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EXHIBIT 99.1
AMERICAN BUSINESS PRODUCTS
and
EQUISERVE TRUST COMPANY, N.A.
Rights Agent
--------------------------
Rights Agreement
Dated as of May 5, 1999
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TABLE OF CONTENTS
Section 1. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................7
Section 3. Issue of Rights Certificates....................................................................8
Section 4. Form of Rights Certificates.....................................................................9
Section 5. Countersignature and Registration..............................................................11
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.......................................11
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..................................12
Section 8. Cancellation and Destruction of Rights Certificates. .........................................14
Section 9. Securities Laws Compliance.....................................................................15
Section 10. Common Stock Record Date.......................................................................16
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights...............................................................................16
Section 12. Certificate of Adjusted Number of Shares. ....................................................24
Section 13. Consolidation, Merger, Share Exchange or Sale or Transfer of
Assets or Earning Power........................................................................24
Section 14. Fractional Rights and Fractional Shares........................................................28
Section 15. Rights of Action...............................................................................29
Section 16. Agreement of Rights Holders....................................................................29
Section 17. Rights Certificate Holder Not Deemed a Shareholder.............................................30
Section 18. Concerning the Rights Agent....................................................................30
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................30
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Section 20. Duties of Rights Agent.........................................................................31
Section 21. Change of Rights Agent.........................................................................33
Section 22. Issuance of New Rights Certificates............................................................34
Section 23. Redemption and Termination.....................................................................34
Section 24. Exchange.......................................................................................36
Section 25. Notice of Certain Events.......................................................................37
Section 26. Notices........................................................................................38
Section 27. Supplements and Amendments.....................................................................39
Section 28. Successors.....................................................................................40
Section 29. Determinations and Actions by the Board of Directors, etc......................................40
Section 30. Benefits of this Agreement.....................................................................41
Section 31. 1989 Rights Agreement..........................................................................41
Section 32. Severability...................................................................................41
Section 33. Governing Law..................................................................................41
Section 34. Counterparts...................................................................................42
Section 35. Descriptive Headings...........................................................................42
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of May 5, 1999 (the "Agreement"), by and
between AMERICAN BUSINESS PRODUCTS, INC., a Georgia corporation (the "Company"),
and EQUISERVE TRUST COMPANY, N.A., a national banking association (the "Rights
Agent").
W I T N E S S E T H
WHEREAS, on May 5, 1999 (the "Rights Dividend Declaration Date"), the
Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of Common Stock, (as hereinafter
defined) of the Company outstanding at the Close of Business on May 17, 1999
(the "Record Date"), and has authorized the issuance of one Right (as such
number may be adjusted pursuant to the provisions of Section 11(m) hereof) for
each share of Common Stock of the Company issued (whether originally issued or
delivered from the Company's treasury) between the Record Date and the
Distribution Date (as hereinafter defined), each right initially representing
the right to purchase six shares of Common Stock of the Company upon the terms
and subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall, after the
Rights Dividend Declaration Date, become the Beneficial Owner of 30% or more of
the shares of Common Stock then outstanding, but shall not include the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan.
Notwithstanding the foregoing, no Person shall become an Acquiring Person as the
result of an acquisition of shares of Common Stock by the Company or a
recapitalization which, by reducing the number of shares of Common Stock
outstanding, increases the proportionate number of shares Beneficially Owned by
such Person to 30% or more of the shares of Common Stock of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 30% or more of the shares of Common Stock of the Company by reason of
share purchases or a recapitalization by the Company and shall, after such share
purchases or recapitalization by the Company, become the Beneficial Owner of an
additional number of shares of Common Stock of the Company equal to or in excess
of 1% of the then outstanding number of shares of Common Stock of the Company,
then such Person shall be deemed to be an Acquiring Person.
(b) "Act" shall mean the Securities Act of 1933.
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(c) "Adverse Person" shall mean any Person declared to be an Adverse
Person by the Board of Directors upon a determination that the criteria set
forth in Section 11(a)(ii)(B) apply to such Person.
(d) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement (the "Exchange
Act").
(e) "Associate" shall mean:
(i) any corporation, organization, or entity or parent or
subsidiary of such corporation, organization, or entity of which a
Person is an officer, director, partner, or member or is, directly or
indirectly, the Beneficial Owner of 10 percent or more of any class of
equity securities or equity interests,
(ii) any trust or other estate in which a Person has a
beneficial interest of 10 percent or more or as to which such Person
serves as trustee or in a similar fiduciary capacity, and
(iii) any brother or sister (whether by whole or half blood),
ancestor, lineal descendant or spouse of a Person, or any such relative
of such spouse.
(f) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "Beneficially Own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own:"
(A) securities acquired by participation in good
faith in a firm commitment underwriting by a Person
engaged in business as an underwriter of securities
until the expiration of forty days after the date of
such acquisition, or
(B) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, or
(C) securities issuable upon exercise of Rights at
any time prior to the occurrence of a "Triggering
Event" (as hereinafter defined in this section), or
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(D) securities issuable upon exercise of Rights from
and after the occurrence of a "Triggering Event" (as
hereinafter defined in this section) which Rights
were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution
Date (as hereinafter defined in Section 3(a)) or
pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(f)
hereof in connection with an adjustment made with
respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or dispose
of or has "Beneficial Ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including pursuant to any agreement, arrangement or understanding,
whether or not in writing; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "Beneficially Own," any
security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding:
(A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the
applicable provisions of the General Rules and
Regulations under the Exchange Act, and
(B) is not also then reportable by such Person 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 (or any Affiliate or Associate thereof) with which
such Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of
this paragraph (f)) or disposing of any voting securities of the
Company.
(g) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the Commonwealth of Massachusetts are
authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date shall mean 5:00 p.m., Eastern
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 p.m., Eastern time, on the next succeeding Business Day.
(i) "Common Stock" shall mean the common stock, par value $2.00 per
share, of the Company into which such shares are reclassified, or for which such
shares are exchanged, except that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock of such Person with
the greatest voting power, or the equity securities or other equity interest
having power to control or direct the management, of such Person as may from
time
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to time be designated by the Continuing Directors of the Company (as such term
is hereinafter defined) in this section.
(j) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(b)(ii)(C) hereof.
(k) "Continuing Director" shall mean:
(i) any member of the Board of Directors of the Company,
while such Person is a member of the Board, who is not an Acquiring
Person or Adverse Person, or an Affiliate or Associate of an Acquiring
Person or Adverse Person, or a representative of an Acquiring Person or
Adverse Person or of any such Affiliate or Associate, and was a member
of the Board prior to the date of this Agreement, or
(ii) any Person who subsequently becomes a member of the
Board, while such Person is a member of the Board, who is not an
Acquiring Person or Adverse Person , or an Affiliate of Associate of an
Acquiring Person or Adverse Person, or a representative of an Acquiring
Person or Adverse Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing Directors.
(l) "Current Market Price" per share of Common Stock on any date
shall mean the average of the daily closing prices per share of such Common
Stock for the thirty (30) consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, and for purposes of computations made
pursuant to Section 11(b) hereof, the Current Market Price per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event that the
Current Market Price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of:
(i) a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities convertible into shares of
such Common Stock (other than the Rights), or
(ii) any subdivision, combination or reclassification of such
Common Stock, and prior to the expiration of the requisite thirty (30)
Trading Days or ten (10) Trading Days period, as set forth above, after
the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification,
then, and in each such case, the Current Market Price shall be properly adjusted
to take into account ex-dividend trading. The closing price for each day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported
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in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national securities
exchange, 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 Dealers, Inc. Automated Quotation System
("Nasdaq") or such other system then in use, or, if on any such date the shares
of Common Stock are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good faith by the Board
of Directors of the Company shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to trading
on any national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, Current Market Price per share shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(m) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(n) "Exchange Act" shall have the meaning set forth in Section 1(d)
hereof.
