed by the Board may be removed by the Board
with or without cause. The removal of an officer without cause shall be without
prejudice to his contract rights, it any. The election or appointment of an
officer shall not of itself create contract rights.
Section 5.3 Resignations.
Any officer may resign at any time in writing by notifying the Board or
the President or the Secretary. Such resignation shall take effect at the date
of receipt of such notice or at such later time as is therein specified, and,
unless otherwise specified, the acceptance of such resignation shall not be
necessary to make it effective. The resignation of an officer shall be without
prejudice to the contract rights of the Corporation, if any.
Section 5.4 Vacancies.
A vacancy in any office because of death, resignation, removal,
disqualification or any other cause shall be filled for the unexpired portion of
the term in the manner prescribed in the By-laws for the regular election or
appointment to such office.
Section 5.5 Compensation.
Salaries or other compensation of the officers may be fixed from time to
time by the Board. No officer shall be prevented from receiving a salary or
other compensation by reason of the fact that he is also a director.
Section 5.6 President.
The President shall be the chief executive officer of the Corporation and
shall have general supervision over the business of the Corporation, subject,
however, to the control of the Board and of any duly authorized committee of
directors. The President shall, if present, preside at all meetings of the
Stockholders and at all meetings of the Board. He may, with the Secretary or the
Treasurer or an Assistant Secretary or an Assistant Treasurer, sign certificates
for shares of capital stock of the Corporation. He may sign and execute in the
name of the Corporation deeds, mortgages, bonds, contracts and other
instruments, except in cases where the signing and execution thereof shall be
expressly delegated by the Board or by the By-laws to some other officer or
agent of the Corporation, or shall be required by law otherwise to be signed or
executed; and, in general, he shall perform all duties incident to
11
the Office of President and such other duties as from time to time may be
assigned to him by the Board.
Section 5.7 Vice Presidents.
At the request of the President, or in his absence, at the request of the
Board, the Vice Presidents shall (in such order as may be designated by the
Board or in the absence of any such designation in order of seniority based on
age) perform all of the duties of the President and so acting shall have all the
powers of and be subject to all restrictions upon the President. Any Vice
President may also, with the Secretary or the Treasurer or an Assistant
Secretary or an Assistant Treasurer, sign certificates for shares of capital
stock of the Corporation; may sign and execute in the name of the Corporation
deeds, mortgages, bonds, contracts or other instruments authorized by the Board,
except in cases where the signing and execution thereof shall be expressly
delegated by the Board or by the By-laws to some other officer or agent of the
Corporation, or shall be required by law otherwise to be signed or executed; and
shall perform such other duties as from time to time may be assigned to him by
the Board or by the President.
Section 5.8 Secretary.
The Secretary, if present, shall act as secretary of all meeting of the
Stockholders and of the Board, and shall keep the minutes thereof in the proper
book or books to be provided for that purpose; he shall see that all notices
required to be given by the Corporation are duly given and served; he may, with
the President or a Vice President, sign certificates for shares of capital stock
of the Corporation; he shall be custodian of the seal of the Corporation and may
seal with the seal of the Corporation, or a facsimile thereof, all certificates
for shares of capital stock of the Corporation and all documents the execution
of which on behalf of the Corporation under its corporate seal is authorized in
accordance with the provisions of the By-laws; he shall have charge of the stock
ledger and also of the other books, records and papers of the Corporation
relating to its organization and management as a Corporation, and shall see that
the reports, statements and other documents required by law are properly kept
and filed; and shall, in general, perform all the duties incident to the office
of Secretary and such other duties as from time to time may be assigned to him
by the Board or by the President.
Section 5.9 Treasurer.
The treasurer shall have charge and custody of, and be responsible for,
all funds, securities and notes of the Corporation; receive and give receipts
for moneys due and payable to the Corporation from any sources whatsoever;
deposit all such moneys in the name of the Corporation in such banks, trust
companies or other depositaries as shall be selected in accordance with these
By-laws; against proper vouchers, cause such funds to be disbursed by checks or
drafts on the authorized depositaries of the Corporation signed in such manner
as shall be determined in accordance with any provisions of the By-laws, and be
responsible for the accuracy of the amounts of all moneys so disbursed;
regularly enter or cause to be entered in books to be kept by him or under his
direction full and adequate account of all moneys received or paid by him for
the account of the Corporation; have the right to require, from time to time
reports or statements giving such information as he may desire with respect to
any and all financial transactions of the Corporation from the officers or
agents transacting the same; render to the President or the Board, whenever the
President or the Board, respectively, shall require him so to do, an account of
the financial condition of the Corporation and of all his transactions as
Treasurer; exhibit at all reasonable times his books of account and other
records to any of the directors upon application at the office of the
Corporation where such books and
12
records are kept; and in general, perform all the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to him
by the Board or by the President; and he may sign with the President or a Vice
President certificates for shares of capital stock of the Corporation.
Section 5.10 Assistant Secretaries and Assistant Treasurers.
Assistant Secretaries and Assistant Treasurers shall perform such duties
as shall be assigned to them by the Secretary or by the Treasurer, respectively,
or by the Board or by the President. Assistant Secretaries and Assistant
Treasurers may, with the President or a Vice President, sign certificates for
shares of capital stock of the Corporation.
ARTICLE VI.
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
Section 6.1 Execution of Contracts.
The Board may authorize any officer, employee or agent, in the name and on
behalf of the Corporation, to enter into any contract or execute and satisfy any
instrument, and any such authority may be general or confined to specific
instances, or otherwise limited.
Section 6.2 Loans.
The President or any other officer, employee or agent authorized by the
By-laws or by the Board may effect loans end advances at any time for the
Corporation from any bank, trust company or other institutions or from any firm,
corporation or individual and for such loans and advances may make, execute and
deliver promissory notes, bonds or other certificates or evidences of
indebtedness of the Corporation, and when authorized so to do may pledge and
hypothecate or transfer any securities or other property of the Corporation as
security for any such loans or advances. Such authority conferred by the Board
may be general or confined to specific instances or otherwise limited.
Section 6.3 Checks, Drafts, Etc.
All checks, drafts and other orders for the payment of money out of the
funds of the Corporation and all notes or other evidences of indebtedness of the
Corporation shall be signed on behalf of the Corporation in such manner as shall
from time to time be determined by resolution of the Board.
Section 6.4 Deposits.
The funds of the Corporation not otherwise employed shall be deposited
from time to time to the order of the Corporation in such banks, trust companies
or other depositaries as the Board may select or as may be selected by an
officer, employee, or agent of the Corporation to whom such power may from time
to time be delegated by the Board.
ARTICLE VII.
STOCK AND DIVIDENDS
Section 7.1 Certificates Representing Shares.
The shares of capital stock of the Corporation shall be represented by
certificates in such form (consistent with the provisions of Section 158 of the
General Corporation Law) as shall be approved by the Board. Such certificates
shall be signed by the President or a Vice President and by the Secretary or an
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Assistant Secretary or the Treasurer or an Assistant Treasurer, and may be
sealed with the seal of the Corporation or a facsimile thereof. The signatures
of the officers upon a certificate may be facsimiles, if the certificate is
countersigned by a transfer agent or registrar other than the Corporation itself
or its employee. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon any certificate shall have
ceased to be such offices, transfer agent or registrar before such certificate
is issued, such certificate may, unless otherwise ordered by the Board, be
issued by the Corporation with the same effect as if such person were such
officer, transfer agent or registrar at the date of issue.
Section 7.2 Transfer of Shares.
Transfers of shares of capital stock of the Corporation shall be made only
on the books of the Corporation by the holder thereof or by his duly authorized
attorney appointed by a power of attorney duly executed and filed with the
Secretary or a transfer agent of the Corporation, and on surrender of the
certificate or certificates representing such shares of capital stock properly
endorsed for transfer and upon payment of all necessary transfer taxes. Every
certificate exchanged, returned or surrendered to the Corporation shall be
marked "Cancelled," with the date of cancellation by the Secretary or an
Assistant Secretary or the transfer agent of the Corporation. A person in whose
name shares of capital stock shall stand on the books of the Corporation shall
be deemed the owner thereof to receive dividends, to vote as such owner and for
all other purposes as respects the Corporation. No transfer of shares of capital
stock shall be valid as against the Corporation, its Stockholders and creditors
for any purpose, except to tender the transferee liable for the debts of the
Corporation to the extent provided by law, until such transfer shall have been
entered on the books of the Corporation by an entry showing from and to whom
transferred.
Section 7.3 Transfer and Registry Agents.
The Corporation may from time to time maintain one or more transfer
offices or agent and registry offices or agents at such place of places as may
be determined from time to time by the Board.
Section 7.4 Lost, Destroyed, Stolen and Mutilated Certificates.
The holder of any shares of capital stock of the Corporation shall
immediately notify the Corporation of any loss, destruction, theft or mutilation
of the certificate representing such shares, and the Corporation may issue a new
certificate to replace the certificate alleged to have been lost, destroyed,
stolen or mutilated. The Board may, in its discretion, as a condition to the
issue of any such new certificate, require the owner of the lost, destroyed,
stolen or mutilated certificate, or his legal representatives, to make proof
satisfactory to the Board of such loss, destruction, theft or mutilation and to
advertise such fact in such manner as the Board may require, and to give the
Corporation and its transfer agents and registrars, or such of them as the Board
may require, a bond in such form, in such sum and with such surety or sureties
as the Board may direct, to indemnify the Corporation and its transfer agents
and registrars against any claim that may be made against any of them on account
of the continued existence of any such certificate so alleged to have been lost,
destroyed, stolen or mutilated and against any expense in connection with such
claim.
