Exhibit 4.1
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AGREEMENT
by and between
UNITED STATIONERS INC.
and
BANKBOSTON, N.A.,
as Rights Agent
---------------
Dated as of
July 27, 1999
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions...........................................................................2
Section 2. Appointment of Rights Agent...................................................................9
Section 3. Issuance of Right Certificates...............................................................10
Section 4. Form of Right Certificates...................................................................13
Section 5. Countersignature and Registration............................................................13
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates......................................15
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights................................16
Section 8. Cancellation and Destruction of Right Certificates...........................................20
Section 9. Reservation and Availability of Shares of Preferred Stock....................................21
Section 10. Preferred Stock Record Date..................................................................23
Section 11. Adjustment of Exercise Price or Number of Shares.............................................24
Section 12. Certification of Adjusted Exercise Price or Number of Shares.................................34
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.........................34
Section 14. Fractional Rights and Fractional Shares......................................................41
Section 15. Rights of Action.............................................................................43
Section 16. Agreement of Right Holders...................................................................43
Section 17. Right Certificate Holder Not Deemed a Stockholder............................................44
Section 18. Concerning the Rights Agent..................................................................45
Section 19. Merger or Consolidation of, or Change in Name of, the Rights Agent...........................46
Section 20. Duties of Rights Agent.......................................................................47
Section 21. Change of Rights Agent.......................................................................50
Section 22. Issuance of New Right Certificates...........................................................52
Section 23. Redemption...................................................................................53
Section 24. Notice of Proposed Actions...................................................................54
Section 25. Notices......................................................................................56
Section 26. Supplements and Amendments...................................................................57
Section 27. Exchange.....................................................................................57
Section 28. Successors...................................................................................60
Section 29. Benefits of this Agreement...................................................................60
Section 30. Delaware Contract............................................................................60
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 31. Counterparts.................................................................................60
Section 32. Descriptive Headings.........................................................................60
Section 33. Severability.................................................................................61
Section 34. Determinations And Actions By The Board Of Directors.........................................61
Exhibit A --.......Summary of Rights
Exhibit B --.......Form of Right Certificate
Exhibit C -- Form of Certificate of Designations
of Series A Junior Preferred Stock
ii
AGREEMENT
Agreement, dated as of July 27, 1999, by and between United
Stationers Inc., a Delaware corporation (the "Company"), and BANKBOSTON, N.A., a
national banking association (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on July 27, 1999, the Board of Directors of the
Company authorized the issuance of, and declared a dividend payable in, one
right (a "Right") for each share of Common Stock, $0.10 par value per share, of
the Company outstanding as of the close of business on August 16, 1999 (the
"Record Date"), each such Right representing the right to purchase one
one-thousandth of a share of Series A Junior Preferred Stock of the Company
("Preferred Stock") having the rights and preferences set forth in the form of
Certificate of Designations attached hereto as Exhibit C authorized by the Board
of Directors on July 27, 1999, upon the terms and subject to the conditions
hereinafter set forth; and
WHEREAS, the Board of Directors of the Company further
authorized the issuance of one Right (subject to adjustment) with respect to
each share of Common Stock which may be issued between the Record Date and the
earlier to occur of the Distribution Date, the Expiration Date or the Final
Expiration Date (as such terms are hereinafter defined); provided, however, that
Rights may be issued with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the Expiration Date in
accordance with Section 22.
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 shall 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 Voting Stock (as such term is hereinafter defined) of the
Company then outstanding; provided, that, an Acquiring Person shall not include
(i) an Exempt Person (as such term is hereinafter defined) or (ii) any Person
who or which, together with all Affiliates and Associates of such Person, would
be an Acquiring Person solely by reason of (A) being the Beneficial Owner of
shares of Voting Stock of the Company, the Beneficial Ownership of which was
acquired by such Person (together with all Affiliates and Associates of such
Person) pursuant to any action or transaction or series of related actions or
transactions approved by the Board of Directors before such Person (together
with all Affiliates and Associates of such Person) otherwise became an Acquiring
Person or (B) a reduction in the number of issued and outstanding shares of
Voting Stock of the Company pursuant to a transaction or a series of related
transactions approved by the Board of Directors of the Company; provided,
further, that in the event such Person described in this clause (ii) does not
become an Acquiring Person by reason of subclause (A) or (B) of this clause
(ii), such Person nonetheless shall become an Acquiring Person in the event such
Person (together with all Affiliates and Associates of such Person)
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thereafter acquires Beneficial Ownership of an additional 1% of the Voting Stock
of the Company, unless the acquisition of such additional Voting Stock would not
result in such Person becoming an Acquiring Person by reason of subclause (A) or
(B) of this clause (ii). Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a) has become such inadvertently, and such Person
divests as promptly as practicable (as determined in good faith by the Board of
Directors) a sufficient number of shares of Common Stock so that such Person
would no longer be an "Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term
in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange
Act of 1934, as amended ("Exchange Act"), as in effect on the date of this
Agreement.
(c) "Associate" of a Person shall mean (i) with respect to a
corporation, any officer or director thereof or of any Subsidiary (as such term
is hereinafter defined) thereof, or any Beneficial Owner of 10% or more of any
class of equity security thereof, (ii) with respect to an association, any
officer or director thereof or of a Subsidiary thereof, (iii) with respect to a
partnership, any general partner thereof or any limited partner thereof who is,
directly or indirectly, the Beneficial Owner of a 10% ownership interest
therein, (iv) with respect to a business trust, any officer or trustee thereof
or of any Subsidiary thereof, (v) with respect to any other trust or an estate,
any trustee, executor or similar fiduciary or any Person who has a 15% or
greater interest as a
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beneficiary in the income from or principal of such trust or estate, (vi) with
respect to a natural person, any relative or spouse of such person, or any
relative of such spouse, who has the same home as such person, and (vii) any
Affiliate of such Person.
(d) A person shall be deemed the "Beneficial Owner" of, or to
"Beneficially Own," any securities (and correlative terms shall have correlative
meanings):
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act
and Regulations 13D and 13G thereunder (or any comparable or
successor law or regulation), in each case as in effect on the
date hereof; or
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time or the fulfillment of a condition or both)
pursuant to any agreement, arrangement or understanding, or
upon the exercise of conversion rights, exchange rights, other
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,"
securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange or (B) the right to vote, alone or in
concert with others, pursuant to any agreement, arrangement or
understanding (whether
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or not in writing); provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "Beneficially Own,"
any securities if the agreement, arrangement or understanding
to vote such security (1) arises solely from a revocable proxy
or consent given in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act and
(2) is not at the time reportable by such Person on a Schedule
13D or Schedule 13G report under the Exchange Act (or any
comparable or successor report), other than by reference to a
proxy or consent solicitation being conducted by such Person;
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for
the purpose of acquiring, holding, voting (except as described
in clause (B) of subparagraph (ii) of this paragraph (d)) or
disposing of any securities of the Company; provided, however,
that for purposes of determining Beneficial Ownership of
securities under this Agreement, officers and directors of the
Company solely by reason of their status as such shall not
constitute a group (notwithstanding that they may be
Associates of one another or may be deemed to constitute a
group for purposes of Section 13(d) the Exchange Act) and
shall not be deemed to own shares owned by another officer or
director of the Company.
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Notwithstanding anything in this paragraph (d) to the
contrary, a Person engaged in the business of underwriting securities shall not
be deemed the "Beneficial Owner" of, or to "Beneficially Own," any securities
acquired or otherwise beneficially owned in good faith in a firm commitment
underwriting until the expiration of forty (40) days after the date of the sale
of securities to the public pursuant to such firm commitment underwriting.
(e) "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.
(f) "Close of Business" on any given date shall mean 5:00
P.M., Eastern time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
(g) "Common Stock" when used with reference to the Company
shall collectively mean the Common Stock, $0.10 par value, of the Company.
"Common Stock" when used with reference to any Person other than the Company
which shall be organized in corporate form shall mean the capital stock or other
equity security with the greatest per share voting power of such Person. "Common
Stock" when used with reference to any Person other than the Company which shall
not be organized in corporate form shall mean units of beneficial interest which
shall represent the right to participate in profits, losses, deductions and
credits of such Person and which shall be entitled to exercise the greatest
voting power per unit of such Person.
(h) "Distribution Date" shall have the meaning set forth in
Section 3(b) hereof.
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(i) "Exchange Act" shall have the meaning set forth in Section
1(b) hereof.
(j) "Exchange Consideration" shall have the meaning set forth
in Section 27 hereof.
(k) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, or (iii) any employee benefit plan or employee stock
plan of the Company or any Subsidiary of the Company, or any trust or other
entity organized, appointed, established or holding Voting Stock for or pursuant
to the terms of any such plan.
(l) "Exercise Price" shall have the meaning set forth in
Section 4 hereof.
(m) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(n) "Fair Market Value" of any property shall mean the fair
market value of such property as determined in accordance with Section 11(b)
hereof.
(o) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(p) "Person" shall mean any individual, firm, corporation or
other entity.
(q) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(r) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
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(s) "Right Certificate" shall have the meaning set forth in
Section 3(d) hereof.
(t) "Spread" shall mean the excess of (1) the value of the
shares of Preferred Stock issuable upon the exercise of a Right in accordance
with Section 11(a)(ii) over (2) the Exercise Price in effect at the time of
determination of the Spread.
(u) "Stock Acquisition Date" shall mean the first date on
which there shall be a public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such (which, for purposes of this
definition, shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) or such earlier date as a majority of the
Board of Directors of the Company shall become aware of the existence of an
Acquiring Person.