(o) "Exempt Person" shall mean the Company, any Subsidiary (as such
term is hereinafter defined) of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any entity or trustee holding
Common Stock for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for employees of the
Company or of any Subsidiary of the Company.
(p) "Expiration Date" shall mean the earlier of the time at which the
Rights are redeemed as provided in Section 23 hereof or the "Final Expiration
Date" (as hereinafter defined in this section).
(q) "Final Expiration Date" shall mean the Close of Business on
November 6, 2009.
(r) "Person" shall mean any individual, firm, corporation, partnership,
limited partnership, limited liability company or other entity and shall include
any successor to such firm, corporation, partnership, limited partnership,
limited liability company or other entity.
(s) "Preferred Stock" shall mean the presently authorized but unissued
preferred shares of the Company, having the rights and preferences to be
determined by the Board of Directors, as set forth in Article Fourth of the
Articles of Incorporation of the Company.
(t) "Principal Party" shall mean
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(i) in the case of any transaction described in clauses
(i) or (ii), of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which shares of Common Stock of the
Company are converted in such merger, consolidation, or share exchange
and if no securities are so issued, the Person that is the other party
to such merger, consolidation, or share exchange or, if there is more
than one such Person, the Person the shares of Common Stock of which
have the greatest aggregate market value of the shares outstanding, or
if the Person that is the other party to the merger does not survive
the merger, the Person that does survive the merger (including the
Company if it survives) or the Person resulting from the consolidation;
and
(ii) in the case of any transaction described in clause (iii)
of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such persons that is the issuer of
Common Stock having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case,
(A) if the Common Stock of such Person is not at such
time and has not been continuously over the preceding
twelve (12) month period registered under Section 12
of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common
Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person;
and
(B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common
Stock having the greatest aggregate market value of
shares outstanding; and
(C) if such Person is owned, directly or indirectly,
by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same
Person, the rules set forth in clauses (1) and (2)
above shall apply to each of the owners having an
interest in the venture as if the Person owned by the
joint venture was a subsidiary of both or all of such
joint venturers, and the Principal Party in each case
shall bear the obligation set forth in Section 13 in
the same ratio as its interest in such Person bears
to the total of such interests.
(u) "Purchase Price" shall have the meaning set forth in Section
11(a)(ii) hereof.
(v) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(w) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.
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(x) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(y) "Section 13 Event" shall mean any event described in clauses (i),
(ii) or (iii) of Section 13(a) hereof,
(z) "Spread" shall have the meaning set forth in Section 11(b)(i)(B)
hereof.
(aa) "Stock Acquisition Date" shall mean the earlier of the first date
of public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such or the date on which the Board of Directors determines that a Person is an
Adverse Person pursuant to Section 11(a)(ii)(B) hereof.
(bb) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is Beneficially Owned, directly
or indirectly, by such Person, or otherwise controlled by such Person or any
other entity (including without limitation, partnerships, limited liability
companies, joint ventures and associations) at least a majority of the total
combined voting power of all classes of voting stock or other ownership
interests of which shall be owned by the Person either directly or indirectly.
(cc) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(dd) "Substitution Period" shall have the meaning set forth in Section
11(b) hereof.
(ee) "Trading Day" shall have the meaning set forth in Section 1(l)
hereof.
(ff) "Triggering Event" shall mean any Section 11(a)(ii) Event, or any
Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the Common Stock) in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
Co-Rights Agents as it may deem necessary or desirable, upon ten (10) days'
prior written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such Co-Rights Agent.
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SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) Until the earlier of:
(i) the Close of Business on the twentieth day after the
Stock Acquisition Date (or, if the twentieth day after the Stock
Acquisition Date occurs before the Record Date, the Close of Business
on the Record Date), or
(ii) the Close of Business on the twentieth Business Day
after the date that a tender or exchange offer by any Person (other
than an Exempt Person) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if upon consummation thereof, such Person would be the
Beneficial Owner of 30% or more of the shares of Common Stock then
outstanding, or
(iii) the Close of Business on the Business Day after the
Board of Directors of the Company determines, pursuant to the criteria
set forth in Section 11(a)(ii)(B) hereof, that a Person is an Adverse
Person (the earliest of (i), (ii), and (iii) being herein referred to
as the "Distribution Date"),
(A) the Rights will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the
names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to
be certificates for Rights) and not by separate
certificates, and
(B) the Rights will be transferable only in
connection with the transfer of the underlying shares
of Common Stock (including a transfer to the
Company).
As soon as practicable after the Distribution Date, the Rights Agent will send
by first-class, insured, postage prepaid mail, to each record holder of the
Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit A hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
11(f) hereof, at the time of distribution of the Rights Certificates, the
Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Rights Certificates representing
only whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company
will file a copy of this Agreement, with a copy of a Summary of Rights in
substantially the form attached hereto as Exhibit B (the "Summary of Rights")
with the Securities and Exchange Commission in accordance
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with the applicable federal securities laws. With respect to certificates for
the Common Stock outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates for the Common Stock and the
registered holders of the Common Stock shall also be the registered holders of
the associated Rights. Until the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 1(p) hereof), the transfer
of any certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates representing such shares
of Common Stock shall also be deemed to be certificates for Rights, and shall
bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between AMERICAN
BUSINESS PRODUCTS, INC. (the "Company") and EQUISERVE TRUST COMPANY,
N.A. (the "Rights Agent") dated as of May 5, 1999 (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of
the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Company will mail
to the holder of this certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after receipt of
a written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who is,
was or becomes an Acquiring Person, an Adverse Person or any Affiliate
or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by
any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of:
(i) the Distribution Date or
(ii) the Expiration Date,
the Rights associated with the Common Stock represented by such certificates
shall be evidenced by such certificates alone and registered holders of Common
Stock shall also be the registered holders of the associated Rights, and the
transfer of any of such certificates shall also constitute the transfer of the
Rights associated with the Common Stock represented by such certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit A 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
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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 Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of shares of Common Stock as shall be set forth therein
at the price determined in accordance with Section 11(a)(ii) hereof (the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights Beneficially Owned by any Person known
to be:
(i) an Acquiring Person, an Adverse Person, or any Associate
or Affiliate of an Acquiring Person or an Adverse Person,
(ii) a transferee of an Acquiring Person or an Adverse Person
(or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person or Adverse Person becomes such, or
(iii) a transferee of an Acquiring Person or an Adverse Person
(or of any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either:
(A) a transfer (whether or not for consideration)
from the Acquiring Person or Adverse Person to holders
of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom such Acquiring Person
or Adverse Person has any continuing agreement,
arrangement or understanding regarding the transferred
Rights or
(B) a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or
effect avoidance of Section 7(e) hereof,
and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible)
the following legend, modified as applicable to such Person:
The Rights represented by this Rights Certificate are or were
Beneficially Owned by a Person who was or became an [Acquiring]
[Adverse] Person or an Affiliate or Associate of an [Acquiring]
[Adverse] Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented hereby
may become null and void in the circumstances specified in Section 7(e)
of such Agreement.
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SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the Person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificates may be signed on behalf of the Company by any Person
who, at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such Person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number of shares of Common Stock (or, following a Triggering
Event, other securities, cash or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall have completed
and signed the Certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so
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requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(a), Section 11(b) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Purchase Price with respect to
the total number of shares (or other securities, cash or other assets, as the
case may be) as to which such surrendered Rights are then exercisable, at or
prior to the Expiration Date.
