Exhibit 4.1
CORE, INC.
and
State Street Bank and Trust Company
as Rights Agent
----------
Shareholder Rights Agreement
Dated as of October 21, 1999
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TABLE OF CONTENTS
1. CERTAIN DEFINITIONS 1
2. APPOINTMENT OF RIGHTS AGENT 7
3. ISSUE OF RIGHT CERTIFICATES 7
4. FORM OF RIGHT CERTIFICATES 10
5. COUNTERSIGNATURE AND REGISTRATION 11
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST
OR STOLEN RIGHT CERTIFICATES 12
7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE
OF RIGHTS 13
8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES 15
9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK 15
10. PREFERRED STOCK RECORD DATE 17
11. ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS 17
12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER
OF SHARES 28
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER 28
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES 31
15. RIGHTS OF ACTION 32
16. AGREEMENT OF RIGHT HOLDERS 32
17. RIGHT CERTIFICATE HOLDER NOT DEEMED A XXXXXXXXXXX 00
00. CONCERNING THE RIGHTS AGENT 33
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT 34
20. DUTIES OF RIGHTS AGENT 35
21. CHANGE OF RIGHTS AGENT 37
22. ISSUANCE OF NEW RIGHT CERTIFICATES 38
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23. REDEMPTION 39
24. EXCHANGE 40
25. NOTICE OF CERTAIN EVENTS 42
26. NOTICES 43
27. SUPPLEMENTS AND AMENDMENTS 44
28. SUCCESSORS 45
29. DETERMINATIONS AND ACTIONS BY THE BOARD OF
DIRECTORS 45
30. BENEFITS OF THIS AGREEMENT 45
31. SEVERABILITY 45
32. GOVERNING LAW 46
33. COUNTERPARTS 46
34. DESCRIPTIVE HEADINGS 46
EXHIBITS
Exhibit A -- Certificate of Designation of Series A Participating
Cumulative Preferred Stock
Exhibit B -- Form of Right Certificate
ii
SHAREHOLDER RIGHTS AGREEMENT
Agreement, dated as of October 21, 1999, between CORE, INC., a
Massachusetts corporation (the "Company"), and State Street Bank and Trust
Company, a Massachusetts chartered trust company (the "Rights Agent").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company desires to provide
shareholders of the Company with the opportunity to benefit from the long-term
prospects and value of the Company and to ensure that shareholders of the
Company receive fair and equal treatment in the event of any proposed takeover
of the Company; and
WHEREAS, on September 21, 1999, the Board of Directors of the Company
determined it desirable and in the best interests of the Company and its
shareholders for the Company to adopt a Shareholder Rights Plan; and
WHEREAS, on September 21, 1999, the Board of Directors of the Company
authorized and declared a dividend distribution of one Right (as such term is
hereinafter defined) for each outstanding share of Common Stock of the Company
outstanding as of November 1, 1999 (the "Record Date"), and authorized the
issuance of one Right for each share of Common Stock of the Company issued
(whether or not originally issued or sold from the Company's treasury, except in
the case of treasury shares having associated Rights) between the Record Date
and the earlier of the Distribution Date or the Expiration Date (as such terms
are hereinafter defined), each Right initially representing the right to
purchase one one-thousandth of a share of Series A Junior Participating
Cumulative Preferred Stock of the Company having the rights, powers and
preferences set forth on EXHIBIT A hereto, upon the terms and subject to the
conditions hereinafter set forth (the "Rights"); and
WHEREAS, the Company desires to appoint the Rights Agent to act as rights
agent hereunder, in accordance with the terms and conditions hereof.
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 (as such term is
hereinafter defined) who or which, together with all Affiliates
(as such term is hereinafter defined) and Associates (as such
term is hereinafter defined) of such Person, shall be the
Beneficial Owner (as such term is hereinafter defined) of 15% or
more of the shares of Common Stock of the Company then
outstanding, but shall not include (i) the Company, (ii) any
Subsidiary (as such term is hereinafter defined) of the Company,
(iii) any employee benefit plan or
compensation arrangement of the Company or any Subsidiary of the
Company or (iv) any Person holding shares of Common Stock of the
Company organized, appointed or established by the Company or any
Subsidiary of the Company for or pursuant to the terms of any such
employee benefit plan or compensation arrangement (the Persons
described in clauses (i) through (iv) above are referred to herein as
"Exempt Persons"); PROVIDED, HOWEVER, that the term "Acquiring
Person" shall not include any Grandfathered Person, unless such
Grandfathered Person at any time after the Grandfathered Time becomes
the Beneficial Owner of more than the Grandfathered Percentage of the
shares of Common Stock of the Company then outstanding. Any
Grandfathered Person who after the Grandfathered Time becomes the
Beneficial Owner of less than 15% of the shares of Common Stock of
the Company then outstanding shall cease to be a Grandfathered
Person.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition by the Company of Common
Stock of the Company which, by reducing the number of shares
outstanding, increases the proportionate number of shares
beneficially owned by such Person to 15% (or in the case of a
Grandfathered Person, the Grandfathered Percentage applicable to such
Grandfathered Person) or more of the shares of Common Stock of the
Company then outstanding; PROVIDED, HOWEVER, that if a Person shall
become the Beneficial Owner of 15% (or in the case of a Grandfathered
Person, the Grandfathered Percentage applicable to such Grandfathered
Person) or more of the shares of Common Stock of the Company then
outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial
Owner of any additional shares (other than pursuant to a stock split,
stock dividend or similar transaction) of Common Stock of the Company
and immediately thereafter be the Beneficial Owner of 15% (or in the
case of a Grandfathered Person, the Grandfathered Percentage
applicable to such Grandfathered Person) or more of the shares of
Common Stock of the Company then outstanding, then such Person shall
be deemed to be an "Acquiring Person."
In addition, notwithstanding the foregoing, a Person shall not be an
"Acquiring Person" if (i) the Board of Directors of the Company
determines that a Person who would otherwise be an "Acquiring
Person," has become such without intending to become an "Acquiring
Person," and such Person divests as promptly as practicable (or
within such period of time as the Board of Directors of the Company
determines is reasonable) a sufficient number of shares of Common
Stock of the Company so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions
of this Section 1(a).
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(b) "ADJUSTMENT SHARES" shall have the meaning set forth in Section
11(a)(ii) hereof.
(c) "ADVERSE PERSON" shall mean any Person declared to be an Adverse
Person by the Board of Directors upon a determination of the Board of
Directors that the criteria set forth in Section 11(a)(ii)(B) apply
to such Person.
(d) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations (the "Rules") under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as in effect on the date of this
Agreement; PROVIDED, HOWEVER, that no Person who is a director or
officer of the Company shall be deemed an Affiliate or an Associate
of any other director or officer of the Company solely as a result of
his or her position as director or officer of the Company.
(e) "ARTICLES OF ORGANIZATION" when used in reference to the Company
shall mean the Articles of Organization, as amended, of the Company.
(f) A Person shall be deemed the "BENEFICIAL OWNER" of, and shall be
deemed to "BENEFICIALLY OWN" and have "BENEFICIAL OWNERSHIP" of, any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, beneficially owns (as
determined pursuant to Rule 13d-3 of the Rules under the
Exchange Act, as in effect on the date of this Agreement);
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has:
(A) the right to acquire (whether or not such right is
exercisable immediately or only after the passage
of time or upon the satisfaction of any conditions
or both) 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 the
Rights), warrants or options, or otherwise;
PROVIDED, HOWEVER, that a Person shall not be
deemed the "Beneficial Owner" of, or to
"beneficially own" or have "Beneficial Ownership"
of, (1) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange; (2) securities
issuable upon exercise of these Rights at any time
prior to the occurrence of a Triggering Event; or
(3) securities issuable upon exercise of Rights
from and after the occurrence of a Triggering
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Event, which Rights were acquired by such Person or any
of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Sections 3(a), 11(i) or
22 hereof; or
(B) the right to vote pursuant to any agreement, arrangement
or understanding (whether or not in writing);
PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own" or have
"Beneficial Ownership" of, any security under this clause
(B) if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable
proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with,
the Rules of the Exchange Act and (2) is not also then
reportable by such person on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(C) the right to dispose of pursuant to any agreement,
arrangement or understanding (whether or not in writing)
(other than customary arrangements with and between
underwriters and selling group members with respect to a
bona fide public offering of securities); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with
which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding
(whether or not in writing) (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in clause (B) of Section 1(d)(ii)
hereof) or disposing of any securities of the Company;
PROVIDED, HOWEVER, that (1) no Person engaged in business as an
underwriter of securities shall be deemed the Beneficial Owner of any
securities acquired through such Person's participation as an
underwriter in good faith in a firm commitment underwriting until the
expiration of forty (40) days after the date of such acquisition, and
(2) no Person who is a director or an officer of the Company shall be
deemed, as a result of his or her position as director or officer of
the Company, the Beneficial Owner of any securities of the Company
that are beneficially owned by any other director or officer of the
Company.
(g) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday, or a
day on which banking institutions in the Commonwealth of
Massachusetts are authorized or obligated by law or executive order
to close.
(h) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., Boston,
Massachusetts time, on such date; PROVIDED, HOWEVER, that if such
date
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is not a Business Day it shall mean 5:00 P.M., Boston, Massachusetts
time, on the next succeeding Business Day.
(i) "COMMON STOCK" when used in reference to the Company shall mean the
common stock, par value $0.10 per share, of the Company or any
other shares of capital stock of the Company into which such
stock shall be reclassified or changed. "Common Stock" when used
with reference to any Person other than the Company organized in
corporate form shall mean (i) the capital stock or other equity
interest of such Person with the greatest voting power, (ii) the
equity securities or other equity interest having power to
control or direct the management of such Person or (iii) if such
Person is a Subsidiary of another Person, the Person or Persons
which ultimately control such first-mentioned Person and which
have issued any such outstanding capital stock, equity securities
or equity interest. "Common Stock" when used with reference to
any Person not organized in corporate form shall mean units of
beneficial interest which (x) shall represent the right to
participate generally in the profits and losses of such Person
(including without limitation any flow-through tax benefits
resulting from an ownership interest in such Person) and (y)
shall be entitled to exercise the greatest voting power of such
Person or, in the case of a limited partnership, shall have the
power to remove or otherwise replace the general partner or
partners.