(v) "Subsidiary" of a Person shall mean any corporation or
other entity of which securities or other ownership interests having voting
power sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly, by
such Person or by any corporation or other entity that is otherwise controlled
by such Person.
(w) "Summary of Rights" shall have the meaning set forth in
Section 3(a) hereof.
(x) "Trading Day" shall have the meaning set forth in Section
11(b) hereof.
(y) "Transfer Tax" shall mean any tax or charge, including any
documentary stamp tax, imposed or collected by any governmental or regulatory
8
authority in respect of any transfer of any security, instrument or right,
including the Rights, shares of the Common Stock and shares of the Preferred
Stock.
(z) "Voting Stock" shall mean (i) the Common Stock of the
Company and (ii) any other shares of capital stock of the Company entitled to
vote generally in the election of directors or entitled to vote together with
the Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or winding
up. For purposes of this Agreement, a stated percentage of the Voting Stock
shall mean a number of shares of the Voting Stock as shall equal in voting power
that stated percentage of the total voting power of the then outstanding shares
of Voting Stock in the election of a majority of the Board of Directors of the
Company or in respect of any merger, consolidation, sale of all or substantially
all of the Company's assets, liquidation, dissolution or winding up. Any
determination required to be made by the Board of Directors of the Company for
purposes of applying the definitions contained in this Section 1 shall be made
by a majority of the Board of Directors in its good faith judgment, which
determination shall be binding on the Rights Agent and the holders of the
Rights.
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 be the holders of Common Stock) in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable upon ten (10) days prior written notice to the Rights
Agent. The Rights Agent shall have no duty to
9
supervise, and shall in no event be liable for, the acts or omissions of any
such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) On the Record Date (or as soon as practicable thereafter),
the Company or the Rights Agent shall send a copy of a Summary of Rights, in
substantially the form attached hereto as Exhibit A (the "Summary of Rights"),
by first class mail, postage prepaid, to each record holder of the Common Stock
as of the close of business on the Record Date, at the address of such holder
shown on the records of the Company.
(b) Until the close of business on the day which is the
earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
the first public announcement of the intent of any Person (other than an Exempt
Person) to commence, a tender or exchange offer upon the successful consummation
of which such Person would be the Beneficial Owner of 15% or more of the then
outstanding shares of Voting Stock of the Company (including any such date which
is after the date of this Agreement and prior to the issuance of the Rights; the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights shall be evidenced by the certificates for Common Stock registered in
the name of the holders of Common Stock (together with, in the case of
certificates for Common Stock outstanding as of the Record Date, the Summary of
Rights) and not by separate Right certificates and the record holders of such
certificates for Common Stock shall be the record holders of the Rights
represented thereby and (y) each Right shall be
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transferable only simultaneously and together with the transfer of a share of
Common Stock (subject to adjustment as hereinafter provided). Until the
Distribution Date (or, if earlier, the Expiration Date or Final Expiration
Date), the surrender for transfer of any certificate for Common Stock shall
constitute the surrender for transfer of the Right or Rights associated with the
Common Stock evidenced thereby, whether or not accompanied by a copy of the
Summary of Rights.
(c) Rights shall be issued in respect of all shares of Common
Stock that become outstanding after the Record Date but prior to the earlier of
the Distribution Date, the Expiration Date or the Final Expiration Date.
Certificates for Common Stock (including, without limitation, certificates
issued upon original issuance, disposition from the Company's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date, or the Final Expiration
Date shall have impressed, printed, written or stamped thereon or otherwise
affixed thereto the following legend:
This certificate also evidences and entitles the holder hereof
to the same number of Rights (subject to adjustment) as the number of
shares of Common Stock represented by this certificate, such Rights
being on the terms provided under the Rights Agreement between United
Stationers Inc. and BANKBOSTON, N.A. (the "Rights Agent"), dated as of
July 27, 1999, as it may be amended from time to time (the
"Agreement"), the terms of which are incorporated herein by reference
and a copy of which is on file at the principal executive offices of
United Stationers Inc. Under certain circumstances, as set forth in the
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. United Stationers
Inc. shall mail to the registered holder of this certificate a copy of
the Agreement without charge within five (5) days after receipt of a
written request therefor. As provided in Section 7(e) of the Agreement,
Rights issued to or Beneficially Owned by Acquiring Persons or their
Affiliates or Associates (as such terms are defined in the Agreement)
or any subsequent holder of such Rights shall be null and void and may
not be exercised by or transferred to any Person.
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With respect to such certificates containing the foregoing
legend, until the Distribution Date the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificate, except as otherwise
provided herein, shall also constitute the transfer of the Rights associated
with the Common Stock represented thereby. In the event that the Company
purchases or otherwise acquires any Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such Common Stock shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which are no longer
outstanding.
Notwithstanding this paragraph (c), the omission of a legend
shall not affect the enforceability of any part of this Agreement or the rights
of any holder of the Rights.
(d) As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send), by first class mail, postage prepaid, to each record holder of the Common
Stock as of the close of business on the Distribution Date, as shown by the
records of the Company, at the address of such holder shown on such records, a
certificate in the form provided by Section 4 hereof (a "Right Certificate"),
evidencing one Right (subject to adjustment as provided herein) for each share
of Common Stock so held. As of and after the Distribution Date, the Rights shall
be evidenced solely by Right Certificates and may be transferred by the transfer
of
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the Right Certificate as permitted hereby, separately and apart from any
transfer of one or more shares of Common Stock.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares, certificate and assignment to be
printed on the reverse thereof), when, as and if issued, shall be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Common Stock or the Rights may from time to time be listed
or as the Company may deem appropriate to conform to usage or otherwise and as
are not inconsistent with the provisions of this Agreement. Subject to the
provisions of Section 22 hereof, Right Certificates evidencing Rights whenever
issued, (i) shall be dated as of the date of issuance of the Rights they
represent and (ii) subject to adjustment from time to time as provided herein,
on their face shall entitle the holders thereof to purchase such number of one
one-thousandths of a share (including fractional shares which are integral
multiples of one-thousandth of a share) of Preferred Stock as shall be set forth
thereon at the price per one one-thousandth of a share of Preferred Stock
payable upon exercise of a Right provided by Section 7(b) hereof, as the same
may from time to time be adjusted as provided herein (the "Exercise Price").
Section 5. Countersignature and Registration.
(a) Each Right Certificate shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice President, either
manually or by facsimile signature, and have affixed thereto the Company's seal
or a facsimile thereof
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which shall be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. Each Right Certificate shall
be countersigned by the Rights Agent either manually or by facsimile signature
and shall not be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any Right Certificate shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery of the certificate by the Company, such Right
Certificate, nevertheless, may be countersigned by the Rights Agent and issued
and delivered 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. Any
Right Certificate may be signed on behalf of the Company by any person who, on
the 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 Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or one or more offices
designated as the appropriate place for surrender of Right Certificates upon
exercise or transfer, and in such other locations as may be required by law,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
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Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14
hereof, at any time after the Close of Business on the Distribution Date, and at
or prior to the Close of Business on the earlier of the Expiration Date or the
Final Expiration Date, any Right Certificate may be (i) transferred or (ii)
split up, combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of one one-thousandths
of a share of Preferred Stock as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
surrender the Right Certificate at the office of the Rights Agent designated for
the surrender of Right Certificates with the form of certificate and assignment
on the reverse side thereof duly endorsed (or enclose with such Right
Certificate a written instrument of transfer in form satisfactory to the Company
and the Rights Agent), duly executed by the registered holder thereof or his
attorney duly authorized in writing, and with such signature duly guaranteed.
Any registered holder desiring to 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 to be split up, combined or exchanged
at the office of the Rights Agent designated therefor. Thereupon, the Rights
Agent shall countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any Transfer Tax that
may be imposed in connection with any transfer, split up, combination or
exchange of any Right Certificates.
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(b) Subject to the provisions of Sections 7(e), 7(f) and 14
hereof, at any time after the Distribution Date and prior to the Expiration
Date, upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, if requested by the Company,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company shall cause a new Right
Certificate of like tenor to be issued and delivered to the registered owner in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration Date
of Rights.
(a)The Rights shall not be exercisable until, and shall become
exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Sections 7(e) and 27(b) hereof). Except as otherwise provided herein, the Rights
may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the principal office
of the Rights Agent in the Commonwealth of Massachusetts, together with payment
of the Exercise Price for each Right exercised, subject to adjustment as
hereinafter provided, at or prior to the Close of Business on the earlier of (i)
July 26, 2009 (the "Final Expiration Date") or (ii) the date on which the Rights
are redeemed as
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provided in Section 23 hereof or the date on which the Rights are exchanged as
provided in Section 27 hereof (such earlier date being herein referred to as the
"Expiration Date").
(b) The Exercise Price shall initially be one hundred dollars
($100) for each one one-thousandth (1/1,000) of a share of Preferred Stock
issued pursuant to the exercise of a Right. The Exercise Price and the number of
one one-thousandths of a share of Preferred Stock or other securities or
property to be acquired upon exercise of a Right shall be subject to adjustment
from time to time as provided in Sections 11 and 13 hereof. The Exercise Price
shall be payable in lawful money of the United States of America, in accordance
with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights with the form of election to
purchase and certificate duly executed, accompanied by payment by certified
check, cashier's check, bank draft or money order payable to the Company or the
Rights Agent of the Exercise Price for the shares of Preferred Stock to be
purchased and an amount equal to any applicable Transfer Tax required to be paid
by the holder of the Right Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Preferred Stock of the Company one or more certificates
representing the number of shares of Preferred Stock to be so purchased, and the
Company hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) as provided in Section 14(b), at the election of the
Company, cause depositary receipts to be issued in lieu of fractional shares of
Preferred Stock, (iii) if the election provided for in the immediately preceding
clause (ii) has not been made, requisition from the Company the amount of cash
to be paid in lieu of the issuance of
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fractional shares (other than fractions that are integral multiples of one
one-thousandth of a share) in accordance with Section 14(b) hereof, (iv) after
receipt of such Preferred Stock certificates and, if applicable, 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 (v) when appropriate, after receipt, promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate; provided, however, that in the case of a purchase of securities,
other than Preferred Stock, pursuant to Section 13 hereof, the Rights Agent
shall promptly take the appropriate actions corresponding in such case to that
referred to in the foregoing clauses (i) through (v) of this Section 7(c).