Section 7.5 Regulations.
The Board may make such rules and regulations as it may deem expedient,
not inconsistent with the By-laws or with the Certificate of Incorporation,
concerning the issue, transfer and registration of certificates representing
shares of its capital stock.
14
Section 7.6 Restriction on Transfer of Stock.
A written restriction on the transfer or registration of transfer of
capital stock of the Corporation, if permitted by Section 202 of the General
Corporation Law and noted conspicuously on the certificate representing such
capital stock, may be enforced against the holder of the restricted capital
stock or any successor or transferee of the holder including an executor,
administrator, trustee, guardian or other fiduciary entrusted with like
responsibility for the person or estate of the holder. Unless noted
conspicuously on the certificate representing such capital stock, a restriction,
even though permitted by Section 202 of the General Corporation Law, shall be
ineffective except against a person with actual knowledge of the restriction. A
restriction on the transfer or registration of transfer of capital stock of the
Corporation may be imposed either by the Certificate of Incorporation or by an
agreement among any number of Stockholders or among such Stockholders and the
Corporation. No restriction so imposed shall be binding with respect to capital
stock issued prior to the adoption of the restriction unless the holders of such
capital stock are parties to an agreement or voted in favor of the restriction.
Section 7.7 Dividends, Surplus, Etc.
Subject to the provisions of the Certificate of Incorporation and of law,
the Board:
7.7.1 May declare and pay dividends or make other distributions on
the outstanding shares of capital stock in such amounts and at such time
or times as, in its discretion, the condition of the affairs of the
Corporation shall render advisable;
7.7.2 May use and apply, in its discretion, any of the surplus of
the Corporation in purchasing or acquiring any shares of capital stock of
the Corporation, or purchase warrants therefor, in accordance with law, or
any of its bonds, debentures, notes, scrip or other securities or
evidences of indebtedness; and
7.7.3 May set aside from time to time out of such surplus or net
profits such sum or sums as, in its discretion, it may think proper, as a
reserve fund to meet contingencies, or for equalizing dividends or for the
purpose of maintaining or increasing the property or business of the
Corporation, or for any purpose it may think conducive to the best
interests of the Corporation.
ARTICLE VIII.
INDEMNIFICATION
Section 8.1 Indemnification of Officers and Directors.
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was a director or an officer of the
Corporation, against expenses (including attorneys' fees) judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding to the fullest extent and in the manner set
forth in and permitted by the General Corporation Law, and any other applicable
law, as from time to time in effect. Such right of indemnification shall not be
deemed exclusive of any other rights to which such director or officer may be
entitled apart from the foregoing provisions. The foregoing provisions of this
Section 8.1 shall be deemed to
15
be a contract between the Corporation and each director and officer who serves
in such capacity at any time while this Article 8 and the relevant provisions of
the General Corporation Law and other applicable law, if any, are in effect and
any repeal or modification thereof shall not affect any rights or obligations
then existing with respect to any state of facts then or theretofore existing or
any action, suit or proceeding theretofore or thereafter brought or threatened
based in whole or in part upon any such state of facts.
Section 8.2 Indemnification of Other Persons.
The Corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative by
reason of the fact that he is or was an employee or agent of the Corporation, or
is or was serving at the request of the Corporation as a director, officer,
employee or agent of another Corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees) judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding to the extent and in the manner
set forth in and permitted by the General Corporation Law, and any other
applicable law, as from time to time in effect. Such right of indemnification
shall not be deemed exclusive of any other rights to which any such person may
be entitled apart from the foregoing provisions.
Section 8.3 Insurance.
The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation or a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under the provisions of Section 8.1 and 8.2 of the By-laws or
under Section 145 of the General Corporation Law or any other provision of Law.
ARTICLE IX.
BOOKS AND RECORDS
Section 9.1 Books and Records.
The Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of the Stockholders, the Board
and any committee of the Board. The Corporation shall keep at the office
designated in the Certificate of Incorporation or at the office of the transfer
agent or registrar of the Corporation in Delaware, a record containing the names
and addresses of all Stockholders, the number and class of shares held by each
and the dates when they respectively became the owners of record thereof.
Section 9.2 Form of Records.
Any records maintained by the Corporation in the regular course of its
business including its stock ledger, books of account, and minute books, may be
kept on, or be in the form of, punch cards, magnetic tape, photographs,
microphotographs, or any other information storage device, provided that the
records so kept can be converted into clearly legible written form within a
reasonable time. The Corporation shall so convert any records so kept upon the
request of any person entitled to inspect the same.
16
Section 9.3 Inspection of Books and Records.
Except as otherwise provided by law, the Board shall determine from time
to time whether, and, if allowed, when and under what conditions and regulations
the accounts, books, minutes and other records of the Corporation, shall be open
to the inspection of any Stockholder or director.
ARTICLE X.
SEAL
The Board may adopt a corporate seal which shall be in the form of a
circle and shall bear the full name of the Corporation, the year of its
incorporation and the word "Delaware."
ARTICLE XI.
FISCAL YEAR
The fiscal year of the Corporation shall be determined, and may be
changed, by resolution of the Board.
ARTICLE XII.
VOTING OF SHARES HELD
Unless otherwise provided by resolution of the Board, the President may,
from time to time, appoint one or more attorneys or agents of the Corporation,
in the name and on behalf of the Corporation, to cast the votes which the
Corporation may be entitled to cast as a Stockholder or otherwise in any other
corporation, any of whose shares or securities may be held by the Corporation,
at meetings of the holders of stock or other securities of such other
corporation, or to consent in writing to any action by any such other
corporation, and may instruct the person or persons so appointed as to the
manner of casting such votes or giving such consent, and may execute or cause to
be executed on behalf of the Corporation and under its corporate seal, or
otherwise, such written proxies, consents, waivers or other instruments as he
may deem necessary or proper in the premises; or the President may himself
attend any meeting of the holders of the stock or other securities of any such
other corporation and thereat vote or exercise any or all other powers of the
Corporation as the holder of such stock or other securities of such other
corporation.
ARTICLE XIII.
AMENDMENTS
The By-laws may be altered, amended, supplemented or repealed, or new
By-laws may be adopted, by vote of the holders of the shares entitled to vote in
the election of directors, provided that Articles 3.2, 3.3, 3.4, 3.5, 3.6, 3.7
and 3.8 may only be amended by the affirmative vote of the holders of not less
than two-thirds of the outstanding voting shares of capital stock of the
Corporation entitled to vote generally in the election of directors; provided,
however, that such two-thirds vote shall not be required for, any amendment,
alteration, change, repeal or
17
adoption of any inconsistent provision declared advisable by the Board by the
affirmative vote of two-thirds of the Board and submitted to Stockholders for
their consideration, but only if a majority of the members of the Board acting
upon such matter shall be Continuing Directors. The term "Continuing Director"
shall mean a director who was a member of the Board as of October 1, 1986. With
the exception of Articles 3.2, 3.3, 3.4, 3.5, 3.6. 3.7 and 3.8 the By-laws may
also be altered, amended, supplemented, repealed, or new By-laws may be adopted,
by the Board. Any By-laws adopted, altered, amended, or supplemented by the
Board may be altered, amended, or supplemented or repealed by the Stockholders
entitled to vote thereon in accordance with the provisions hereof.
18
Exhibit 3(iv)
CERTIFICATE OF ELIMINATION
ELIMINATING CLASSES OF SERIES B, C and D CONVERTIBLE PREFERRED STOCKS
OF
ENZON, INC.
(Pursuant to Section 151 of the Delaware General Corporation Law)
The undersigned, being the President and Chief Executive Officer of Enzon,
Inc., a corporation organized and existing under the General Corporation Law of
the State of Delaware (the "GCL"), hereby certifies, pursuant to Section 151 of
the GCL, that:
1. The name of the Corporation is Enzon, Inc. (the "Corporation").
2. On January 31, 1996, the Corporation filed a Certificate of Designation
creating a class of capital stock designated as Series B Convertible Preferred
Stock, par value $.01 per share (the "Series B Stock"), and authorized the
issuance of 40,000 shares of such class.
3. On March 15, 1996, the Corporation filed a Certificate of Designation
creating a class of capital stock designated as Series C Convertible Preferred
Stock, par value $.01 per share (the "Series C Stock"), and authorized the
issuance of 20,000 shares of such class.
4. On February 28, 1997, the Corporation filed a Certificate of
Designation creating a class of capital stock designated as Series D Convertible
Preferred Stock, par value $.01 per share (the "Series D Stock"), and authorized
the issuance of 20,000 shares of such class.
5. No shares of the Series B Stock, the Series C Stock or the Series D
Stock are outstanding and none will be issued pursuant to the Certificates of
Designation listed in paragraphs two (2), three (3) and four (4) above.
6. Pursuant to the authorization and direction of the Board of Directors
of the Corporation, adopted by the resolution set forth below, the Corporation
hereby eliminates the Classes of Series B Stock, Series C Stock and Series D
Stock.