(j) "CURRENT VALUE" shall have the meaning set forth in Section 11(a)
(iii) hereof.
(k) "DEPOSITARY AGENT" shall have the meaning set forth in Section 7(c)
hereof.
(l) "DISTRIBUTION DATE" shall have the meaning defined in Section 3(a)
hereof.
(m) "EXERCISE PRICE" shall have the meaning defined in Section 4(a)
hereof.
(n) "EXPIRATION DATE" and "FINAL EXPIRATION DATE" shall have the meanings
set forth in Section 7(a) hereof.
(o) "FAIR MARKET VALUE" of any securities or other property shall be as
determined in accordance with Section 11(d) hereof.
(p) "GRANDFATHERED PERCENTAGE" shall mean, with respect to any
Grandfathered Person, the percentage of the outstanding shares of
Common Stock that such Grandfathered Person, together with all
Affiliates and Associates of such Grandfathered Person,
beneficially owns as of the Grandfathered Time plus an additional
two percent (2%); provided, however, that, in the event any
Grandfathered Person shall sell, transfer, or otherwise dispose
of any outstanding shares of Common Stock after the Grandfathered
Time, the Grandfathered Percentage shall, subsequent to such
sale, transfer or disposition, mean, with respect to such
Grandfathered Person, the lesser of (i) the Grandfathered
Percentage as in effect immediately prior to such sale,
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transfer or disposition or (ii) the percentage of outstanding shares
of Common Stock that such Grandfathered Person beneficially owns
immediately following such sale, transfer or disposition plus an
additional two percent (2%).
(q) "GRANDFATHERED PERSON" shall mean either of (i) Xxxxxx Xxxxxx Xxxx &
Co., LLC or (ii) Warburg, Xxxxxx Asset Management, Inc. or any of
their respective Affiliates or Associates.
(r) "GRANDFATHERED TIME" shall mean 5:00 P.M., Boston, Massachusetts
time, on October 21, 1999.
(s) "GROUP" shall have the meaning set forth in clause (b) of the
definition of "Person."
(t) "PERSON" shall mean (a) an individual, a corporation, a partnership,
an association, a joint stock company, a trust, a business trust, a
government or political subdivision, any unincorporated organization,
or any other association or entity, and (b) a "group" as that term is
used for purposes of Section 13(d)(3) of the Exchange Act.
(u) "PREFERRED STOCK" shall mean shares of Series A Junior Participating
Cumulative Preferred Stock, without par value, of the Company having
the rights and preferences set forth in the form of Certificate of
Designation attached hereto as EXHIBIT A.
(v) "PREFERRED STOCK EQUIVALENTS" shall have the meaning set forth in
Section 11(b) hereof.
(w) "PRINCIPAL PARTY" shall have the meaning defined in Section 13(b)
hereof.
(x) "REDEMPTION PRICE" shall have the meaning defined in Section 23
hereof.
(y) "REGISTERED COMMON STOCK" shall have the meaning set forth in Section
13(b) hereof.
(z) "RIGHT CERTIFICATE" shall have the meaning set forth in Section 3(a)
hereof.
(aa) "SECTION 11(a)(ii) EVENT" shall have the meaning set forth in Section
11(a)(ii) hereof.
(bb) "SECTION 11(a)(ii) TRIGGER DATE" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(cc) "SECTION 13 EVENT" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
(dd) "SECTION 24(a)(i) EXCHANGE RATIO" shall have the meaning set forth in
Section 24(a)(i) hereof.
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(ee) "SECTION 24(a)(ii) EXCHANGE RATIO" shall have the meaning set forth
in Section 24(a)(ii) hereof.
(ff) "SPREAD" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(gg) "STOCK ACQUISITION DATE" shall mean the date of the first public
announcement (which for purposes of this definition shall include,
without limitation, the issuance of a press release or the filing of
a publicly-available report or other document with the Securities and
Exchange Commission or any other governmental agency) by the Company,
acting pursuant to a resolution adopted by the Board of Directors of
the Company, or an Acquiring Person that an Acquiring Person has
become such.
(hh) "SUBSIDIARY" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient, in the absence of
contingencies, to elect a majority of the board of directors or other
persons performing similar functions of such corporation or other
entity are at the time directly or indirectly beneficially owned or
otherwise controlled by such Person either alone or together with one
or more Affiliates of such Person.
(ii) "SUBSTITUTION PERIOD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(jj) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date (as hereinafter defined in Section 3(a))
also be the holders of the Common Stock of the Company) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable. In the event the Company appoints one or
more Co-Rights Agents, the respective duties of the Rights Agent and any
Co-Rights Agents shall be as the Company shall determine. The Company shall give
ten (10) days' prior written notice to the Rights Agent of the appointment of
one or more Co-Rights Agents and the respective duties of the Rights Agent and
any such Co-Rights Agents. The Rights Agent shall have no duty to supervise, and
shall in no event be liable for, the acts or omissions of any such Co-Rights
Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) From the date hereof until the earliest of (i) the Close of
Business on the tenth calendar day after the Stock Acquisition Date,
(ii) the Close of Business on the tenth Business Day (or such later
calendar day, if any, as the Board of Directors of the Company may
determine in its sole discretion) after the date a tender or exchange
offer by any Person, other than an Exempt Person, is first
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published or sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act, or any successor rule, if, upon consummation thereof,
such Person could become the Beneficial Owner of 15% (or in the case
of a Grandfathered Person, the Grandfathered Percentage applicable to
such Grandfathered Person) or more of the shares of Common Stock of
the Company then outstanding or (iii) the determination by the Board
of Directors of the Company, pursuant to the criteria set forth in
Section 11(a)(ii)(B) hereof, that a Person is an Adverse Person
(including any such date which is after the date of this Agreement
and prior to the issuance of the Rights) (the earliest of such dates
being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for the Common Stock of the Company registered in
the names of the holders of the Common Stock of the Company (which
certificates for Common Stock of the Company shall be deemed also to
be certificates for Rights) and not by separate certificates, and (y)
the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock of the Company. As soon as
practicable after the Distribution Date, the Rights Agent will, at
the Company's expense send, by first-class, insured, postage prepaid
mail, to each record holder of the Common Stock of the Company 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
certificates, in substantially the form of EXHIBIT B hereto (the
"Right Certificates"), evidencing one Right for each share of Common
Stock of the Company so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per
share of Common Stock of the Company has been made pursuant to
Section 11(o) hereof, the Company may make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a)
hereof) at the time of distribution of the Right Certificates, so
that Right Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of
and after the Close of Business on the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) With respect to certificates for the Common Stock of the Company
issued prior to the Close of Business on the Record Date, the
Rights will be evidenced by such certificates for the Common
Stock of the Company on or until the Distribution Date (or the
earlier redemption, expiration or termination of the Rights), and
the registered holders of the Common Stock of the Company also
shall be the registered holders of the associated Rights. Until
the Distribution Date (or the earlier redemption, expiration or
termination of the Rights), the transfer of any of the
certificates for the Common Stock of the Company outstanding
prior to the date of this Agreement shall also constitute the
transfer of the Rights associated with the Common Stock of the
Company represented by such certificate.
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(c) Certificates for the Common Stock of the Company issued after the
Record Date, but prior to the earlier of the Distribution Date or the
redemption, expiration or termination of the Rights, shall be deemed
also to be certificates for Rights, and shall bear a legend,
substantially in the form set forth below:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Shareholder Rights
Agreement between CORE, INC. and State Street Bank and Trust
Company, as Rights Agent, dated as of October 21, 1999, as
amended, restated, renewed or extended from time to time (the
"Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal offices of CORE, INC. and the stock transfer
administration office of the Rights Agent. 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. CORE, INC. may redeem
the Rights at a redemption price of $0.001 per Right, subject
to adjustment, under the terms of the Rights Agreement. CORE,
INC. will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor.
Under certain circumstances, Rights issued to or held by
Acquiring Persons, Adverse Persons or any Affiliates or
Associates thereof (as defined in the Rights Agreement), and
any subsequent holder of such Rights, may become null and void.
The Rights shall not be exercisable, and shall be void so long
as held, by a holder in any jurisdiction where the requisite
qualification, if any, to the issuance to such holder, or the
exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable.
With respect to such certificates containing the foregoing legend,
the Rights associated with the Common Stock of the Company
represented by such certificates shall be evidenced by such
certificates alone until the Distribution Date (or the earlier
redemption, expiration or termination of the Rights), and the
transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock of the
Company represented by such certificates. In the event that the
Company purchases or acquires any shares of Common Stock of the
Company after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Stock of the Company shall be
deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the shares of Common Stock of
the Company which are no longer outstanding. The failure to print the
foregoing legend on any such certificate representing Common Stock of
the
9
Company or any defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of
Section 7(e) hereof.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment and certificate to be printed on the
reverse thereof) shall each be substantially in the form of
EXHIBIT B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law, rule or regulation or
with any rule or regulation of any stock exchange on which the
Rights may from time to time be listed, or to conform to
customary usage. The Right Certificates shall be in a
machine-printable format and in a form reasonably satisfactory to
the Rights Agent. Subject to the provisions of Section 11 and
Section 22 hereof, the Right Certificates, whenever distributed,
shall be dated as of the Record Date, shall show the date of
countersignature, and on their face shall entitle the holders
thereof to purchase such number of one one-thousandths of a share
of Preferred Stock as shall be set forth therein at the price set
forth therein (the "Exercise Price"), but the number of such
shares and the Exercise Price shall be subject to adjustment as
provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights beneficially owned by (i) an
Acquiring Person, an Adverse Person or any Associate or Affiliate
of an Acquiring Person or an Adverse Person, (ii) a transferee of
an Acquiring Person or an Adverse Person (or of any Associate or
Affiliate of an Acquiring Person or an Adverse Person) who
becomes a transferee after the Acquiring Person or Adverse Person
becomes such, or (iii) a transferee of an Acquiring Person or an
Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or Adverse Person to
holders of equity interests in such Acquiring Person or Adverse
Person or to any Person with whom the Acquiring Person or Adverse
Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights, the
shares of Common Stock of the Company associated with such Rights
or the Company or (B) a transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, and any Right Certificate
issued pursuant to Section 6, Section 11 or Section 22 upon
transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall have deleted
therefrom the second sentence of the existing legend on such
Right Certificate and in substitution therefor shall contain the
following legend:
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The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person, an Adverse Person or an Affiliate or an Associate of an
Acquiring Person or an Adverse Person (as such terms are
defined in the Rights Agreement). This Right Certificate and
the Rights represented hereby may become null and void under
certain circumstances as specified in Section 7(e) of the
Rights Agreement.