Notwithstanding the foregoing provisions of this Section 7(c), the Company may
suspend the issuance of shares of Preferred Stock and other securities upon
exercise of a Right for a reasonable period, not in excess of ninety (90) days,
during which the Company seeks to register under the Securities Act of 1933, as
amended (the "Act"), and any applicable securities law of any other
jurisdiction, the shares of Preferred Stock or other securities to be issued
pursuant to the Rights; provided, however, that nothing contained in this
Section 7(c) shall relieve the Company of its obligations under Section 9(d)
hereof. Upon any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is no longer in
effect.
(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 to the
18
registered holder of such Right Certificate or his assign, subject to the
provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Agreement to the
contrary, from and after the time (the "invalidation time") when any Person
first becomes an Acquiring Person, any Rights that are Beneficially Owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the invalidation time or (z) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person (or any such Associate or Affiliate) to
holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of this Section 7(e), and subsequent transferees of such Persons
referred to in clause (y) and (z) above, shall be null and void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Agreement.
The Company shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) are complied with, but shall have no liability to any holder
of Right Certificates or any other Person as a result of its failure to make any
determination with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. No Right Certificate shall be issued pursuant to
Section 3 hereof that represents Rights beneficially owned by an Acquiring
Person or any Affiliate or
19
Associate thereof whose Rights would be null and void pursuant to the provisions
of this Section 7(e); no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person (or an Affiliate or Associate of
such Acquiring Person) whose Rights would be null and void pursuant to the
provisions of this Section 7(e) or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
(or an Associate or Affiliate of such Acquiring Person) whose Rights would be
void pursuant to the provisions of this Section 7(e) shall be cancelled.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate following 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 to any of
its agents, be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent
20
shall cancel and retire, any Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares 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 out of authorized and issued shares of Preferred Stock held
in its treasury, such number of shares of Preferred Stock as will from time to
time be sufficient to permit the exercise in full of all outstanding Rights.
(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 in accordance with this Agreement to be listed,
upon official notice of issuance, upon the principal national securities
exchange, if any, upon which the Common Stock is listed or, if the principal
market for the Common Stock is not on any national securities exchange, to be
eligible for quotation in the National Association of Securities Dealers'
Automated Quotation System or any successor thereto or other comparable
quotation system.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to insure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to
21
payment of the Exercise Price in respect thereof), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(d) The Company shall use its best efforts to (i) file, as
soon as practicable following the occurrence of the event described in Section
11(a)(ii), or as soon as is required by law following the Distribution Date, as
the case may be, a registration statement under the Act, with respect to the
shares of Preferred Stock purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (a) the date as of which the
Rights are no longer exercisable for Preferred Stock, and (b) the earlier of the
Expiration Date and the Final Expiration Date. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days, the issuance of
shares of Preferred Stock upon exercise of a Right in order to prepare and file
a registration statement under the Act and permit it to become effective. The
Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement under the Act (if required)
shall have been declared effective.
(e) The Company covenants and agrees that it will pay when due
and payable any and all federal and state Transfer Taxes which may be payable in
respect of
22
the issuance or delivery of the Right Certificates or of any shares of Preferred
Stock issued or delivered 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 a Right Certificate to a Person other than, or the
issuance or delivery of certificates for Preferred Stock upon exercise of Rights
in a name other than that of, the registered holder of the Right Certificate,
and the Company shall not be required to issue or deliver a Right Certificate or
certificate for Preferred Stock to a Person other than such registered holder
until any such Transfer Tax shall have been paid (any such Transfer 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
Transfer Tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for shares 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 Preferred Stock represented thereby on, and such certificate shall be
dated as of, 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 as of, the next
succeeding Business Day on which the Preferred Stock transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive
23
dividends or other distributions, 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 or Number of Shares.
The Exercise Price and the number of shares of Preferred Stock which may be
purchased upon exercise of a Right 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 or pay any dividend on Common Stock
payable in shares of Common Stock, (B) subdivide or split the
outstanding shares of Common Stock into a greater number of shares or
(C) combine or consolidate the outstanding shares of Common Stock into
a smaller number of shares or effect a reverse split of the outstanding
shares of Common Stock, then and in each such event the number of one
one-thousandth of a share of Preferred Stock issuable upon the Exercise
of a Right after the record date for such event (if one shall have been
established or, if not, after the date of such event) shall be the
number of one one-thousandth of a share of Preferred Stock issuable
immediately prior to such event multiplied by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which is the
number of shares of Common Stock outstanding immediately after such
event and the Exercise Price to be in effect after the record date for
such event (if one shall have been established or, if not, after the
date of such event) shall be determined by
24
multiplying the Exercise Price in effect immediately prior to such
event by such fraction. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 27 of this Agreement, in the event
that any Person shall become an Acquiring Person, then, except as
otherwise provided in this Section 11, each holder of a Right, except
as provided in Section 7(e) hereof, shall thereafter have the right to
receive upon exercise of such Right in accordance with the terms of
this Agreement and payment of the Exercise Price, such number of one
one-thousandth of a share of Preferred Stock as shall equal the result
obtained by (1) multiplying the then current Exercise Price by the
number of one one-thousandth of a share of Preferred Stock for which a
Right is then exercisable and dividing the product by (2) 50% of the
Fair Market Value of one one-thousandth of a share of Preferred Stock
(determined pursuant to Section 11(b) hereof) on the date of such
occurrence.
(iii) In the event that the Company does not have available
sufficient authorized but unissued Preferred Stock to permit the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Company shall take all such action as may be
necessary to authorize and reserve for issuance such number of
additional shares of Preferred Stock as may from time to time be
required to be issued upon the exercise in full
25
of all Rights from time to time outstanding and, if necessary, shall
use its best efforts to obtain stockholder approval thereof. In lieu of
issuing shares of Preferred Stock in accordance with the foregoing
subparagraph (ii), the Company may, if the Board of Directors
determines that such action is necessary or appropriate and not
contrary to the interests of holders of Rights, elect to issue or pay,
upon the exercise of the Rights, cash, property, shares of Preferred or
Common Stock, or any combination thereof, having an aggregate Fair
Market Value equal to the Fair Market Value of the shares of Preferred
Stock which otherwise would have been issuable pursuant to Section
11(a)(ii), which Fair Market Value shall be determined by an investment
banking firm selected by the Board of Directors. For purposes of the
preceding sentence, the Fair Market Value of the Preferred Stock shall
be as determined pursuant to Section 11(b). Subject to Section 23
hereof, any such election by the Board of Directors of the Company must
be made and publicly announced within thirty (30) days after the date
on which the event described in Section 11(a)(ii) occurs.
(b 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 on any date shall be determined as provided
in this Section 11(b). 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 thirty (30) consecutive Trading Days (as such term
26
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 Common Stock
is determined during a period which includes any date that is within thirty (30)
Trading Days after (i) the ex-dividend date for a dividend or distribution on
such stock payable in shares of Common Stock or securities convertible into
shares of Common Stock, or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or reclassification of such
stock, then, and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. The closing price for any day shall
be the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way (in
either case, as reported in the applicable transaction reporting system with
respect to securities listed or admitted to trading on the Nasdaq National
Market), or, if the securities are not listed or admitted to trading on the
Nasdaq National Market, as reported in the applicable transaction reporting
system with respect to securities listed on the principal national securities
exchange or Nasdaq market on which such security is listed or admitted to
trading; or, if not listed or admitted to trading on any national securities
exchange or Nasdaq market, the last quoted price (or, if not so quoted, the
average of the high bid and low asked prices) in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use; or, if 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. The term
"Trading Day" shall mean
27
a day on which the principal national securities exchange or Nasdaq market 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 or Nasdaq market, a Business Day. 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 other security, as
determined by an independent investment banking firm experienced in the
valuation of securities selected in good faith by the Board of Directors of the
Company, or, if no such investment banking firm is, in the good faith judgment
of the Board of Directors, available to make such determination, in good faith
by the Board of Directors of the Company; provided, however, that for purposes
of making the adjustment provided for by Section 11(a)(ii) hereof, the Fair
Market Value of a share of Preferred Stock shall not be less than 100% of the
product of the 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 (as defined in the Certificate of Designations relating 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. In the
case of property other than securities, the "Fair Market Value" thereof shall be
determined in good faith by the Board of Directors of the Company based upon
such appraisals or valuation reports of such independent experts as the Board of
Directors of the Company shall in good faith determine to be appropriate in
accordance with good business practices and the interests of the holders of
Rights. Any such determination of Fair Market Value shall be described in a
statement filed with the Rights Agent and shall be binding upon the Rights
Agent.
28
(c) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within forty-five (45) calendar days after such
record date) to subscribe for or purchase Common Stock or securities convertible
into Common Stock at a price per share (or having a conversion price per share,
if a security convertible into Common Stock) less than the then current per
share Fair Market Value of the Common 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 Common Stock
outstanding on such record date plus the number of shares of Common Stock which
the aggregate offering price of the total number of shares of Common Stock so to
be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current Fair Market Value
and the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Shares of Common Stock owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed and in the event
that such rights, options or warrants are not so
29
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.