7. The following is the resolution of the Corporation's Board of Directors
eliminating such classes of preferred stock:
1
RESOLVED, that there currently being no outstanding shares of (1) the
Series B Convertible Preferred Stock; (2) the Series C Convertible Preferred
Stock or (3) the Series D Convertible Preferred Stock, and that no shares will
be issued subject to the certificates of designation setting forth the relative
rights and preferences of the shares of each such series and previously filed
with the Delaware Secretary of State and pursuant to Section 151 of the Delaware
General Corporation Law the officers of the Corporation be and they hereby are
authorized to file with the Delaware Secretary of State a Certificate of
Elimination reciting this resolution and such Certificate will have the effect
of eliminating from the Corporation's Certificate of Incorporation, as amended
all matters set forth in the certificates of designation with respect to (1) the
Series B Convertible Preferred Stock; (2) the Series C Convertible Preferred
Stock and (3) the Series D Convertible Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Elimination is executed on behalf
of the Corporation by its President and Chief Executive Officer this 20th day of
May, 2002.
ENZON, INC.
By: /s/ Arthur Higgins
---------------------------------------
Arthur Higgins
President and Chief Executive Officer
2
Exhibit 3(v)
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES B PREFERRED STOCK
OF
ENZON, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Enzon, Inc. (the "Corporation"), a corporation organized and existing
under the laws of the State of Delaware, does hereby certify that, pursuant to
the authority conferred on the Board of Directors of the Corporation by the
Certificate of Incorporation, as amended, of the Corporation and in accordance
with Section 151 of the General Corporation Law of the State of Delaware, the
Board of Directors of the Corporation adopted the following resolution creating
the preferences and rights of its series of 600,000 shares of Preferred Stock,
no shares of which have been issued, designated as "Series B Preferred Stock."
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Certificate of
Incorporation, as amended, the preferences and rights of the series of Preferred
Stock of the Corporation, designated as "Series B Preferred Stock," be and are
hereby amended and restated in their entirety, and that the designation and
amount of such series and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
(a) Designation and Amount. The shares of such series shall be
designated as "Series B Preferred Stock" (the "Series B Preferred Stock")
and the number of shares constituting the Series B Preferred Stock shall
be six hundred thousand (600,000). Such number of shares may be increased
or decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series B Preferred Stock to
a number less than the number of shares then outstanding plus the number
of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series B Preferred Stock.
(b) Dividends and Distributions.
(i) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and
superior to the Series B Preferred Stock with respect to dividends,
the holders of shares of Series B Preferred Stock, in preference to
the holders of Common Stock, par value $.01 (the "Common Stock"), of
the Corporation, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable
in cash on the first
day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series
B Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth, 1,000 times the
aggregate per share amount of all cash dividends, and 1,000 times
the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a
share of Series B Preferred Stock. In the event the Corporation
shall at any time after June 3, 2002, declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series B
Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(ii) The Corporation shall declare a dividend or distribution
on the Series B Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding Common Stock); provided
that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share on the Series B
Preferred Stock shall nevertheless be payable, out of funds legally
available for such purpose, on such subsequent Quarterly Dividend
Payment Date.
(iii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series B Preferred Stock in an
amount less than the total amount of such
2
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares
at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series B
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
(c) Voting Rights. The holders of shares of Series B Preferred Stock
shall have the following voting rights:
(i) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation
shall at any time after June 3, 2002, declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares
of Series B Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(ii) Except as otherwise provided herein, in any other
Certificate of Designation creating a series of preferred stock or
any similar stock, or by law, the holders of shares of Series B
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(iii) Except as set forth herein, or as otherwise provided by
law, holders of Series B Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
(d) Certain Restrictions.
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series B Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
(1) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock;
3
(2) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(3) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series B Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series B
Preferred Stock; or
(4) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or any
shares of stock ranking on a parity with the Series B
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
(e) Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized
but unissued shares of preferred stock and may be reissued as part of a
new series of preferred stock subject to the conditions and restrictions
on issuance set forth herein, in the Certificate of Incorporation, as
amended, or in any other certificate of designation creating a series of
preferred stock or any similar stock or as otherwise required by law.
(f) Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be
made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received the greater of (i) $1,000 per share,
plus an amount equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such payment, or (ii) an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity
4
(either as to dividends or upon liquidation, dissolution or winding up)
with the Series B Preferred Stock, except distributions made ratably on
the Series B Preferred Stock and all such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled
upon such liquidation, dissolution or winding up. In the event the
Corporation shall at any time after June 3, 2002, declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event under clause (1)(ii) of the
preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(g) Consolidation, Merger, Etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each
share of Series B Preferred Stock shall at the same time be similarly
exchanged or changed into an amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 1,000 times the aggregate
amount of stock, securities, cash and/or any other property (payable in
kind), as the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation shall at any
time after June 3, 2002, declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise) into a greater or lesser number of shares
of Common Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of shares of
Series B Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(h) No Redemption. The shares of Series B Preferred Stock shall not
be redeemable.
(i) Rank. The Series B Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets, junior to all
series of any other class of the Corporation's preferred stock.
(j) Fractional Shares. Series B Preferred Stock may be issued in
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to receive dividends, participate in
distributions and to have the benefit of all other rights of holders of
Series B Preferred Stock.
(k) Amendment. The Certificate of Incorporation, as amended of the
Corporation shall not be amended in any manner which would materially
alter or change the powers, preferences or rights of the Series B
Preferred Stock so as to affect them adversely
5
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series B Preferred Stock, voting together as a
single class.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Designation, Preferences and Rights on behalf of the Corporation this 22nd day
of May, 2002.
/s/ Arthur J. Higgins
----------------------------------
Arthur J. Higgins
President, Chief Executive Officer
6
Exhibit 4.3
================================================================================
ENZON, INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
as Rights Agent
RIGHTS AGREEMENT
Dated as of May 17, 2002
================================================================================
Table of contents
-----------------
Page
----
Section 1. Certain Definitions..............................................1
Section 2. Appointment of Right Agent.......................................5
Section 3. Issue of Right Certificates......................................5
Section 4. Form of Right Certificates.......................................6
Section 5. Countersignature and Registration................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.....................................................7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....8
Section 8. Cancellation and Destruction of Right Certificates...............9
Section 9. Availability of Preferred Shares.................................9
Section 10. Preferred Shares Record Date....................................10
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights................................................11
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......16
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...................................................16
Section 14. Fractional Rights and Fractional Shares.........................19
Section 15. Rights of Action................................................19
Section 16. Agreement of Right Holders......................................20
Section 17. Right Certificate Holder Not Deemed a Shareholder...............20
Section 18. Concerning the Rights Agent.....................................20
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......21
Section 20. Duties of Rights Agent..........................................22
Section 21. Change of Rights Agent..........................................23
Section 22. Issuance of New Right Certificates..............................24
Section 23. Redemption......................................................24
Section 24. Exchange........................................................25
Section 25. Notice of Certain Events........................................26
Section 26. Notices.........................................................27
Section 27. Supplements and Amendments......................................27
Section 28. Successors......................................................27
Section 29. Benefits of this Agreement; No Liability........................28
Section 30. Severability....................................................28
Section 31. Governing Law...................................................28
Section 32. Counterparts....................................................28
Section 33. Descriptive Headings............................................28
Form of Certificate of Designation, Preferences and Rights of
Series B Preferred Stock of Enzon, Inc......................................A-1
Form of Right Certificate...................................................B-1
Summary of Rights to Purchase Preferred Shares..............................C-1
3
RIGHTS AGREEMENT
This Rights Agreement dated as of May 17, 2002 is between Enzon, Inc., a
Delaware corporation (the "Company"), and Continental Stock Transfer & Trust
Company, as rights agent (the "Rights Agent").
RECITALS:
WHEREAS, effective May 17, 2002, the Board of Directors of the Company
authorized and declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as hereinafter defined) of the Company
outstanding on June 3, 2002 (the "Record Date"), each Right representing the
right to purchase one one-thousandth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth, and has
further authorized and directed the issuance of one Right with respect to each
Common Share that shall become outstanding between the Record Date and the
earliest of the Distribution Date, the Redemption Date, the Exchange Date and
the Final Expiration Date (as such terms are hereinafter defined).
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
Section 1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
"Acquiring Person" shall mean any Person who or which, together with all
Affiliates and Associates of such Person, shall be the Beneficial Owner of the
Threshold Percentage or more of the Common Shares of the Company then
outstanding, other than as a result of a Permitted Offer, but shall not include
any Exempt Person.
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.
"Agreement" shall mean this Rights Agreement as originally executed or as
it may from time to time be supplemented, amended, renewed, restated or extended
pursuant to the applicable provisions hereof.
A Person shall be deemed the "Beneficial Owner" of and shall be deemed to
"beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, beneficially owns, directly or indirectly, including without
limitation securities with respect to which such Person or any such
Person's Affiliates or Associates has "beneficial ownership" pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), or
upon the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any agreement,
arrangement or understanding; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to beneficially own, any security if
the agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and regulations promulgated under
the Exchange Act and (2) is not also then reportable on Schedule 13D under
the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated
by the proviso to clause (ii)(B) above) or disposing of any securities of
the Company.
Notwithstanding anything in this definition of Beneficial Ownership to the
contrary, the phrase "then outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be
deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M. New York, New
York time, on such date; provided, however, that if such date is not a Business
Day, it shall mean 5:00 P.M., New York, New York time, on the next succeeding
Business Day.
"Closing Price" with respect to a security on any given date shall mean
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities
2
Dealers, Inc. Automated Quotations System or such other system then in use, or,
if on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Directors
of the Company. If on any such day no market maker is making a market in the
Common Shares, the fair value of such share on such day as determined in good
faith by the Board of Directors of the Company shall be used in lieu of the
Closing Price for such day.