The Company shall give notice to the Rights Agent promptly after it
becomes aware of the existence and identity of any Acquiring Person
or Adverse Person or any Associate or Affiliate thereof. The Company
shall instruct the Rights Agent in writing of the Rights which should
be so legended. The failure to print the foregoing legend on any such
Right Certificate or any defect therein shall not affect in any
manner whatsoever the application or interpretation of the provisions
of Section 7(e) hereof.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board of Directors, or its
President or any Vice President and by its Treasurer or any
Assistant Treasurer, or by its Clerk or any Assistant Clerk,
either manually or by facsimile signature, and shall have affixed
thereto the Company's seal or a facsimile thereof which shall be
attested to by the Clerk or any Assistant Clerk of the Company,
either manually or by facsimile signature. The Right Certificates
shall be manually countersigned by an authorized signatory of the
Rights Agent and shall not be valid for any purpose unless so
countersigned, and such countersignature upon any Right
Certificate shall be conclusive evidence, and the only evidence,
that such Right Certificate has been duly countersigned as
required hereunder. In case any officer of the Company who shall
have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right
Certificates, nevertheless, may be countersigned by an authorized
signatory of the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificates may be signed on
behalf of the Company by any person who, at the actual date of
the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at one of its offices designated as the appropriate place
for surrender of Right Certificates upon exercise or transfer, books
for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number
11
of Rights evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on
the Expiration Date, any Right Certificate or Certificates may be
transferred, split up, combined or exchanged for another Right
Certificate or Certificates, entitling the registered holder to
purchase a like number of one one-thousandths of a share of
Preferred Stock (or following a Triggering Event, preferred
stock, cash, property, debt securities, Common Stock of the
Company or any combination thereof) as the Right Certificate or
Certificates surrendered then entitled such holder to purchase
and at the same Exercise Price. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate
shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Certificates to be
transferred, split up, combined or exchanged, with the form of
assignment and certificate duly executed, at the office or
offices of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall
have completed and signed the certificate contained in the form
of assignment on the reverse side of such Right Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Right Certificate or Certificates,
as the case may be, as so requested. The Company may require
payment by the registered holder of a Right Certificate, of a sum
sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate, if mutilated, the Company
will execute and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
12
Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after
the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the
office or offices of the Rights Agent designated for such
purpose, together with payment of the aggregate Exercise Price
for the total number of one one-thousandths of a share of
Preferred Stock (or other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then
exercised, at or prior to the earlier of (i) the Close of
Business on the tenth anniversary of the date of this agreement
(the "Final Expiration Date"), (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof or (iii) the time
at which such Rights are exchanged as provided in Section 24
hereof (the earlier of (i), (ii) or (iii) being herein referred
to as the "Expiration Date"). Except as set forth in Section 7(e)
hereof and notwithstanding any other provision of this Agreement,
any Person who prior to the Distribution Date becomes a record
holder of shares of Common Stock of the Company may exercise all
of the rights of a registered holder of a Right Certificate with
respect to the Rights associated with such shares of Common Stock
of the Company in accordance with the provisions of this
Agreement, as of the date such Person becomes a record holder of
shares of Common Stock of the Company.
(b) The Exercise Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially
be $50.00, shall be subject to adjustment from time to time as
provided in Section 11 and Section 13 hereof and shall be payable in
lawful money of the United States of America in accordance with
Section 7(c) below.
(c) As promptly as practicable following the Distribution Date,
the Company shall deposit with a corporation, trust, bank or
similar institution 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 a
federal or state authority (such institution is hereinafter
referred to as the "Depositary Agent"), certificates representing
the shares of Preferred Stock that may be acquired upon exercise
of the Rights and the Company shall cause such Depositary Agent
to enter into an agreement pursuant to which the Depositary Agent
shall issue receipts representing interests in the shares of
Preferred Stock so deposited. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, accompanied by payment of the Exercise Price for the
shares to be purchased and an amount equal to any
13
applicable transfer tax (as determined by the Rights Agent) by
certified check or bank draft payable to the order of the Company or
by money order, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i) requisition from the Depositary Agent
(or make available, if the Rights Agent is the Depositary Agent)
depositary receipts or certificates for the number of one
one-thousandths of a share of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes the Depositary Agent to comply
with all such requests, (ii) when appropriate, requisition from the
Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii)
promptly after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the
registered holder of such Right Certificate. In the event that the
Company is obligated to issue other securities (including Common
Stock) of the Company, pay cash or distribute other property pursuant
to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash or other property are
available for distribution by the Rights Agent, if and when
appropriate. The payment of the Exercise Price may be made by
certified or bank check payable to the order of the Company, or by
money order or wire transfer of immediately available funds to the
account of the Company (provided that notice of such wire transfer
shall be given by the holder of the related Right to the Rights
Agent).
(d) In case the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent and delivered to the registered
holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event or
Section 13 Event, any Rights beneficially owned by (i) an
Acquiring Person, an Adverse Person or any Associate or Affiliate
of an Acquiring Person or an Adverse Person, (ii) a transferee of
an Acquiring Person or an Adverse Person (or of any Associate or
Affiliate of an Acquiring Person or an Adverse Person) who
becomes a transferee after the Acquiring Person or Adverse Person
becomes such or (iii) a transferee of an Acquiring Person or an
Adverse Person (or of any Associate or Affiliate of an Acquiring
Person or an Adverse Person) who becomes a transferee prior to or
concurrently with the Acquiring Person or Adverse Person becoming
such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person or
Adverse Person to holders of equity interests in such Acquiring
Person or Adverse Person or to any Person with whom the Acquiring
Person or Adverse Person has any continuing agreement,
arrangement or understanding regarding
14
the transferred Rights, the shares of Common Stock of the Company
associated with such Rights or the Company, or (B) a transfer which
the Board of Directors of the Company has determined is part of a
plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall be null and void
without any further action and no holder of such Rights shall have
any rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an
Acquiring Person or Adverse Person or any Affiliates or Associates of
an Acquiring Person or an Adverse Person or any transferee of any of
them hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder of Rights upon the
occurrence of any purported exercise as set forth in this Section 7
unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth
on the reverse side of the Right Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of
Preferred Stock or any authorized and issued shares of Preferred
Stock held in its treasury, the number of shares of Preferred Stock
that will be sufficient to permit the exercise in full of all
outstanding and exercisable Rights. Upon the occurrence of any events
resulting in an increase in the aggregate number of shares of
Preferred Stock issuable upon exercise of all outstanding Rights in
excess of the number then reserved, the Company shall make
appropriate increases in the number of shares so reserved.
15
(b) The Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares of Preferred Stock
issued or reserved for issuance to be listed, upon official notice of
issuance, upon the principal national securities exchange, if any,
upon which the Common Stock of the Company is listed or, if the
principal market for the Common Stock of the Company is not on any
national securities exchange, to be eligible for quotation on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") or any successor thereto or other comparable quotation
system.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event on which the consideration to be
delivered by the Company upon exercise of the Rights has been
determined in accordance with Section 11(a)(iii) hereof, or as
soon as required by law following the Distribution Date, as the
case may be, a registration statement under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and
(iii) cause such registration statement to remain effective (with
a prospectus that at all times meets the requirements of the
Securities Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities or (B) the
Expiration Date. The Company will also take such action as may be
appropriate under, and which will ensure compliance with, the
securities or "blue sky" laws of the various states in connection
with the exercisability of the Rights. The Company may
temporarily suspend, for a period of time not to exceed ninety
(90) days after the date determined in accordance with the
provisions 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
such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect, in each case with
prompt written notice to the Rights Agent. Notwithstanding any
such provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of Preferred Stock
delivered upon the exercise of the Rights shall, at the time of
delivery of the certificates or depositary receipts for such shares
(subject to payment of the Exercise Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the
Right Certificates or of
16
any certificates for shares of Preferred Stock upon the exercise of
Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or
delivery of Right Certificates to a person other than, or in respect
of the issuance or delivery of securities in a name other than that
of, the registered holder of the Right Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for
securities in a name other than that of the registered holder upon
the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for Preferred Stock (including
any fraction of a share of Preferred Stock) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the shares of Preferred Stock represented thereby on, and such certificate shall
be dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Exercise 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 Preferred Stock transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the Preferred Stock transfer books of the Company are open; and further
PROVIDED, HOWEVER, that if delivery of shares of Preferred Stock is delayed
pursuant to Section 9(c), such Person shall be deemed to have become the record
holder of such shares of Preferred Stock only when such shares first become
deliverable. Prior to the exercise of the Right evidenced thereby, the holder of
a Right Certificate shall not be entitled to any rights of a shareholder of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS.