(d) In case the Company shall fix a record date for the making
of a distribution to all holders of the Common 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 quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in shares of Common Stock) or subscription rights or warrants (excluding
those referred to in Section 11(c) hereof), 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 Fair Market Value of the shares of Common Stock on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
and the denominator of which shall be such current Fair Market Value of the
shares of Common Stock. Such adjustment 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
then be in effect if such record date had not been fixed.
(e) Unless the Company shall have exercised its election as
provided in Section 11(f), upon each adjustment of the Exercise Price as a
result of the calculations made in Section (c) and (d), each Right outstanding
immediately prior to the making of
30
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
obtained by (i) multiplying (x) the number of one one-thousandths of a share of
Preferred Stock covered by a Right immediately prior to the adjustment pursuant
to this Section 11(e) 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.
(f) The Company may elect on or after the date of any
adjustment of the Exercise Price pursuant to Sections 11(c) and 11(d) to adjust
the number of Rights in substitution for any adjustment pursuant to Section
11(e) in the number of one one-thousandths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-thousandths of a 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 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 the Right Certificates have been issued, upon each adjustment
of the
31
number of Rights pursuant to this Section 11(e), 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, if any, 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 shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(g) All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-thousandth of a share, as the case
may be.
(h) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price and the number of shares to be issued
upon exercise of the Rights as in the initial Right Certificates issued
hereunder but, nevertheless, shall represent the Rights as so adjusted.
(i) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock upon exercise of
the Rights below the then par value, if any, of the shares of Preferred Stock,
the Company shall use its best
32
efforts to 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 non-assessable shares of such Preferred Stock at such adjusted purchase
price per share.
(j) Anything in this Section 11 to the contrary
notwithstanding, in the event of any reclassification of stock of the Company or
any recapitalization, reorganization or partial liquidation of the Company or
similar transaction, the Company shall be entitled to make such further
adjustments in the number of shares of Preferred Stock which may be acquired
upon exercise of the Rights, and such adjustments in the Exercise Price
therefor, in addition to those adjustments expressly required by the other
paragraphs of this Section 11, as the Board of Directors of the Company shall
determine to be necessary or appropriate in order for the holders of the Rights
in such event to be treated equitably and in accordance with the purpose and
intent of this Agreement or in order that any such event shall not, but for such
adjustment, in the opinion of counsel to the Company, result in the stockholders
of the Company being subject to any United States federal income tax liability
by reason thereof.
(k) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Company other than the Preferred
Stock, thereafter the Exercise Price and the number of such other shares so
receivable upon exercise of a 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 Sections 11(a),
11(c), 11(d) 11(e), 11(f) and 11(j) hereof, as applicable, and the
33
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.
Section 12. Certification of Adjusted Exercise Price or Number
of Shares. Whenever an adjustment is made as provided in Section 11, 13, 23 or
27, the Company shall (a) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts giving rise to such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to make such
certification or give such notice shall not affect the validity of or the force
or effect of the requirement for such adjustment. Any adjustment to be made
pursuant to Section 11, 13 or 23(c) of this Agreement shall be effective as of
the date of the event giving rise to such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any adjustment unless and
until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, at any time after the time that any
Person becomes an Acquiring Person, (x) the Company shall, directly or
indirectly, consolidate with, or merge with and into, any other Person or
Persons (other than an Exempt Person) and the Company shall not be the surviving
or continuing corporation of such consolidation or merger, or (y) any Person or
Persons (other than an Exempt Person)
34
shall, directly or indirectly, consolidate with, or merge with and into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be changed
into or exchanged for stock or other securities of any other Person (other than
an Exempt Person) or of the Company or cash or any other property, or (z) the
Company or one or more of its Subsidiaries shall, directly or indirectly, sell
or otherwise transfer to any other Person, in one or more transactions, assets
or earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole), then, on the first occurrence
of any such event, proper provision shall be made so that (i) each holder of
record of a Right, except as provided in Section 7(e) hereof, shall thereafter
have the right to receive, upon the exercise thereof at a price equal to the
then current Exercise Price multiplied by the number of one one-thousandths of a
share of Preferred Stock for which a Right is then exercisable, in accordance
with the terms of this Agreement and in lieu of shares of Preferred Stock, such
number of shares of validly issued, fully paid, non-assessable and freely
tradeable Common Stock of the Principal Party (as defined herein), not subject
to any liens, encumbrances, rights of first refusal or other adverse claims, as
shall equal 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 then exercisable and dividing that product by (2) 50% of the
then per share Fair Market Value of the Common Stock of the Principal Party on
the date of the consummation, merger, sale or transfer; provided, however, that
the Exercise Price (as adjusted) and the number of shares of Common Stock of
such Principal Party so
35
receivable upon exercise of a Right shall be subject to further adjustment as
appropriate in accordance with Section 11 hereof to reflect any events occurring
in respect of the Common Stock of such Principal Party after the occurrence 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 or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" for all purposes of this Agreement
shall thereafter be deemed to refer to such Principal Party; (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 in accordance with the
provisions of Section 9 hereof applicable to the reservation of Preferred Stock)
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; provided, however, that, upon the subsequent occurrence
of any merger, consolidation, sale of all or substantially all of the assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Exercise Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had it, at the
time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other
36
property and (v) the provisions of Section 11(a)(ii) hereof shall be of no
effect following the occurrence of any event described in clause (x), (y) or (z)
above of this Section 13(a).
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x)
or (y) of the first sentence of Section 13(a) hereof: (A) the
Person that is the issuer of the securities into which shares
of Common Stock of the Company are changed or otherwise
exchanged or converted in such merger or consolidation, or, if
there is more than one such issuer, the issuer of the Common
Stock of which has the greatest market value or (B) if no
securities are so issued, (x) the Person that is the other
party to the merger or consolidation and that survives such
merger or consolidation, or, if there is more than one such
Person, the Person the Common Stock of which has the greatest
market value or (y) if the Person that is the other party to
the merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in (z)
of the first sentence in Section 13(a), the Person that is the
party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such
37
Persons as is the issuer of Common Stock having the greatest
market value of shares outstanding; provided, however, that in
any such case, 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, then (i) if such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and
has been so registered, the term "Principal Party" shall refer
to such other Person, or (2) if such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks of all of which are and have been so registered, the
term "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest
market value of shares outstanding, or (3) if such Person is
owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses
(1) and (2) above shall apply to each of the owners having an
interest in the venture as if the Person owned by the joint
venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall
bear the obligations set forth in this Section 13 in the same
ratio as its interest in such Person bears to the total of
such interests.
(c) The Company shall not consummate any consolidation, merger
or sale or transfer of assets or earning power referred to in Section 13(a)
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock that have not been issued or reserved for issuance to permit
exercise in full of all Rights in
38
accordance with this Section 13 and unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights
Agent an agreement confirming that the Principal Party shall, upon consummation
of such consolidation, merger or sale or transfer of assets or earning power,
assume this Agreement in accordance with Section 13(a) hereof and that all
rights of first refusal or preemptive rights in respect of the issuance of
shares of Common Stock of the Principal Party upon exercise of outstanding
Rights have been waived and that such transaction shall not result in a default
by the Principal Party under this Agreement, and further providing that, as soon
as practicable after the date of any consolidation, merger or sale or transfer
of assets or earning power referred to in Section 13(a) hereof, the Principal
Party will:
(i) prepare and file a registration statement under
the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration
statement to become effective as soon as practicable after
such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus
at all times meeting the requirements of the Act) until the
date of expiration of the Rights, and similarly comply with
applicable state securities laws;
(ii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or to
meet the eligibility requirements for quotation on NASDAQ;
39
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply in
all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act. In the event
that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction
described in Section 11(a)(ii) hereof, the Rights which have
not theretofore been exercised shall, subject to the
provisions of Section 7(e) hereof, thereafter be exercisable
in the manner described in Section 13(a); and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of
outstanding Rights.
(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 corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Fair
Market Value per share (determined pursuant to Section 11(b) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then Fair Market Value (other than to holders of Rights
pursuant to this Section 13) or (ii) providing for any special tax or similar
payment in connection with the issuance to any holder of a Right of Common Stock
of such Principal Party pursuant to the
40
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.
(e) The Company covenants and agrees that it shall not, at any
time after any Person becomes an Acquiring Person, enter into any transaction of
the type described in clauses (x) through (z) of Section 13(a) hereof if (i) at
the time of or immediately after such consolidation, merger, sale, transfer or
other transaction there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by the
Rights, (ii) prior to, simultaneously with or immediately after such
consolidation, merger, sale, transfer or other transaction, the stockholders of
the Person who constitutes, or would constitute, the Principal Party for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates or Associates or (iii)
the form or nature of organization of the Principal Party would preclude or
limit the exercisability of the Rights.
