PRINTCAFE SOFTWARE, INC.
and
MELLON INVESTOR SERVICES LLC
as Rights Agent
-------------------------
STOCKHOLDERS
RIGHTS AGREEMENT
Dated as of
February 13, 2003
-------------------------
TABLE OF CONTENTS
Section Page
------- ----
1. Certain Definitions......................................................... 1
2. Appointment of Rights Agent................................................. 6
3. Issue of Rights Certificates................................................ 6
4. Form of Rights Certificate.................................................. 8
5. Countersignature and Registration........................................... 9
6. Transfer, Split Up, Combination, and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost, or Stolen Rights Certificates..............9
7. Exercise of Rights; Purchase Price; Expiration Date of Rights............... 10
8. Cancellation and Destruction of Rights Certificates......................... 12
9. Reservation and Availability of Capital Stock............................... 13
10. Common Stock Purchase Record Date.......................................... 15
11. Adjustment of Purchase Price, Number and Kind of Shares.................... 15
or Number of Rights
12. Certificate of Adjusted Purchase Price or Number of Shares................. 21
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power....... 22
14. Fractional Rights; Fractional Shares; Waiver............................... 25
15. Rights of Action........................................................... 26
16. Agreement of Rights Holders................................................ 26
17. Rights Certificate Holder Not Deemed a Stockholder......................... 27
18. Concerning the Rights Agent................................................ 27
19. Merger or Consolidation or Change of Name of Rights Agent.................. 28
20. Duties of Rights Agent..................................................... 28
21. Change of Rights Agent..................................................... 31
22. Issuance of New Rights Certificates........................................ 32
23. Redemption and Termination................................................. 32
24. Exchange..... ............................................................. 33
25. Notice of Certain Events................................................... 34
26. Notices.................................................................... 35
27. Supplements and Amendments................................................. 35
28. Successors..................................................................36
29. Determinations and Actions by the Board of Directors....................... 36
30. Benefits of this Agreement................................................. 37
31. Severability............................................................... 37
32. Governing Law.............................................................. 37
33. Counterparts............................................................... 37
34. Descriptive Headings....................................................... 37
ii
This STOCKHOLDERS RIGHTS AGREEMENT, dated as of February 13, 2003 by and
between Printcafe Software, Inc., a Delaware corporation (the "Company"), and
Mellon Investor Services LLC, a New Jersey limited liability company, as Rights
Agent (the "Rights Agent").
WHEREAS, effective February 13, 2003 (the "Rights Dividend Declaration
Date"), the Special Committee of the Board of Directors of the Company
authorized and declared a distribution of one right for each share of Common
Stock, par value $.0001 per share, of the Company (the "Common Stock")
outstanding at the Close of Business (as such term is defined herein) on
February 14, 2003 (the "Record Date"), and has authorized the issuance of one
such right (as such number may hereafter be adjusted pursuant hereto) for each
share of Common Stock that shall become outstanding (whether originally issued
or delivered from the Company's treasury) between the Record Date and, except as
otherwise provided in Section 23 herein, the Distribution Date, each such right
initially representing the right to purchase, upon the terms and subject to the
conditions hereinafter set forth, one half (1/2) of a share of Common Stock
(each a "Right" and together with all other such rights distributed or issued
pursuant hereto, 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 be the Beneficial Owner of
shares of Voting Stock representing 15% or more of the total Voting Power of the
aggregate of all shares of Voting Stock then outstanding, but shall not include
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any Subsidiary of the Company, or any trustee or fiduciary holding
Voting Stock for, or pursuant to the terms of, any such plan, acting in such
capacity. Notwithstanding the foregoing:
(i) No Person shall become an "Acquiring Person" as the result of an
acquisition of Voting Stock by the Company, which, by reducing the number
of shares of Voting Stock outstanding, increases the proportionate
percentage of the total Voting Power represented by all shares of Voting
Stock Beneficially Owned by such Person, together with all Affiliates and
Associates of such Person, to 15% or more of the total Voting Power of the
aggregate of all shares of Voting Stock then outstanding; provided,
however, that if a Person, together with all Affiliates and Associates of
such Person, shall become the Beneficial Owner of shares of Voting Stock
representing 15% or more of total Voting Power of the aggregate of all
shares of Voting Stock then outstanding by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of any additional shares of Voting Stock (other than
shares issued by the Company as a dividend or distribution made pro rata to
all holders of Common Stock), then, subject to Section 1(a)(ii), such
Person shall be deemed to be an "Acquiring Person;"
(ii) If the Board of Directors determines in good faith that a Person
who would otherwise be an "Acquiring Person," as defined pursuant to this
Section 1(a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of shares of Voting Stock so
that such Person would no longer be an "Acquiring Person," as defined
pursuant to this Section 1(a), then such Person shall not be deemed to be
an "Acquiring Person" for any purposes of this Agreement;
(iii) If a Person would otherwise be deemed an "Acquiring Person" upon
the adoption of this Agreement, such Person (herein referred to as a
"Grandfathered Stockholder") will not be deemed an "Acquiring Person" for
purposes of this Agreement unless and until (A) subject to Section
1(a)(ii), such Grandfathered Stockholder, or any Affiliate or Associate of
such Grandfathered Stockholder, acquires Beneficial Ownership of any
additional shares of Voting Stock after adoption of this Agreement, in
which case, such Person shall no longer be deemed a Grandfathered
Stockholder and shall be deemed an "Acquiring Person;" or (B) in the case
of a Grandfathered Stockholder who, together with its Affiliates and
Associates, Beneficially Owns any shares of Voting Stock by reason of a
right to acquire such shares pursuant to an agreement, arrangement or
understanding (whether or not in writing, but excluding any right to
acquire shares pursuant to options or warrants granted by the Company prior
to adoption of this Agreement), such Grandfathered Stockholder or one or
more of its Affiliates or Associates exercises such right to acquire or
otherwise acquires such shares, directly or indirectly, pursuant to the
terms and conditions of such agreement, arrangement or understanding or
enters into a new agreement, arrangement or understanding (whether or not
in writing) for the purpose of acquiring, holding or voting such shares, in
which case, such Person shall no longer be deemed a Grandfathered
Stockholder and shall be deemed an "Acquiring Person;" provided, however,
that if upon consummation of the acquisition of Beneficial Ownership of
additional shares of Voting Stock pursuant to clause (A) of this
Subparagraph (iii) or upon exercise of a right to acquire or acquisition,
directly or indirectly, of shares of Voting Stock or entry into a new
agreement to acquire, hold or vote such shares pursuant to clause (B) of
this Subparagraph (iii), such Grandfathered Stockholder, together with its
Affiliates and Associates, does not then Beneficially Own 15% or more of
the total Voting Power of the aggregate of all shares of Voting Stock then
outstanding, then such Grandfathered Stockholder shall not be deemed an
"Acquiring Person;" and
(iv) Electronics for Imaging, Inc. ("EFI") will not become an
"Acquiring Person" for purposes of this Agreement solely as a result of the
approval, execution or delivery of the Stock Option Agreement, to be dated
as of February 13, 2003 (the "EFI Stock Option Agreement"), by and between
the Company and EFI or the consummation of the transactions contemplated by
the EFI Stock Option Agreement, including the acquisition of shares of
Common Stock by EFI pursuant to the EFI Stock Option Agreement; provided,
however, that if EFI, together with all its Affiliates and Associates,
shall become the Beneficial Owner of any additional shares of Voting Stock
(other than shares of Common Stock issuable pursuant to the EFI Stock
Option Agreement) and upon acquisition of Beneficial Ownership of such
2
additional shares shall, together with all its Affiliates and Associates,
be the Beneficial Owner of shares of Voting Stock (including shares
issuable pursuant to the EFI Option Agreement) representing 15% or more of
the total Voting Power of the aggregate of all shares of Voting Stock then
outstanding, then, subject to Section 1(a)(ii), EFI shall be deemed to be
an "Acquiring Person."