The Exercise Price, the number and kind of shares covered by each Right and
the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide
the outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares or (D) issue
any shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in
connection
17
with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Exercise Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books of the
Company were open, 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 consideration to
be paid upon the exercise of a Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of a Right. If an event occurs
which would require an adjustment under both 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) Subject to the provisions of Section 24 hereof, in the event
(A) any Person, alone or together with its Affiliates and
Associates, shall become an Acquiring Person, or
(B) the Board of Directors of the Company, by majority
vote, shall declare any Person to be an Adverse Person,
after (x) a determination that such Person, alone or
together with its Affiliates and Associates, has become
the Beneficial Owner of 10% or more of the outstanding
shares of Common Stock of the Company and (y) a
determination by the Board of Directors, after
reasonable inquiry and investigation, including such
consultation, if any, with such persons as such
directors shall deem appropriate, that (a) such
Beneficial Ownership by such Person is intended to
cause, is reasonably likely to cause or will cause the
Company to repurchase the Common Stock of the Company
beneficially owned by such Person or to cause pressure
on the Company to take action or enter into a
transaction or series of transactions which would
provide such Person with short-term financial gain
under circumstances where the Board of Directors
determines that the best long-term interests of the
Company and its shareholders, but for the actions and
possible actions of such Person, would not be served by
taking such action or entering into such transactions
or series of transactions at that time or (b) such
Beneficial Ownership is causing or reasonably likely to
cause a material adverse impact (including,
18
but not limited to, impairment of relationships with
customers or impairment of the Company's ability to
maintain its competitive position) on the business or
prospects of the Company. No delay or failure by the
Board of Directors to declare a Person to be an Adverse
Person shall in any way waive or otherwise affect the
power of the Board of Directors subsequently to declare
a Person to be an Adverse Person. In the event that the
Board of Directors should at any time determine, upon
reasonable inquiry and investigation, including
consultation with such Persons as the Board of
Directors shall deem appropriate, that such Person has
not met or complied with any condition specified by the
Board of Directors, the Board of Directors may at any
time thereafter declare such Person to be an Adverse
Person pursuant to the provisions of this Section
11(a)(ii)(B),
then, and in each such case, promptly following any such occurrence
(a "Section 11(a)(ii) Event"), proper provision shall be made so that
each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have a right to receive, upon exercise thereof at
the then current Exercise Price in accordance with the terms of this
Agreement, such number of shares of Preferred Stock of the Company as
shall equal the result obtained by (x) multiplying the then current
Exercise Price by the then number of one one-thousandths of a share
of Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event, whether
or not such Right was then exercisable, and dividing that product by
(y) 50% of the Fair Market Value per one one-thousandth of a share of
the Preferred Stock (determined pursuant to Section 11(d)) on the
date of the occurrence of a Section 11(a)(ii) Event (such number of
shares being referred to as the "Adjustment Shares").
(iii) In lieu of issuing any shares of Preferred Stock in
accordance with Section 11(a)(ii) hereof, the Company,
acting by or pursuant to a resolution of the Board of
Directors of the Company, may, and in the event that the
number of shares of Preferred Stock which are authorized by
the Company's Articles of Organization but not outstanding
or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the
exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by or pursuant to a resolution of the Board
of Directors of the Company, shall (A) determine the excess
of (X) the Fair Market Value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value")
over (Y) the Exercise Price attributable to each Right (such
excess being referred to as the "Spread") and (B) with
respect to all or a portion of each Right (subject to
Section 7(e) hereof), make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable
Exercise Price, (1) Common Stock of the
19
Company, (2) cash, (3) a reduction in the Exercise Price, (4)
Preferred Stock Equivalents which the Board of Directors of
the Company has deemed to have the same value as shares of
Common Stock of the Company, (5) debt securities of the
Company, (6) other assets or securities of the Company or (7)
any combination of the foregoing which, when added to any
shares of Preferred Stock issued upon such exercise, has an
aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of
Directors of the Company; PROVIDED, HOWEVER, that if the
Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Company's right
of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section 11(a)(ii)
Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and
without requiring payment of the Exercise Price, shares of
Preferred Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate
value equal to the Spread. If the Board of Directors of the
Company shall determine in good faith that it is likely that
sufficient additional shares of Preferred Stock could be
authorized for issuance upon exercise in full of the Rights,
the 30-day period set forth above may be extended to the
extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may
seek shareholder approval for the authorization of such
additional shares (such period, as it may be extended, being
referred to herein as the "Substitution Period"). To the
extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to
Section 7(e) hereof, that such action shall apply uniformly to
all outstanding Rights and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended
and a public announcement at such time as the suspension is no
longer in effect. For purposes of this Section 11(a)(iii), the
value of the Preferred Stock shall be the Fair Market Value
(as determined pursuant to Section 11(d) hereof) per share of
the Preferred Stock on the Section 11(a)(ii) Trigger Date and
the value of any Preferred Stock Equivalent shall be deemed to
have the same value as the Preferred Stock on such date.
20
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within forty-five (45) calendar days after
such record date) to subscribe for or purchase Preferred Stock (or
securities having the same or more favorable rights, privileges and
preferences as the shares of Preferred Stock ("Preferred Stock
Equivalents")) or securities convertible into Preferred Stock or
Preferred Stock Equivalents at a price per share of Preferred Stock
or per share of Preferred Stock Equivalents (or having a conversion
price per share, if a security convertible into Preferred Stock or
Preferred Stock Equivalents) less than the Fair Market Value (as
determined pursuant to Section 11(d) hereof) per share of Preferred
Stock on such record date, the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares of
Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or Preferred Stock
Equivalents to be offered (and the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at
such Fair Market Value and the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record date,
plus the number of additional shares of Preferred Stock and Preferred
Stock Equivalents to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible); PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of a Right be less than
the aggregate par value of the shares of stock of the Company
issuable upon exercise of a Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a
form other than cash, the value of such consideration shall be the
Fair Market Value thereof determined in accordance with Section 11(d)
hereof. Shares of Preferred Stock owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustments 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 Exercise Price shall be
adjusted to be the Exercise Price which would then be in effect if
such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), of
evidences of indebtedness, cash (other than a regular periodic cash
dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock)
or convertible securities, subscription rights or warrants (excluding
those referred to in Section 11(b)), the Exercise Price to be in
effect after such record date
21
shall be determined by multiplying the Exercise Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the Fair Market Value (as determined pursuant to
Section 11(d) hereof) per one one-thousandth of a share of Preferred
Stock on such record date, less the Fair Market Value (as determined
pursuant to Section 11(d) hereof) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such
convertible securities, subscription rights or warrants applicable to
one one-thousandth of a share of Preferred Stock and the denominator
of which shall be the Fair Market Value (as determined pursuant to
Section 11(d) hereof) per one one-thousandth of a share of Preferred
Stock; PROVIDED, HOWEVER, that in no event shall the consideration to
be paid upon the exercise of a Right be less than the aggregate par
value of the shares of stock of the Company issuable upon exercise of
a Right. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not
so made, the Exercise Price shall again be adjusted to be the
Exercise Price which would be in effect if such record date had not
been fixed.
(d) For the purpose of this Agreement, the "Fair Market Value" of any
share of Preferred Stock, Common Stock or any other stock or any
Right or other security or any other property shall be determined as
provided in this Section 11(d).
(i) In the case of a publicly-traded stock or other security, the
Fair Market Value on any date shall be deemed to be the
average of the daily closing prices per share of such stock or
per unit of such other security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior
to such date; PROVIDED, HOWEVER, that in the event that the
Fair Market Value per share of any share of stock is
determined during a period following the announcement by the
issuer of such stock of (x) a dividend or distribution on such
stock payable in shares of such stock or securities
convertible into shares of such stock or (y) any subdivision,
combination or reclassification of such stock, and prior to
the expiration of the 30 Trading Day period after the ex-
dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification,
then, and in each such case, the Fair Market Value shall be
properly adjusted to take into account ex-dividend trading.
The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if
the securities are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities
exchange on which such security is listed or admitted to
trading; or, if not listed or admitted to trading on
22
any national securities exchange, the last quoted price (or,
if not so quoted, the average of the last quoted 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 no bids for such security are 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 security selected by the Board of Directors of the
Company. If on any such date no market maker is making a
market in such security, the Fair Market Value of such
security on such date shall be determined reasonably and with
utmost good faith to the holders of the Rights by the Board of
Directors of the Company, PROVIDED, HOWEVER, that if at the
time of such determination there is an Acquiring Person or an
Adverse Person, the Fair Market Value of such security on such
date shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors of the
Company, which determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. The term "Trading Day"
shall mean a day on which the principal national securities
exchange on which such security is listed or admitted to
trading is open for the transaction of business or, if such
security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) If a security is not publicly held or not so listed or traded,
"Fair Market Value" shall mean the fair value per share of
stock or per other unit of such security, determined
reasonably and with utmost good faith to the holders of the
Rights by the Board of Directors of the Company; PROVIDED,
HOWEVER, that if at the time of such determination there is an
Acquiring Person or an Adverse Person, the Fair Market Value
of such security on such date shall be determined by a
nationally recognized investment banking firm selected by the
Board of Directors of the Company, which determination shall
be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the
Rights; PROVIDED, HOWEVER, that for the purposes of making any
adjustment provided for by Section 11(a)(ii) hereof, the Fair
Market Value of a share of Preferred Stock shall not be less
than the product of the then Fair Market Value of a share of
Common Stock multiplied by the higher of the then Dividend
Multiple or Vote Multiple (as both of such terms are defined
in the Certificate of Designation attached as Exhibit A
hereto) applicable to the Preferred Stock and shall not exceed
105% of the product of the then Fair Market Value of a share
of Common Stock multiplied by the higher of the then Dividend
Multiple or Vote Multiple applicable to the Preferred Stock.
(iii) In the case of property other than securities, the Fair Market
Value thereof shall be determined reasonably and with utmost
good faith to the
23
holders of Rights by the Board of Directors of the Company;
PROVIDED, HOWEVER, that if at the time of such determination
there is an Acquiring Person or an Adverse Person, the Fair
Market Value of such property on such date shall be determined
by a nationally recognized investment banking firm selected by
the Board of Directors of the Company, which determination
shall be described in a statement filed with the Rights Agent
and shall be binding upon the Rights Agent and the holders of
the Rights
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Exercise Price shall be required unless such adjustment would require
an increase or decrease of at least 1% in the Exercise Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the
nearest hundred-thousandth of a share of Common Stock of the Company
or ten-millionth of a share of Preferred Stock, as the case may be,
or to such other figure as the Board of Directors of the Company may
deem appropriate. 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 (3) years from the date of the
transaction which mandates such adjustment or (ii) the Expiration
Date.