(b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall be determined in the manner provided in Section
11(a)(ii) and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per share of Common Stock (or other shares, securities, cash or other
assets, as the case may be) to be purchased as set forth below and an amount
equal to any applicable transfer tax, the Rights Agent shall, subject to Section
20(j) hereof, thereupon promptly
(i) (A) requisition from any transfer agent of the shares
of Common Stock (or make available, if the Rights
Agent is the transfer agent for such shares)
certificates for the total number of shares of Common
Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply
with all such requests, or
(B) if the Company shall have elected to deposit the
total number of shares of Common Stock issuable upon
exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent
depositary receipts
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representing such number of shares of Common Stock as
are to be purchased (in which case certificates for the
shares of Common Stock represented by such receipts
shall be deposited by the transfer agent with the
depositary agent) and the Company will direct the
depositary agent to comply with such request,
(ii) requisition from the Company the amount of cash, if any,
to be paid in lieu of fractional shares in accordance with Section 14
hereof,
(iii) requisition from the Company the amount of other
securities, cash or assets to be paid in lieu of shares of Common Stock
pursuant to an adjustment required under Section 11(b) hereof,
(iv) after receipt of such certificates, depositary receipts,
other securities, cash or assets, cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
and
(v) after receipt thereof, deliver such cash, if any, to or
upon the order of the registered holder of such Rights Certificate.
The payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(b) hereof) shall be made in cash or by certified bank check, bank
draft or money order payable to the order of the Company. In the event that the
Company is obligated to issue other securities of the Company, pay cash and/or
distribute other property pursuant to Section 11(b) hereof, the Company will
make all arrangements necessary so that such other securities, cash and/or other
property are available for distribution by the Rights Agent, if and when
appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 6 and Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering Event, any Rights
Beneficially Owned by:
(i) an Acquiring Person, an Adverse Person or of an
Associate or Affiliate of an Acquiring Person of an Adverse Person,
(ii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person or Adverse Person becomes such,
or
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(iii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the Acquiring Person or Adverse Person
becoming such and receives such Rights pursuant to either:
(A) a transfer (whether or not for consideration)
from the Acquiring Person or the Adverse Person to
holders of equity interests in such Acquiring Person
or Adverse Person or to any Person with whom the
Acquiring Person or Adverse Person has any continuing
agreement, arrangement or understanding regarding the
transferred Rights or
(B) a transfer which the Board of Directors of the
Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Rights Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or Adverse Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise, and
(ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written
request of the
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Company, destroy such canceled Rights Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. SECURITIES LAWS COMPLIANCE.
(a) The Company shall use its best efforts to:
(i) file, as soon as practicable following the earliest date
after the first occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(b) hereof, or
as soon as is required by law following the Distribution Date, as the
case may be, a registration statement under the Act, with respect to
the securities purchasable upon exercise of the Rights on an
appropriate form,
(ii) cause such registration statement to become effective as
soon as practicable after such filing, and
(iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the earlier of:
(A) the date as of which the Rights are no
longer exercisable for such securities, and
(B) the date of the expiration of the Rights.
The Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities 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 ninety (90) days after the date set
forth in clause (i) of the first sentence of this Section 9(a), the
exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement has been declared effective.
(b) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Common Stock (and, following
the occurrence of a Triggering Event, other securities) delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such shares or
other securities (subject to payment of the Purchase Price), be duly and validly
authorized and issued.
(c) 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
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or delivery of the Rights Certificates and of any certificates for a number of
shares of Common Stock (or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of shares of Common Stock (or other securities, as the case may be) in
respect of a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to issue or deliver
any certificates for a number of shares of Common Stock (or any other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax is due.
SECTION 10. COMMON STOCK RECORD DATE.
Each Person in whose name any certificate for a number of shares of
Common Stock (or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such shares of Common Stock (or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of the Purchase Price (and all applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Common Stock (or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Stock (or other
securities, as the case may be) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.
The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11.
(a) (i) In the event that, at any time after the Close of Business on
the Distribution Date and prior to the Close of Business on the
Expiration Date, the Company shall:
(A) declare or pay any dividend on the Common Stock payable in
shares of Common Stock,
(B) subdivide the outstanding shares of Common Stock,
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(C) combine the outstanding shares of Common Stock into a
smaller number of shares of Common Stock,
(D) issue any shares of its capital stock in a
reclassification of its Common Stock (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof,
then and in such event, the number of shares of Common Stock, the
number and kind of shares of Preferred Stock, other securities or
property, as the case may be, issuable upon the exercise of a Right on
such date shall be proportionately adjusted so that the holder of any
Right exercised on or after such date shall be entitled to receive,
upon the exercise thereof and payment of the Exercise Price, the
aggregate number of shares of Common Stock, the number and kind of
shares of Preferred Stock, other securities or property, as the case
may be, that, if such Right had been exercised immediately prior to
such date and at a time when such Right was exercisable and the
transfer books of the Company were open, such holder would have owned
upon such exercise and would have been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Person (other than an Exempt Person), alone or
together with its Affiliates and Associates, shall, at any
time after the Rights Dividend Declaration Date, become an
Acquiring Person, other than pursuant to any transaction set
forth in Section 13(a) hereof, or pursuant to a tender offer
or an exchange offer for all outstanding shares of Common
Stock at a price and on terms determined by at least a
majority of the Continuing Directors who are not officers of
the Company, to be
(1) at a price which is fair to shareholders (taking
into account all factors which such members of the
Board deem relevant including, without limitation,
prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis
designed to realize maximum value) and
(2) otherwise in the best interests of the Company
and its shareholders, or
(B) the Board of Directors of the Company shall declare
any Person to be an Adverse Person, upon a determination that
such Person, alone or together with its Affiliates and
Associates, has, at any time after the Rights Dividend
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Declaration Date, become the Beneficial Owner of an
amount of Common Stock of the Company which the Board
of Directors determines to be substantial (which
amount shall in no event be less than 10% of the
shares of Common Stock then outstanding) and a
determination by at least a majority of the Board of
Directors who are not officers of the Company, after
reasonable inquiry and investigation, including
consultation with such Persons as the directors shall
deem appropriate, that (a) such Beneficial Ownership
by such Person is intended to cause the Company to
repurchase the Common Stock Beneficially Owned by
such Person or to cause pressure on the Company to
take action or enter into a transaction or series of
transactions intended to provide such Person with
short-term financial gain under circumstances where
the Board of Directors determines that the best
long-term interests of the Company and its
shareholders would not be served by taking such
action or entering into such transactions or series
of transactions at that time or (b) such Beneficial
Ownership is causing or is reasonably likely to cause
a material adverse impact (including but not limited
to, impairment of relationships with employees,
customers, suppliers or creditors or impairment of
the Company's ability to maintain its competitive
position) on the business or prospects of the
Company,
then, promptly following the occurrence of each such Section 11(a)(ii) Event,
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof, a number of shares of Common Stock equal to six
shares of Common Stock multiplied by a fraction, the numerator of which is the
number of shares of Common Stock outstanding on the Stock Acquisition Date, and
the denominator of which is the number of Rights outstanding on the Stock
Acquisition Date that are not Beneficially Owned by the Acquiring Person or
Adverse Person or its Affiliates or Associates. The price (which following such
first occurrence, shall thereafter be referred to as the "Purchase Price") for
the exercise of each Right shall be equal to the product of (x) 20% of the then
Current Market Price per share of the Common Stock (determined pursuant to
Section 1(l) on the Stock Acquisition Date), multiplied by (y) the number of
shares of Common Stock to be received upon exercise, as set out in this
subparagraph.
(iii) In the event that, at any time after the Close of
Business on the Distribution Date and prior to the Close of Business on
the Expiration Date, the Company shall fix a record date for the making
of a dividend or other distribution with respect to the Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation), evidences of indebtedness, cash (other than a regular
periodic cash dividend at a rate not in excess of 125% of the rate of
the last cash dividend theretofore paid), assets (other than a dividend
payable in Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants, 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 Current Market Price per share of Common Stock on such record
date, less the fair market value (as determined reasonably and with
utmost good
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faith to the holders of Rights 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) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants distributable in
respect of one share of Common Stock and the denominator of which shall
be the Current Market Price per share of the Common Stock. 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 the Purchase Price which
would be in effect if such record date had not been fixed.