"Common Shares," when used with reference to the Company, shall mean the
shares of Common Stock, par value $0.01 per share, of the Company. "Common
Shares," when used with reference to any Person other than the Company, shall
mean the capital stock (or equity interest) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of any other Person,
the Person or Persons that ultimately control such first mentioned Person.
The "Current Per Share Market Price" of a security shall mean the average
of the daily Closing Prices per share of such security for the 30 consecutive
Trading Days immediately prior to such date; provided, however, that in the
event that the Current Per Share Market Price of such security is determined
during a period following the announcement by the issuer of the security of (A)
a dividend or distribution on the security payable in shares of such security or
securities convertible into such shares, or (B) any subdivision, combination or
reclassification of such security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each such
case, the Current Per Share Market Price shall be appropriately adjusted to
reflect the Current Per Share Market Price per share equivalent of such
security. With respect to the Preferred Shares of the Company, if such Preferred
Shares are not publicly traded, then the Current Per Share Market Price of such
Preferred Shares shall be deemed conclusively to be the Current Per Share Market
Price of the Common Shares (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof),
multiplied by 1,000. If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, "Current Per Share Market Price" of the
Preferred Shares shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent.
"Distribution Date" shall mean the earlier of (i) the Close of Business on
the day after the Shares Acquisition Date or (ii) the Close of Business on the
day (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) after the date of
the commencement by any Person (other than an Exempt Person) of, or of the first
public announcement of the intention of any Person (other than an Exempt Person)
to commence, a tender or exchange offer, the consummation of which would result
in any Person becoming an Acquiring Person.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Date" shall mean the time at which the Rights are exchanged as
provided in Section 24 hereof.
"Exchange Ratio" shall have the meaning set forth in Section 24 hereof.
3
"Exempt Person" shall mean (i) the Company, (ii) any Subsidiary of the
Company, (iii) any employee benefit plan of the Company or of any Subsidiary of
the Company, (iv) any Person or entity organized, appointed or established by
the Company for or pursuant to the terms of any such employee benefit plan, (v)
any Person who becomes the Beneficial Owner of the Threshold Percentage or more
of the Common Shares of the Company then outstanding by reason of share
purchases by the Company, unless and until such time as such Person shall
increase the number of Common Shares of the Company beneficially owned by such
Person above the number of Common Shares of the Company beneficially owned by
such Person at the time of the share purchase by the Company that caused such
Person to exceed the Threshold Percentage, and (vi) any Person who otherwise
would be an Acquiring Person but whom the Board of Directors determines, in good
faith, to have become such inadvertently (including, without limitation, because
(A) such person was unaware that he or it was the Beneficial Owner of a
percentage of Common Shares that otherwise would cause such person to be an
Acquiring Person, or (B) such Person was aware of the extent to which he or it
is the Beneficial Owner of Common Shares but had no actual knowledge of the
consequences of being such a Beneficial Owner under this Agreement) and without
any intention of changing or influencing control of the Company, and if such
Person, after being advised of such determination and within a period of time
set by the Board of Directors, divests himself or itself of a sufficient number
of Common Shares so that such Person would no longer be the Beneficial Owner of
the Threshold Percentage or more of the Common Shares of the Company then
outstanding, then such Person shall not be deemed to be or to have become an
Acquiring Person for any purposes of this Agreement; and during any period of
time (x) prior to the time the Board of Directors shall have become aware that
such Person would have become an Acquiring Person but for the provisions of this
clause (vi), (y) during which the Board of Directors is making the determination
called for under this clause (vi), and (z) during which such Person is divesting
himself or itself of a sufficient number of Common Shares so that such Person no
longer would be the Beneficial Owner of the Threshold Percentage or more of the
Common Shares of the Company then outstanding, such Person shall not be deemed
to be or to have become an Acquiring Person for any purpose under this
Agreement.
"Final Expiration Date" shall mean the Close of Business on May 16, 2012.
"Permitted Offer" shall mean a tender offer or an exchange offer for all
outstanding Common Shares of the Company determined by the Board of Directors of
the Company, after receiving such advice as it deems necessary and giving due
consideration to all relevant factors, to be in the best interests of the
Company and its stockholders.
"Person" shall mean any individual, firm, corporation or other entity, and
shall include any successor (by merger or otherwise) of such entity.
"Preferred Shares" shall mean shares of Series B Preferred Stock, par
value $0.01 per share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to this Agreement as
Exhibit A.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Section 4 hereof.
4
"Record Date" shall have the meaning set forth in the recitals hereto.
"Redemption Date" shall mean the time at which the Rights are redeemed as
provided in Section 23 hereof.
"Right" shall have the meaning set forth in the recitals hereto.
"Right Certificate" shall mean a certificate substantially in the form of
Exhibit B hereto.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shares Acquisition Date" shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a
report filed pursuant to Section 13(d) of the Exchange Act) by the Company or
any Person that such Person has become an Acquiring Person.
"Subsidiary" of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity
interest is owned, directly or indirectly, by such Person.
"Summary of Rights" shall mean a summary of this Agreement, in
substantially the form of Exhibit C hereto.
"Threshold Percentage" shall mean 15%.
"Trading Day" shall mean a day on which the principal national securities
exchange on which a security is listed or admitted to trading is open for the
transaction of business or, if a security is not listed or admitted to trading
on any national securities exchange, a Business Day.
Section 2. Appointment of Right Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Shares of
the Company in accordance with the terms and conditions hereof), and the Rights
Agent hereby accepts such appointment. The Company may from time to time appoint
such co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) the Rights will be evidenced (subject
to the provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and
(ii) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested, send) by first-class, postage-prepaid mail to each record
holder of Common Shares as of the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certificate
5
evidencing one Right for each Common Share so held. As of the Distribution Date,
the Rights will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the Company
will send a copy of the Summary of Rights by first-class, postage-prepaid mail
to each record holder of Common Shares as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company. With
respect to certificates for Common Shares outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof together with a copy of the
Summary of Rights. Until the Distribution Date (or the earlier of the Redemption
Date, the Exchange Date or the Final Expiration Date if occurring prior to the
Distribution Date), the surrender for transfer of any certificate for Common
Shares outstanding on the Record Date, with or without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this paragraph (c)) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date, the Exchange Date or the Final
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to certain
rights as set forth in a Rights Agreement between Enzon, Inc. and
Continental Stock Transfer & Trust Company, dated as of May 17, 2002 (the
"Rights Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal executive
offices of Enzon, Inc. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate certificates
and will no longer be evidenced by this certificate. Enzon, Inc. will mail
to the holder of this certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor. Under certain
circumstances, as set forth in the Rights Agreement, Rights issued to any
Person who becomes an Acquiring Person or an Associate or Affiliate
thereof (as defined in the Rights Agreement), or certain transferees of
such Person, may become null and void.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Shares represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby. In
the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates.
The Right Certificates (and the forms of election to purchase Preferred
Shares and of assignment to be printed on the reverse thereof)
6
shall be substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Right Certificates shall entitle the holders thereof
to purchase such number of one one-thousandths of a Preferred Share as shall be
set forth therein at the price per one one-thousandth of a Preferred Share set
forth therein (the "Purchase Price"), but the number of such one one-thousandths
of a Preferred Share and the Purchase Price shall be subject to adjustment as
provided herein.
Section 5. Countersignature and Registration.
The Right Certificates shall be executed on behalf of the Company by any
of its Chairman of the Board, its Vice Chairman, its President, its Executive
Vice President, any of its Vice Presidents, its Treasurer or its Controller
either manually or by facsimile signature and shall be attested by the Secretary
or an Assistant Secretary of the Company, either manually or by facsimile
signature. The Right Certificates shall be countersigned by the Rights Agent,
either manually or by facsimile signature, for purposes of authorization only
and shall not be valid for any purpose unless countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such Person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 14 hereof, at any time after the
Close of Business on the Distribution Date, and at or prior to the Close of
Business on the earlier of the Redemption Date, the Exchange Date or the Final
Expiration Date, any Right Certificate or Right Certificates (other than Right
Certificates representing Rights that have become void pursuant to Section
11(a)(ii) hereof) may be transferred, split up, combined or exchanged for
another Right Certificate or Right Certificates, entitling the registered holder
to purchase a like number of one one-thousandths of a Preferred Share as the
Right Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up, combine or
exchange any Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the Right Certificate
or Right Certificates to be transferred, split up,
7
combined or exchanged at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the Person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will issue, execute and deliver
a new Right Certificate of like tenor to the Rights Agent for countersignature
and delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the office or offices of the Rights Agent designated for
such purpose, together with payment of the Purchase Price for each one
one-thousandth of a Preferred Share as to which the Rights are exercised, at or
prior to the earliest of the Final Expiration Date, the Redemption Date or the
Exchange Date.
(b) The Purchase Price for each one one-thousandth of a Preferred Share
pursuant to the exercise of a Right shall be $190.00 (One Hundred Ninety
Dollars), shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by payment of
the Purchase Price for the shares to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent for the Preferred
Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Company shall have elected to deposit with a depository
agent the total number of Preferred Shares issuable upon exercise of the Rights
hereunder, requisition from the depositary agent depositary receipts
representing such number of one one-thousandths of a Preferred Share as are to
be purchased and the Company hereby directs the depositary agent to comply with
such request, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
8
designated by such holder and (iv) when appropriate, after receipt, deliver such
cash to or upon the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall exercise
less than all of the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section unless such registered holder shall have (i) duly
completed and executed the form of election to purchase set forth on the reverse
side of the Right Certificate surrendered for such exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) of such Right Certificate or Affiliates or Associates thereof
as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or to any
of its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Rights Agreement. The Company shall deliver to
the Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or, at the written request of
the Company, may (but shall not be required to) destroy such cancelled Right
Certificates, and, if such cancelled Right Certificates are destroyed, shall
deliver to the Company a certificate of destruction.