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the Exchange Act Regulations, as in effect on the
date of this Agreement; provided, however, that no director or officer of the
Company shall be deemed an Affiliate or Associate of any other director or
officer of the Company solely as a result of his or her being a director or
officer of the Company.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to "Beneficially Own" and to have "Beneficial Ownership" of any securities:
(i) that such Person or any of such Person's Affiliates or Associates
beneficially owns, directly or indirectly (as determined pursuant to Rule
13d-3 of the Exchange Act Regulations as in effect on the date of this
Agreement); provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own or to have Beneficial Ownership
of, any security if the agreement, arrangement, or understanding to vote
such security that would otherwise render such Person the Beneficial Owner
of such security (1) arises solely from a revocable proxy or consent given
to such Person in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable provisions of the
Exchange Act and the Exchange Act Regulations, and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report);
(ii) that such Person or any of such Person's Affiliates or Associates
has (A) the right to acquire (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement, arrangement,
or understanding, whether or not in writing (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon the exercise
of conversion rights, exchange rights, rights (other than these Rights),
warrants, or options, or otherwise; provided, however, that a Person shall
not be deemed the Beneficial Owner of, or to Beneficially Own or to have
Beneficial Ownership of securities tendered pursuant to a tender or
exchange offer made in accordance with the Exchange Act Regulations by or
on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange; or
(B) the right to vote pursuant to any agreement, arrangement, or
understanding (except to the extent contemplated by the proviso to
subparagraph (i) of this paragraph (c)); or
(iii) that are Beneficially Owned, directly or indirectly, by any
other Person (or any Affiliate or Associate of such Person) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement, or understanding, whether or not in writing (other
3
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the proviso to subparagraph (i) of this paragraph (c)), or disposing of any
such securities.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding that such Person
would be deemed to Beneficially Own hereunder.
(d) "Board of Directors" shall mean the Board of Directors of the Company
or any duly authorized committee thereof, including, without limitation, the
Special Committee of the Board of Directors of the Company appointed by
resolution of the Board of Directors adopted on January 22, 2003.
(e) "Business Day" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in New York City, New York or Pittsburgh,
Pennsylvania are authorized or obligated by law or executive order to close.
(f) "Certificate of Incorporation" shall mean the Seventh Amended and
Restated Certificate of Incorporation of the Company, as filed with the Office
of the Secretary of State of the State of Delaware on June 21, 2002, as the same
may hereafter be amended or restated.
(g) "Close of Business" on any given date shall mean 5:00 P.M., New York
City time, on such date; provided, however, that if such date is not a Business
Day, it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(h) "Common Stock" shall have the meaning set forth in the Preamble to this
Agreement.
(i) "Common Equity Interest" when used with reference to any Person other
than the Company shall mean the class or series of capital stock (or equity
interest) with the greatest voting power (in relation to any other classes or
series of capital stock (or equity interest)) of such other Person.
(j) "Distribution Date" shall have the meaning set forth in Section 3(a).
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(l) "Exchange Act Regulations" shall mean the General Rules and Regulations
under the Exchange Act.
(m) "Expiration Date" has the meaning set forth in Section 7(a).
4
(n) "Final Expiration Date" has the meaning set forth in Section 7(a).
(o) "Grandfathered Stockholder" has the meaning set forth in Section
1(a)(iii).
(p) "Person" shall mean any individual, partnership, limited liability
company, firm, corporation, association, trust, unincorporated organization, or
other entity, as well as any syndicate or group deemed to be a Person under
Section 14(d)(2) of the Exchange Act.
(q) "Principal Party" shall have the meaning set forth in Section 13(b).
(r) "Purchase Price" shall have the meaning set forth in Section 7(b).
(s) "Record Date" shall have the meaning set forth in the Preamble to this
Agreement.
(t) "Right" and "Rights" shall have the meaning set forth in the Preamble
to this Agreement.
(u) "Rights Certificates" shall have the meaning set forth in Section 3(a).
(v) "Rights Dividend Declaration Date" shall have the meaning set forth in
the Preamble to this Agreement.
(w) "Section 11(a)(ii) Event" shall mean the event described in Section
11(a)(ii) hereof that triggers the adjustment provided in Section 11(a)(ii).
(x) "Section 13 Event" shall mean any event described in clause (x), (y),
or (z) of Section 13(a) hereof. ----------------
(y) "Securities Act" shall mean the Securities Act of 1933, as amended.
(z) "Stock Acquisition Date" shall mean the first date of public
announcement (including, without limitation, the filing of any report pursuant
to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that
an Acquiring Person has become such.
(aa) "Subsidiary" shall mean, with reference to any Person, any other
Person of which (1) a majority of the Voting Power of the voting securities or
equity interests is Beneficially Owned, directly or indirectly, by such
first-mentioned Person or otherwise controlled by such first-mentioned Person,
or (2) an amount of voting securities or equity interests sufficient to elect at
least a majority of the directors or equivalent governing body of such other
Person is Beneficially Owned, directly or indirectly, by such first-mentioned
Person, or otherwise controlled by such first-mentioned Person.
(bb) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
5
(cc) "Voting Power" when used with reference to the capital stock of, or
units of equity interest in, any Person shall mean the number of votes entitled
to be cast generally in the election of directors of such Person (if such Person
is a corporation) or to participate in the management and control of such Person
(if such Person is not a corporation).
(dd) "Voting Stock" shall mean the Common Stock and any other class or
series of securities of the Company entitled to vote generally, together with
the Common Stock, in the election of directors of the Company. In calculating
the number of any class or series of Voting Stock for purposes of Section 11(b)
and Section 11(e) hereof, the number of shares, or fractions of a share, of such
class or series of capital stock that is entitled to the same or substantially
the same Voting Power as a whole share of Common Stock shall be deemed to be one
share of such Voting Stock.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. With
the consent of the Rights Agent, the Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable. The Rights Agent shall
have no duty to supervise, and in no event shall be liable for, the acts or
omissions of any such co-Rights Agent.
Section 3. Issue of Rights Certificates. (a) Until the earlier of (i) the
Close of Business on the tenth Business Day after the Stock Acquisition Date and
(ii) the Close of Business on the tenth Business Day (or such later date as may
be determined by action of a majority of the Board of Directors prior to such
time as any Person becomes an Acquiring Person and of which later date the
Company will give the Rights Agent prompt written notice) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary
of the Company, any employee benefit plan maintained by the Company or any of
its Subsidiaries or any trustee or fiduciary holding Voting Stock for, or
pursuant to the terms of, any such plan, acting in such capacity) is first
published or sent or given within the meaning of Rule 14d-4(a) of the Exchange
Act Regulations or any successor rule, if upon consummation thereof such Person
would be the Beneficial Owner of shares of Voting Stock representing 15% or more
of the total Voting Power of the aggregate of all shares of Voting Stock then
outstanding (including any such date that is after the date of this Agreement
and prior to the issuance of the Rights) (the earlier of (i) and (ii) above
being the "Distribution Date"):
(x) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for shares of Common Stock
registered in the names of the holders of shares of Common Stock as of
and subsequent to the Record Date (which certificates for shares of
Common Stock shall be deemed also to be certificates for Rights) and
not by separate rights certificates; and
(y) the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the
Company).
6
As soon as practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or cause
to be sent (and the Rights Agent will, if requested and provided with all
necessary information, send) by first-class, insured, postage prepaid mail, to
each record holder of shares of 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
(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(i) or Section 11(p) hereof, at the time of distribution
of the Rights Certificates, the Company may 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
send a copy of a Summary of Rights to Purchase Common Stock in substantially the
form attached hereto as Exhibit B and which may be appended to certificates that
represent shares of Common Stock (hereinafter referred to as the "Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of Common
Stock as of the Close of Business on the Record Date, at the address of such
holder shown on the records of the Company. With respect to certificates for
Common Stock outstanding as of the Record Date, until the Distribution Date, the
Rights will be evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights attached thereto.
Until the earlier of the Distribution Date or the Expiration Date, the surrender
for transfer of any certificate for Common Stock outstanding on the Record Date,
with or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Stock
represented thereby.