Section 14. Fractional Rights andFractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional Rights
(i.e., Rights to acquire less than one one-thousandth of a share of Preferred
Stock), unless such fractional Rights
41
result from a transaction referred to in Section 11(a)(i) hereof. If the Company
shall determine not to issue such fractional Rights, then, in lieu of such
fractional Rights, there shall be paid to the holders of record 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.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions that are integral multiples of
one one-thousandth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions that are
integral multiples of one one-thousandth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Company may, at its election, issue
depositary receipts evidencing fractions of shares pursuant to an appropriate
agreement between the Company and a depositary selected by it, provided, that
such agreement shall provide that the holders of such depositary receipts shall
have all of the rights, privileges and preferences to which they would be
entitled as owners of the Preferred Stock. With respect to fractional shares
that are not integral multiples of one one-thousandth of a share, if the Company
does not issue such fractional shares or depositary receipts in lieu thereof,
there shall be paid to the holders of record of Right Certificates at the time
such Right Certificates are exercised as herein provided an amount in cash equal
to the same fraction of the Fair Market Value of a share of Preferred Stock.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares of Preferred Stock
42
(other than fractions which are integral multiples of one one-thousandth of a
share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect
of this Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Each holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for Common Stock registered in the name of the
holders of Common Stock
43
(together, as applicable, with the Summary of Rights), which certificates for
Common Stock shall also constitute certificates for Rights, and not by separate
Right Certificates, and each Right shall be transferable only simultaneously and
together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Stock certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Stock or any
other securities 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 stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof (except as provided in Section 7(f) hereof), or to give
44
or withhold consent to any corporate action (except as provided in Section 7(f)
hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The Company
also agrees that the Rights Agent shall not under any circumstances be liable to
anyone for any acts or omissions hereunder of the Rights Agent other than
arising due to the Rights Agent's gross negligence, bad faith or willful
misconduct.
(b) The Rights Agent shall be protected against, and shall
incur no liability for or in respect of, any action taken, suffered or omitted
by it in connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate for Preferred Stock or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
45
Section 19. Merger or Consolidation of, or Change in Name of,
the 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 stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement any of the Right Certificates shall have
been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; in case at
that time any of the Right
46
Certificates shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; 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 imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates by their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President
or any Vice President and by the Treasurer or the Secretary or an Assistant
Secretary 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.
47
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage.
(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 adjustment required under the provisions of
Section 11 or 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after receipt of a certificate describing any such
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Preferred Stock will, when issued, be
validly authorized and issued, fully paid and nonassessable.
48
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of the Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President or any Vice President or the Treasurer
or the Secretary of the Company, and 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 or for any delay in acting while waiting for
those instructions. 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 and/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 any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
49
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) If, with respect to any Right Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate contained in the form
of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has not been completed to certify the holder is not
an Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent
shall not take any further action with respect to such requested exercise or
transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock and the Preferred Stock by registered or
certified
50
mail. The Company may remove the Rights Agent or any successor Rights Agent
(with or without cause) upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and the Preferred Stock by registered or certified
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Rights Agent.
Notwithstanding the foregoing provisions of this Section 21, in no event shall
the resignation or removal of a Rights Agent be effective until a successor
Rights Agent shall have been appointed and have accepted such appointment. If
the Company shall fail to make such appointment within a period of thirty (30)
days after 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 holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the United States
or of any state thereof, in good standing, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination in the conduct of its corporate trust or stock
transfer business by federal or state authorities and which has at the time of
its appointment as Rights Agent a combined capital and surplus of at least
$5,000,000 or (b) an Affiliate controlled by 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
51
responsibilities as if it had been originally named as Rights Agent without
further act or deed, but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and 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. Notwithstanding the foregoing provisions, in the event of
resignation, removal or incapacity of the Rights Agent, the Company shall have
the authority to act as the Rights Agent until a successor Rights Agent shall
have assumed the duties of the Rights Agent hereunder.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the 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 Voting Stock
following the Distribution Date and prior to the Expiration Date, the Company
may with respect to shares of Voting Stock so issued or sold pursuant to (i) the
exercise of stock
52
options, (ii) under any employee plan or arrangement, (iii) upon the exercise,
conversion or exchange of securities, notes or debentures issued by the Company
or (iv) a contractual obligation of the Company, in each case existing prior to
the Distribution Date, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale.
Section 23. Redemption.
(a) The Company may, at its option, but only by the vote of a
majority of the Board of Directors, redeem all but not less than all of the then
outstanding Rights, at any time prior to the Stock Acquisition Date at a
redemption price of $.001 per Right, subject to adjustments as provided in
subsection (c) below (the "Redemption Price").
(b) Without any further action and without any notice, the
right to exercise the Rights will terminate effective at the time so designated
by action of the Board of Directors ordering the redemption of the Rights and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within ten (10) days after the effective time of the action of
the Board of Directors ordering the redemption of the Rights, the Company shall
give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice 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. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each notice of redemption will state the
method by which the payment of the Redemption Price will be made. At the option
of the Board of Directors, the Redemption Price may be paid in cash to each
Rights holder or by the issuance of
53
shares (and, at the Company's election pursuant to Section 14(b) hereof, cash or
depositary receipts in lieu of fractions of shares other than fractions which
are integral multiples of one one-thousandth of a share) of Preferred Stock or
Common Stock having a Fair Market Value equal to such cash payment.
(c) In the event the Company shall at any time after the date
of this Agreement (A) pay any dividend on Common Stock in shares of Common
Stock, (B) subdivide or split the outstanding shares of Common Stock into a
greater number of shares or (C) combine or consolidate the outstanding shares of
Common Stock into a smaller number of shares or effect a reverse split of the
outstanding shares of Common Stock, then, and in each such event, the Redemption
Price shall be appropriately adjusted to reflect the foregoing.
Section 24. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall
propose (i) to effect any of the transactions referred to in Section 11(a)(i) or
to pay any dividend to the holders of record of its shares of Common Stock
payable in shares of capital stock of any class or to make any other
distribution to the holders of record of its Common Stock (other than a regular
periodic cash dividend), or (ii) to offer to the holders of record of its Common
Stock options, warrants, or other rights to subscribe for or to purchase shares
of Common Stock (including any security convertible into or exchangeable for
Common Stock) or shares of stock of any class or any other securities, options,
warrants, convertible or exchangeable securities or other rights, or (iii) to
effect any reclassification of its Preferred Stock or Common Stock or any
recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger with or into, or to effect any sale
54
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, or (v) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall give to
each holder of record of a Right Certificate, in accordance with Section 25,
notice of such proposed action, which shall specify the record date for the
purposes of such transaction referred to in Section 11(a)(i) or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution, or winding up is to take place and the record date for determining
participation therein by the holders of record of Common Stock 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 ten (10) days
prior to the record date for determining holders of record of the Preferred
Stock for purposes of such action, and in the case of any such other action, at
least ten (10) days prior to the date of the taking of such proposed action or
the date of participation therein by the holders of record of Common Stock or
Preferred Stock, whichever shall be the earlier. The failure to give notice
required by this Section 24 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.
(b) In case the event referred to in Section 11(a)(ii) shall
occur, then the Company shall as soon as practicable thereafter, in accordance
with Section 25 hereof, give to each holder of a Right notice of the occurrence
of such event, which
55
notice shall describe the event and the consequences of the event to holders of
Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on the Company shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
United Stationers Inc.
0000 Xxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxx 00000-0000
Attn: General Counsel
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 record of any
Right Certificate or Right to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
BANKBOSTON, N.A.
c/o Equiserve Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Right Certificate or
Right shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
56
Section 26. Supplements and Amendments. For as long as the
Rights are then redeemable and except as provided in the last sentence of this
Section 26, the Company may in its sole and absolute discretion, and the Rights
Agent shall if the Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of the Rights. At any time when
the Rights are not then redeemable and except as provided in the last sentence
of this Section 26, the Company may, and the Rights Agent shall if the Company
so directs, supplement or amend this Agreement without the approval of any
holders of Right Certificates (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 or (iii) to change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable,
provided, that no such supplement or amendment pursuant to this clause (iii)
shall materially adversely affect the interest of the holders of Right
Certificates. Upon the delivery of a 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 26, the Rights Agent shall execute
such supplement or amendment. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
changes the Redemption Price.
Section 27. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section 7(e)
hereof) by exchanging for each such
57
Right a number of shares of Common Stock having an aggregate Fair Market
Value on the date such Person becomes an Acquiring Person equal to the Spread,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date such Person becomes an Acquiring Person
(such amount per Right being hereinafter referred to as the "Exchange
Consideration"). Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Voting Stock then
outstanding. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exchanged pursuant to
this Section 27(a) shall thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this Section 27(a).
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 27 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive the Exchange Consideration. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the
58
shares of Common Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become null and void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 27, the
Company shall substitute to the extent of such insufficiency, for each share of
Common Stock that would otherwise be issuable upon exchange of a Right, a number
of shares of Preferred Stock or fractions thereof having an aggregate Fair
Market Value equal to the Fair Market Value of one share of Common Stock as of
the date any Person becomes an Acquiring Person.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence fractional
shares. In lieu of such fractional shares, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock for the Trading Day immediately prior to the date of exchange pursuant to
this Section 27.
59
Section 28. Successors. All of 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. 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 holders of Common Stock in their
capacity as holders of the Rights) 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 holders of record of the Right
Certificates (and, prior to the Distribution Date, the holders of Common Stock
in their capacity as holders of the Rights).
Section 30. Delaware Contract. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 31. 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 32. 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.
60
Section 33. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 34. Determinations And Actions By The Board Of
Directors. The Board of Directors of the Company shall have the exclusive power
and authority to administer this Agreement and to exercise the rights and powers
specifically granted to the Board of Directors of the Company 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, without
limitation, a determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, calculations, interpretations and determinations
(including for purposes of clause (y) below, all omissions with respect to the
foregoing) that are done or made by the Board of Directors of the Company in
good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights, as such, and all other parties, and (y)
not subject the Board of Directors to any liability to the holders of the
Rights.
61
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
UNITED STATIONERS INC.
By: /s/ Xxxxx Xxxxxxx Xxxxx
-----------------------------------
Xxxxx Xxxxxxx Xxxxx
Vice President
BANKBOSTON, N.A.