(f) If as a result of any provision of Section 11(a) or Section 13(a)
hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other
than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock
contained in Section 11(a), (b), (c), (d), (e), (g) through (k) and
(m), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred 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 Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of one
one-thousandths of a share of Preferred Stock (or other securities or
amount of cash or combination thereof) purchasable 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 Exercise Price as a result
of the calculations made in Section 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 Exercise
Price, that number of one one-thousandths of a share of Preferred
Stock (calculated to the nearest ten-millionth) as the Board of
24
Directors of the Company determines is appropriate to preserve the
economic value of the Rights, including, by way of example, that
number obtained by (i) multiplying (x) the number of one
one-thousandths of a share of Preferred Stock for which a Right may
be exercisable immediately prior to this adjustment by (y) the
Exercise Price in effect immediately prior to such adjustment of the
Exercise Price and (ii) dividing the product so obtained by the
Exercise Price in effect immediately after such adjustment of the
Exercise Price.
(i) The Company may elect on or after the date of any adjustment of the
Exercise Price to adjust the number of Rights, in substitution for
any adjustment in the number of shares of Preferred Stock purchasable
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 one one-thousandths of a share of Preferred 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
hundred-thousandth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise
Price in effect immediately after adjustment of the Exercise Price.
The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment
to be made. This record date may be the date on which the Exercise
Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least ten (10) days later
than the date of the public announcement. If Right Certificates have
been issued, upon each adjustment of the number of Rights pursuant to
this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Right Certificates on
such record date Right Certificates evidencing, subject to Section 14
hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof,
if required by the Company, new Right Certificates evidencing all the
Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the
option of the Company, the adjusted Exercise Price) and shall be
registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise Price or the
number of one one-thousandths of a share of Preferred Stock issuable
upon the exercise of the Rights, the Right Certificates theretofore
and thereafter issued may continue to express the Exercise Price per
share and the number of shares
25
which were expressed in the initial Right Certificates issued
hereunder without prejudice to any adjustment or change.
(k) Before taking any action that would cause an adjustment reducing the
Exercise Price below the then stated value, if any, of the number of
one one-thousandths of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action
which may, in the opinion of its counsel, be necessary in order that
the Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock at such adjusted Exercise
Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Exercise Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence
of such event the issuing to the holder of any Right exercised after
such record date the number of one one-thousandths of a share of
Preferred Stock or other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of one
one-thousandths of a share of Preferred Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise on
the basis of the Exercise 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 upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Exercise
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the
Board of Directors of the Company shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock,
issuance wholly for cash of any shares of Preferred Stock at less
than the Fair Market Value, issuance wholly for cash of shares of
Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, stock dividends
or issuance of rights, options or warrants referred to hereinabove in
this Section 11, hereafter made by the Company to holders of its
Preferred Stock, shall not be taxable to such shareholders.
(n) The Company covenants and agrees that it shall not, at any time after
the Distribution Date and so long as the Rights have not been
redeemed pursuant to Section 23 hereof or exchanged pursuant to
Section 24 hereof, (i) consolidate with (other than a Subsidiary of
the Company in a transaction that complies with the proviso at the
end of this sentence), (ii) merge with or into, or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries taken as a whole, to any other Person or
Persons (other than
26
the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with the proviso at the end of
this sentence) if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments outstanding or agreements or arrangements in effect which
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 shareholders of a Person who constitutes, or would
constitute, the "Principal Party" for the purposes of Section 13(a)
hereof shall have received a distribution of Rights previously owned
by such Person or any of its Affiliates and Associates; PROVIDED,
HOWEVER, that this Section 11(n) shall not affect the ability of any
Subsidiary of the Company to consolidate with, or merge with or into,
or sell or transfer assets or earning power to, any other Subsidiary
of the Company. The Company further covenants and agrees that after
the Distribution Date it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will substantially diminish or otherwise
eliminate the benefits intended to be afforded by the Rights.
(o) Notwithstanding anything in this Agreement to the contrary, in the
event the Company shall at any time after the date of this Agreement
and prior to the Distribution Date (i) declare or pay any dividend on
the outstanding Common Stock of the Company payable in shares of
Common Stock of the Company or (ii) effect a subdivision, combination
or consolidation of the outstanding shares of Common Stock of the
Company (by reclassification or otherwise than by payment of
dividends in shares of Common Stock of the Company) into a greater or
lesser number of shares of Common Stock of the Company, then in any
such case (A) the number of one one-thousandths of a share of
Preferred Stock purchasable after such event upon proper exercise of
each Right shall be determined by multiplying the number of one
one-thousandths of a share of Preferred Stock so purchasable
immediately prior to such event by a fraction, the numerator of which
is the number of shares of Common Stock of the Company outstanding
immediately prior to such event and the denominator of which is the
number of shares of Common Stock of the Company outstanding
immediately after such event, and (B) each share of Common Stock of
the Company outstanding immediately after such event shall have
issued with respect to it that number of Rights which each share of
Common Stock of the Company outstanding immediately prior to such
event had issued with respect to it. The adjustments provided for in
this Section 11(o) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(p) The exercise of Rights under Section 11(a)(ii) shall only result in
the loss of rights under Section 11(a)(ii) to the extent so exercised
and shall not otherwise affect the rights of holders of Right
Certificates under this Rights Agreement,
27
including rights to purchase securities of the Principal Party
following a Section 13 Event which has occurred or may thereafter
occur, as set forth in Section 13 hereof. Upon exercise of a Right
Certificate under Section 11(a)(ii), the Rights Agent shall return
such Right Certificate duly marked to indicate that such
exercise has occurred.
Section 12. CERTIFICATE OF ADJUSTED EXERCISE 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 accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock of the Company a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate (or,
if prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock of the Company) in accordance with Section 26 hereof. The
Rights Agent shall be fully protected in relying on any such certificate and on
any adjustment contained therein and shall not be deemed to have knowledge of
any such adjustment unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a
transaction which is not prohibited by Section 11(n) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of
the Company in a transaction which is not prohibited by the proviso
at the end of the first sentence of Section 11(n) hereof) shall
consolidate with the Company, or merge with and into the Company and
the Company shall be the continuing or surviving corporation of such
merger and, in connection with such merger, all or part of the shares
of Common Stock of the Company shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell, mortgage or otherwise
transfer (or one or more of its Subsidiaries shall sell, mortgage or
otherwise transfer), in one transaction or a series of related
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) to any other Person or Persons (other than the Company or
any Subsidiary of the Company in one or more transactions, each of
which is not prohibited by the proviso at the end of the first
sentence of Section 11(n) hereof), 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 have the right to
receive, upon the exercise thereof at the then current Exercise Price
in accordance with the terms of this Agreement, such number
28
of validly authorized and issued, fully paid and nonassessable shares
of freely tradeable Common Stock of the Principal Party (as
hereinafter defined in Section 13(b)), free and clear of rights of
call or first refusal, liens, encumbrances, transfer restrictions or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Exercise Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13
Event, and dividing that product by (2) 50% of the Fair Market Value
(determined pursuant to Section 11(d) hereof) per share of the Common
Stock of such Principal Party on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale, mortgage or transfer, all the
obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions
of Section 11 hereof shall apply to such Principal Party; and (iv)
such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of shares of its
Common Stock to permit exercise of all outstanding Rights in
accordance with this Section 13(a) and the making of payments in cash
and/or other securities in accordance with Section 11(a)(iii) hereof)
in connection with such consummation as may be necessary to assure
that the provisions hereof shall thereafter be applicable, as nearly
as reasonably may be, in relation to its shares of Common Stock
thereafter deliverable upon the exercise of the Rights.
(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), the Person that is the
issuer of any securities into which shares of Common Stock of
the Company are converted in such merger or consolidation, or,
if there is more than one such issuer, the issuer of Common
Stock that has the highest aggregate Fair Market Value
(determined pursuant to Section 11(d)), and if no securities
are so issued, the Person that is the other party to the
merger or consolidation, or, if there is more than one such
Person, the Person the Common Stock of which has the highest
aggregate Fair Market Value (determined pursuant to Section
11(d)); and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, 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 the Common Stock of which
29
has the highest aggregate Fair Market Value (determined
pursuant to Section 11(d));
PROVIDED, HOWEVER, that in any such case, (1) if the Common
Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under
Section 12 of the Exchange Act ("Registered Common Stock") or such
Person is not a corporation, and such Person is a direct or indirect
Subsidiary or Affiliate of another Person who has Registered Common
Stock outstanding, "Principal Party" shall refer to such other
Person; (2) if the Common Stock of such Person is not Registered
Common Stock or such Person is not a corporation, and such Person is
a direct or indirect Subsidiary of another Person but is not a direct
or indirect Subsidiary of another Person which has Registered Common
Stock outstanding, "Principal Party" shall refer to the ultimate
parent entity of such first-mentioned Person; (3) if the Common Stock
of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by
more than one Person, and one or more of such other Persons has
Registered Common Stock outstanding, "Principal Party" shall refer to
whichever of such other Persons is the issuer of the Registered
Common Stock having the highest aggregate Fair Market Value
(determined pursuant to Section 11(d)); and (4) if the Common Stock
of such Person is not Registered Common Stock or such Person is not a
corporation, and such Person is directly or indirectly controlled by
more than one Person, and none of such other Persons has Registered
Common Stock outstanding, "Principal Party" shall refer to whichever
ultimate parent entity is the corporation having the greatest
shareholders' equity or, if no such ultimate parent entity is a
corporation, "Principal Party" shall refer to whichever ultimate
parent entity is the entity having the greatest net assets.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless prior thereto (x) the Principal Party shall have a
sufficient number of authorized shares of its Common Stock, which
have not been issued or reserved for issuance, to permit the exercise
in full of the Rights in accordance with this Section 13, and (y) the
Company and each Principal Party and each other Person who may become
a Principal Party as a result of such consolidation, merger, sale or
transfer shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in Section
13(a) and (b) and further providing that, as soon as practicable
after the date of any consolidation, merger, sale or transfer of
assets mentioned in Section 13(a), the Principal Party at its own
expense will:
(i) prepare and file a registration statement under the Securities
Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, cause such
registration statement to become effective as soon as
practicable after such filing and cause such registration
statement to remain effective (with a prospectus that at all
30
times meets the requirements of the Securities Act) until the
Expiration Date;
(ii) qualify or register the Rights and the securities purchasable
upon exercise of the Rights under the blue sky laws of such
jurisdictions as may be necessary or appropriate;
(iii) list (or continue the listing of) the Rights and the
securities purchasable upon financial statements for the
Principal Party and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10
under the Exchange Act.