(c) Rights shall, without any further action, be issued in respect of all
shares of Common Stock that become outstanding (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates,
representing such shares of Common Stock, issued after the Record Date shall
bear the following legend:
"This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Stockholders Rights Agreement between Printcafe
Software, Inc. (the "Company") and Mellon Investor Services LLC, a New
Jersey limited liability company, as Rights Agent (the "Rights Agent")
dated as of February 13, 2003 (the "Rights Agreement"), the terms of which
are incorporated herein by reference and a copy of which is on file at the
principal office 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 after
receipt of a written request therefor. Under certain circumstances, as set
7
forth in the Rights Agreement, Rights that are Beneficially Owned by any
Person who is, was, or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such capitalized terms are defined in the Rights
Agreement), or specified transferees of such Acquiring Person (or Affiliate
or Associate thereof) may become null and void."
After the Record Date but prior to the earlier of the Distribution Date and the
Expiration Date, if new certificate(s) representing shares of Common Stock are
issued in connection with the transfer, split up, combination, or exchange of
certificate(s) representing shares of Common Stock or if new certificate(s)
representing shares of Common Stock are issued to replace any certificate(s)
that have been mutilated, destroyed, lost, or stolen, then such new
certificate(s) shall bear the foregoing legend. With respect to all certificates
containing the foregoing legend, until the earlier of the Distribution Date or
the Expiration Date, the Rights associated with the shares of Common Stock
represented by such certificates shall be evidenced by such certificates alone
and registered holders of the shares 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 shares of Common Stock represented by such certificates. In the event that
the Company purchases or acquires any shares of Common Stock after the Record
Date but prior to the Distribution Date, any Rights associated with such shares
of Common Stock shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the shares of Common
Stock that are no longer outstanding.
Section 4. Form of Rights Certificate. (a) The Rights Certificates (and the
forms of election to purchase and of assignment and the certificate to be
printed on the reverse thereof) shall 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 (but which do not affect the rights, duties or responsibilities of
the Rights Agent) and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or any rule
or regulation thereunder or with any rule or regulation of any stock exchange
upon which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11, 13, 22, 23, 24, and 27 hereof, the
Rights Certificates, whenever distributed, shall be dated as of the Distribution
Date and on their face shall entitle the holders thereof to purchase such number
of half (1/2) shares of Common Stock as shall be set forth therein at the price
set forth therein, but the amount and type of securities, cash, or other assets
that may be acquired 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 hereto that represents Rights
Beneficially Owned by: (i) an Acquiring Person or any Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) that becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and that receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
8
such Acquiring Person (or such Associate or Affiliate) or to any Person with
whom such Acquiring Person (or such Associate or Affiliate) has any continuing
written or oral agreement, arrangement, or understanding regarding either the
transferred Rights, shares of Common Stock, or the Company, or (B) a transfer
that the Board of Directors has determined in good faith to be part of a plan,
agreement, arrangement, or understanding that has as a primary purpose or effect
the avoidance of Section 7(e) hereof shall, upon the written direction of the
Board of Directors, contain (to the extent feasible), the following legend:
"The Rights represented by this Rights Certificate are or were
Beneficially Owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such capitalized terms
are defined in the Stockholders Rights Agreement, dated as of February 13,
2003 (the "Rights Agreement"), between Printcafe Software, Inc. and Mellon
Investor Services LLC, a New Jersey limited liability company, as Rights
Agent). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in Section
7(e) of the Rights Agreement."
Section 5. Countersignature and Registration. (a) Rights Certificates shall
be executed on behalf of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Vice Chairman of the Board, or its
Treasurer, shall have affixed thereto the Company's corporate seal (or a
facsimile thereof), and shall be attested by the Company's Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or by facsimile. Rights Certificates bearing the
manual or facsimile signatures of the individuals who were at any time the
proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
countersigning of such Rights Certificates by the Rights Agent or did not hold
such offices at the date of such Rights Certificates. No Rights Certificate
shall be entitled to any benefit under this Agreement or be valid for any
purpose unless there appears on such Rights Certificate a countersignature duly
executed by the Rights Agent by manual or facsimile signature of an authorized
officer, and such countersignature upon any Rights Certificate shall be
conclusive evidence, and the only evidence, that such Rights Certificate has
been duly countersigned as required hereunder.
(b) Following the Distribution Date, receipt by the Rights Agent of notice
to that effect and all other relevant information, the Rights Agent will keep or
cause to be kept, at its office designated 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 name and address of
each holder of the Rights Certificates, the number of Rights evidenced on its
face by each Rights Certificate, and the date of each Rights Certificate.
Section 6. Transfer, Split Up, Combination, and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost, or Stolen Rights Certificates. (a)
Subject to the provisions of Sections 4(b), 7(e), and 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
(other than Rights Certificates representing Rights that have become null and
void pursuant to Section 7(e) hereof, that have been redeemed pursuant to
9
Section 23 hereof, or that have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined, or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase a like
number of half (1/2) shares of Common Stock (subject to adjustment as provided
herein) as the Rights Certificate or Certificates surrendered then entitled such
holder 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 office 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 executed the certificate set
forth 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) of the Rights represented by such
Rights Certificate or Affiliates or Associates thereof as the Company shall
reasonably request; whereupon the Rights Agent shall, subject to the provisions
of 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 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. The Rights Agent shall have no duty or obligation under this
Section unless and until it is satisfied that all such taxes and/or governmental
charges have been paid.
(b) If a Rights Certificate shall be mutilated, lost, stolen, or destroyed,
upon request by the registered holder of the Rights represented thereby and upon
payment to the Company and the Rights Agent of all reasonable expenses incident
thereto, there shall be issued, in exchange for and upon cancellation of the
mutilated Rights Certificate, or in substitution for the lost, stolen, or
destroyed Rights Certificate, a new Rights Certificate, in substantially the
form of the prior Rights Certificate, of like tenor and representing the
equivalent number of Rights, but, in the case of loss, theft, or destruction,
only upon receipt of evidence satisfactory to the Company and the Rights Agent
of such loss, theft or destruction of such Rights Certificate and, if requested
by the Company or the Rights Agent, indemnity also satisfactory to it.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Prior to the earlier of (i) the Close of Business on February 13, 2013 (the
"Final Expiration Date"), or (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof or (iii) the time at which the Rights are
exchanged as provided in Section 24 hereof (the earlier of (i), (ii), and (iii)
being the "Expiration Date"), the registered holder of any Rights Certificate
may, subject to the provisions of Sections 7(e) and 9(c) hereof, exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date upon surrender of the 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 office of the
Rights Agent designated for such purpose, together with payment of the aggregate
Purchase Price (as hereinafter defined) for the number of shares of Common Stock
10
(or half (1/2) shares thereof or, if applicable, such other securities, cash or
other assets, as the case may be) for which such surrendered Rights are then
exercisable.
(b) The purchase price for each half (1/2) share of Common Stock
purchasable upon exercise of a Right shall be $6.80 (as adjusted from time to
time as provided in Sections 11 and 13(a) hereof) (the "Purchase Price"). The
Purchase Price shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c)(2) below.
(c) (1) Subject to Section 14(b) hereof, following the Distribution Date,
the Company may (at the direction of the Board of Directors) deposit with a
corporation or entity in good standing organized under the laws of the United
States or any State of the United States, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority (the "Depositary Agent")
certificates representing the shares (or half (1/2) shares) of Common Stock that
may be acquired upon exercise of the Rights and may cause such Depositary Agent
to enter into an agreement pursuant to which the Depositary Agent shall issue
receipts representing interests in the shares of Common Stock so deposited.
(2) 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 for the half (1/2) shares of Common Stock (or, if applicable, such other
securities, cash, or other assets, as the case may be) to be purchased thereby
as set forth below and an amount equal to any applicable tax or charge required
to be paid by the holder of such Rights Certificate in accordance with Section 9
hereof, or evidence satisfactory to the Company of payment of such tax or
charge, the Rights Agent shall, subject to Section 20(k) hereof, thereupon
promptly (i)(A) requisition from any transfer agent of the Common Stock
certificates representing such number of shares of Common Stock (or half (1/2)
shares thereof or, if applicable, such other securities) as are to be purchased
and the Company will direct its transfer agent to comply with all such requests,
and/or (B) requisition from the Depositary Agent depositary receipts
representing such number of half (1/2) shares of Common Stock as are to be
purchased and the Company will direct the Depositary Agent to comply with all
such requests, (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)
after receipt of such certificates or such depositary receipts, 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 (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. 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(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash, and/or
other property is available for distribution by the Rights Agent, if and when
necessary to comply with this Agreement. The payment of the Purchase Price (as
such amount may be reduced pursuant to Section 11(a)(iii) hereof) may be made in
cash or by certified or bank check or money order payable to the order of the
Company.