By: /s/ Xxxxxxxxx X. Xxxxxxxx
-----------------------------------
Xxxxxxxxx X. Xxxxxxxx
Director, Client Services
EXHIBIT A
AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED
TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED
BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT
BE EXERCISED OR TRANSFERRED TO ANY PERSON
UNITED STATIONERS INC.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED STOCK
On July 27, 1999, the Board of Directors of United Stationers
Inc. (the "Company") declared a dividend distribution of one Preferred Stock
Purchase Right for each outstanding share of Common Stock, par value $.10 per
share (the "Common Stock"), of the Company. The distribution is payable as of
August 16, 1999 to stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one-thousandth (1/1,000) of a
share of preferred stock of the Company, designated as Series A Junior Preferred
Stock (the "Preferred Stock") at a price of one hundred dollars ($100) per
one-thousandth (1/1,000) of a share ("Exercise Price"). The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and BANKBOSTON, N.A., as Rights Agent (the "Rights Agent").
As discussed below, initially the Rights will not be
exercisable, certificates will not be sent to stockholders and the Rights
automatically will trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors,
become exercisable upon the close of business on the day (the "Distribution
Date") which is the earlier of (i) the tenth day following a public announcement
that a person or group of affiliated or associated persons, with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Company (an "Acquiring Person") and (ii) the
tenth business day (or such later date as may be determined by the Board of
Directors prior to such time as any person or group of affiliated or associated
persons becomes an Acquiring Person) after the date of the commencement or
announcement of a person's or group's intention to commence a tender or exchange
offer the consummation of which would result in the ownership of 15% or more of
the Company's outstanding voting stock (even if no shares are actually purchased
pursuant to such offer); prior thereto, the Rights would not be exercisable,
would not be represented by a separate certificate, and would not be
transferable apart from the Company's Common Stock, but will instead be
evidenced, with respect to any of the Common Stock certificates outstanding as
of August 16, 1999, by such Common Stock certificate with a copy of this Summary
of Rights attached thereto. An Acquiring
A-1
Person does not include (A) the Company, (B) any subsidiary of the Company, (C)
any employee benefit plan or employee stock plan of the Company or of any
subsidiary of the Company, or any trust or other entity organized, appointed,
established or holding voting stock for or pursuant to the terms of any such
plan, or (D) any person or group of affiliated or associated persons whose
ownership of 15% or more of the shares of voting stock of the Company then
outstanding results solely from (i) any action or transaction or transactions
approved by the Board of Directors before such person or group became an
Acquiring Person or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Company pursuant to a transaction or transactions
approved by the Board of Directors (provided that any person or group that does
not become an Acquiring Person by reason of clause (i) or (ii) above shall
become an Acquiring Person upon acquisition of an additional 1% of the Company's
voting stock unless such acquisition of additional voting stock will not result
in such person or group becoming an Acquiring Person by reason of such clause
(i) or (ii)).
Until the Distribution Date (or earlier redemption, exchange
or expiration of the Rights), new Common Stock certificates issued after August
16, 1999 will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption, exchange or expiration of
the Rights), the surrender for transfer of any of the Common Stock certificates
outstanding as of August 16, 1999, with or without a copy of this Summary of
Rights attached thereto, will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date.
The Rights will expire at the close of business on July 26, 2009, unless earlier
redeemed or exchanged by the Company as described below.
The Preferred Stock is nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent series of preferred
stock, subordinate to any other series of the Company's preferred stock. The
Preferred Stock may not be issued except upon exercise of Rights. Each share of
Preferred Stock will be entitled to receive when, as and if declared, a
quarterly dividend in an amount equal to the greater of $0.001 per share or
1,000 times the cash dividends declared on the Company's Common Stock. In
addition, the holders of the Preferred Stock are entitled to receive 1,000 times
any non-cash dividends (other than dividends payable in equity securities)
declared on the Common Stock, in like kind. In the event of the liquidation of
the Company, the holders of Preferred Stock will be entitled to receive, for
each share of Preferred Stock, a payment in an amount equal to the greater of
$0.001 or 1,000 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 1,000 votes, voting together with the Common Stock. In
the event of any merger, consolidation or other transaction in which Common
Stock is exchanged, each share of Preferred Stock will be entitled to receive
1,000 times the amount received per share of Common Stock. The
A-2
rights of Preferred Stock as to dividends, liquidation and voting are protected
by anti-dilution provisions.
The number of shares of Preferred Stock issuable upon exercise
of the Rights and Exercise Price of the Rights are subject to certain
adjustments from time to time in the event of a stock dividend on, or a
subdivision or combination of, the Common Stock. The Exercise Price for the
Rights also is subject to adjustment in the event of extraordinary distributions
of cash or other property to holders of Common Stock.
Unless the Rights are earlier redeemed or exchanged, in the
event that, after the time that a Person becomes an Acquiring Person, the
Company were to be acquired in a merger or other business combination (in which
any shares of Common Stock are changed into or exchanged for other securities or
assets) or more than 50% of the assets or earning power of the Company and its
subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement provides that proper
provision will be made so that each holder of record of a Right will from and
after such date have the right to receive, upon payment of the Exercise Price,
that number of shares of common stock of the acquiring company having a market
value at the time of such transaction equal to two times the Exercise Price.
In addition, unless the Rights are earlier redeemed or
exchanged, in the event that a person or group becomes an Acquiring Person, the
Rights Agreement provides that proper provisions will be made so that each
holder of record of a Right, other than the Acquiring Person (whose Rights will
thereupon become null and void), will thereafter have the right to receive, upon
payment of the Exercise Price, that number of shares of the Preferred Stock
having a market value at the time of the transaction equal to two times the
Exercise Price (such market value to be determined with reference to the market
value of the Company's Common Stock as provided in the Rights Agreement).
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50% or more of
the outstanding voting stock, the Board of Directors of the Company may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, for that number of shares of the Company's
Common Stock having a fair market value on the first date such person or group
became an Acquiring Person equal to the excess of (i) the value of the shares of
Preferred Stock issuable upon the exercise of the Rights in the event of such
acquisition over (ii) the exercise price of the Rights, in each case as
adjusted.
Fractions of shares of Preferred Stock (other than fractions
which are integral multiples of one-thousandth of a share) may, at the election
of the Company, be evidenced by depositary receipts. The Company may also issue
cash in lieu of fractional shares which are not integral multiples of
one-thousandth of a share.
At any time prior to the time there has been a public
announcement that a person has become an Acquiring Person, the Company may
redeem the Rights in whole,
A-3
but not in part, at a price of $.001 per Right (the "Redemption Price").
Immediately upon the effective time of the action of the Board of Directors of
the Company authorizing redemption of the Rights, the right to exercise the
Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
For as long as the Rights are then redeemable, the Company
may, except with respect to the Redemption Price, amend the Rights in any
manner, including an amendment to extend the time period in which the Rights may
be redeemed. At any time when the Rights are not then redeemable, the Company
may amend the Rights in any manner that does not materially adversely affect the
interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a Current Report on Form 8-K
dated July 28, 1999. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement
which is incorporated in this summary description herein by reference.
A-4
EXHIBIT B
[Form of Right Certificate]
Certificate No. W- ______ Rights
NOT EXERCISABLE AFTER JULY 26, 2009 OR EARLIER IF EXCHANGED OR
REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $.001 PER RIGHT
(SUBJECT TO ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE
RIGHTS AGREEMENT. AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO
BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR
THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE EXERCISED OR TRANSFERRED TO ANY PERSON.
Right Certificate
This certifies that __________________________, , or its
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement dated as of July 27, 1999 (the
"Rights Agreement") between United Stationers Inc., a Delaware corporation (the
"Company"), and _____________________________, a banking corporation organized
under the laws of the State of ___________ (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern time) on July
26, 2009 at the office of the Rights Agent designated in the Rights Agreement
for such purpose, or its successor as Rights Agent, in Commonwealth of
Massachusetts, one one-thousandth (1/1,000) of a fully paid nonassessable share
of Series A Junior Preferred Stock (the "Preferred Stock") of the
B-1
Company at a purchase price of one hundred dollars ($100), as the same may from
time to time be adjusted in accordance with the Rights Agreement (the "Exercise
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase attached hereto duly executed.
As provided in the Rights Agreement, the Exercise Price and
the number of shares of Preferred Stock 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 and, upon the happening of
certain events, securities other than shares of Preferred Stock, or other
property, may be acquired upon exercise of the Rights evidenced by this Right
Certificate, as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are 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 of the Rights
Agent, the Company and the holders of record of Right Certificates. Copies of
the Rights Agreement are on file at the principal executive office of the
Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent designated in the
Rights Agreement for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder of record to purchase a like aggregate number of shares of
Preferred Stock as the Rights evidenced by the Right
B-2
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option or
under certain other circumstances at a redemption price of $.001 per Right.
No fractional shares of Preferred Stock (other than fractions
which are integral multiples of one one-thousandth (1/1,000) of a share) are
required to be issued upon the exercise of any Right or Rights evidenced hereby,
and in lieu thereof the Company may cause depositary receipts to be issued
and/or a cash payment may 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
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at meeting
thereof, or to give or withhold consent to any corporate action or to receive
notice of meetings or other actions affecting stockholders (except as provided
in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise,
B-3
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 the Rights Agent.
B-4
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of -------------, -----.
ATTEST:
----------------------------- By:
Secretary -----------------------------
Title:
-----------------------------
Countersigned:
[Rights Agent]
By
-----------------------------
Authorized Signature
B-5
[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 Certificates.)
FOR VALUE RECEIVED ____________________________________
hereby sells, assigns and transfers unto ----------------------------
---------------------------------------------------------------------
(Please print name and address of transferee)
---------------------------------------------------------------------
Rights evidenced by 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:
B-6
Certificate
-----------
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Associate or an Affiliate thereof (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
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.