(d) In case the Principal Party which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation or
By-laws or other instrument governing its affairs, which provision
would have the effect of (i) causing such Principal Party to issue
(other than to holders of Rights pursuant to this Section 13), in
connection with, or as a consequence of, the consummation of a
transaction referred to in this Section 13, shares of Common Stock of
such Principal Party at less than the then current Fair Market Value
(determined pursuant to Section 11(d)) or securities exercisable for,
or convertible into, Common Stock of such Principal Party at less
than such Fair Market Value, or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of
the Common Stock of such Principal Party pursuant to the provisions
of 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 canceled, waived or
amended, or that the authorized securities shall be redeemed, so that
the applicable provision will have no effect in connection with, or
as a consequence of, the consummation of the proposed transaction.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(o)
hereof, or to distribute Right Certificates which evidence fractional
Rights. If the Company elects not to issue such fractional Rights,
the Company shall pay, in lieu of such fractional Rights, to the
registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Fair Market Value of a whole Right,
as determined pursuant to Section 11(d) hereof.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of
one one-thousandth of a share of Preferred Stock) upon exercise of
the Rights or to distribute
31
certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock). In lieu of fractional
shares of Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company may pay to
the registered holders of Right Certificates at the time such Rights
are exercised as herein provided an amount in cash equal to the same
fraction of the Fair Market Value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the Fair Market
Value of one one-thousandth of a share of Preferred Stock shall be
determined pursuant to Section 11(d) hereof for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section
14.
Section 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, other than rights of
action vested in the Rights Agent pursuant to Sections 18 and 20 hereof, are
vested in the respective registered holders of the Right Certificates (or, prior
to the Distribution Date, the registered holders of the Common Stock of the
Company); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the Common Stock of the Company), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the Common Stock of the Company), may, in such
registered holder's own behalf and for such registered holder's own benefit,
enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, his right to exercise
the Right evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and 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.
Holders of Rights shall be entitled to recover the reasonable costs and
expenses, including attorneys' fees, incurred by them in any action to enforce
the provisions of this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right, by accepting the same, consents and agrees with
the Company and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, each Right will be transferable only
simultaneously and together with the transfer of shares of Common
Stock of the Company;
(b) after the Distribution Date, the Right Certificates are transferable
only on the registry books of the
32
Rights Agent if surrendered at the office or offices of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer;
(c) subject to Sections 6(a) and 7(f), the Company and the Rights Agent
may deem and treat the person in whose name a Right Certificate (or,
prior to the Distribution Date, the associated certificate
representing Common Stock of the Company) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right
Certificates or the associated certificate representing Common Stock
of the Company made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and, subject to the last sentence
of Section 7(e), 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 other Person as the result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority prohibiting or otherwise restraining
performance of such obligations; PROVIDED, HOWEVER, that the Company
must use its best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the shares of
Preferred Stock or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon the
holder of any Right Certificate, as such, any of the rights of a shareholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent such reasonable
compensation as shall be agreed to in writing between the Company and
the Rights Agent for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and disbursements and other disbursements incurred
in the administration and execution of this
33
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, or expense, incurred
without gross negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against any
claim of liability arising therefrom, directly or indirectly. The
provisions of this Section 18(a) shall survive the expiration of the
Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate representing Common Stock of the
Company, Preferred Stock, or other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it in good faith
and without negligence to be genuine and to be signed and executed by
the proper Person or Persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or shareholder services
business of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either
in the name of the predecessor or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the
full force provided in the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates
so countersigned; and in case at that time
34
any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its
prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations expressly imposed by
this Agreement upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel selected by it (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring
Person or Adverse Person and the determination of "Fair Market
Value") be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof shall be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by a person believed by the Rights Agent to be the
Chairman of the Board of Directors, a Vice Chairman of the Board of
Directors, the Chief Executive Officer, the President, a Vice
President, the Treasurer, any Assistant Treasurer, the Clerk or an
Assistant Clerk of the Company and delivered to the Rights Agent. Any
such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions
of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach
by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible
for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 7(e) hereof) or any
adjustment required under the provisions of Sections 11, 13 or 23(c)
hereof or responsible
35
for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after receipt of a certificate describing any
such adjustment furnished in accordance with Section 12 hereof), nor
shall it be responsible for any determination by the Board of
Directors of the Company of the Fair Market Value of the Rights or
Preferred Stock pursuant to the provisions of Section 14 hereof; 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 of the Company or Preferred Stock to be issued pursuant
to this Agreement or any Right Certificate or as to whether or not
any shares of Common Stock of the Company or Preferred Stock will,
when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company shall perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
and certificates delivered pursuant to any provision hereof from any
person believed by the Rights Agent to be the Chairman of the Board
of Directors, any Vice Chairman of the Board of Directors, the Chief
Executive Officer, the President, a Vice President, the Clerk, an
Assistant Clerk, the Treasurer or an Assistant Treasurer of the
Company, and is authorized to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or suffered to be taken by it in good
faith in accordance with instructions of 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 or omitted by the Rights Agent under
this Agreement and the date on or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not
be liable for any action taken by, or omission of, the Rights Agent
in accordance with a proposal included in 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 or
omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in
any transaction in which the
36
Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or
for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, (i) the certificate attached to the
form of assignment or form of election to purchase, as the case may
be, has either not been completed or indicates an affirmative
response to clause (1) or clause (2) thereof, or (ii) any other
actual or suspected irregularity exists. The Rights Agent shall not
take any further action with respect to such requested exercise or
transfer without first consulting with the Company, and will
thereafter take further action with respect thereto only in
accordance with the Company's written instructions.
Section 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) days' notice in writing
mailed to the Company and to each transfer agent of the Common Stock of the
Company and Preferred Stock by registered or certified mail, and to the holders
of the Right Certificates by first class mail. The Company may remove the Rights
Agent or any successor Rights Agent (with or without cause), effective
immediately or on a specified date, by written notice given to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock of the Company and Preferred Stock, and by giving notice to the
holders of the Right Certificates by any means reasonably determined by the
Company to inform such holders of such removal (including without limitation, by
including such information in one or more of the Company's reports to
shareholders or reports or filings with the Securities and Exchange Commission).
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
If the Company shall fail to make such appointment within a period of thirty
(30) days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
incumbent Rights Agent or the registered holder of any Right Certificate may
apply to any court of competent
37
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, shall be (a) a
corporation organized and doing business under the laws of the United States or
of the Commonwealth of Massachusetts or the State of New York (or of any other
state of the United States so long as such corporation is authorized to do
business as a banking institution in the Commonwealth of Massachusetts or the
State of New York), in good standing, which is authorized under such laws to
exercise stock transfer or corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000 or (b) an Affiliate of a corporation described in clause (a) of
this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock of the Company and the Preferred Stock, and mail a notice
thereof in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by the Board of Directors of
the Company to reflect any adjustment or change in the Exercise Price per share
and the number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock of the Company following the Distribution Date
and prior to the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock of the Company 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 hereafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; PROVIDED,
HOWEVER, that (i) no such Right 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 Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustments shall otherwise have been made in lieu of the issuance thereof.
38
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its option, redeem all
but not less than all of the then outstanding Rights at a redemption
price of $0.001 per Right, appropriately adjusted to reflect any
dividend declared or paid on the Common Stock of the Company in
shares of Common Stock of the Company or any subdivision or
combination of the outstanding shares of Common Stock of the Company
or similar event occurring after the date of this Agreement (such
redemption price, as adjusted from time to time, being hereinafter
referred to as the "Redemption Price"). The Rights may be redeemed
only until the earliest to occur of (i) the time at which any Person
becomes an Acquiring Person, (ii) the declaration by the Board of
Directors that any Person is an Adverse Person or (iii) the Final
Expiration Date.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights in accordance with Section 23
hereof, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of
the Board of Directors of the Company ordering the redemption of the
Rights in accordance with Section 23 hereof, the Company shall give
notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice to the Rights Agent
and to all such holders 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 of the Company. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives
the notice. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent. Any
notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such
notice of 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 Section 24 hereof or in connection with
the purchase of shares of Common Stock of the Company prior to the
Distribution Date.
(c) The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock of the Company (based on the Fair Market Value
of the Common Stock of the Company as of the time of redemption) or
any other form of consideration deemed appropriate by the Board of
Directors of the Company.
39
Section 24. EXCHANGE.
(a) (i) The Board of Directors of the Company may, at its option,
at any time on or after the occurrence of a Section 11(a)(ii)
Event, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof)
for shares of Common Stock of the Company at an exchange ratio
of one share of Common Stock of the Company 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 "Section 24(a)(i) Exchange Ratio"). Notwithstanding the
foregoing, the Board of Directors of the Company shall not be
empowered to effect such exchange at any time after any Person
(other than an Exempt Person), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of
50% or more of the Common Stock of the Company.
(ii) Notwithstanding the foregoing, the Board of Directors of the
Company may, at its option, at any time on or after the
occurrence of a Section 11(a)(ii) Event, exchange all or part
of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for shares of Common Stock
of the Company at an exchange ratio specified in the following
sentence, as appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after
the date of this Agreement. Subject to the adjustment
described in the foregoing sentence, each Right may be
exchanged for that number of shares of Common Stock of the
Company obtained by dividing the Spread (as defined in Section
11(a)(iii)) by the then Fair Market Value per one
one-thousandth of a share of Preferred Stock on the earlier of
(x) the date on which any person becomes an Acquiring Person
or (y) the date on which a tender or exchange offer by any
Person (other than an Exempt Person) is first published or
sent or given within the meaning of Rule 14d-4(a) of the
Exchange Act or any successor rule, if upon consummation
thereof such Person could become an Acquiring Person (such
exchange ratio being referred to herein as the "Section
24(a)(ii) Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than
an Exempt Person), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of 50% or more of
the Common Stock of the Company.