Section 9. Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved and
kept available out of its authorized and unissued Preferred Shares, the number
of Preferred Shares that will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) At such time, if any, as the Preferred Shares issuable upon the
exercise of Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable (but only to the extent that it is reasonably likely
that the Rights will be exercised), all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company will prepare and file, as soon as practicable following
expiration of the Company's right of redemption pursuant to Section 23, a
registration statement under the Securities Act with respect to the Rights and
the securities purchasable upon exercise of the Rights on an appropriate form,
and use its best efforts to cause such registration statement to (i) become
effective as soon as practicable after such filing, and (ii) remain effective
(with a
9
prospectus at all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities or (B) the Final Expiration Date. The Company will also take
such action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed 90 days after the date the registration statement is
filed, the exercisability of the Rights in order to permit the registration
statement to become effective. Upon any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification in such jurisdiction shall not have
been obtained or the exercise thereof is not permitted under applicable law.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all Preferred Shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price and any applicable transfer
taxes), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares (or Common Shares or preferred share equivalents, if
applicable) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates or depositary receipts for the Preferred Shares in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise, or to issue or to deliver any
certificates or depositary receipts for Preferred Shares upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it
has been established to the Company's reasonable satisfaction that no such tax
is due.
Section 10. Preferred Shares Record Date.
Each Person in whose name any certificate for Preferred Shares is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred Shares represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the transfer books of the Company for
the Preferred Shares are closed, such Person shall be deemed to have become the
record holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which such transfer books are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred Shares for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
10
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights.
The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall
be entitled to receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such
date and at a time when the Preferred Shares transfer books of the Company
were open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. If an event occurs which would require an
adjustment under both Sections 11(a)(i) and 11(a)(ii) hereof, then the
adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to Section
11(a)(ii) hereof.
(ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person, unless the event by which such Person
became an Acquiring Person is a transaction described in Section 13(a)
hereof, each holder of a Right shall thereafter have a right to receive,
upon exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable and dividing that product by
(y) 50% of the Current Per Share Market Price of the Company's Common
Shares on the date that such Person becomes an Acquiring Person. In the
event that any Person shall become an Acquiring Person and the Rights
shall then be outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be afforded by the
Rights.
From and after the date that such Person becomes an Acquiring
Person, any Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Acquiring Person)
shall be void and any holder of such Rights shall thereafter have no right
to exercise such Rights under any provision of this Agreement. No Right
Certificate shall be issued pursuant to Section 3 that represents
11
Rights beneficially owned by an Acquiring Person (or any Associate or
Affiliate of such Acquiring Person) whose Rights would be void pursuant to
the preceding sentence; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person (or any Associate
or Affiliate of such Acquiring Person) whose Rights would be void pursuant
to the preceding sentence or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Rights Certificate delivered to the Rights
Agent for transfer to an Acquiring Person (or any Associate or Affiliate
of such Acquiring Person) whose Rights would be void pursuant to the
preceding sentence shall be cancelled.
(iii) In the event that there shall not be sufficient Common Shares
authorized but unissued to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof, the Company shall take all such
action as may be necessary to authorize additional Common Shares for
issuance upon exercise of the Rights. In the event the Company shall,
after good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares, the Company shall
substitute, for each Common Share that otherwise would be issuable upon
exercise of a Right, a number of Preferred Shares or fraction thereof such
that the Current Per Share Market Price of one Preferred Share multiplied
by such number or fraction is equal to the Current Per Share Market Price
of one Common Share as of the date of issuance of such Preferred Share or
fraction thereof.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares (such shares are herein
called "preferred share equivalents")) or securities convertible into Preferred
Shares or preferred share equivalents at a price per Preferred Share or
preferred share equivalent (or having a conversion price per share, if a
security convertible into Preferred Shares or preferred share equivalents) less
than the then Current Per Share Market Price of the Preferred Shares on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or preferred share equivalents so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such Current Per Share Market Price and the denominator of which
shall be the number of Preferred Shares outstanding on such record date plus the
number of additional Preferred Shares and/or preferred share equivalents to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible); provided, however, that in no event
shall the consideration to be paid upon the exercise of one Right be less than
the aggregate par value of the shares of capital stock of the Company issuable
upon exercise of one Right. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Preferred Shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a
12
record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then Current Per Share Market Price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to one Preferred Share and the denominator of which shall be such
Current Per Share Market Price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of capital stock of the Company
to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(d) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(d), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(e) If as a result of an adjustment made pursuant to Section 11(a) and
13(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon exercise
of any Right shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through 11(c), inclusive, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Shares
shall apply on like terms to any such other shares.
(f) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
13
(g) Unless the Company shall have exercised its election as provided in
Section 11(h), subject to the provisions of Sections 11(a) and 13 hereof, upon
each adjustment of the Purchase Price as a result of the calculations made in
Sections 11(b) and (c), each Right outstanding immediately prior to the making
of such adjustment shall thereafter evidence the right to purchase, at the
adjusted Purchase Price, that number of one one-thousandths of a Preferred Share
(calculated to the nearest one one-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-thousandths of a share covered by a
Right immediately prior to this adjustment by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(h) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(h), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein, may bear, at the
option of the Company, the adjusted Purchase Price, and shall be registered in
the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(i) Irrespective of any adjustment or change in the Purchase Price or the
number of one one-thousandths of a Preferred Share issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one one-thousandths of
a Preferred Share which were expressed in the initial Right Certificates issued
hereunder.
(j) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-thousandth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the
14
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
(k) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(l) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its sole discretion the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of any
Preferred Shares at less than the Current Per Share Market Price, (iii) issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (iv) dividends on
Preferred Shares payable in Preferred Shares or (v) issuance of rights, options
or warrants referred to hereinabove in Section 11(b), hereafter made by the
Company to holders of its Preferred Shares shall not be taxable to such
stockholders.
(m) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Section 23, 24 or 27, take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(n) Anything in this Agreement or the Rights to the contrary
notwithstanding, in the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any such case (i) the
number of one one-thousandths of a Preferred Share purchasable after such event
upon proper exercise of each Right shall be determined by multiplying the number
of one one-thousandths of a Preferred Share so purchasable immediately prior to
such event by a fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which is the
number of Common Shares outstanding immediately after such event, and (ii) each
Common Share outstanding immediately after such event shall have issued with
respect to it that number of Rights which each Common Share outstanding
immediately prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or consolidation
is effected. If an event occurs which would require an adjustment under Section
11(a)(ii) and
15
this Section 11(n), the adjustments provided for in this Section 11(n) shall be
in addition and prior to any adjustment required pursuant to Section 11(a)(ii).
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event, directly or indirectly, at any time after there is an
Acquiring Person,
(w) the Company shall consolidate with, or merge with and into, any
other Person (other than a wholly owned Subsidiary of the Company in a
transaction that complies with Section 11(m) hereof) and the Company shall
not be the continuing or surviving corporation of such consolidation or
merger,
(x) any Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(m) hereof) shall consolidate
with, or merge with and into, the Company and the Company shall be the
continuing or surviving corporation of such consolidation or merger and,
in connection with such consolidation or merger, all or part of the
outstanding Common Shares of the Company held by existing stockholders of
the Company shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other
property,
(y) the Company shall effect a statutory share exchange with the
outstanding Common Shares of the Company being exchanged for stock or
other securities of any other Person, cash or property, or
(z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the
assets or earning power, respectively, of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or one or
more of its wholly owned Subsidiaries,
then, and in each such case, except as contemplated by Section 13(e), proper
provision shall be made so that (i) each holder of a Right (except as otherwise
provided in this Agreement) shall thereafter have the right to receive, upon the
exercise thereof by payment of the amount equal to the product of the number of
one one-thousandths of a Preferred Share which would otherwise be issuable upon
exercise of a Right and the then current Purchase Price in accordance with the
terms of this Agreement and in lieu of Preferred Shares, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable Common
Shares of the Principal Party, not subject to any liens, encumbrances, rights of
first refusal or adverse claims, as shall be equal to the result obtained by (x)
multiplying the then current Purchase Price by the number of one one-thousandths
of a Preferred Share for which a Right is, immediately prior to the first
occurrence
16
of a consolidation, merger, statutory share exchange, sale or transfer with a
Principal Party, exercisable and (y) dividing that product by 50% of the Current
Per Share Market Price of the Common Shares of such Principal Party (determined
on the date of consummation of such consolidation, merger, statutory share
exchange, sale or transfer); (ii) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such merger, consolidation, statutory
share exchange, sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be deemed
to refer to such Principal Party; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
its Common Shares to permit the exercise of all outstanding Rights) in
connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clauses (w), (x) or
(y) of the first sentence of Section 13(a), the Person that is the issuer
of any securities into which Common Shares of the Company are converted in
such merger, consolidation or exchange, or if no securities are so issued,
the Person that is the other party to such merger, consolidation or
exchange; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant
to such transaction or transactions; provided, however, that in any such
case, (1) if the Common Shares of such Person are not at such time or have
not been continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Shares of which are and have been
so registered, "Principal Party" shall refer to such other Person, and (2)
in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the Common Shares of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is
the issuer of the Common Shares having the greatest aggregate market
value.