11
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
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 Sections 6 and 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the time that any Person becomes an Acquiring Person, any Rights
Beneficially Owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and who receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person (or any such Associate or Affiliate) to holders of equity interests in
such Acquiring Person (or any such Associate or Affiliate) or to any Person with
whom the Acquiring Person (or such Associate or Affiliate) has any continuing
written or oral agreement, arrangement, or understanding regarding the
transferred Rights, shares of Common Stock, or the Company or (B) a transfer
that the Board of Directors has determined in good faith to be part of a plan,
agreement, arrangement, or understanding that has as a primary purpose or effect
the avoidance of this Section 7(e), shall be null and void without any further
action, and any holder of such Rights thereafter shall have no rights or
preferences whatsoever with respect to such Rights, whether under any provision
of this Agreement, the Rights Certificates, or otherwise (including, without
limitation, rights and preferences pursuant to Sections 7, 11, 13, 23, and 24
hereof). The Company shall notify the Rights Agent when this Section 7(e)
applies and shall use reasonable efforts to ensure compliance with the
provisions of this Section 7(e) and Section 4(b), but neither the Company nor
the Rights Agent shall have any liability to any holder of Rights or any other
Person as a result of the Company's failure to make any determination under this
Section 7(e) or such Section 4(b) with respect to an Acquiring Person or its
Affiliates, Associates, or transferees.
(f) Notwithstanding anything in this Agreement or any Rights Certificate 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 by such registered holder
unless such registered holder shall have (i) completed and executed the
certificate following 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) of the Rights represented by such Rights Certificate 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 cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any Rights
12
Certificates acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Rights Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The Company
shall at all times prior to the Expiration Date cause to be reserved and kept
available out of its authorized but unissued shares of Common Stock and/or out
of any shares of Common Stock held in its treasury (and following the occurrence
of a Triggering Event, out of the authorized but unissued shares of such other
equity securities of the Company as may be issuable upon exercise of the Rights
and/or out of any shares of such securities held in its treasury), the number of
shares of Common Stock (and following the occurrence of a Triggering Event, the
number of shares of such other equity securities of the Company) that, as
provided in this Agreement, will be sufficient to permit the full exercise of
all outstanding Rights. Upon the occurrence of any events resulting in an
increase in the aggregate number of shares of Common Stock (or other equity
securities of the Company) issuable upon exercise of all outstanding Rights
above the number then reserved, the Company shall make appropriate increases in
the number of shares so reserved.
(b) So long as the shares of Common Stock (and following the occurrence of
a Triggering Event, any other equity securities of the Company) to be issued and
delivered upon the exercise of the Rights may be listed on any stock exchange,
the Company shall during the period from the Distribution Date through the
Expiration Date use its best efforts to cause all securities reserved for such
issuance to be listed on such exchange upon official notice of issuance upon
such exercise.
(c) The Company shall use its reasonable best efforts (i) either (A) as
soon as practicable following the first occurrence of a Section 11(a)(ii) Event
and a determination by the Company in accordance with Section 11(a)(iii) hereof,
if applicable, of the consideration to be delivered by the Company upon exercise
of the Rights, or (B) if so required by law, as soon as required following the
Distribution Date (the earliest of (A) and (B) being the "Registration Date"),
to file a registration statement on an appropriate form under the Securities
Act, with respect to the securities that may be acquired upon exercise of the
Rights (the "Registration Statement"); (ii) to cause the Registration Statement
to become effective as soon as practicable after such filing; (iii) to cause the
Registration Statement to remain effective (and to include a prospectus at all
times complying with the requirements of the Securities Act) until the earlier
of (A) the date as of which the Rights are no longer exercisable for the
securities covered by the Registration Statement and (B) the Expiration Date;
and (iv) to take as soon as practicable following the Registration Date such
action as may be required to ensure that any acquisition of securities upon
exercise of the Rights complies with any applicable state securities or "Blue
Sky" laws. The Company may temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause (i) of the first sentence of
this Section 9(c), 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 promptly notify the Rights Agent thereof in
writing and issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement (with
13
prompt written notice thereof to the Rights Agent) at such time as the
suspension is no longer in effect stating that the suspension on the
exercisability of the Rights is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction (x) if the requisite qualification in such jurisdiction
shall not have been obtained and until a registration statement has been
declared effective or (y) if the exercise thereof shall not be permitted under
applicable law.
(d) The Company shall take such action as may be necessary to ensure that
all shares of Common Stock (and, following the occurrence of a Triggering Event,
any other securities that may be delivered upon exercise of Rights) shall be, at
the time of delivery of the certificates or depositary receipts for such
securities (subject to payment of the Purchase Price), duly and validly
authorized and issued, fully paid and non-assessable.
(e) The Company shall pay when due and payable any and all documentary,
stamp, or tax, or other charge, that is payable in respect of the issuance and
delivery of the Rights Certificates or the issuance and delivery of any
certificates for shares of Common Stock (or other equity securities of the
Company that may be delivered upon exercise of the Rights) upon the exercise of
Rights; provided, however, the Company shall not be required to pay any such tax
or charge that may be payable in connection with the issuance or delivery of
shares of Common Stock (or half (1/2) shares thereof), or any certificates or
depositary receipts for such shares of Common Stock (or half (1/2) shares
thereof or, if applicable, such other securities, cash or other assets, as the
case may be) to any Person other than the registered holder of the Rights
Certificates evidencing the Rights surrendered for exercise. The Company shall
not be required to issue or deliver any certificates for shares of Common Stock
(or half (1/2) shares thereof or, if applicable, such other securities, cash or
other assets, as the case may be) to, or in a name other than that of, the
registered holder upon the exercise of any Rights until any such tax or charge
shall have been paid (any such tax or charge 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 or charge is due.
(f) The Company shall use its reasonable best efforts, on or prior to the
date that is either (A) as soon as practicable following the first occurrence of
a Section 11(a)(ii) Event and a determination by the Company in accordance with
Section 11(a)(iii) hereof, if applicable, of the consideration to be delivered
by the Company upon exercise of the Rights, or (B) if so required by law, as
soon as required following the Distribution Date, to obtain any and all
regulatory approvals that may be required with respect to the securities
purchasable upon exercise of the Rights. The Company may temporarily suspend,
for a period of time not to exceed 90 days after the date set forth in the first
sentence of this Section 9(f), the exercise of the Rights in order to permit the
Company to obtain the necessary regulatory approvals. Upon any such suspension,
the Company shall promptly notify the Rights Agent thereof in writing and issue
a public announcement stating that the exercise of the Rights has been
temporarily suspended, as well as a public announcement (with prompt written
notice thereof to the Rights Agent) at such time as the suspension is no longer
in effect stating that the suspension on the exercise of the Rights is no longer
in effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable unless and until all required regulatory
14
approvals have been obtained with respect to the securities purchasable upon
exercise of the Rights.