(b) In the event that the number of shares of Common Stock which are
authorized by the Company's articles of incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii), the Company shall:
(i) determine the excess of
(A) the Current Market Price of the Shares of Common
Stock issuable upon the exercise of a Right over
(B) the Purchase Price (such excess, the "Spread"), and
(ii) with respect to each Right (other than Rights which have
become void pursuant to Section 7(e) hereof), make adequate provision
to substitute for the Shares, upon payment of the applicable Purchase
Price,
(A) cash,
(B) a reduction in the Purchase Price,
(C) Preferred Stock of the Company (including,
without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the
Company has deemed to have substantially the same value as
shares of Common Stock (such shares of preferred stock to
be referred to as "Common Stock Equivalents")),
(D) debt securities or other securities of the Company,
(E) other assets, or
(F) any combination of the foregoing,
having an aggregate value, when added to the value of the shares of
Common Stock actually issued upon the exercise of such right, equal to
the Current Market Price (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by the
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Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors
of the Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (ii) above
within thirty (30) days following the later of (u) the first occurrence
of a Section 11(a)(ii) Event and (v) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later of (u)
and (v) being referred to herein as the "Section 11(a)(ii) Trigger
Date"), then the Company shall be obligated to deliver, to the extent
permitted by applicable law and any material agreements in effect to
which the Company is a party, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary, cash,
which shares and/or cash have an aggregate value equal to the Spread.
If the Board of Directors of the Company shall determine that it is
likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty
(30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such period,
as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the
first and/or second sentences of this Section 11(b)(ii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such action
shall apply uniformly to all outstanding Rights, and (y) may suspend
the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value thereof. In
the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section
11(b)(ii), the value of the shares of Common Stock shall be the Current
Market Price (as determined pursuant to Section 1(l) hereof) per share
of the Common Stock on the Section 11(a)(ii) Trigger Date and the value
per share or fractional value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Stock on such date. The
Board of Directors of the Company may, but shall not be required to,
establish procedures to allocate the right to receive shares of Common
Stock upon the exercise of the Rights among the holders of the Rights
pursuant to this Section 11(b)(ii).
(c) Anything herein to the contrary notwithstanding, no adjustment in
the number of shares of Common Stock purchasable upon exercise of a Right
pursuant to Section 11(a)(ii) hereof or in the Purchase Price or Spread pursuant
to Section 11(b) hereof shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) in the aggregate number of
shares or in the Spread or Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(c) are not required to be made
shall be carried forward and taken into account in any subsequent adjustments.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest one-hundredth of a share of Common Stock. Notwithstanding the first
sentence of this Section 11(c), any adjustment required by this Section 11 shall
be made no later than the earlier of
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(i) three (3) years from the date of the transaction which
mandates such adjustment or
(ii) the Expiration Date.
(d) If as a result of an adjustment made pursuant to Section 11(b) or
Section 13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than Common Stock,
thereafter the number of such other shares so receivable upon exercise of any
Right and the Purchase Price thereof shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Common Stock contained in Sections 11(a), (b),
(c), (e), (f), (i) and (j) and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Common Stock shall apply on like terms to any such
other shares.
(e) All Rights originally issued by the Company subsequent to any
adjustment made to the number of shares of Common Stock purchasable upon
exercise of a Right pursuant to Section 11(a)(ii) hereof shall evidence the
right to purchase the number of shares of Common Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(f) The Company may elect on or after the date of any adjustment of the
number of shares of Common Stock purchasable upon exercise of a Right pursuant
to Section 11(a)(ii) hereof to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. The aggregate of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of shares of Common Stock
for which the aggregate of the Rights was exercisable immediately prior to such
adjustment. Adjustments in Rights shall be calculated to the nearest
one-hundredth of a Right. The Company shall make a public announcement of its
election to adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be made.
This record date may be the date on which the number of shares of Common Stock
purchasable upon exercise is adjusted or any day thereafter, but if the Rights
Certificates have been issued the record date shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(f), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates to be so
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted number of
shares of Common Stock purchasable upon exercise of a Right) and shall be
registered in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
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(g) Irrespective of any adjustment or change in the number of shares of
Common Stock issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the number of shares
which were expressed in the initial Rights Certificates issued hereunder.
(h) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the Common Stock or
other shares of Common Stock Equivalents issuable upon exercise of the Rights,
the Company shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock or Common Stock Equivalents
at such adjusted Purchase Price. In the event that it appears that the issuance
of shares of Common Stock at the Purchase Price called for herein would result
in issuance of shares of Common Stock that were not validly issued fully paid
and nonassessable shares of Common Stock, the Company may issue Common Stock
Equivalents in the manner provided in Section 11(b)(ii)(C) hereof.
(i) In any case in which this Section 11 shall require that an
adjustment in the number of shares of Common Stock or other capital stock or
securities of the Company, if any, issuable upon exercise of the Rights shall be
made effective as of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuance to the holder of any
Right exercised after such record date the number of shares of Common Stock and
other capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of shares of Common Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the number of shares of Common Stock purchasable upon exercise of a
Right in effect prior to such adjustment; provided, however, that the Company
shall deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring such
adjustment.
(j) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such adjustments in the Purchase Price or
number of shares of Common Stock purchasable upon exercise of a Right , in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their judgment the Board of Directors of the Company shall
determine to be advisable in order that any
(i) consolidation or subdivision of the Common Stock,
(ii) issuance wholly for cash of any shares of Common Stock at
less than the Current Market Price,
(iii) issuance wholly for cash of shares of preferred stock or
other securities which by their terms are convertible into or
exchangeable for shares of Common Stock,
(iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this
Section 11,
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hereafter made by the Company to holders of its Common Stock shall not be
taxable to such stockholders.
(k) The Company covenants and agrees that it shall not, at any
time after the Distribution Date,
(i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(l) hereof),
(ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section
11(l) hereof),
(iii) engage in a share exchange with any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(l) hereof),
(iv) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with
Section 11(l) hereof), if
(A) at the time of or immediately after such
consolidation, merger, share exchange, sale or transfer,
there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which
would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or
(B) prior to, simultaneously with or immediately after
such consolidation, merger, share exchange, sale or
transfer, the stockholders of the Person who
constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(l) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at any time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(m) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date
(i) declare or pay any dividend on the outstanding shares of
Common Stock payable in shares of Common Stock,
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(ii) subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock into a
smaller number of shares,
then in any such case the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall remain unchanged, so that the value of the rights
remaining shall represent the same proportion of the value of the Company as
before. Rights associated with shares eliminated by any combination of
outstanding shares of Common Stock shall be canceled by operation of such
combination.
SECTION 12. CERTIFICATE OF ADJUSTED NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 13
hereof, the Company shall
(a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer
agent for the Common Stock, a copy of such certificate, and
(c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 26
hereof.