(c) The Company shall not consummate any consolidation, merger, statutory
share exchange, sale or transfer described in Section 13(a) above with a
Principal Party unless such Principal Party shall have a sufficient number of
authorized, unreserved Common Shares which have not been issued or are held in
treasury to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any such
consolidation, merger, share exchange, sale or transfer, the Principal Party
will:
(i) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities purchaseable upon
exercise of the Rights, on an appropriate form, and use its best efforts
to cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective
17
(with a prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (1) the date as of which the Rights are no
longer exercisable for such securities or (2) the Final Expiration Date;
(ii) take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under
the Exchange Act.
(d) The Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights. Without limiting the generality of the preceding
sentence, in case the Principal Party which is to be a party to a transaction of
the kind referred to in this Section 13 has a provision in any of its authorized
securities or in its articles of incorporation or bylaws or other instrument
governing its corporate affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction of the kind referred to in this Section
13, Common Shares of such Principal Party at less than the then Current Per
Share Market Price or securities exercisable for or convertible into Common
Shares of such Principal Party at less than such then Current Per Share Market
Price (other than to holders of Rights pursuant to this Section 13) or (ii)
providing for any special payment, tax or similar provisions in connection with
the issuance of Common Shares of such Principal Party pursuant to the provisions
of Section 13; then, in such event, the Company shall
not consummate any such transaction unless prior thereto the provision in
question of such Principal Party shall have been cancelled, waived or amended so
as to avoid any of the effects referred to in clauses (i) and (ii), or the
authorized securities shall have been redeemed, so that the applicable provision
will have no effect in connection with, or as a consequence of, the consummation
of the proposed transaction.
(e) Notwithstanding anything in this Agreement to the contrary, Section 13
shall not be applicable to a transaction described in subparagraphs (w), (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who acquired Common Shares pursuant to a Permitted Offer (or a wholly
owned Subsidiary of any such Person or Persons), (ii) the price per Common Share
offered in such transaction is not less than the price per Common Share paid to
all holders of Common Shares whose shares were purchased pursuant to such
Permitted Offer and (iii) the form of consideration being offered to the
remaining holders of Common Shares pursuant to such transaction is the same as
the form of consideration paid pursuant to such Permitted Offer. Upon
consummation of any such transaction contemplated by this Section 13(e), all
Rights hereunder shall expire.
(f) The provisions of this Section 13 shall similarly apply to successive
mergers, consolidations, statutory share exchanges or sale or other transfers.
18
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights otherwise would be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the Closing Price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-thousandth
of a Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-thousandth of a Preferred
Share may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided that if the Company issues depositary receipts pursuant
to any such agreement, such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred Shares represented
by such depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes of this Section
14(b), the current market value of a Preferred Share shall be the Closing Price
of a Preferred Share for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Right expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action.
All rights of action in respect of this Agreement, excepting the rights of
action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Shares), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
Common Shares), may, in such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise the Rights evidenced by such Right Certificate in the manner
provided in such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
19
Section 16. Agreement of Right Holders.
Every holder of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the principal
office of the Rights Agent, duly endorsed or accompanied by a proper instrument
of transfer;
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement or the Rights to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided, however, that the Company must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on demand of
the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The
20
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any loss, liability, or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises. The Company's reimbursement and
indemnification obligations described in this Section 18(a) shall survive the
termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Preferred Shares (or for depositary receipts evidencing
fractional interests in Preferred Shares) or Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or corporate trust business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
21
Section 20. Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman, any Vice
Chairman, the President, any Executive Vice President, any Vice President, the
Treasurer, the Secretary or the Controller of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the Rights
Agent for any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor shall it
be responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in
the terms of the Rights (including the manner, method or amount thereof)
provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after receipt
of actual notice from the Company stating that a change or adjustment is
required and specifying the manner and amount thereof); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
22
(g) The Rights Agents is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Vice Chairman, the President, any
Executive Vice President, any Vice President, the Secretary, the Treasurer or
the Controller of the Company, and to apply to such officers for advice of
instructions in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with instructions of
any such officer or for any delay in acting while waiting for those
instructions.
(h) The Rights Agent and any shareholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties under this Agreement or in the exercise of its
rights or powers if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the form of assignment or form of election to
purchase, as the case may be, has either not been duly completed and executed or
indicates an affirmative response to enumerated clause (1) and/or (2) on the
reverse side of the applicable Right Certificate, the Rights Agent shall not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
Section 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of the Common Shares or Preferred Shares by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then
23
the Rights Agent or the registered holder of any Right Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of New Jersey or New York (or of any other state
of the United States so long as such corporation is authorized to do business as
a banking institution in the State of New Jersey or New York), in good standing,
having an office in the State of New Jersey or New York, which is authorized
under such laws to exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state authority and which
has or is a subsidiary of a corporation which has at the time of its appointment
as Rights Agent a combined capital and surplus of at least $100 million or (b)
an affiliate of a corporation described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option, at any time
prior to such time as any Person becomes an Acquiring Person, redeem all but not
less than all of the then outstanding Rights at a redemption price of $.0l per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement (such redemption
price being hereinafter referred to as the "Redemption Price"). The Company may,
at its option, pay the Redemption Price in cash, Common Shares of the Company
(based on the Current Per Share Market Price of the Common Shares at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors. The redemption of the Rights by the Board of Directors may be made
effective at such time and on such basis and with such conditions as the Board
of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights pursuant to paragraph (a) of this Section
23, and without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall
24
promptly give public notice of any such redemption; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24 hereof, and
other than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at any time
after any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common
Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the Date of this Agreement (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person) becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of outstanding and
exercisable Rights (other than Rights which have become void pursuant to the
provisions of Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
authorized but unissued and unreserved to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common Shares for issuance
upon exchange of the Rights. In the event the Company shall, after good faith
effort, be unable to take all such action as may be necessary to authorize
25
such additional Common Shares, the Company shall substitute, for each Common
Share that otherwise would be issuable upon exchange of a Right, a number of
Preferred Shares or fraction thereof such that the Current Per Share Market
Price of one Preferred Share multiplied by such number or fraction is equal to
the Current Per Share Market Price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares. In lieu
of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
Section 24(d), the current market value of a whole Common Share shall be the
Closing Price of a Common Share for the Trading Day immediately prior to the
date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of its Preferred Shares
rights or warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect any statutory share exchange with the
outstanding Common Shares of the Company being exchanged for stock or other
securities of any other corporation or cash or other property, (vi) to effect
the liquidation, dissolution or winding up of the Company, or (vii) to declare
or pay any dividend on the Common Shares payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common Shares),
then, in each such case, the Company shall give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 10 days prior to the record date
determining holders of the Preferred Shares for purposes of such action, and in
case of any such other action, at least 10 days prior to the date of the taking
of such proposed action or the date of participation therein by the holders of
the Common Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall
26
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
Enzon, Inc.
20 Kingsbridge Road
Piscataway, NJ 08854-3998
Attention: General Counsel
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
17 Battery Place
New York, NY 10004
Attention: Compliance Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if published by press release and promptly thereafter
is filed with the Securities and Exchange Commission on a Current Report on Form
8-K, or if sent by first-class mail, postage prepaid, addressed to such holder
at the address of such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments.
The Company may from time to time supplement or amend this Agreement
without the approval of any holders of Right Certificates in order (i) to extend
the Final Expiration Date or, provided that at the time of such amendment no
Person has become an Acquiring Person, the period during which the Rights may be
redeemed, (ii) to cure any ambiguity, to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions of this Agreement, (iii) prior to the time that any Person becomes an
Acquiring Person, to otherwise change or supplement any provision in this
Agreement in any manner which the Company may deem necessary or desirable, or
(iv) subject to clause (i) of this Section 27, from and after the time that any
Person becomes an Acquiring Person, to otherwise change or supplement any
provision in this Agreement in any manner which the Company may deem necessary
or desirable and which shall not adversely affect the interests of the holders
of Right Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person).
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit
of the Company or the Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
27
Section 29. Benefits of this Agreement; No Liability.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares). Notwithstanding anything to the contrary in this
Agreement, none of the Company, the Rights Agent or the Board of Directors shall
have any liability to, nor be subject to any claim of, any holder of the Common
Shares of the Company or the Rights by reason of any failure of the Company to
comply with the provisions of this Agreement prior to the time the Board of
Directors has actual knowledge of the existence of an Acquiring Person or during
the period allowed for a potentially inadvertent Acquiring Person to divest
himself or itself of Common Shares of the Company as provided in Section 1
hereof or by reason of the failure of any such potentially inadvertent Acquiring
Person to accomplish such divestiture.
Section 30. Severability.
If any term, provision, covenant or restriction of this Agreement is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
Section 31. Governing Law.
This Agreement and each Right Certificate issued hereunder shall be deemed
to be a contract made under the laws of the State of New Jersey and for all
purposes shall be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely within such
State.
Section 32. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 33. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
constriction of any of the provisions hereof.
28
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
ENZON, INC.
Attest:
By /s/ Kenneth J. Zuerblis By /s/ Arthur J. Higgins
------------------------- ----------------------------
Kenneth J. Zuerblis Arthur J. Higgins
Its Vice President, Finance Its President and Chief Executive
and Chief Financial Officer Officer
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY, Transfer Agent
Attest:
By /s/ Thomas Jennings By /s/ William F. Seegraber
------------------------- ----------------------------
Thomas Jennings William F. Seegraber
Its Asst. Secretary Its Vice President
29
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES B PREFERRED STOCK
OF
ENZON, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Enzon, Inc. (the "Corporation"), a corporation organized and existing
under the laws of the State of Delaware, does hereby certify that, pursuant to
the authority conferred on the Board of Directors of the Corporation by the
Certificate of Incorporation, as amended, of the Corporation and in accordance
with Section 151 of the General Corporation Law of the State of Delaware, the
Board of Directors of the Corporation adopted the following resolution amending
and restating the preferences and rights of its series of 600,000 shares of
Preferred Stock, no shares of which have been issued, designated as "Series B
Preferred Stock."