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to subsection (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
40
Rights shall be to receive that number of shares of Common Stock of
the Company equal to the number of such Rights held by such holder
multiplied by the Section 24(a)(i) Exchange Ratio or the Section
24(a)(ii) Exchange Ratio, as applicable. The Company shall promptly
give notice of any such exchange in accordance with Section 26 hereof
and shall promptly 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; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock of the
Company for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions
of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Stock (or Preferred Stock
Equivalent, as such term is defined in Section 11(b) hereof) for
Common Stock of the Company exchangeable for Rights, at the initial
rate of one one-thousandth of a share of Preferred Stock (or
Preferred Stock Equivalent) for each share of Common Stock of the
Company, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Stock pursuant to the terms thereof,
so that the fraction of a share of Preferred Stock delivered in lieu
of each share of Common Stock of the Company shall have the same
voting rights as one share of Common Stock of the Company.
(d) In the event that there shall not be sufficient shares of Common
Stock of the Company or Preferred Stock (or Preferred Stock
Equivalents) issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock of the
Company or Preferred Stock (or Preferred Stock Equivalent) for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common Stock
of the Company or to distribute certificates which evidence
fractional shares of Common Stock of the Company. If the Company
elects not to issue such fractional shares of Common Stock of the
Company, the Company shall pay, in lieu of such fractional shares of
Common Stock of the Company, to the registered holders of the Right
Certificates with regard to which such fractional shares of Common
Stock of the Company would otherwise be issuable, an amount in cash
equal to the same fraction of the Fair Market Value of a whole share
of Common Stock of the Company. For the purposes
41
of this paragraph (e), the Fair Market Value of a whole share of
Common Stock of the Company shall be the closing price of a share of
Common Stock of the Company (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the
holders of Preferred Stock (other than a regular periodic cash
dividend out of earnings or retained earnings of the Company), or
(ii) to offer to the holders of Preferred Stock rights or warrants to
subscribe for or to purchase any additional shares of Preferred Stock
or shares of stock of any class or any other securities, rights or
options, or (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision
of outstanding shares of Preferred Stock), or (iv) to effect any
consolidation or merger into or with, or to effect any sale, mortgage
or other transfer (or to permit one or more of its Subsidiaries to
effect any sale, mortgage or other transfer), in one transaction or a
series of related transactions, of 50% or more of the assets or
earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person (other than a Subsidiary of the Company in one
or more transactions each of which is not prohibited by the proviso
at the end of the first sentence of Section 11(n) hereof), (v) to
effect the liquidation, dissolution or winding up of the Company, or
(vi) to declare or pay any dividend on the Common Stock of the
Company payable in Common Stock of the Company or to effect a
subdivision, combination or consolidation of the Common Stock of the
Company (by reclassification or otherwise than by payment of
dividends in Common Stock of the Company) then in each such case, the
Company shall give to each holder of a Right Certificate and to the
Rights Agent, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for the purposes
of such stock dividend, distribution of rights or warrants, 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 of the Company and/or Preferred Stock, if any such date
is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days
prior to the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of any
such other action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation therein
by the holders of the shares of Common Stock of the Company and/or
Preferred Stock, whichever shall be the earlier; PROVIDED, HOWEVER,
no such notice shall be required pursuant to this Section 25 as a
result of any Subsidiary of the Company effecting a consolidation or
merger with or into, or
42
effecting a sale or other transfer of assets or earning power to, any
other Subsidiary of the Company in a manner not inconsistent with the
provisions of this Agreement.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to
each registered holder of a Right Certificate and to the Rights
Agent, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section
11(a)(ii) hereof.
Section 26. NOTICES.
Notices or demands authorized by this Agreement to be given or made by the
Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, by facsimile transmission or by nationally-recognized overnight courier
addressed (until another address is filed in writing with the Rights Agent) as
follows:
CORE, INC.
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
With a copy to: Xxxxxxx X. Xxxx, Esq.
Rich, May, Xxxxxxxx & Xxxxxxxx, P.C.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or
made if sent by first class mail, postage prepaid, by facsimile transmission
or by nationally recognized overnight courier addressed (until another
address is filed in writing with the Company) as follows:
State Street Bank and Trust Company
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing shares of
Common Stock of the Company) shall be sufficiently given or made if sent by
first-class mail, postage
43
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS.
Prior to the occurrence of a Section 11(a)(ii) Event, the Company and the
Rights Agent shall, if the Board of Directors of the Company so directs,
supplement or amend any provision of this Agreement as the Board of Directors of
the Company may deem necessary or desirable without the approval of any holders
of certificates representing shares of Common Stock of the Company. From and
after the occurrence of a Section 11(a)(ii) Event, the Company and the Rights
Agent shall, if the Board of Directors of the Company so directs, supplement or
amend this Agreement without the approval of any holder of Right Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder, or
(iv) to change or supplement the provisions hereof in any manner which the Board
of Directors of the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates (other than
an Acquiring Person, Adverse Person or any Affiliate or Associate of an
Acquiring Person or Adverse Person); PROVIDED, HOWEVER, that from and after the
occurrence of a Section 11(a)(ii) Event this Agreement may not be supplemented
or amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable or (B) any other time period unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and the
benefits to, the holders of Rights (other than an Acquiring Person, Adverse
Person or any Affiliate or Associate of an Acquiring Person or Adverse Person).
Without limiting the foregoing, the Company may at any time prior to the
occurrence of a Section 11(a)(ii) Event amend this Agreement to lower the
threshold set forth in Section 1(a) to not less than the greater of (i) the sum
of .001% and the largest percentage of the outstanding Common Stock of the
Company 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 entity holding Common Stock
of the Company for or pursuant to the terms of any such plan) and (ii) 10%. Upon
the delivery of such certificate from an appropriate officer of the Company
which states that the proposed supplement or amendment is in compliance with the
terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Prior to the occurrence of a Section 11(a)(ii) Event, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock of the Company. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any amendment or
supplement pursuant to this Section 27 which alters the Rights Agent's rights or
duties.
44
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 Common Stock of the Company outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of the Company 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 Rules
under the Exchange Act as in effect on the date hereof. The Board of Directors
of the Company 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, or as may be necessary or advisable in the
administration of this Agreement, including without limitation, the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the 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 in
good faith 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 any
member of the Board of Directors to any liability to the holders of the Rights
or to any other person.
Section 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any person or
corporation other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the Common Stock
of the Company) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, registered holders of the Common Stock of
the Company).
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; PROVIDED, HOWEVER, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
the Agreement would adversely affect the purpose or effect of the Agreement, the
right
45
of redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of such
determination by the Board of Directors.
Section 32. GOVERNING LAW.
This Agreement, each Right and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the Commonwealth of
Massachusetts and for all purposes shall be governed by and construed in
accordance with the laws of such Commonwealth applicable to contracts to be made
and to be performed entirely within such Commonwealth. The courts of the
Commonwealth of Massachusetts and of the United States of America located in the
Commonwealth of Massachusetts (the "Massachusetts Courts") shall have exclusive
jurisdiction over any litigation arising out of or relating to this Agreement
and the transactions contemplated hereby, and any Person commencing or otherwise
involved in any such litigation shall waive any objection to the laying of venue
of such litigation in the Massachusetts Courts and shall not plead or claim in
any Massachusetts Court that such litigation brought therein has been brought in
an inconvenient forum.
Section 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
[Remainder of page intentionally left blank]
46
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as an instrument under seal and attested, all as of the day and
year first above written.
Attest: CORE, INC.
By: By:
------------------------------ -------------------------------
Name:
-----------------------------
Title:
----------------------------
Attest: STATE STREET BANK AND
By: TRUST COMPANY, as rights agent
------------------------------
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
EXHIBITS
Exhibit A -- Certificate of Designation of Series A Participating
Cumulative Preferred Stock
Exhibit B -- Form of Right Certificate
47
FEDERAL IDENTIFICATION
NO. 00-0000000
----------
THE COMMONWEALTH OF MASSACHUSETTS
XXXXXXX XXXXXXX XXXXXX
Secretary of the Commonwealth
Xxx Xxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000-0000
CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A CLASS OR SERIES OF STOCK
(GENERAL LAWS, CHAPTER 156B, SECTION 26)
We, Xxxxx X. Xxxxxx , *President/xxxxxxxx,
-------------------------------------------------
and Xxxxxxx X. Xxxxx , *Clerk/xxxxxxxxxxxx,
-------------------------------------------------
of CORE, INC.
-------------------------------------------------------------------------
(EXACT NAME OF CORPORATION)
located at: Two Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000
----------------------------------------------------------------
(STREET ADDRESS OF CORPORATION IN MASSACHUSETTS)
do hereby certify that a meeting of the directors of the corporation held on
September 21, 1999, the following vote establishing and designating a class
or series of stock and determining the relative rights and preferences
thereof was duly adopted:
See continuation sheets II-A to II-F.
SIGNED UNDER THE PENALTIES OF PERJURY, this 21st day of October, 1999,
------ ---------------
Xxxxx X. Xxxxxx , *President/xxxxxxxxx
-----------------------------------------------------
Xxxxxxx X. Xxxxx , *Clerk/xxxxxxxxxxxxx
-----------------------------------------------------
THE COMMONWEALTH OF MASSACHUSETTS
CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A SERIES OF A CLASS OF STOCK
(GENERAL LAWS, CHAPTER 156B, SECTION 26)
-------------------------------------------------------------------------------
I hereby approve the within Certificate of Vote of Directors and, the filing
fee in the amount of $__________ having been paid, said certificate is deemed
to have been filed with me this ____ day of ___________, 19__.
EFFECTIVE DATE:
---------------------------------------------------------------
XXXXXXX XXXXXXX XXXXXX
SECRETARY OF THE COMMONWEALTH
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
Xxxxxxx X. Xxxx, Esq.
c/o Rich, May, Xxxxxxxx & Xxxxxxxx, P.C.
-------------------------------------------------------------------------------
000 Xxxxxxx Xxxxxx, 0xx Xxxxx
-------------------------------------------------------------------------------
Xxxxxx, XX 00000-0000
-------------------------------------------------------------------------------
Telephone: (000) 000-0000
--------------------------------------------------------------------
CORE, INC.