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained and shall not be deemed to have knowledge of
any adjustment unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly,
(i) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(l) hereof), and the Company
shall not be the continuing or surviving corporation of such
consolidation or merger,
(ii) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(l) hereof) shall consolidate
with, or merge with or into, the Company, or engage in a share exchange
with the Company, and the Company shall be the continuing or surviving
corporation of such consolidation, merger or share exchange and, in
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connection with such consolidation, merger or share exchange, all or
part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person (or of the
Company) or cash or any other property, or
(iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person or
Persons (other than the Company or any Subsidiary of the Company in one
or more transactions each of which complies with Section 11(l) hereof),
then, and in each such case, promptly following the occurrence of each such
Section 13 Event, proper provision shall be made so that:
(iv) each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price, based on the
Current Market Price of the Common Stock of the Company as of the last
Business Day prior to the first public announcement of such Section 13
Event, in accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, non-assessable and freely
tradeable shares of Common Stock of the Principal Party (as such term
is defined in Section 1(t)), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to
product of six times the result obtained by dividing the Current Market
Price of a share of Common Stock by the Current Market Price of a share
of Common Stock of the Principal Party multiplied by a fraction the
numerator of which is the number of shares of Common Stock outstanding
on the Stock Acquisition Date, and the denominator of which is the
number of Rights outstanding on the Stock Acquisition Date that are not
Beneficially Owned by the Acquiring Person or Adverse Person or its
Affiliates or Associates, provided, however, that the Purchase Price
and the number of shares of Common Stock of such Principal Party
issuable upon the exercise of each Right shall be further adjusted as
provided in Section 11(d) of this Agreement to reflect any events
occurring in respect of such Principal Party after the date of such
Section 13 Event;
(v) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such Section 13 Event, all the obligations
and duties of the Company pursuant to this Agreement;
(vi) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal
Party following the first occurrence of a Section 13 Event;
(vii) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of
its Common Stock in accordance with Section 9 hereof) in connection
with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as
nearly as
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reasonably may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights, provided that, upon the
subsequent occurrence of any merger, consolidation, share exchange,
sale or transfer of assets or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon
be entitled to receive, upon Exercise of a Right and payment of the
Purchase Price as provided in this Section 13(a), such cash, shares,
rights, dividends, warrants and other property which such holder would
have been entitled to receive had such holder, at the time of such
transaction, owned the Common Stock of the Principal Party receivable
upon the exercise of a Right pursuant to this Section 13(a); and
(viii) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any Section 13 Event,
except as they apply to the determination of the Purchase Price.
(b) The Company shall not consummate any such consolidation, merger,
share exchange, sale or transfer unless prior thereto the Company and the
Principal Party shall have exercised and delivered to the Rights Agent an
agreement confirming that the requirements of Sections 13(a) and (b) hereof
shall promptly be performed in accordance with their terms, that the Principal
Party has a sufficient number of authorized shares of its Common Stock which
have not been issued or reserved for issuance to permit the exercise in full of
the Rights in accordance with this Section 13 and unless prior thereto the
Company and such Principal Party shall have executed and delivered to the Rights
Agent a supplemental agreement providing for the terms set forth in paragraph
(a) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger, share exchange or sale of assets
mentioned in paragraph (a) of this Section 13, the Principal Party will
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable upon
exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to
(A) become effective as soon as practicable after such
filing and
(B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the
blue sky laws of such jurisdictions as may be necessary or appropriate;
(iii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on any national
securities exchange or Nasdaq, to list or admit to trading (or continue
the listing of) the Rights and the securities purchasable upon exercise
of the Rights on such securities exchange or Nasdaq, of, if the Common
Stock of the Principal Party shall not be listed or admitted to trading
on any such national securities
-26-
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exchange or Nasdaq, to cause the Rights and the securities receivable
upon exercise of the Rights to be reported by such other system then in
use;
(iv) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for registration on
Form 10 under the Exchange Act; and
(v) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
(c) The provisions of this Section 13 shall similarly apply to
successive mergers, consolidations, share exchanges or sales or other transfers.
In the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(d) In case the Principal Party has provision in any of its
authorized securities or in its certificate or articles of incorporation or
bylaws or other instrument governing its corporate affairs, which provision
would have the effect of
(i) causing such Principal Party to issue (other than to
holders of Rights pursuant to this Section 13), in connection with, or
as a consequence of, the consummation of a transaction referred to in
this Section 13, shares of Common Stock of such Principal Party at less
than the then Current Market Price per share thereof (determined
pursuant to Section 1(l) hereof) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than
such then Current Market Price, or
(ii) providing for any special payment, tax or similar
provision in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of Section 13,
then, in such event, the Company hereby agrees with each holder of Rights that
it shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any
time after a Person first becomes an Acquiring Person, enter into any
transaction of the type contemplated by (i)-(iii) of Section 13(a) hereof if (x)
at the time of or immediately after such consolidation, merger, share exchange,
sale, transfer or other transaction there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights, (y) prior to, simultaneously with or
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immediately after such consolidation, merger, share exchange, sale, transfer or
other transaction, the stockholders of the Person who constitutes, or would
constitute, the Principal Party for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (z) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, the Company may pay to the registered holders of the
Rights Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or if the Rights
are not listed or admitted to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of
Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one share of
Common Stock. For purposes of this Section 14(b), the current market value of
one share of Common Stock shall be the closing price of one share of Common
Stock (as determined pursuant to Section 1(l) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
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SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, other than rights of
action given to in the Rights Agent pursuant to Section 18 hereof, are vested in
the respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Rights Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution Date, of the
Common Stock) in his own behalf and for his own benefit, may enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Rights Certificate (or, prior to the Distribution Date, such
Common Stock) in the manner provided in such Rights Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.
Every holder of a Right by accepting the same consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to Section 7(e) hereof, shall
be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Company must use its
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best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
shares of Common Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder 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 Rights
or Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any losses, expenses, claims, damages or liabilities,
incurred without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement and
performance hereunder, including, without limitation, the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly, and will promptly reimburse the Rights Agent for any legal or other
expenses reasonably incurred in investigating or defending any such loss,
expense, claim, damage or liability.
(b) The Rights Agent shall be protected by the indemnity provided
by this Section 18 and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate for Common
Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
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
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corporation succeeding to the corporate trust or stock transfer business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto; provided, however, that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of a predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Rights Certificates either in the
name of the predecessor or in the name of the successor Rights Agent; and in all
such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or Adverse
Person and the determination of Current Market Price) be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
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(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals maintained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity or legality of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or legality or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt of the
certificate described in Section 12 hereof setting forth any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock will, when so issued, be validly authorized and
issued, fully paid and non-assessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable to the Company or the holder of any Rights
Certificate or any stockholder of the Company for any action taken or suffered
to be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder, 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 the 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, however, reasonable care was exercised in the
selection and continued employment thereof.
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(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 hereunder or in the exercise of its rights if
there shall be, in the sole judgment of the Rights Agent, 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 Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30) days' notice in
writing mailed to the Company, and to each transfer agent of the Common Stock,
by registered or certified mail, and, following the Distribution Date, to the
holders of the Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon thirty (30) days' notice in
writing, mailed to the Rights Agent or successor Rights agent, as the case may
be, and to each transfer agent of the Common Stock, by registered or certified
mail, and, following the Distribution Date, to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation organized and doing
business under the laws of the United States or of any state, in good standing,
which is authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of a corporation described
in clause (a) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and, following the Distribution Date, mail a notice thereof in
writing to the registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
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SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price or the
number or kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the earlier of the
redemption or expiration of the Rights, the Company:
(a) may, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company or upon a contractual obligation of the
Company in each case existing prior to the Distribution Date, and
(b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that
(c) no such Rights Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Rights Certificate would be issued, and
(d) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustments shall otherwise have been made in lieu of
the issuance thereof.