RESOLVED, that pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of its Certificate of
Incorporation, as amended, the preferences and rights of the series of Preferred
Stock of the Corporation, designated as "Series B Preferred Stock," be and are
hereby amended and restated in their entirety, and that the designation and
amount of such series and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof are as follows:
(a) Designation and Amount.
The shares of such series shall be designated as "Series B Preferred
Stock" (the "Series B Preferred Stock") and the number of shares constituting
the Series B Preferred Stock shall be six hundred thousand (600,000). Such
number of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
Series B Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series B
Preferred Stock.
(b) Dividends and Distributions.
(i) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and
superior to the Series B Preferred Stock with respect to dividends,
the holders of shares of Series B Preferred Stock, in preference to
the holders of Common Stock, par value $.01 (the "Common Stock"), of
the Corporation, and of any other junior stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of
funds
legally available for the purpose, quarterly dividends payable in
cash on the first day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a
share of Series B Preferred Stock, in an amount per share (rounded
to the nearest rent) equal to the greater of (a) $1.00 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of
any share or fraction of a share of Series B Preferred Stock. In the
event the Corporation shall at any time after June 3, 2002, declare
or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares
of Series B Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(ii) The Corporation shall declare a dividend or distribution
on the Series B Preferred Stock as provided in paragraph (A) of this
Section immediately after it declares a dividend or distribution on
the Common Stock (other than a dividend payable in shares of Common
Stock or a subdivision of the outstanding Common Stock); provided
that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share on the Series B
Preferred Stock shall nevertheless be payable, out of funds legally
available for such purpose, on such subsequent Quarterly Dividend
Payment Date.
(iii) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which
case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series B Preferred Stock
entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares
A-2
of Series B Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series B
Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof.
(c) Voting Rights.
The holders of shares of Series B Preferred Stock shall have the following
voting rights:
(i) Subject to the provision for adjustment hereinafter set
forth, each share of Series B Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the Corporation
shall at any time after June 3, 2002, declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares
of Series B Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction,
the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(ii) Except as otherwise provided herein, in any other
Certificate of Designation creating a series of preferred stock or
any similar stock, or by law, the holders of shares of Series B
Preferred Stock and the holders of shares of Common Stock and any
other capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation.
(iii) Except as set forth herein, or as otherwise provided by
law, holders of Series B Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
(d) Certain Restrictions.
(i) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on
shares of Series B Preferred Stock outstanding shall have been paid
in full, the Corporation shall not:
A-3
(1) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock;
(2) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(3) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series B Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon dissolution, liquidation or winding up) to the Series B
Preferred Stock; or
(4) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or any
shares of stock ranking on a parity with the Series B
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any
shares of stock of the Corporation unless the Corporation could,
under paragraph (A) of this Section 4, purchase or otherwise acquire
such shares at such time and in such manner.
(e) Reacquired Shares.
Any shares of Series B Preferred Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of preferred stock and may be reissued as
part of a new series of preferred stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of Incorporation,
as amended, or in any other certificate of designation creating a series of
preferred stock or any similar stock or as otherwise required by law.
(f) Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock unless, prior thereto, the holders of shares of Series
B Preferred Stock shall have received the greater of (i) $1,000 per share, plus
an amount equal to
A-4
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment, or (ii) an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock, or (2) to the holders of shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except distributions made ratably on the Series B Preferred
Stock and all such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time after June 3, 2002,
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event under clause (1)(ii) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(g) Consolidation, Merger, Etc.
In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series B Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Corporation shall at any
time after June 3, 2002, declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with respect to
the exchange or change of shares of Series B Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(h) No Redemption.
The shares of Series B Preferred Stock shall not be redeemable.
(i) Rank.
The Series B Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Corporation's preferred stock.
(j) Fractional Shares.
Series B Preferred Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares, to receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series B Preferred Stock.
A-5
(k) Amendment.
The Certificate of Incorporation, as amended of the Corporation shall not
be amended in any manner which would materially alter or change the powers,
preferences or rights of the Series B Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of Series B Preferred Stock, voting together as a single
class.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Designation, Preferences and Rights on behalf of the Corporation this ___ day of
May, 2002.
----------------------------------
Arthur J. Higgins
President, Chief Executive Officer
A-6
Exhibit B
FORM OF RIGHT CERTIFICATE
Certificate No. R- _______________ Rights
NOT EXERCISABLE AFTER MAY 16, 2012 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT (SUBJECT TO
ADJUSTMENT) AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY A PERSON WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND SUBSEQUENT HOLDERS OF SUCH RIGHTS MAY BECOME NULL AND
VOID.
RIGHT CERTIFICATE
ENZON, INC.
This certifies that _________________________________, or registered
assigns, is the registered owner of the number of rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of May 17, 2002 (the "Rights
Agreement"), between Enzon, Inc., a Delaware corporation (the "Company"), and
Continental Stock Transfer & Trust Company (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., New York, New York
time, on May 16, 2012, at the office or offices of the Rights Agent designated
for such purpose, or of its successor as Rights Agent, one one-thousandth of a
fully paid nonassessable share of Series B Preferred Stock, par value $0.01 per
share (the "Preferred Shares"), of the Company, at a purchase price of $190.00
(the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of June 3, 2002, based on the Preferred Shares as
constituted at such date. As provided in the Rights Agreement, the Purchase
Price and the number of one one-thousandths of a Preferred Share which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates (which
limitations of rights include the suspension of the exercisability of the Rights
under certain circumstances
specified in the Rights Agreement). Copies of the Rights Agreement are on file
at the principal executive offices of the Company and the above-mentioned
office(s) of the Rights Agent and will be mailed without charge by the Company
or the Rights Agent to the holder of this certificate promptly following receipt
by the Company or the Rights Agent of a written request therefor.
If any Person or group of affiliated or associated Persons becomes an
Acquiring Person, any Rights evidenced by this Right Certificate that are or
were acquired or beneficially owned by any Acquiring Person (or any Associate or
Affiliate, as such terms are defined in the Rights Agreement, of such Acquiring
Person) shall be void and any holder of such Rights shall thereafter have no
right to exercise such Rights; and any Right Certificates delivered to the
Rights Agent for transfer to an Acquiring Person (or any Associate or Affiliate
of such Acquiring Person) whose Rights would be void pursuant to this sentence
shall be cancelled.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Preferred Shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may, but are not required to, be redeemed by the Company at
a redemption price of $.01 per Right, subject to adjustment as provided in the
Rights Agreement, payable in cash, Common Shares (as such term is defined in the
Rights Agreement) or any other form of consideration deemed appropriate by the
Board of Directors, and (ii) may, but are not required to, be exchanged by the
Company in whole or in part for Common Shares.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
B-2
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the manual or facsimile signature of the proper officer of the
Company.
Dated as of_____________
Enzon, Inc.
By
-----------------------------------
Its
----------------------------------
Countersigned
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY, as Rights Agent
By
----------------------------------
Its
---------------------------------
B-3
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _________________________________________ hereby sells,
assigns and transfers unto (Please print name and address of transferee)
______________________________________________________________________ this
Right Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint____________ Attorney, to transfer the
within Right Certificate on the books of the within-named Company, with full
power of substitution.
Please insert social security
number, taxpayer identification
number or other identifying number: ___________________
Dated:__________, 20__
------------------------------------
Signature
Signature Guaranteed:
- ------------------------------------
Signatures must be guaranteed.
B-4
Form of Reverse Side of Right Certificate--continued
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of
its knowledge) by checking the appropriate boxes that:
(A) this Right Certificate
[ ] is
or
[ ] is not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement); and
(B) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
------------------------------------
Signature
NOTICE
The signature of the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Right Certificate in every
particular, with out alteration or enlargement or any change whatsoever.
B-5
Form of Reverse Side of Right Certificate--continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right Certificate)
To Enzon, Inc.:
The undersigned hereby irrevocably elects to exercise__________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
number, taxpayer identification
number or other identifying number:______________________
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security
taxpayer identification number
or other identifying number: _____________________
- ------------------------------------------------------------------------------
(Please print name and address)
- ------------------------------------------------------------------------------
Dated:________, 20__
------------------------------------
Signature
Signature Guaranteed:
- --------------------------------
Signatures must be guaranteed.
B-6
Form of Reverse Side of Right Certificate--continued
CERTIFICATE
The undersigned hereby certifies (after due inquiry and to the best of its
knowledge) by checking the appropriate boxes that:
(C) this Right Certificate
[ ] is
or
[ ] is not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement); and
(D) the undersigned
[ ] did
or
[ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who is,
was or subsequently became an Acquiring Person or an Affiliate or Associate of
an Acquiring Person.
------------------------------------
Signature
NOTICE
The signature of the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, with out alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the foregoing Assignment
or Election to Purchase, as the case may be, is not completed, the Company and
the Rights Agent will deem the beneficial owner of the Rights evidenced by this
Rights Certificate to be an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.
B-7
Exhibit C
ENZON, INC.