Section 10. Common Stock Purchase Record Date. Each Person in whose name
any certificate for shares of Common Stock (or half (1/2) shares thereof or, if
applicable, other securities) 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 such half (1/2) shares thereof or, if applicable, such other
securities) 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 any 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, if applicable, such other
securities) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the Common
Stock (or, if applicable, such other securities) transfer books of the Company
are open and, provided further, that if delivery of shares of Common Stock (or
half (1/2) shares thereof) is delayed pursuant to Section 9(c) hereof, such
Persons shall be deemed to have become the record holders of such shares (or
half (1/2) shares) of Common Stock only when such shares first become
deliverable. Prior to the exercise of the Rights evidenced thereby, the holder
of a Rights Certificate shall not be entitled to any rights of a shareholder of
the Company with respect to securities 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 securities covered
by each Right, and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the Rights
Dividend Declaration Date (A) declare a dividend on the outstanding Common Stock
payable in shares of Common Stock, (B) subdivide the outstanding Common Stock,
(C) combine the outstanding Common Stock into a smaller number of shares, or (D)
issue any shares of its capital stock in a reclassification of the 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), the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
(or fractions thereof) of Common Stock or capital stock, as the case may be,
issuable on such date upon exercise of the Rights, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares (or fractions thereof) of Common Stock or
capital stock, as the case may be, which, if such Right had been exercised
immediately prior to such date, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
15
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares (or fractions thereof) of capital stock of the
Company issuable upon exercise of one Right. If an event occurs that 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 any Person becomes an Acquiring Person, provision shall
be made so that each holder of a Right (except as provided below in Section
11(a)(iii) and in Sections 7(e), 13, and 24 hereof) shall thereafter have the
right to receive, upon exercise thereof, at a price equal to the then current
Purchase Price multiplied by the number of half (1/2) shares of Common Stock for
which a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event (such product thereafter being, for all purposes of this
Agreement other than Section 13 hereof, the "Purchase Price"), in accordance
with the terms of this Agreement, in lieu of the number of half (1/2) shares of
Common Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, such number of shares of Common Stock
as shall equal the result obtained by dividing (x) the Purchase Price (as the
same has been adjusted pursuant to the foregoing provisions of this Section
11(a)(ii)), by (y) 50% of the then current market price (determined pursuant to
Section 11(d) hereof) per whole share of Common Stock on the date of such first
occurrence (such shares of Common Stock (and/or half (1/2) shares thereof) being
the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock that are
authorized by the Company's Certificate of Incorporation but are not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights is
insufficient to permit the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company shall take all
such action as may be necessary to authorize additional shares of Common Stock
for issuance upon exercise of the Rights. In the event that the Company shall,
after good faith effort, be unable to take all such actions as may be necessary
to authorize such additional shares of Common Stock, the Company, by the vote of
a majority of the Board of Directors, shall: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of each such Right
(the "Current Value") over (2) the Purchase Price (such excess being the
"Spread"), and (B) with respect to each such Right, make adequate provision to
substitute for such Adjustment Shares, upon exercise of such Rights and payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) Common Stock or other equity securities of the Company, to the extent
permitted by the Company's Certificate of Incorporation, (4) debt securities of
the Company, (5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such aggregate value has
been determined by a majority of the Board of Directors, after receiving advice
from a nationally recognized investment banking firm; provided, however, that if
the Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty days following the first occurrence of a Section
11(a)(ii) Event (for purposes hereof, the "Section 11(a)(iii) Trigger Date"),
then the Company shall be obligated to deliver, 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 of
Common Stock and/or cash shall have an aggregate value equal to the Spread. To
the extent that the Company determines that some action need be taken pursuant
16
to this Section 11(a)(iii), the Company shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a share of Common Stock or a
shares of any other equity security of the Company shall be the current market
price (as determined pursuant to Section 11(d) hereof) per share on the Section
11(a)(iii) Trigger Date.
(b) In case the Company shall fix a record date for the issuance of rights,
options, or warrants to all holders of any shares of Common Stock entitling them
to subscribe for or purchase (for a period expiring within forty-five calendar
days after such record date) shares of Common Stock or shares of Voting Stock or
securities convertible into shares of Common Stock or shares of Voting Stock at
a price per share of Common Stock or per share of Voting Stock (or having a
conversion price per share, if a security convertible into Common Stock or
Voting Stock) less than the current market price (as determined pursuant to
Section 11(d) hereof) per share of Common Stock on such record date, then the
Purchase Price with respect to the Common Stock 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 sum of the number of shares of Common Stock and Voting Stock (if
any) outstanding on such record date plus the number of shares of Common Stock
or Voting Stock, as the case may be, that the aggregate offering price of the
total number of shares of Common Stock and/or Voting Stock so to be offered
(and/or the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such current market price, and the denominator
of which shall be the number of shares of Common Stock and Voting Stock (if any)
outstanding on such record date plus the number of additional shares of Common
Stock and/or Voting Stock to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible). In
case such subscription price may be paid by delivery of consideration all or
part of which may be in a form other than cash, the value of such consideration
shall be as determined by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding and
conclusive for all purposes on the Rights Agent and the holders of the Rights.
Shares of Common Stock and/or Voting Stock (if any) owned by or held for the
account of the Company or any Subsidiary shall not be deemed outstanding for the
purpose of such computation. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such rights or warrants are
not so issued, the Purchase Price shall be adjusted to be the Purchase Price
that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all
holders of shares of Common Stock (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 quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in shares of Common Stock, but including any
dividend payable in stock other than Common Stock), or subscription rights,
options or warrants (excluding those referred to in Section 11(b) hereof), then,
in each case, 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 (as determined pursuant to Section 11(d) hereof) per share of Common Stock
17
on such record date minus the fair market value (as determined in good faith by
a majority of the Board of Directors, whose determination shall be described in
a statement filed with the Rights Agent and shall be binding and conclusive for
all purposes on the Rights Agent and the holder of the Rights) of the cash,
assets, or evidences of indebtedness so to be distributed or of such
subscription rights or warrants distributable in respect of a share of Common
Stock, and the denominator of which shall be such current market price (as
determined pursuant to Section 11(d) hereof) per share of Common Stock on such
record date. 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 be adjusted to be the Purchase Price that would have been
in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current market
price" per share of any security, including the Common Stock or any Common
Equity Interest, on any date shall be deemed to be the average of the daily
closing prices per share of such security for the ten consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided,
however, if prior to the expiration of such requisite ten Trading Day period,
the issuer announces either (A) a dividend or distribution on such security
payable in shares of such security or securities convertible into such shares
(other than the Rights), or (B) any subdivision, combination, or
reclassification of such security, then, following the ex-dividend date for such
dividend or the record date for such subdivision, as the case may be, the
"current market price" for such security shall be properly adjusted to take into
account such event. The closing price for each day shall be, if the shares of
such security are listed and admitted to trading on a national securities
exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which such shares of such security are listed or admitted to trading or, if
such shares 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 such shares
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 such
shares selected by a majority of the Board of Directors. If on any such date no
market maker is making a market in such shares, the fair value of such shares on
such date as determined in good faith by a majority of the Board of Directors
shall be used. If such shares are 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 a majority of the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. The term "Trading Day" shall mean, if such
shares of such security are listed or admitted to trading on any national
securities exchange, a day on which the principal national securities exchange
on which such shares are listed or admitted to trading is open for the
transaction of business or, if such shares are not so listed or admitted, a
Business Day.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Purchase Price; provided,
however, that any adjustments that by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
18
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest hundred-thousandth of a share of Common Stock
or to the nearest ten-thousandth of a share of Common Equity Interest or Voting
Stock or other share, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the transaction that
mandates such adjustment or (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Sections 11(a)(ii) or
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), (d), (e),
(g), (h), (i), (j), (k), (1), and (m), 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.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of half (1/2) shares of
Common Stock (or other securities or amount of cash or combination thereof) that
may be acquired from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of half (1/2) shares of
Common Stock (calculated to the nearest one hundred-thousandth of a shares)
obtained by (i) multiplying (x) the number of half (1/2) shares of Common Stock
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of shares of Common Stock (or half (1/2) shares thereof) that may be
acquired upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number of half
(1/2) shares of Common Stock for which a Right was exercisable immediately prior
to such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one ten-thousandth of a Right) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement, and notify the Rights Agent in writing, 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.
19
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Rights Certificates have been issued, shall be at
least ten days later than the date of such public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), 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 Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or the
number of half (1/2) shares of Common Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per half (1/2) share and the number of half (1/2)
shares of Common Stock that was expressed in the initial Rights Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value of the number of half (1/2) shares of
Common Stock issuable upon exercise of the Rights, the Company shall take any
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue such fully paid and non-assessable number
of shares (and/or half (1/2) shares) of Common Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer (and shall promptly notify the Rights
Agent in writing of any such election) until the occurrence of such event the
issuance to the holder of any Right exercised after such record date of that
number of half (1/2) shares of Common Stock and shares of other capital stock or
securities of the Company, if any, issuable upon such exercise over and above
the number of half (1/2) shares of Common Stock and shares of other capital
stock or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due 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.