SECTION 23. REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its option, at
any time prior to the earlier of
(i) the Close of Business on the twentieth day following the
Stock Acquisition Date (or, if the Stock Acquisition Date shall have
occurred prior to the Record Date, the Close of Business on the
twentieth day following the Record Date) (as either such period may be
extended pursuant to the provisions of Section 27 hereof) or
(ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.01 per Right, as such amount may be appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such redemption price being hereinafter referred to as the "Redemption
Price"), such Redemption Price to be payable in cash, shares of Common stock
(based on the Current Market Price, as defined in Section 1(l) hereof, of the
Common Stock at the time of
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redemption) or such other form of consideration as may be deemed appropriate by
the Board of Directors of the Company; provided, however, if the Board of
Directors of the Company authorizes redemption of the Rights in either of the
circumstances set forth in clauses (iii) and (iv) below, then there must be
Continuing Directors then in office and such authorization shall require the
concurrence of a majority of such Continuing Directors:
(iii) such authorization occurs on or after the time a Person
becomes an Acquiring Person, or
(iv) such authorization occurs on or after the date of a
change (resulting from a proxy or consent solicitation) in a majority
of the Directors in office at the commencement of such solicitation if
any Person who is a participant in such solicitation has stated (or, if
upon the commencement of such solicitation, a majority of the Board of
Directors of the Company has determined in good faith) that such Person
(or any of its Affiliates or Associates) intends to take, or may
consider taking, any action which would result in such Person becoming
an Acquiring Person or Adverse Person or which would cause the
occurrence of a Triggering Event unless, concurrent with such
solicitation, such Person (or one or more of its Affiliates or
Associates) is making a tender offer or exchange offer in compliance
with Section 11(a)(ii)(A) hereof respecting approval of the terms of
such tender offer or exchange offer by a majority of the Continuing
Directors who are not officers of the Company;
provided further, however, that if, following the occurrence of a Stock
Acquisition Date and following the expiration of the right of redemption
hereunder but prior to any Triggering Event,
(v) a Person who is an Acquiring Person shall have
transferred or otherwise disposed of a number of shares of Common Stock
in one transaction or series of transactions, not directly or
indirectly involving the Company or any of its Subsidiaries, which did
not result in the occurrence of a Triggering Event such that such
Person is thereafter a Beneficial Owner of less than 10% of the
outstanding shares of Common Stock, and
(vi) there are no other Persons, immediately following the
occurrence of the event described in clause (v), who are Acquiring
Persons or Adverse Persons,
then the right of redemption shall be reinstated and thereafter be subject to
the provisions of this Section 23. Notwithstanding the foregoing, the Board of
Directors of the Company may not redeem any rights following its determination
that any Person is an Adverse Person. Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the Company's right
of redemption hereunder and under subsection (b) of this Section 23 has expired.
(b) During the period commencing at the Close of Business on the
twentieth day following the Stock Acquisition Date and terminating on the
earlier of
(i) the occurrence of a Triggering Event and
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(ii) the Final Expiration Date,
the Board of Directors of the Company may, at its option, redeem all but not
less than all of the then outstanding Rights at the Redemption Price
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), provided that such redemption is
incidental to a merger, consolidation or other business combination involving
the Company or a reorganization or restructuring of the Company which a majority
of the Continuing Directors shall determine to be in the best interests of the
Company and its shareholders.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to this Section 23 (or at
such later time as the Board of Directors may establish for the effectiveness of
such redemption) , evidence of which shall have been filed with the Rights Agent
and without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Board of Directors ordering the redemption of the Rights, the
Company shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such holders at
each holder's last address as it appears upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the Transfer
Agent for the Common Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made. The failure to give, or any defect in, any such
notice will not affect the validity of such redemption.
SECTION 24. EXCHANGE.
(a) The Continuing Directors of the Company may, at their option, at
any time after any Person first becomes an Acquiring Person or an Adverse
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, (such exchange ratio being hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Continuing
Directors shall not be empowered to effect such exchange at any time after (i)
any Person (other than an Exempt Person), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of shares of Common
Stock aggregating 50% or more of the shares of Common Stock then outstanding or
(ii) the occurrence of a Section 13 Event.
(b) Immediately upon the action of the Continuing Directors of this
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further notice, the right to exercise such Rights
shall terminate and the only right thereafter a holder of such Rights shall have
shall be to receive that number of shares of Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; provided, however, that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company shall promptly mail a
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notice of any such exchange to all of the holders of the Rights so exchanged at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock for Rights
will be effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata based
on the number of Rights (other than Rights which have become void pursuant to
the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, or that
any regulatory actions or approvals are necessary in connection therewith, the
Company may, in its discretion, take such actions or seek such approvals as may
be necessary to authorize additional shares of Common stock for issuance upon
exchange of the Rights. In the event that the Company shall, after good faith
effort, be unable to take such actions or obtain such approvals as may be
necessary to authorize such additional shares of Common Stock, the Company shall
substitute, to the extent of such insufficiency, for each share of Common Stock
that would otherwise be issuable upon exchange of a Right, a number of units of
Common Stock Equivalents as defined in Section 11(b)(ii) hereof, cash, other
securities, or other assets of the Company or any combination of the foregoing
equal to the Current Market Price of one share of Common Stock (determined
pursuant to Section 1(l) hereof) as of the date of issuance of such Common Stock
Equivalents or fractions thereof.
(d) The Company shall not, in connection with any exchange
pursuant to this Section 24, be required to issue fractions of shares of Common
Stock or to distribute certificates which evidence fractional shares of Common
Stock. In lieu of such fractional shares of Common Stock, the Company may pay to
the registered holders of the Rights Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to the second sentence of Section 1(l) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date,
(i) to pay any dividend payable in stock of any class to the
holders of the Common Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company in an
amount not exceeding 125 percent of the next previous regular quarterly
cash dividend) or
(ii) to offer to the holders of Common Stock rights or
warrants to subscribe for or to purchase any additional shares of
Common Stock or shares of stock of any class or any other securities,
rights or options, or
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(iii) to effect any reclassification of its Common Stock
(other than a reclassification involving only the subdivision of
outstanding shares of Common Stock), or
(iv) to effect any consolidation, merger or share exchange,
or to permit one or more of its subsidiaries holding 50% of the assets
or earning power of the Company and its subsidiaries (taken as a whole)
to engage in a consolidation, merger or share exchange, into or with
any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(l) hereof), 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 transaction or a series of
related transactions, of more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which complies with
Section 11(l) hereof), or
(v) to effect the liquidation, dissolution or winding up of
the Company,
then, in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants,
reclassification or the date on which such reclassification, consolidation,
merger, share exchange, sale, transfer, liquidation, dissolution or winding up
is to take place and the date of participation therein by the holders of the
shares of Common Stock, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above at
least twenty (20) days prior to the record date for determining holders of the
shares of Common Stock for purposes of such action, and in the case of any such
other action, at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
shares of Common Stock, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) or Section
13 hereof shall occur, then, in any such case, the Company shall, as soon as
practicable thereafter, give to each holder of a Rights Certificate (or if
occurring prior to the Distribution Date, the holders of the Common Stock), to
the extent feasible and in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii) or Section 13 hereof.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
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American Business Products, Inc.
0000 Xxxxxxxxx Xxxxxxx X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Rights Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
EQUISERVE TRUST COMPANY, N.A.
c/o Equiserve Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company, in the case of Rights
represented by certificates for Common Stock, and on the registry books of the
Rights Agent, in the case of Rights represented by Rights Certificates.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Subject to the last sentence of this Section 27, for so long as the
Rights are then redeemable, the Company may in its sole and absolute discretion,
and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of the holders
of the Rights. At any time when the Rights are no longer redeemable, and subject
to the last sentence of this Section 27, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend any provision of this Agreement
without the approval of any holders of Rights Certificates in order
(a) to cure any ambiguity,
(b) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein,
(c) to shorten or lengthen any time period hereunder, or
(d) to change or supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Rights Certificates (other than an
Acquiring Person, an Adverse Person or an Affiliate or Associate of any such
Person);
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provided, this Agreement may not be supplemented or amended to lengthen,
pursuant to clause (c) of this sentence,
(e) a time period relating to when the Rights may be redeemed at
such time as the Rights are not then redeemable, or
(f) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of the Rights.
Upon the delivery of a certificate that is signed by an appropriate officer of
the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Final Expiration Date, the Purchase Price or
the number of shares of Common Stock for which a Right is exercisable; provided,
however that the Continuing Directors by a majority vote, may at any time, at
their option, supplement or amend this Agreement to increase the number of
shares of Common Stock for which a Right is exercisable and to extend the Final
Expiration Date.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS, ETC.