VOTE OF DIRECTORS ESTABLISHING
SERIES A PARTICIPATING CUMULATIVE PREFERRED STOCK
Pursuant to Section 26 of Chapter 156B of the General Laws of The Commonwealth
of Massachusetts:
VOTED: That pursuant to authority conferred upon and vested in the Board
of Directors by the Articles of Organization, as amended (the
"Articles"), of CORE, INC. (the "Corporation"), the Board of
Directors hereby establishes and designates a series of Preferred
Stock of the Corporation, and hereby fixes and determines the
relative rights and preferences of the shares of such series, in
addition to those set forth in the Articles, as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series A Participating Cumulative Preferred Stock" (the "Series A
Preferred Stock"), and the number of shares initially constituting such series
shall be 100,000.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) (i) Subject to the rights of the holders of any shares of any
series of preferred stock (or any similar stock) ranking prior and superior to
the Series A Preferred Stock with respect to dividends, the holders of shares of
Series A Preferred Stock, in preference to the holders of shares of the Common
Stock, $0.10 par value, of the Corporation (the "Common Stock") and of any other
junior stock, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provisions for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. The multiple of cash and
non-cash dividends declared on the Common Stock to which holders of the Series A
Preferred Stock are entitled, which shall be 1,000 initially but which shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple."
II-A
(ii) In the event the Corporation shall at any time after
October 21, 1999 (the "Rights Declaration Date") (a) declare or pay any
dividend on Common Stock payable in shares of Common Stock, or (b) effect a
subdivision or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in each such case the Dividend Multiple thereafter
applicable to the determination of the amount of dividends which holders of
shares of Series A Preferred Stock shall be entitled to receive shall be the
Dividend Multiple applicable immediately prior to such event multiplied by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event.
(iii) Notwithstanding anything else contained in this
subsection (A), the Corporation shall, out of funds legally available for that
purpose, declare a dividend or distribution on the Series A Preferred Stock as
provided in this subsection (A) immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
(B) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated PRO RATA on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix in
accordance with applicable law a record date for the determination of holders of
shares of Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than such
number of days prior to the date fixed for the payment thereof as may be allowed
by applicable law.
Section 3. VOTING RIGHTS. In addition to any other voting rights
required by law, the holders of shares of Series A Preferred Stock shall have
the following voting rights:
II-B
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the shareholders of the Corporation.
The number of votes which a holder of a share of Series A Preferred Stock is
entitled to cast, which shall initially be 1,000 but which may be adjusted from
time to time as hereinafter provided, is hereinafter referred to as the "Vote
Multiple." In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
Vote Multiple thereafter applicable to the determination of the number of votes
per share to which holders of shares of Series A Preferred Stock shall be
entitled shall be the Vote Multiple immediately prior to such event multiplied
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein or by law, the holders of
shares of Series A Preferred Stock and the holders of shares of Common Stock and
the holders of shares of any other capital stock of this Corporation having
general voting rights, shall vote together as one class on all matters submitted
to a vote of shareholders of the Corporation.
(C) Except as otherwise required by applicable law or as set forth
herein, holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever dividends or distributions payable on the Series A
Preferred Stock as provided in Section 2 are in arrears, thereafter and until
all accrued and unpaid dividends and distributions, whether or not declared, on
shares of Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except dividends paid ratably on
the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then
entitled;
II-C
(iii) except as permitted in subsection 4(A)(iv) below, redeem,
purchase or otherwise acquire for consideration shares of any
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of any stock
ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under subsection (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
preferred stock and may be reissued as part of a new series of preferred stock
to be created by resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made (x) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (1) $1,000.00 per share or
(2) an aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 1,000 times the aggregate amount to be
distributed per share to holders of Common Stock, or (y) to the holders of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except distributions made ratably
on the Series A Preferred Stock and all other such parity stock in proportion to
the total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or
II-D
winding up. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case
the aggregate amount per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under clause
(x) of the preceding sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such event. Neither the consolidation of nor merging of the Corporation with
or into any other corporation or corporations, nor the sale or other transfer
of all or substantially all of the assets of the Corporation, shall be deemed
to be a liquidation, dissolution or winding up of the Corporation within the
meaning of this Section 6.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged,
plus accrued and unpaid dividends, if any, payable with respect to the Series A
Preferred Stock. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare or pay any dividend on Common Stock payable in
shares of Common Stock, or (ii) effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. REDEMPTION. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. RANKING. Unless otherwise expressly provided in the Articles
or a Certificate of Vote of Directors Establishing a Class of Stock relating to
any other series of preferred stock of the Corporation, the Series A Preferred
Stock shall rank junior to every other series of the Corporation's preferred
stock previously or hereafter authorized, as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and shall rank
senior to the Common Stock.
II-E
Section 10. AMENDMENT. The Articles and this Certificate of Vote of
Directors Establishing a Class of Stock shall not be amended in any manner which
would materially alter or change the powers, preferences or special rights of
the Series A Preferred Stock so as to affect them adversely (within the meaning
of Section 77 of Chapter 156B of the Massachusetts General Laws) without the
affirmative vote of the holders of two-thirds or more of the outstanding shares
of Series A Preferred Stock, voting separately as a class.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be issued
in whole shares or in any fraction of a share that is one one-thousandth
(1/1,000th) of a share or any integral multiple of such fraction, which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock. In
lieu of fractional shares, the Corporation may elect to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one
one-thousandth (1/1,000th) of a share or any integral multiple thereof.
II-F
EXHIBIT B
to
Shareholders Rights Agreement
[Form of Right Certificate]
Certificate No. R- ___ ______ Rights
NOT EXERCISABLE AFTER OCTOBER 21, 2009 OR EARLIER IF NOTICE OF REDEMPTION IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF CORE, INC., AT
$0.001 PER RIGHT ON THE TERMS SET FORTH IN THE SHAREHOLDER RIGHTS AGREEMENT
BETWEEN CORE, INC. AND STATE STREET BANK AND TRUST COMPANY, AS RIGHTS AGENT,
DATED AS OF OCTOBER 21, 1999 (THE "RIGHTS AGREEMENT"). UNDER CERTAIN
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON, AN ADVERSE PERSON OR AN ASSOCIATE
OR AFFILIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID.
Right Certificate
CORE, INC.
This certifies that _________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions
of the Shareholder Rights Agreement dated as of October 21, 1999 (the "Rights
Agreement") between CORE, INC. (the "Company") and State Street Bank and
Trust Company, as Rights Agent (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to the close of business on October 21, 2009
at the office or offices of the Rights Agent designated for such purpose, or
its successors as Rights Agent, one one-thousandth of a fully paid,
non-assessable share of the Series A Participating Cumulative Preferred Stock
(the "Preferred Stock") of the Company, at a purchase price of $50 per one
one-thousandth of a share (the "Exercise Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase and
the related Certificate duly executed. The number of Rights evidenced by this
Right Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Exercise Price per share set forth
above, are the number and Exercise Price as of ____________, based on the
Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person, an Adverse Person
or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement), (ii) a transferee of any such Acquiring Person, Adverse
Person, Associate or Affiliate, or (iii) under certain circumstances specified
in the Rights Agreement, a transferee of a Person who, after such transfer,
became an Acquiring Person or an Adverse Person, or an Affiliate or Associate of
an Acquiring Person or an Adverse Person, such Rights shall become null and void
and no holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price and the number
of shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the principal office of the
Company and the designated office of the Rights Agent and are also available
upon written request to the Company or the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for another Right Certificate or Certificates of like
tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive, upon surrender hereof, another Right Certificate or
Certificates for the number of whole Rights not exercised. If this Right
Certificate shall be exercised in whole or in part pursuant to Section 11(a)(ii)
of the Rights Agreement, the holder shall be entitled to receive this Right
Certificate duly marked to indicate that such exercise has occurred as set forth
in the Rights Agreement.
Under certain circumstances, subject to the provisions of the Rights
Agreement, the Board of Directors of the Company at its option may exchange all
or any part of the Rights evidenced by this Certificate for shares of the
Company's Common Stock or Preferred Stock at an exchange ratio (subject to
adjustment) specified in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Board of Directors of the Company at
its option at a redemption price of $0.001 per Right (payable in cash, Common
Stock or other consideration deemed appropriate by the Board of Directors).
The Company is not obligated to issue fractional shares of stock upon
the exercise of any Right or Rights evidenced hereby (other than fractions which
are integral multiples of one one-thousandth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depositary receipts).
If the Company elects not to issue such fractional shares, in lieu thereof a
cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock, Common Stock or any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by an authorized signatory of the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the Company
as a document under corporate seal.
Attested: CORE, INC.
By: By:
------------------------- ----------------------------
Name:
Title:
Countersigned:
STATE STREET BANK &
TRUST COMPANY, as Rights Agent
By:
-------------------------
Name:
Title:
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________________ hereby sells, assigns and
transfers unto ____________________________________ (Please print name and
address of transferee) ____________________________________ this Right
Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ___________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: Signature:
------------------------- ---------------------------
Signature Guaranteed:
------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate ______ are ______
are not being transferred by or on behalf of a Person who is or was an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such Person (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned ____ did ____ did not directly or indirectly acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person, an Adverse Person or an Affiliate or Associate of any such
Person.
Dated: Signature
------------------------- ----------------------------
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To CORE, INC.:
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Right Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security or other
identifying taxpayer number:
----------------------------
-------------------------------------------------------------------------------
(Please Print Name and Address)
-------------------------------------------------------------------------------
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If such number of Rights shall not be all the Rights evidenced by this
Right Certificate or if the Rights are being exercised pursuant to Section
11(a)(ii) of the Rights Agreement, a new Right Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
Please insert social security or other
identifying taxpayer number:
----------------------------
-------------------------------------------------------------------------------
(Please Print Name and Address)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Dated: Signature:
------------------------- ---------------------------
Signature Guaranteed:
----------------------------------
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate ____ are ____ are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person, an Adverse Person or an Affiliate or Associate of any such Person (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned ____ did ____ did not directly or indirectly acquire the Rights
evidenced by this Right Certificate from any Person who is, was or became an
Acquiring Person, an Adverse Person or an Affiliate or Associate of any such
Person.
Dated: Signature:
------------------------- ---------------------------
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
