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Rights Agreement

 

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Title:

Rights Agreement

Entities:

American Medical Security Group Inc.; Blue Cross & Blue Shield United of Wisconsin; Quarles & Brady LLP

Date:

2001

Size:

Preview shows 10KB of 174KB total

Price:

$55

ID:

#301616

 

 

► Corporate ► Rights Agreements
► Insurance ► Accident & Health Insurance
► Services ► Legal

 

 

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                                       AND



FIRSTAR BANK, N.A.
RIGHTS AGENT


RIGHTS AGREEMENT


DATED AS OF AUGUST 9, 2001



{PAGE}



TABLE OF CONTENTS


Section 1. CERTAIN DEFINITIONS 1

Section 2. APPOINTMENT OF RIGHTS AGENT 5

Section 3. ISSUANCE OF RIGHTS CERTIFICATES. 5

Section 4. FORM OF RIGHTS CERTIFICATES 7

Section 5. COUNTERSIGNATURE AND REGISTRATION 7

Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES 7

Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS 8

Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES 10

Section 9. AVAILABILITY OF PREFERRED SHARES 11

Section 10. PREFERRED SHARES RECORD DATE 12

Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS 12

Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES 20

Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER 20

Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 22

Section 15. RIGHTS OF ACTION 24

Section 16 AGREEMENT OF RIGHT HOLDERS 24

Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER 25

Section 18. CONCERNING THE RIGHTS AGENT 25

Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT 25

Section 20. DUTIES OF RIGHTS AGENT 26

i


Section 21. CHANGE OF RIGHTS AGENT 27

Section 22. ISSUANCE OF NEW RIGHTS CERTIFICATES 28

Section 23. REDEMPTION 28

Section 24. EXCHANGE 29

Section 25. NOTICE OF CERTAIN EVENTS 30

Section 26. NOTICES 31

Section 27. SUPPLEMENTS AND AMENDMENTS 32

Section 28. SUCCESSORS 32

Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. 32

Section 30. BENEFITS OF THIS AGREEMENT 32

Section 31. SEVERABILITY. 33

Section 32. GOVERNING LAW 33

Section 33. COUNTERPARTS 33

Section 34. DESCRIPTIVE HEADINGS 33


ii
{PAGE}


RIGHTS AGREEMENT


Agreement, dated as of August 9, 2001, between American Medical Security
Group, Inc., a Wisconsin corporation (the "Company"), and Firstar Bank, N.A.
(the "Rights Agent").

On August 9, 2001 (the "Rights Dividend Declaration Date"), 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 August 20, 2001 (the "Record Date"), each Right
representing the right to purchase one ten-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 and the
Final Expiration Date (as such terms are hereinafter defined).

Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:

Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:

(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall become the Beneficial Owner
(as such term is hereinafter defined) of 12% or more of the Common Shares of the
Company then outstanding after the date hereof. Notwithstanding the foregoing,
the term "Acquiring Person" shall not include (i) the Company; (ii) any
Subsidiary (as such term is hereinafter defined) of the Company; (iii) any
employee benefit plan or employee stock ownership plan of the Company or any
Subsidiary of the Company; (iv) any entity holding Common Shares for or pursuant
to the terms of any such plan; (v) Blue Cross & Blue Shield United of Wisconsin
("BCBS") and its Affiliates and Associates, provided that from time to time
after the date hereof BCBS and its Affiliates and Associates do not increase the
aggregate number of Common Shares over which such Persons have beneficial
ownership as of any such time (other than Common Shares the beneficial ownership
of which was acquired through (A) any dividend or distribution of any Common
Shares or any Company securities convertible or exchangeable into Common Shares
or any stock split or (B) any grants of Common Shares or any Company securities
exercisable for Common Shares (or the exercise of any such securities for Common
Shares) under any benefit plan of the Company generally available for directors
of the Company), PROVIDED, HOWEVER, that nothing in this clause (v) shall
prohibit BCBS and its Affiliates and Associates from collectively beneficially
owning less than 12% of the Common Shares of the Company then outstanding; or
(vi) any Person who or which together with all Affiliates and Associates of such
Person shall become an "Acquiring Person" as the result of an acquisition of
Common Shares by the Company which, by reducing the number of shares
outstanding, increases the proportional number of shares beneficially owned by
such

1


Person together with all Affiliates and Associates of such Person to 12% or more
of the Common Shares of the Company then outstanding, PROVIDED, HOWEVER, that if
a Person shall become the Beneficial Owner of 12% or more of the Common Shares
of the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person shall be deemed to
be an "Acquiring Person." Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of Common Shares so that
such Person would no longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed
to be an "Acquiring Person" for any purposes of this Agreement.

(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") as in effect on
the date of this Agreement, but shall not include the Company, any Subsidiary of
or other Person controlled by the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company or any Person appointed as trustee
by the Company or such Subsidiary pursuant to the terms of any such plan in the
Person's capacity as trustee.

 

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