For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board of Directors of the Company
(or, where specifically provided for herein, certain specified members thereof)
shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(a) interpret the provisions of this Agreement, and
(b) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, but not limited to, a determination
to redeem or not redeem the Rights or to amend the Agreement).
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All such actions, calculations, interpretations and determinations (including,
for purposes of clause (c) below, all omissions with respect to the foregoing)
which are done or made by the Board (or, where specifically provided for herein,
by certain specified members thereof) in good faith, shall
(c) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and
(d) not subject the Board or such specified members thereof to any
liability to the holders of the Rights.
SECTION 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered holders of
the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of the Common Stock).
SECTION 31. 1989 RIGHTS AGREEMENT.
Nothing in this Agreement shall be construed to amend, repeal, restate
or supercede the Rights Agreement dated October 25, 1989 (the "1989 Rights
Agreement"). Any rights issued under the 1989 Rights Agreement shall be governed
by the terms of the 1989 Rights Agreement. The 1989 Rights Agreement and this
Agreement shall be construed and operate separately.
SECTION 32. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the Close of Business of the twentieth day following the
date of such determination by the Board of Directors.
SECTION 33. GOVERNING LAW.
This Agreement, each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Georgia and
for all purposes shall be governed by and construed in accordance with the laws
of such State applicable to contracts to be made and to be performed entirely
within such State.
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SECTION 34. 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 35. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, The parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the date and year first above written.
AMERICAN BUSINESS PRODUCTS, INC.
Attest:
By: Xxxx X. Xxxx By: Xxxxxxx X. Xxxxx
------------------------- ------------------------------------
Title: Treasurer Title: Vice President and Chief
Financial Officer
EQUISERVE TRUST COMPANY, N.A.
Attest:
By: By: Xxxxxxx X. XxxXxxx
------------------------- ------------------------------------
Title: Title: Managing Director
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EXHIBIT A
Certificate No. _______ ________ Rights
NOT EXERCISABLE AFTER NOVEMBER 6, 2009 OR EARLIER IF REDEEMED BY THE COMPANY OR
LATER IF EXTENDED BY THE CONTINUING DIRECTORS. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN [ACQUIRING] [ADVERSE] PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN [ACQUIRING] [ADVERSE] PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Rights Certificate
AMERICAN BUSINESS PRODUCTS, 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 May 5, 1999 (the "Rights Agreement"),
between American Business Products, Inc., a Georgia Corporation (the "Company"),
and Equiserve Trust Company, N.A., a national banking association (the "Rights
Agent"), to purchase from the Company at any time prior to 5:00 P.M. (Atlanta
time) on November 6, 2009 or such later date chosen by the Continuing Directors
at the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, six shares of Common Stock (the "Common Stock") of
the Company, at a purchase price equal to twenty percent (20%) of the Current
Market Price on the Stock Acquisition Date, as those terms are defined in
Section 1 of the Rights Agreement (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase and
related Certificate duly executed. The Purchase Price may be paid in cash or by
certified bank check or money order payable to the Company. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of May 5, 1999,
based upon the Common Stock as constituted at such date.
These rights shall only become exercisable upon the occurrence of a
Section 11(a)(ii) Event (as such term is defined in the Rights Agreement), if
the Rights evidenced by this Certificate are
--------
* The portion of the legend in brackets shall be inserted only if
applicable, shall be modified to apply to an Acquiring Person or an Adverse
Person, as applicable, and shall replace the preceding sentence.
A-1
48
beneficially owned by a person other than (i) an Acquiring Person, an Adverse
Person or an Affiliate or Associate of any such Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any such Acquiring
Person, Adverse Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, an Adverse Person or an
Affiliate or Associate of any such Person. If the Rights are beneficially owned
by any of the Persons specified in clauses (i), (ii) or (iii) of the preceding
sentence, such Rights shall become null and void and no holder hereof shall have
any right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Common Stock or other securities, which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights Agreement).
The Continuing Directors may (i) increase the number of shares issuable
upon exercise of the Rights and (ii) decide to exchange all or part of the
exercisable Rights for shares of Common Stock at an exchange ratio of one share
of Common Stock per Right.
This Rights Certificate is subject to all of the terms, provisions, and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by this reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of the
Rights Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of shares of Common Stock as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Rights Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may (unless the Board of Directors shall have made a
determination that a Person is an Adverse Person) be redeemed by the Company at
its option at a redemption price of $.01 per Right at any time prior to the
earlier of the close of business on (i) the twentieth day following the Stock
Acquisition Date (as such time period may be extended pursuant to the Rights
Agreement), and (ii) the Final Expiration Date (as such time period may be
extended pursuant to the Rights Agreement). After the expiration of the
redemption period, the Company's right of redemption may be reinstated if an
Acquiring Person reduces his beneficial ownership to 10% or less of the
A-2
49
outstanding shares of Common Stock in a transaction or series of transactions
not involving the Company.
The Company is not required to issue fractional shares of Common Stock
upon the exercise of any Right or Rights evidenced hereby, and in lieu thereof a
cash payment may be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares of
Common Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned for any purpose by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _______________ ___, 19__.
ATTEST: AMERICAN BUSINESS PRODUCTS, INC.
By:
------------------------------ ----------------------------------
Secretary Title:
----------- ----------------------------
Countersigned:
EQUISERVE TRUST COMPANY, N.A.
By:
--------------------------
Authorized Signature
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FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Rights
Certificate)
To: AMERICAN BUSINESS PRODUCTS, INC.
The undersigned hereby irrevocably elects to exercise _____________
Rights represented by this Rights Certificate to purchase the shares of Common
Stock issuable upon the exercise of the Rights (or such other securities of the
Company or of any other Person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
Please insert social security or other identifying number:
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number:
------------------------------------------------------------------------------
(Please print name and address)
------------------------------------------------------------------------------
Dated: __________________, 199__
-------------------------------
Signature
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The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person,
an Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person, an Adverse
Person or an Affiliate or Associate of any such Person.
Dated: , 199
----------------- -- ---------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On May 5, 1999, the Board of Directors of American Business Products,
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of Company Common Stock (the "Common Stock") to stockholders
of record at the close of business on May 17, 1999. Each Right entitles the
registered holder to purchase from the Company six shares of Common Stock at a
Purchase Price of 20% of Current Market Value, measured as of the date that an
announcement is made that a person has acquired sufficient shares to become an
Acquiring Person (30%) or an Adverse Person (not less than 10%). The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and Equiserve Trust Company, N.A.
Initially, the Rights will be attached to all Common Stock Certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earlier of (i) 20 days following a public
announcement that a person or a group of affiliated or associated persons (an
"Acquiring Person") has acquired 30% or more of the outstanding shares of Common
Stock, (ii) 20 days following the commencement of a tender offer or an exchange
offer that would result in a person or group beneficially owning 30% or more of
such outstanding shares of Common Stock or (iii) 20 business days after the
Board of Directors of the Company shall declare any Person to be an Adverse
Person, upon a determination that such person, alone or together with its
affiliates or associates, has become the Beneficial Owner of an amount of Common
Stock which the Board of Directors determines to be substantial (which amount
shall in no event be less than 10% of the shares of Common Stock then
outstanding) and a determination by at least a majority of the Board of
Directors who are not officers of the Company, after reasonable inquiry and
investigation, including consultation with such persons as such directors shall
deem appropriate, that (a) such Beneficial Ownership by such person is intended
to cause the company to repurchase the Common Stock Beneficially Owned by such
person or to cause pressure on the Company to take action or enter into a
transaction or series of transactions intended to provide such person with
short-term financial gain under circumstances where the Board of Directors
determines that the best long-term interests of the Company and its stockholders
would not be serviced by taking such action or entering into such transactions
or series of transactions at that time or (b) such Beneficial Ownership is
causing or is reasonably likely to cause a material adverse impact (including
but not limited to, impairment of relationships with employees, customers,
suppliers or creditors or impairment of the Company's ability to maintain its
competitive position) on the business or prospects of the Company.