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 17, 2002 the Board of Directors of Enzon, Inc. (the "Company"),
declared a dividend of one preferred share purchase right (a "Right") per share
for each outstanding share of Common Stock, par value $0.01 (the "Common
Shares"), of the Company. The dividend will be payable on June 3, 2002 (the
"Record Date") to holders of record of the Common Shares on that date.
Each Right entitles the registered holder to purchase from the Company one
one-thousandth of a share of Series B Preferred Stock, par value $0.01 (the
"Preferred Shares"), of the Company at a price of $190.00 per one-thousandth of
a Preferred Share (the "Purchase Price"), subject to adjustment; provided,
however, under the circumstances described below, holders will receive Common
Shares instead of Preferred Shares. The description and terms of the Rights are
set forth in the Rights Agreement, dated as of May 17, 2002 (the "Rights
Agreement"), between the Company and Continental Stock Transfer & Trust Company,
as Rights Agent (the "Rights Agent"). Capitalized terms used herein but not
defined shall have the meaning assigned to them in the Rights Agreement.
Initially, the Rights will attach to all certificates representing Common
Shares then outstanding and no separate Right Certificates (as defined herein)
will be distributed. The Rights will separate from the Common Shares, and a
Distribution Date for the Rights will occur upon the earlier of:
(2) the close of business on the day following a public
announcement that a person or group of affiliated or
associated persons has become an "Acquiring Person" (i.e., has
become, subject to certain exceptions, the Beneficial Owner of
15% (the "Threshold Percentage") or more of the outstanding
Common Shares); and
(3) the close of business on the day following the
commencement or public announcement of the intention to
commence a tender offer or exchange offer, the consummation of
which would result in a person or group of affiliated or
associated persons becoming, subject to certain exceptions,
the Beneficial Owner of the Threshold Percentage or more of
the outstanding Common Shares (or such later date as may be
determined by the Board of Directors of the Company prior to a
person or group of affiliated or associated persons becoming
an Acquiring Person).
A Person will not be an Acquiring Person if the Board of Directors of the
Company determines that such Person became the Beneficial Owner of the Threshold
Percentage or more of the Common Shares of the Company then outstanding
inadvertently and such Person divests itself, within a reasonable period of time
as determined by the Board of Directors, of a sufficient number of Common Shares
so that such Person is no longer the Beneficial Owner of the Threshold
Percentage or more of the Common Shares of the Company then outstanding.
Until the Distribution Date,
(i) the Rights will be evidenced by the Common Share certificates
and will be transferred with and only with the Common Shares,
(ii) new Common Share certificates issued after the Record Date upon
transfer or new issuance of the Common Shares will contain a notation
incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any Common Share certificate,
even without such notation or a copy of the Summary of Rights distributed
to stockholders of record as of the Record Date, also will constitute the
transfer of the Rights associated with the Common Shares represented by
such certificate.
As promptly as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date, and such separate Right Certificates alone will evidence the
Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on May 16, 2012, unless extended or earlier redeemed or exchanged by
the Company as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable upon exercise of the Rights, are subject to
adjustment from time to time to prevent dilution:
(i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Shares,
(ii) upon the grant to holders of the Preferred Shares of certain
rights, options or warrants to subscribe for or purchase Preferred Shares
or securities convertible into Preferred Shares or preferred share
equivalents at less than the then current market price of the Preferred
Shares, or
(iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular periodic cash
dividends or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those described in clause (ii) of this
paragraph).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
the Purchase Price. No fraction of a Preferred Share will be issued (other than
fractional shares which are integral multiples of one one-thousandth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depositary receipts) if in lieu thereof, a payment in cash is made based on the
closing price (prorated for the fraction) of a Preferred Share on the last
trading date prior to the date of exercise.
The number of outstanding Rights and the number of one one-thousandths of
a Preferred Share issuable upon exercise of each Right also are subject to
adjustment in the event of a stock
C-2
split of the Common Shares, a stock dividend on the Common Shares payable in
Common Shares, or subdivisions, consolidations or combinations of the Common
Shares occurring, in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of the greater of (a) $1.00 or (b) subject to the
provision for adjustment, 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions declared on the Common Shares
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of the Preferred Shares. In the event of
liquidation, the holders of the Preferred Shares would be entitled to receive a
preferential liquidation payment of the greater of (i) $1,000 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment, or (ii) an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
Common Shares, or to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with the
Preferred Shares. Each Preferred Share will have 1,000 votes, voting together
with the Common Shares. Finally, in the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 1,000 times the amount received per Common Share.
These rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-thousandth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
If any person or group of affiliated or associated persons becomes an
Acquiring Person (unless the event by which such Person became an Acquiring
Person is a Permitted Offer described in the following paragraph), then each
holder of a Right, other than Rights beneficially owned by the Acquiring Person
and certain transferees thereof (which will thereafter be void), will thereafter
have the right to receive, upon exercise thereof at the then current Purchase
Price of the Right, that number of Common Shares having a market value of two
times such Purchase Price of the Right, subject to certain possible adjustments.
If, at any time after there is an Acquiring Person, the Company is
acquired in certain mergers or other business combination transactions (other
than certain transactions with a subsidiary of the Company or a transaction with
a person who acquired Common Shares through a tender offer or exchange offer for
all outstanding Common Shares of the Company determined by the Board of
Directors to be in the best interests of the Company and its stockholders (a
"Permitted Offer") or 50% or more of the assets or earning power of the Company
and its subsidiaries (taken as a whole) are sold, each holder of a Right (other
than Rights which have become void under the terms of the Rights Agreement) will
thereafter have the right to receive, upon exercise thereof at the then current
Purchase Price of the Right, that number of Common Shares of the acquiring
company (or, in certain cases, one of its affiliates) having a market value of
two times such Purchase Price of the Right.
C-3
In certain events specified in the Rights Agreement, the Company is
permitted temporarily to suspend the exercisability of the Rights.
At any time after a person or group of affiliated or associated persons
becomes an Acquiring Person, and prior to the acquisition by a person or group
of affiliated or associated persons of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange all or part of the
Rights (other than Rights which have become void under the terms of the Rights
Agreement) for Common Shares at an exchange ratio of one Common Share per Right,
subject to adjustment.
At any time prior to such time as any Person becomes an Acquiring Person,
the Board of Directors of the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, subject to adjustment, payable in cash,
Common Shares or any other form of consideration deemed appropriate by the Board
of Directors. The period of time during which the Rights may be redeemed may be
extended if no person has become an Acquiring Person. The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including without limitation, the right
to vote or to receive dividends. In addition, the Company will have no liability
to holders of Rights or of the Common Shares for any failure to comply with the
Rights Agreement during any period the Board of Directors is unaware of the
existence of the Acquiring Person.
A copy of the Rights Agreement, dated as of May 17, 2002, has been filed
with the Securities and Exchange Commission as an exhibit to Form 8-A dated May
17, 2002. A copy of the Rights Agreement is available free of charge from the
Company at the following address: Enzon, Inc., 20 Kingsbridge Road, Piscataway,
NJ 08854-3998, Attention: General Counsel. This summary does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated in this summary by reference.
C-4
Exhibit 99.1
PRESS RELEASE Contact: Kenneth J. Zuerblis
Vice President, Finance & CFO
732-980-4717
[Noonan/Russo Communications, Inc.
212-696-4455
Hala Bashir, Media Relations x356]
ENZON, INC. ADOPTS STOCKHOLDERS' RIGHTS PLAN
Piscataway, New Jersey; May 22, 2002 - Enzon, Inc. (Nasdaq: ENZN) announced
today that its board of directors adopted a rights plan under which its
stockholders of record on June 3, 2002 will receive a dividend payable in
preferred stock purchase rights.
The plan is designed to ensure that stockholders realize fair value and equal
treatment in the event of an attempted takeover of the company and to protect
the company and its stockholders against coercive takeover tactics. The plan was
not adopted in response to any efforts to acquire the company, and Enzon is not
aware of any such efforts. Each right will initially entitle stockholders to
purchase a fractional share of Enzon's preferred stock for $190. However, the
rights are not immediately exercisable and will become exercisable only upon the
occurrence of certain events. If a person or group acquires, or announces a
tender or exchange offer that would result in the acquisition of, 15 percent or
more of Enzon's common stock while the stockholder rights plan remains in place,
then, unless (1) the rights are redeemed by Enzon for $0.01 per right, or (2)
the board of directors determines that a tender or exchange offer for all of the
outstanding common stock of the company is in the best interest of the company
and the stockholders, then the rights will become exercisable by all rights
holders except the acquiring person or group for (1) shares of Enzon or (2) in
certain circumstances, shares of the third party acquirer, each having a value
of twice the right's then-current exercise price. Further details of the plan
are outlined in a letter that will be mailed to stockholders following the
record date.
Additionally, Enzon's board of directors approved and adopted several amendments
to Enzon's bylaws to provide for: (a) advance notice of stockholder proposals
and stockholder nominations for the election of directors; (b) a mandate that
the board of directors determine a record date for any action taken by a written
consent of the stockholders; and (c) verification of stockholder consents.
Except for the historical information herein, the matters discussed in this new
release include forward-looking statements that may involve a number of risks
and uncertainties. Actual results may vary significantly based upon a number of
factors which are described in the Company's Form 10-K, Form 10-K/A, Form 10-Qs
and Form 8-Ks on file with the SEC, including without limitation, risks in
obtaining and maintaining regulatory approval for indications and expanded
indications, risks that Enzon will not outperform the sector, market acceptance
of and continuing demand for Enzon's products and the impact of competitive
products and pricing.