(m) Anything in this Section 11 to the contrary notwithstanding, prior to
the Distribution Date, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that the Board of Directors shall determine
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
20
price, (iii) issuance wholly for cash of shares of Common Stock or securities
that 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, hereafter made by the Company to holders of its
Common, shall not be taxable to such holders or shall reduce the taxes payable
by such holders.
(n) The Company shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a direct or indirect, wholly-owned
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a direct or
indirect, wholly-owned Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of 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 direct or indirect, wholly-owned
Subsidiaries in one or more transactions, each of which complies with Section
11(o) hereof), if (x) at the time of or immediately after such consolidation,
merger, or sale there are any rights, warrants, or other instruments or
securities outstanding or agreements in effect that would substantially diminish
or otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with, or immediately after such consolidation, merger,
or sale, the Person that constitutes, or would constitute, the "Principal Party"
for purposes of Section 13(a) hereof shall have distributed or otherwise
transferred to its shareholders or other persons holding an equity interest in
such Person Rights previously owned by such Person or any of its Affiliates and
Associates; provided, however, this Section 11(n) shall not affect the ability
of any Subsidiary of the Company to consolidate with, merge with or into, or
sell or transfer assets or earning power to, any other Subsidiary of the
Company.
(o) After the Distribution Date and so long as any Rights shall then be
outstanding (other than Rights that have become null and void pursuant to
Section 7(e) hereof), the Company shall not, except as permitted by Sections 23,
24, and 27 hereof, take (or permit any Subsidiary of the Company to take) any
action if at the time such action is taken it is reasonably foreseeable that
such action will diminish substantially or otherwise eliminate the benefits
intended to be afforded by the Rights.
Section 12. Certificate of Adjusted Purchase Price or 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 and computations 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 or statement
therein contained and shall have no duty or liability with respect to, and shall
not be deemed to have knowledge of, any adjustment or any such event unless and
until it shall have received such a certificate.
21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) at any time after a Person has become an Acquiring Person, in the event
that, directly or indirectly, either (x) the Company shall consolidate with, or
merge with and into, any other Person (other than a direct or indirect,
wholly-owned Subsidiary of the Company in a transaction that complies with
Section 11(o) hereof), and the Company shall not be the continuing or surviving
entity of such consolidation or merger, (y) any Person (other than a direct or
indirect, wholly-owned Subsidiary of the Company in a transaction that complies
with Section 11(o) hereof) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving entity of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be converted into or
exchanged for stock or other securities of any other Person (or the Company) or
cash or any other property or (z) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer) to any
Person or Persons (other than the Company or any of its direct or indirect,
wholly-owned Subsidiaries in one or more transactions, each of which complies
with Section 11(o) hereof), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) (any such event described in (x), (y), or (z)
being herein referred to as a "Section 13 Event"); then, and in each such case,
proper provision shall be made so that:
(i) 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 multiplied by the number of half (1/2)
shares of Common Stock for which a Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of half (1/2) shares of Common
Stock, such number of validly authorized and issued, fully paid, and
non-assessable shares of Common Equity Interest of the Principal Party
(which shares shall not be subject to any liens, encumbrances, rights of
first refusal, transfer restrictions, or other adverse claims) as shall be
equal to the result obtained by (1) multiplying such then current Purchase
Price by the number of half (1/2) shares of Common Stock for which such
Right is exercisable immediately prior to the first occurrence of a Section
13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such half (1/2)
shares of Common Stock for which a Right would be exercisable hereunder but
for the occurrence of such Section 11(a)(ii) Event by the Purchase Price
that would be in effect hereunder but for such first occurrence) and (2)
dividing that product (which, following the first occurrence of a Section
13 Event, shall be the "Purchase Price" for all purposes of this Agreement)
by 50% of the then current market price (determined pursuant to Section
11(d) hereof) per share of the Common Equity Interest of such Principal
Party on the date of consummation of such Section 13 Event.;
(ii) 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;
22
(iii) 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;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its Common
Equity Interest) in connection with the consummation of any such
transaction as may be necessary to ensure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be possible, to its
shares of Common Equity Interest thereafter deliverable upon the exercise
of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no further
effect following the first occurrence of any Section 13 Event, and the
Rights that have not theretofore been exercised shall thereafter become
exercisable in the manner described in this Section 13.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y) of
the first sentence of Section 13(a), (A) the Person (including the Company
as successor thereto or as the surviving corporation) that is the issuer of
any securities or other equity interests into which shares of Common Stock
are converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer of Common Equity Interest that has the highest
aggregate current market price (determined pursuant to Section 11(d)
hereof) and (B) if no securities or other equity interests are so issued,
the Person (including the Company as successor thereto or as the surviving
entity) that is the other constituent party to such merger or
consolidation, or, if there is more than one such Person, the Person that
is a constituent party to such merger or consolidation, the Common Equity
Interest of which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party receiving the
largest 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 transferred pursuant to such transaction or transactions or
if the Person receiving the largest portion of the assets or earning power
cannot be determined, whichever Person that has received assets or earning
power pursuant to such transaction or transactions, the Common Equity
Interest of which has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof);
provided, however, that in any such case, (1) if the Common Equity Interest of
such Person is not at such time and has not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act ("Registered
Common Equity Interest"), and such Person is a direct or indirect Subsidiary of
another Person that has Registered Common Equity Interest outstanding,
"Principal Party" shall refer to such other Person; (2) if the Common Equity
23
Interest of such Person is not Registered Common Equity Interest, and such
Person is a direct or indirect Subsidiary of another Person (other than an
individual), but is not a direct or indirect Subsidiary of another Person that
has Registered Common Equity Interest outstanding, "Principal Party" shall refer
to the ultimate parent entity of such first-mentioned Person; (3) if the Common
Equity Interest of such Person is not Registered Common Equity Interest, and
such Person is directly or indirectly controlled by more than one Person, and
one or more of such other Persons has Registered Common Equity Interest
outstanding, "Principal Party" shall refer to whichever of such other Persons is
the issuer of the Registered Common Equity Interest having the highest aggregate
current market price (determined pursuant to Section 11(d) hereof); and (4) if
the Common Equity Interest of such Person is not Registered Common Equity
Interest, and such Person is directly or indirectly controlled by more than one
Person (one or more of which is a Person other than an individual), and none of
such other Persons has Registered Common Equity Interest outstanding, "Principal
Party" shall refer to whichever ultimate parent entity is the corporation having
the greatest stockholders' equity or, if no such ultimate parent entity is a
corporation, shall refer to whichever ultimate parent entity is the entity
having the greatest net assets.
(c) The Company shall not consummate any Section 13 Event unless the
Principal Party shall have a sufficient number of authorized shares of its
Common Equity Interest that have not been issued (or reserved for issuance) or
that are held in its treasury to permit the exercise in full of the Rights in
accordance with this Section 13, and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that the Principal Party shall use
its best efforts to:
(i) (A) prepare and file on an appropriate form, as soon as
practicable following the execution of such agreement, a registration
statement under the Securities Act with respect to the shares of Common
Equity Interest that may be acquired upon exercise of the Rights, (B) cause
such registration statement to remain effective (and to include a
prospectus at all times complying with the requirements of the Securities
Act) until the Expiration Date, and (C) take such action as may be required
to ensure that any acquisition of such shares of Common Equity Interest
upon the exercise of the Rights complies with any applicable state security
or "Blue Sky" laws as soon as practicable following the execution of such
agreement;
(ii) as soon as practicable after the execution of such agreement,
deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates that comply in all respects with
the requirements for registration on Form 10 (or any successor form) under
the Exchange Act; and
(iii) obtain any and all regulatory approvals as may be required with
respect to the shares of Common Equity Interest securities that may be
acquired upon exercise of the Rights.