B-7
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO _____________________:
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 such Rights and requests
that certificates for such share(s) be issued in the following name:
Please insert social security
or other identifying number:
----------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
B-8
Please insert social security
or other identifying number:
----------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: ________________, _____
---------------------------------------------
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
B-9
EXHIBIT C
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PREFERRED STOCK
OF
UNITED STATIONERS INC.
Pursuant to Section 151 of the Delaware
General Corporation Law
I, Xxxxx Xxxxxxx Xxxxx, the Vice President, General Counsel
and Secretary of United Stationers Inc., a corporation organized and existing
under the Delaware General Corporation Law (the "Company"), in accordance with
the provisions of Section 151 of such law, DO HEREBY CERTIFY that pursuant to
the authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Company, the Board of Directors on July 27, 1999 adopted
the following resolution which creates a series of shares of Preferred Stock
designated as Series A Junior Preferred Stock, as follows:
RESOLVED, that pursuant to Section 151(g) of the Delaware
General Corporation Law and the authority vested in the Board of Directors of
the Company in accordance with the provisions of the Certificate of
Incorporation of the Company, a series of Preferred Stock of the Company be, and
hereby is, created, and the powers, designations, preferences and relative,
participating, optional or other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof, be, and hereby are,
as follows:
C-1
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting such series shall be
68,000.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set
forth, and subject to the rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, (i) cash dividends in an amount per
share (rounded to the nearest cent) equal to 1,000 times the aggregate per share
amount of all cash dividends declared or paid on the Common Stock, $0.10 par
value per share, of the Company (the "Common Stock") and (ii) a preferential
cash dividend (the "Preferential Dividends"), if any, in preference to the
holders of Common Stock, on the first day of each fiscal quarter of the Company
(each 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, payable in an amount (except in the case of the
first Quarterly Dividend Payment if the date of the first issuance of Series A
Preferred Stock is a date other than a Quarterly Dividend Payment date, in which
case such payment shall be a prorated amount of such amount) equal to $0.001 per
share of Series A Preferred Stock less the per share amount of all cash
dividends declared on the Series A Preferred Stock pursuant to clause (i) of
this sentence since the immediately preceding Quarterly Dividend Payment Date
or, with
C-2
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. In the event
the Company shall, at any time after the issuance of any share or fraction of a
share of Series A Preferred Stock, make any distribution on the shares of Common
Stock of the Company, whether by way of a dividend or a reclassification of
stock, a recapitalization, reorganization or partial liquidation of the Company
or otherwise, which is payable in cash or any debt security, debt instrument,
real or personal property or any other property (other than cash dividends
subject to the immediately preceding sentence, a distribution of shares of
Common Stock or other capital stock of the Company or a distribution of rights
or warrants to acquire any such share, including any debt security convertible
into or exchangeable for any such share, at a price less than the Fair Market
Value (as hereinafter defined) of such share), then, and in each such event, the
Company shall simultaneously pay on each then outstanding share of Series A
Preferred Stock of the Company a distribution, in like kind, of 1,000 times such
distribution paid on a share of Common Stock (subject to the provisions for
adjustment hereinafter set forth). The dividends and distributions on the Series
A Preferred Stock to which holders thereof are entitled pursuant to clause (i)
of the first sentence of this paragraph and pursuant to the second sentence of
this paragraph are hereinafter referred to as "Dividends" and the multiple of
such cash and non-cash dividends on the Common Stock applicable to the
determination of the Dividends, which shall be 1,000 initially but shall be
adjusted from time to time as hereinafter provided, is hereinafter referred to
as the "Dividend Multiple". In the event the Company shall at any time after
August 16, 1999 declare or pay any dividend or make any distribution on Common
Stock payable in shares of Common Stock, or effect a
C-3
subdivision or split or a combination, consolidation or reverse split of the
outstanding 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.
(B) The Company shall declare each Dividend at the same time
it declares any cash or non-cash dividend or distribution on the Common Stock in
respect of which a Dividend is required to be paid. No cash or non-cash dividend
or distribution on the Common Stock in respect of which a Dividend is required
to be paid shall be paid or set aside for payment on the Common Stock unless a
Dividend in respect of such dividend or distribution on the Common Stock shall
be simultaneously paid, or set aside for payment, on the Series A Preferred
Stock.
(C) Preferential Dividends shall begin to accrue on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issuance of any shares of Series A
Preferred Stock. Accrued but unpaid Preferential Dividends shall cumulate but
shall not bear interest. Preferential Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of
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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.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provisions 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 holders of the Common
Stock. The number of votes which a holder of Series A Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as hereinafter
provided, is hereinafter referred to as the "Vote Multiple". In the event the
Company shall at any time after August 16, 1999 declare or pay any dividend on
Common Stock payable in shares of Common Stock, or effect a subdivision or split
or a combination, consolidation or reverse split of the outstanding 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 after such event 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, in the Certificate of
Incorporation or by law, the holders of shares of Series A Preferred Stock and
the holders
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of shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Company.
(C) In the event that the Preferential Dividends accrued on
the Series A Preferred Stock for four or more quarterly dividend periods,
whether consecutive or not, shall not have been declared and paid or irrevocably
set aside for payment, the holders of record of Preferred Stock of the Company
of all series (including the Series A Preferred Stock), other than any series in
respect of which such right is expressly withheld by the Certificate of
Incorporation or the authorizing resolutions included in any Certificate of
Designations therefor, shall have the right, at the next meeting of stockholders
called for the election of directors, to elect two members to the Board of
Directors, which directors shall be in addition to the number required prior to
such event, to serve until the next Annual Meeting and until their successors
are elected and qualified or their earlier resignation, removal or incapacity or
until such earlier time as all accrued and unpaid Preferential Dividends upon
the outstanding shares of Series A Preferred Stock shall have been paid (or
irrevocably set aside for payment) in full. The holders of shares of Series A
Preferred Stock shall continue to have the right to elect directors as provided
by the immediately preceding sentence until all accrued and unpaid Preferential
Dividends upon the outstanding shares of Series A Preferred Stock shall have
been paid (or set aside for payment) in full. Such directors may be removed and
replaced by such stockholders, and vacancies in such directorships may be filled
only by such stockholders (or by the remaining director elected by such
stockholders, if there be one) in the manner permitted by law; provided,
however, that any such action by stockholders shall be taken at a meeting of
stockholders and shall not be taken by written consent thereto.
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(D) Except as otherwise required by the Certificate of
Incorporation or by law or set forth herein, holders of Series A Preferred Stock
shall have no other 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 the taking of any corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Dividends are in
arrears or the Company shall be in default of payment thereof, thereafter and
until all accrued and unpaid Preferential Dividends and Dividends, whether or
not declared, on shares of Series A Preferred Stock outstanding shall have been
paid or set irrevocably aside for payment in full, and in addition to any and
all other rights which any holder of shares of Series A Preferred Stock may have
in such circumstances, the Company 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 as to
dividends with the Series A Preferred Stock, unless dividends
are 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
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such shares are then entitled if the full dividends accrued
thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of
this paragraph 4(A), redeem or 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 Company may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares
of any stock of the Company ranking junior (both as to
dividends and upon liquidation, dissolution 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 stock
ranking on a parity with the Series A Preferred Stock (either
as to dividends or upon liquidation, dissolution or winding
up), except in accordance with a purchase offer made 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 Company shall not permit any Subsidiary (as
hereinafter defined) of the Company to purchase or otherwise acquire for
consideration any shares of stock of the Company unless the Company could, under
paragraph (A) of this Section 4,
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purchase or otherwise acquire such shares at such time and in such manner. A
"Subsidiary" of the Company shall mean any corporation or other entity of which
securities or other ownership interests having ordinary voting power sufficient
to elect a majority of the board of directors of such corporation or other
entity or other persons performing similar functions are beneficially owned,
directly or indirectly, by the Company or by any corporation or other entity
that is otherwise controlled by the Company.
(C) The Company shall not issue any shares of Series A
Preferred Stock except upon exercise of Rights issued pursuant to that certain
Rights Agreement dated as of July 27, 1999 between the Company and BANKBOSTON,
N.A. as Rights Agent, as it may be amended from time to time, a copy of which is
on file with the Secretary of the Company at its principal executive office and
shall be made available to stockholders of record without charge upon written
request therefor addressed to said Secretary. Notwithstanding the foregoing
sentence, nothing contained in the provisions hereof shall prohibit or restrict
the Company from issuing for any purpose any series of Preferred Stock with
rights and privileges similar to, different from, or greater than, those of the
Series A Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares upon their retirement and cancellation shall become authorized but
unissued shares of Preferred Stock, without designation as to series, and such
shares may be reissued as part of a new
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series of Preferred Stock to be created by resolution or resolutions of the
Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
voluntary or involuntary liquidation, dissolution or winding up of the Company,
no distribution shall be made (i) 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 the holders of shares of Series A
Preferred Stock shall have received for each share of Series A Preferred Stock,
subject to adjustment as hereinafter provided, (A) $1,000 plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment or, (B) if greater than the amount
specified in clause (i)(A) of this sentence, an amount equal to 1,000 times the
aggregate amount to be distributed per share to holders of Common Stock, as the
same may be adjusted as hereinafter provided and (ii) to the holders of stock
ranking on a parity upon liquidation, dissolution or winding up with the Series
A Preferred Stock, unless simultaneously therewith distributions are made
ratably on the Series A Preferred Stock and all other shares of such parity
stock in proportion to the total amounts to which the holders of shares of
Series A Preferred Stock are entitled under clause (i)(A) of this sentence and
to which the holders of such parity shares are entitled, in each case upon such
liquidation, dissolution or winding up. The amount to which holders of Series A
Preferred Stock may be entitled upon liquidation, dissolution or winding up of
the Company pursuant to clause (i)(B) of the foregoing sentence is hereinafter
referred to as the "Participating Liquidation Amount" and the multiple of the
amount to be distributed to holders of shares of Common Stock upon the
liquidation, dissolution or winding up of
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the Company applicable pursuant to said clause to the determination of the
Participating Liquidation Amount, as said multiple may be adjusted from time to
time as hereinafter provided, is hereinafter referred to as the "Liquidation
Multiple". In the event the Company shall at any time after August 16, 1999
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or split or a combination, consolidation or reverse
split of the outstanding shares of Common Stock into a greater or lesser number
of shares of Common Stock, then, in each such case, the Liquidation Multiple
thereafter applicable to the determination of the Participating Liquidation
Amount to which holders of Series A Preferred Stock shall be entitled after such
event shall be the Liquidation 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.
Section 7. Certain Reclassifications and Other Events.
(A) In the event that holders of shares of Common Stock of the
Company receive after August 16, 1999 in respect of their shares of Common Stock
any share of capital stock of the Company (other than any share of Common Stock
of the Company), whether by way of reclassification, recapitalization,
reorganization, dividend or other distribution or otherwise (a "Transaction"),
then, and in each such event, the dividend rights, voting rights and rights upon
the liquidation, dissolution or winding up of the Company of the shares of
Series A Preferred Stock shall be adjusted so that after such
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event the holders of Series A Preferred Stock shall be entitled, in respect of
each share of Series A Preferred Stock held, in addition to such rights in
respect thereof to which such holder was entitled immediately prior to such
adjustment, to (i) such additional dividends as equal the Dividend Multiple in
effect immediately prior to such Transaction multiplied by the additional
dividends which the holder of a share of Common Stock shall be entitled to
receive by virtue of the receipt in the Transaction of such capital stock, (ii)
such additional voting rights as equal the Vote Multiple in effect immediately
prior to such Transaction multiplied by the additional voting rights which the
holder of a share of Common Stock shall be entitled to receive by virtue of the
receipt in the Transaction of such capital stock and (iii) such additional
distributions upon liquidation, dissolution or winding up of the Company as
equal the Liquidation Multiple in effect immediately prior to such Transaction
multiplied by the additional amount which the holder of a share of Common Stock
shall be entitled to receive upon liquidation, dissolution or winding up of the
Company by virtue of the receipt in the Transaction of such capital stock, as
the case may be, all as provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the
Company receive after August 16, 1999 in respect of their shares of Common Stock
any right or warrant to purchase Common Stock (including as such a right, for
all purposes of this paragraph, any security convertible into or exchangeable
for Common Stock) at a purchase price per share less than the Fair Market Value
of a share of Common Stock on the date of issuance of such right or warrant,
then and in each such event the dividend rights, voting rights and rights upon
the liquidation, dissolution or winding up of the Company of the shares of
Series A Preferred Stock shall each be adjusted so that after
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such event the Dividend Multiple, the Vote Multiple and the Liquidation Multiple
shall each be the product of the Dividend Multiple, the Vote Multiple and the
Liquidation Multiple, as the case may be, in effect immediately prior to such
event multiplied by a fraction the numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the maximum number of shares of Common Stock which could be
acquired upon exercise in full of all such rights or warrants and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the number of shares
of Common Stock which could be purchased, at the Fair Market Value of the Common
Stock at the time of such issuance, by the maximum aggregate consideration
payable upon exercise in full of all such rights or warrants.
(C) In the event that holders of shares of Common Stock of the
Company receive after August 16, 1999 in respect of their shares of Common Stock
any right or warrant to purchase capital stock of the Company (other than shares
of Common Stock), including as such a right, for all purposes of this paragraph,
any security convertible into or exchangeable for capital stock of the Company
(other than Common Stock), at a purchase price per share less than the Fair
Market Value of such shares of capital stock on the date of issuance of such
right or warrant, then and in each such event the dividend rights, voting rights
and rights upon liquidation, dissolution or winding up of the Company of the
shares of Series A Preferred Stock shall each be adjusted so that after such
event each holder of a share of Series A Preferred Stock shall be entitled, in
respect of each share of Series A Preferred Stock held, in addition to such
rights in respect thereof to which such holder was entitled immediately prior to
such event, to receive
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(i) such additional dividends as equal the Dividend Multiple in effect
immediately prior to such event multiplied, first, by the additional dividends
to which the holder of a share of Common Stock shall be entitled upon exercise
of such right or warrant by virtue of the capital stock which could be acquired
upon such exercise and multiplied again by the Discount Fraction (as hereinafter
defined) and (ii) such additional voting rights as equal the Vote Multiple in
effect immediately prior to such event multiplied, first, by the additional
voting rights to which the holder of a share of Common Stock shall be entitled
upon exercise of such right or warrant by virtue of the capital stock which
could be acquired upon such exercise and multiplied again by the Discount
Fraction and (iii) such additional distributions upon liquidation, dissolution
or winding up of the Company as equal the Liquidation Multiple in effect
immediately prior to such event multiplied, first, by the additional amount
which the holder of a share of Common Stock shall be entitled to receive upon
liquidation, dissolution or winding up of the Company upon exercise of such
right or warrant by virtue of the capital stock which could be acquired upon
such exercise and multiplied again by the Discount Fraction. For purposes of
this paragraph, the "Discount Fraction" shall be a fraction the numerator of
which shall be the difference between the Fair Market Value of a share of the
capital stock subject to a right or warrant distributed to holders of shares of
Common Stock of the Company as contemplated by this paragraph immediately after
the distribution thereof and the purchase price per share for such share of
capital stock pursuant to such right or warrant and the denominator of which
shall be the Fair Market Value of a share of such capital stock immediately
after the distribution of such right or warrant.
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(D) For purposes of this Certificate of Designations, the
"Fair Market Value" of a share of capital stock of the Company (including a
share of Common Stock) on any date shall be deemed to be the average of the
daily closing price per share thereof over the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date; provided,
however, that, in the event that such Fair Market Value of any such share of
capital stock is determined during a period which includes any date that is
within 30 Trading Days after (i) the ex-dividend date for a dividend or
distribution on stock payable in shares of such stock or securities convertible
into shares of such stock, or (ii) the effective date of any subdivision, split,
combination, consolidation, reverse stock split or reclassification of such
stock, then, and in each such case, the Fair Market Value shall be appropriately
adjusted by the Board of Directors of the Company to take into account
ex-dividend or post-effective date trading. The closing price for any day shall
be the last sale price, regular way, or, in case, no such sale takes place on
such day, the average of the closing bid and asked prices, regular way (in
either case, as reported in the applicable transaction reporting system with
respect to securities listed or admitted to trading on the Nasdaq National
Market), or, if the shares are not listed or admitted to trading on the Nasdaq
National Market, as reported in the applicable transaction reporting system with
respect to securities listed on the principal national securities exchange or
Nasdaq market on which the shares are listed or admitted to trading or, if the
shares are not listed or admitted to trading on any national securities exchange
or Nasdaq market, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in
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use, or if on any such date the shares are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in the shares selected by the Board of Directors of
the Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange or Nasdaq market on which the shares are listed or
admitted to trading is open for the transaction of business or, if the shares
are not listed or admitted to trading on any national securities exchange or
Nasdaq market, on which the Nasdaq National Market or such other national
securities exchange as may be selected by the Board of Directors of the Company
is open. If the shares are not publicly held or not so listed or traded on any
day within the period of 30 Trading Days applicable to the determination of Fair
Market Value thereof as aforesaid, "Fair Market Value" shall mean the fair
market value thereof per share as determined in good faith by the Board of
Directors of the Company. In either case referred to in the foregoing sentence,
the determination of Fair Market Value shall be described in a statement filed
with the Secretary of the Company.
Section 8. Consolidation, Merger, etc. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each
outstanding share of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case may
be, for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event.
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Section 9. Effective Time of Adjustments.
(A) Adjustments to the Series A Preferred Stock required by
the provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Company shall give prompt written notice to each
holder of a share of Series A Preferred Stock of the effect of any adjustment to
the voting rights, dividend rights or rights upon liquidation, dissolution or
winding up of the Company of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the Company to give such
notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment.
Section 10. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable at the option of the Company or any holder
thereof. Notwithstanding the foregoing sentence of this Section, the Company may
acquire shares of Series A Preferred Stock in any other manner permitted by law,
the provisions hereof and the Certificate of Incorporation of the Company.
Section 11. Ranking. Unless otherwise provided in the
Certificate of Incorporation of the Company or a Certificate of Designations
relating to a subsequent series of preferred stock of the Company, the Series A
Preferred Stock shall rank junior to all other series of the Company's Preferred
Stock as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding up and senior to the Common Stock.
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Section 12. Amendment. The provisions hereof and the
Certificate of Incorporation of the Company shall not be amended in any manner
which would adversely affect the rights, privileges or powers of the Series A
Preferred Stock without, in addition to any other vote of stockholders required
by law, the affirmative vote of the holders of two-thirds or more of the
outstanding shares of Series A Preferred Stock, voting together as a single
class.
IN WITNESS WHEREOF, I have executed and subscribed this
Certificate of Designations and do affirm the foregoing as true under the
penalties of perjury this 27th day of July, 1999.
By:
-------------------------------------------------
Name: Xxxxx Xxxxxxx Xxxxx
Title: Vice President, General Counsel and
Secretary
ATTEST:
By:
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Name:
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Title:
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