Until the Distribution Date, (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new
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Common Stock Certificates issued after May 17, 1999 will contain a notation
incorporating the Rights Agreement by reference and (iii) the surrender for
transfer of any certificates for Common Stock will also constitute the transfer
of the Rights associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on November 6, 2009, unless earlier redeemed by
the Company as described below or unless the Rights Agreement is amended by the
Continuing Directors to extend such date.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except as otherwise determined by
the Board of Directors, only shares of Common Stock issued prior to the earlier
of the Distribution Date or Expiration Date will be issued with Rights.
In the event that the Board of Directors determines that a person is an
Adverse Person or, at any time following the Distribution Date, a Person becomes
the owner of more than 30% of the then outstanding shares of Common Stock
(except pursuant to an offer for all outstanding shares of Common Stock which
the independent directors determine to be fair to and otherwise in the best
interests of the Company and its shareholders) each holder of a Right will
thereafter have the right to receive, upon exercise, a number of shares of
Common Stock equal to six shares of Common Stock multiplied by a fraction, the
numerator of which is the number of shares of Common Stock outstanding on the
Stock Acquisition Date, and the denominator of which is the number of Rights
outstanding on the Stock Acquisition Date that are not Beneficially Owned by the
Acquiring Person or Adverse Person or its Affiliates or Associates. The price
for the exercise of each Right shall be equal to the product of (x) 20% of the
then Current Market Price per share of the Common Stock on the Stock Acquisition
Date, multiplied by (y) the number of shares of Common Stock to be received upon
exercise. Notwithstanding any of the foregoing, following the occurrence of any
of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, Beneficially
Owned by any Acquiring Person or Adverse Person will be null and void. However,
Rights are not exercisable following the occurrence of the events set forth
above until such time as the Rights are no longer redeemable by the Company as
set forth below.
For example, if the Current Market Value of a share of Common Stock
were $18.00 at the Stock Acquisition Date, and if the Acquiring Person owned 50%
of the then outstanding Common Stock when the Rights became exercisable, the
exercise price would be $43.20 ($3.20 per share), and the number of shares
purchasable with each right would be twelve.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination in which
the Company is not the surviving corporation (other than a merger which follows
an offer described in the second preceding paragraph), or (ii) all of its shares
are acquired in a share exchange or the Company engages in a merger or
consolidation in which all or part of its outstanding shares of Common Stock are
changed into or exchanged for stock, other securities or assets of any other
person or (iii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights
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which previously have been voided as set forth above) shall thereafter have the
right to receive, upon exercise, a number of shares of common stock of the
acquiring company equal to the result obtained by multiplying six times the
result obtained by dividing the current market price of a share of the Company's
Common Stock by the current market price of a share of the Common Stock of the
acquiring corporation, or if such stock is not traded in public markets, of its
parent corporation multiplied by a fraction the numerator of which is the number
of shares of Common Stock outstanding on the Stock Acquisition Date, and the
denominator of which is the number of Rights outstanding on the Stock
Acquisition Date that are not Beneficially Owned by the Acquiring Person or
Adverse Person or its Affiliates or Associates. The purchase price will be
calculated on the same basis as if the Right holder were exercising a Right to
purchase Common Stock of the Company at that time.
The number of shares issuable, and the purchase price payable, 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 Common Stock or (ii) upon the distribution to Common
shareholders of cash, evidences of indebtedness or assets (excluding regular
quarterly cash dividends) or of subscription rights or warrants. The Continuing
Directors may decide to exchange all or part of the exercisable Rights for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. The Company is not required to issue fractional Rights, and, in lieu
thereof, an adjustment in cash may be made based on the market price of the
rights on the last trading date prior to the date of adjustment. The Company is
not required to issue fractional shares upon exercise of the Rights, and, in
lieu thereof, an adjustment in cash may be made based on the market price of the
Common Stock on the last trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at a price of $.01 per Right, at any time until twenty days following the
Stock Acquisition Date. The Company may not redeem the Rights if the Board of
Directors has previously declared a person an Adverse Person. After the
redemption period has expired, the Company's right of redemption may be
reinstated if an Acquiring Person reduces his beneficial ownership to 10% or
less of the outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company. Immediately upon the action of the Board
of Directors ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the $.01 redemption
price.
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. While the distribution of the Rights will not
be taxable to stockholders or the Company, stockholders may, depending upon the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
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Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended by the
board prior to the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in order to cure
any ambiguity, to make changes which do not adversely affect the interests of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement; provided, however, that no amendment to adjust the time period
governing redemption shall be made at such time as the Rights are not redeemable
and the Continuing Directors may, at any time, amend the Rights Agreement to
increase the number of shares of Common Stock for which a Right is exercisable
and to extend the Final Expiration Date.
As of March 31, 1999 there were 15,072,295 shares of Common Stock of
the Company outstanding, and 1,689,602 shares of Common Stock of the Company in
the treasury. As of March 31, 1999, options to purchase 1,296,594 shares of
Common Stock were outstanding.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
in a manner which causes the Rights to become exercisable, unless the terms of
an offer for all shares are first approved by the Board. The Rights, however,
should not affect any prospective offeror willing to make an offer at a fair
price and otherwise in the best interests of the Company and its shareholders,
as determined by the Board, or willing to negotiate with the Board. The Rights
should not interfere with any merger or other business combination approved by
the Board since the Board may, at its option, at any time until twenty days
following the Stock Acquisition Date (including the declaration of an Adverse
Person) redeem all, but not less than all, of the then-outstanding Rights at the
redemption price.
In addition, certain provisions of the Company's Articles of
Incorporation, as amended (the "Articles of Incorporation"), may have
anti-takeover effects. Article 8 provides that members of the Board of Directors
are elected for staggered three year terms, and may only be removed for cause.
Article 10 provides that any merger, consolidation, share exchange or sale of
10% or more of the Company's total assets which involves an interested person
(defined as a person owning 5% or more of the Company's common stock) must be
approved by holders of not less than 80% of the outstanding shares of each class
of stock, and at least two-thirds of the shares of each class not held by the
interested person, unless the transaction is first approved by a majority of the
directors not affiliated with such interested person, before such person became
an interested person. Article 10 also restores the right of the Company's
shareholders to dissent from any merger, consolidation, share exchange or sale
of assets which involves an interested person and which is not first approved by
the Board of Directors. In considering such transactions the Board of Directors
is authorized by Article 11 to consider, among other things, the effects of a
proposed transaction on employees, customers, communities in which the Company
operates, and other constituencies of the Company.
Certain provisions of the Company's Bylaws, as amended may also have
anti-takeover effects. Article VII provides that the Company shall be covered by
Georgia's "Business Combination" statute, which provides that an interested
shareholder (defined as the holder of 10% or more of the Company's outstanding
shares) may not engage in a business combination (defined as a merger,
consolidation or sale of assets) with the Company for a period of five years
after becoming an interested shareholder unless (i) the Board of Directors
approved the transaction prior
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to the person's becoming an interested shareholder; (ii) the interested
shareholder acquired 90% of all voting shares (excluding shares held by certain
members of management) in the transaction in which the interested shareholder
became such; or (iii) after becoming an interested shareholder, the interested
shareholder acquired at least 90% of all outstanding shares, and the business
combination is approved by at least a majority of the remaining shares
(excluding shares held by certain members of management). Article 10 of the
Articles of Incorporation provides that this statute also shall apply to share
exchange with an interested shareholder.
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