(d) In case the Principal Party that is to be a party to a transaction
referred to in this Section 13 has at the time of such transaction, or
immediately following such transaction will have, a provision in any of its
24
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its affairs, or any other agreements or arrangements, which
provision would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, shares of Common Equity Interest of such
Principal Party at less than the then current market price per share (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or convertible
into, Common Equity Interest of such Principal Party at less than such then
current market price (other than to holders of Rights pursuant to this Section
13); (ii) providing for any special payment, tax, or similar provisions in
connection with the issuance of the Common Equity Interest of such Principal
Party pursuant to the provisions of Section 13; or (iii) otherwise eliminating
or substantially diminishing the benefits intended to be afforded by the Rights
in connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13; then, in such event, the Company 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 cancelled, 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 provisions of this Section 13 shall similarly apply to successive
mergers or consolidations 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 that have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
Section 14. Fractional Rights; Fractional Shares; Waiver. (a) The Company
shall not be required to issue fractions of Rights or to distribute Rights
Certificates that evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the Persons to which such fractional Rights would
otherwise be issuable, an amount in cash equal to such fraction of the market
value of a whole Right. For purposes of this Section 14(a), the market value of
a whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date that such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be, if the
Rights are listed or admitted to trading on a national securities 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.
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 shall be used and such determination shall be described in a
statement filed with the Rights Agent and delivered to the holders of the
Rights, which shall be conclusive for all purposes.
25
(b) The Company shall not be required to issue fractions of shares of
Common Stock (other than fractions that are integral multiples of one half (1/2)
of a share of Common Stock) upon exercise of the Rights or to distribute
certificates that evidence such fractional shares of Common Stock (other than
fractions that are integral multiples of one half (1/2) of a share of Common
Stock). Subject to Section 7(c)(1) hereof, fractions of shares of Common Stock
in integral multiples of one half (1/2) of a share of Common Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a Depositary Agent selected by it;
provided, however, that such agreement shall provide that the holders of such
depositary receipts shall have all the rights, privileges, and preferences to
which they are entitled as Beneficial Owners of the shares (or half (1/2)
shares) of Common Stock represented by such depositary receipts. In lieu of such
fractional shares of Common that are not integral multiples of one half (1/2) of
a share, 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 then current market price of a share of Common Stock on
the day of exercise, determined in accordance with Section 11(d) hereof.
(c) The holder of a Right, by the acceptance of the Right, expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent, are vested in
the respective registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of certificates representing shares of
Common Stock); and any registered holder of a Rights Certificate (or, prior to
the Distribution Date, of a certificate representing shares of 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 a certificate representing
shares of Common Stock), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company or any other Person to enforce, or otherwise act in respect of, his
right to exercise the Rights evidenced by such Rights Certificate 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;
26
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the office 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
duly 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 shall 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 any 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, judgment 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 best
efforts to have any such order, decree, judgment or ruling lifted or otherwise
overturned as promptly as practicable.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. 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 that 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, except as provided in Section 25 hereof, to receive notice
of meetings or other actions affecting shareholders, or to receive dividends or
subscription rights, or otherwise, until the Right 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 other reasonable disbursements incurred in the
preparation, delivery, amendment, 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
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement,
cost or expense (including, without limitation, the reasonable fees and expenses
of legal counsel), incurred without gross negligence or bad faith on the part of
the Rights Agent (which gross negligence or bad faith must be determined by a
final, non-appealable order, judgment, decree or ruling of a court of competent
27
jurisdiction), for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance, administration, exercise and performance of its
duties under this Agreement. The costs and expenses incurred in enforcing this
right of indemnification and defending against any claim of liability shall be
paid by the Company. The provisions of this Section 18 and Section 20 below
shall survive the termination of this Agreement, the exercise or expiration of
the Rights and the resignation, replacement or removal of the Rights Agent.
(b) The Rights Agent shall be authorized and protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it in
connection with its acceptance and administration of this Agreement and the
exercise and performance of its duties hereunder, in reliance upon any Rights
Certificate or certificate for shares of Common Stock or other capital stock or
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. (a)
Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the corporate trust or shareholder
services businesses 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 document or any further act on the part of any of the parties
hereto; provided, however, that such Person 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 Rights Agent 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 to perform
only the duties and obligations expressly imposed by this Agreement (and no
implied duties) upon the following terms and conditions, by all of which the
28
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 or an employee of the Rights Agent), and the advice or
opinion of such counsel shall be full and complete authorization and protection
to the Rights Agent and the Rights Agent shall incur no liability for or in
respect of any action taken, suffered or omitted by it and in accordance with
such advice or 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 an Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking, suffering or omitting to take 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 Chief Executive
Officer, the President, the Vice-Chairman of the Board, 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 and
complete authorization and protection to the Rights Agent and the Rights Agent
shall incur no liability for or in respect of any action taken, suffered or
omitted by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own gross negligence or bad faith (which gross negligence or
bad faith must be determined by a final, non-appealable order, judgment, decree
or ruling of a court of competent jurisdiction). Anything herein to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage. Any liability of the
Rights Agent under this Rights Agreement will be limited to the amount of annual
fees paid by the Company to the Rights Agent.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the 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 have any responsibility for the validity of
this Agreement or the execution and delivery hereof (except the due execution
and delivery hereof by the Rights Agent) or for the validity or execution of any
Rights Certificate (except its countersignature thereon); nor shall it be
responsible for any breach by the Company of any covenant or failure by the
Company to satisfy conditions contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including Rights becoming null and void pursuant to Section 7(e)
hereof) or any adjustment in the terms of the Rights required under the
provisions of Sections 11, 13, 23, or 24 hereof or for the manner, method, or
amount of any such change or adjustment or the ascertaining of the existence of
29
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Rights Certificates after receipt by the
Rights Agent of the certificate describing any such adjustment contemplated by
Section 12); 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 or any other securities to be issued pursuant to this Agreement
or any Rights Certificate or as to whether any shares of Common Stock or any
other securities will, when so issued, be validly authorized and issued, fully
paid and non-assessable.
(f) The Company shall perform, execute, acknowledge, and deliver or cause
to be performed, executed, acknowledged, and delivered all such further acts,
instruments, and assurances as may reasonably be required by the Rights Agent
for the performance by the Rights Agent of its duties under this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
the Vice-Chairman of the Board, 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 such
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall not be liable for or in respect of any action taken,
suffered or omitted by it in accordance with instructions of any such officer or
for any delay in acting while waiting for those instructions. The Rights Agent
shall be fully authorized and protected in relying upon the most recent
instructions received by any such officer. Any application by the Rights Agent
for written instructions from the Company may, at the option of the Rights
Agent, set forth in writing any action proposed to be taken, suffered or omitted
by the Rights Agent under this Rights Agreement and the date on and/or after
which such action shall be taken or suffered or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or suffered
by, or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application (which
date shall not be less than five Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken, suffered or omitted.
(h) The Rights Agent and any shareholder, affiliate, 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 the Rights Agent were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent or any such stockholder, affiliate, director, officer or employee from
acting in any other capacity for the Company or for any other Person.
(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 (through its
directors, officers and employees) or by or through its attorneys or agents, and
30
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 or any other Person resulting from any such act, default, neglect or
misconduct, absent gross negligence or bad faith in the selection and continued
employment thereof (which gross negligence or bad faith must be determined by a
final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).
(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
it believes 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 not been
completed, has not been signed, 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 or transfer without first consulting with the
Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty days' prior notice in writing mailed to the Company, by registered
or certified mail, in which case the Company shall promptly give or cause to be
given written notice to the registered holders of Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty days' prior 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 to the registered
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 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 Person organized and doing business
under the laws of the United States or any state of the United States in good
standing, shall be authorized under such laws to exercise corporate trust, stock
transfer or shareholder services powers, shall be subject to supervision or
examination by federal or state authorities and shall have 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 Person 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
31
with the predecessor Rights Agent and each transfer agent of the Common Stock,
and mail a notice thereof in writing to the registered holders of the Rights
Certificates by first-class mail. 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.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or the Rights Certificates to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by a majority of the Board of Directors to reflect
any adjustment or change made in accordance with the provisions of this
Agreement in the Purchase Price or the number or kind or class of shares or
other securities or property that may be acquired under the Rights Certificates.
In addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the Expiration Date, the Company
(a) shall, 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, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors, issue Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
that (i) 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 (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) The Board of Directors may,
within its sole discretion, at any time prior to the earlier of (i) such time as
any Person becomes an Acquiring Person and (ii) the Final Expiration Date,
redeem all, but not less than all, of the then outstanding Rights at a
redemption price of $.001 per Right, appropriately adjusted to reflect any stock
split, reverse stock split, stock dividend, or similar transaction occurring
after the date hereof (such redemption price, as adjusted, being hereinafter
referred to as the "Redemption Price"). The redemption of the Rights by the
Board of Directors pursuant to this paragraph (a) may be made effective at such
time, on such basis, and with such conditions as the Board of Directors in its
sole discretion may establish. The Company may, at its option, pay the
Redemption Price in cash, shares (and/or half (1/2) shares) of Common Stock
(based on the current market price (determined pursuant to Section 11(d) hereof)
of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of Rights pursuant to paragraph (a) of this Section 23, and without
any further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right held. The Company shall promptly
give (i) written notice to the Rights Agent of any such redemption and (ii)
public notice of any such redemption; provided, however, that the failure to
give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors ordering
32
the redemption of the Rights, the Company shall mail a notice of redemption to
all the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Stock. Any
notice that is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem, acquire,
or purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, or other than
in connection with the purchase of shares of Common Stock or the conversion or
redemption of shares of Common Stock in accordance with the applicable
provisions of the Certificate of Incorporation prior to the Distribution Date.
Section 24. Exchange. (a) The Board of Directors may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section 7(e) hereof) for
Common Stock at an exchange ratio of one share of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend, or similar
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Acquiring Person, together with all Affiliates and Associates of
such Acquiring Person, becomes the Beneficial Owner of shares of Voting Stock
representing 75% or more of the total Voting Power of the aggregate of all
shares of Voting Stock then outstanding.
(b) Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to paragraph (a) of this Section 24 and without
any further action and without any notice, the right to exercise such Rights
shall terminate and the only right thereafter of a holder of such Rights shall
be to receive that number of 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 (i) written notice to the Rights Agent of any such exchange and
(ii) public notice of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to all
of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice that 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 that will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights that have become null and 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, the Company may, at
the election of a majority of the Board of Directors, take all such action as
may be necessary to authorize additional shares of Common Stock for issuance
33
upon exchange of the Rights. Notwithstanding anything in this Section 24 to the
contrary, the Board of Directors shall not authorize or effect the exchange of
Rights as contemplated in accordance with this Section 24 unless and until there
shall be sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit any such exchange.
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 or series to the holders of Common Stock or to
make any other distribution to the holders of Common Stock (other than a regular
quarterly cash dividend out of earnings or retained earnings of the Company);
(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; (iii) to effect any
reclassification of Common Stock (other than a reclassification involving only
the subdivision of outstanding shares of Common Stock); (iv) to effect any
consolidation or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o) 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 or more 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(o) 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 registered
holder of a Rights Certificate, to the extent feasible, and to the Rights Agent
in accordance with Section 26 hereof, a written notice of such proposed action,
which shall specify the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
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
ten (10) 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 ten (10) 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; provided, however, that no such
action shall be taken pursuant to this Section 25(a) that will or would conflict
with any provision of the Certificate of Incorporation; provided further, that
no such notice shall be required pursuant to this Section 25, if any Subsidiary
of the Company effects a consolidation or merger with or into, or effects a sale
or other transfer of assets or earnings power to, any other Subsidiary of the
Company.
(b) In case any of the events set forth in Section 11(a)(ii) hereof shall
occur, then, in any such case, (i) the Company shall, as soon as practicable
thereafter, give to each holder of a Rights Certificate, to the extent feasible,
and to the Rights Agent in accordance with Section 26 hereof, a written notice
of the occurrence of such event, which notice shall describe such event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof,
and (ii) all references in the preceding Section 25(a) to Common Stock shall be
deemed to refer, if appropriate, to any other securities that may be acquired
upon exercise of a Right.
34
(c) In case any Section 13 Event shall occur, then the Company shall, as
soon as practicable thereafter, give to each registered holder of a Rights
Certificate, to the extent feasible, and to the Rights Agent in accordance with
Section 26 hereof, a written notice of the occurrence of such event, which
notice shall describe such event and the consequences of such event to holders
of Rights under Section 13(a) hereof.
Section 26. Notices. All notices and other communications provided for
hereunder shall, unless otherwise stated herein, be in writing and mailed or
sent or delivered:
If to the Company, at its address at:
Printcafe Software, Inc.
Forty 00xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Corporate Secretary
With a copy to:
Potter Xxxxxxxx & Xxxxxxx LLP
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
And if to the Rights Agent, at its address at:
Mellon Investor Services LLC
1 Mellon Center
000 Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Relationship Manager
With a copy to:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
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 in writing
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 or the Rights Agent,
as the case may be.
Section 27. Supplements and Amendments. Subject to this Section 27, the
Company, by action of the Board of Directors, may from time to time supplement
or amend this Agreement without the approval of any holders of Rights in order
35
to cure any ambiguity, to correct or supplement any provision contained herein
that may be defective or inconsistent with any other provisions herein, to
shorten or lengthen any time period hereunder, or to make any other provisions
with respect to the Rights that the Company may deem necessary or desirable, any
such supplement or amendment to be evidenced by a writing signed by the Company
and the Rights Agent; provided, however, that from and after such time as any
Person becomes an Acquiring Person, this Agreement shall not be amended in any
manner that would adversely affect the interests of the holders of Rights (other
than Rights that have become null and void pursuant to Section 7(e) hereof).
Without limiting the foregoing, the Company, by action of the Board of
Directors, may at any time prior to such time as any Person becomes an Acquiring
Person amend this Agreement (A) to make the provisions of this Agreement
inapplicable to a particular transaction by which a Person would otherwise
become an Acquiring Person or to otherwise alter the terms and conditions of
this Agreement as they may apply with respect to any such transaction; and (B)
to lower the thresholds set forth in Sections 1(a) and 3(a) to not less than the
greater of (i) the sum of .001% and the largest percentage of Voting Power
represented by the then outstanding shares of Voting Stock then known by the
Company to be Beneficially Owned by any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any trustee or fiduciary holding shares of Voting
Stock for, or pursuant to the terms of, any such plan, acting in such capacity),
and (ii) 10%. Upon delivery of a certificate from an appropriate officer of the
Company and, if requested by the Rights Agent, an opinion of counsel, that
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, the Rights
Agent may, but shall not be obligated to, enter into any supplement or amendment
that affects the Rights Agent's own rights, duties, obligations or immunities
under this Agreement. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock.
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. For all
purposes of this Agreement, any calculation of the number of shares of any class
or series of Voting Stock outstanding at any particular time, including for
purposes of determining the particular percentage of outstanding shares of
Voting Stock of which any Person is the Beneficial Owner (or the particular
percentage of total Voting Power of such outstanding shares of Voting Stock
represented by shares of Voting 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 Exchange Act Regulations as in effect on the date hereof.
Except as otherwise specifically provided herein, the Board of Directors shall
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors or
to the Company hereunder, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power (i) to interpret the provisions of this Agreement, and (ii) to make all
determinations deemed necessary or advisable for the administration of this
36
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board of Directors or any
member thereof to any liability to the holders of the Rights. The Rights Agent
is entitled always to assume the Company's Board of Directors acted in good
faith and shall be fully protected and incur no liability in reliance thereon.
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 shares of 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 shares of Common Stock).
Section 31. Severability. If any term, provision, covenant, or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State; provided, however, that all
provisions regarding the rights, duties, obligations and immunities of the
Rights Agent (including, without limitation, the provisions of Sections 18, 19,
20, and 21 hereof) shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.
Section 33. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which taken
together shall constitute one and the same instrument.
Section 34. Descriptive Headings. The headings contained in this Agreement
are for descriptive purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
[Signature Page To Follow On Next Page]
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first above written.
PRINTCAFE SOFTWARE, INC.
By_________________________________
Xxxx X. Xxxx
President and Chief Executive Officer
MELLON INVESTOR SERVICES LLC,
as Rights Agent
By_________________________________
Name:
Title:
