EXHIBIT 1
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LEXMARK INTERNATIONAL, INC.
and
THE BANK OF NEW YORK, as Rights Agent
AMENDED AND RESTATED RIGHTS AGREEMENT
Dated as of
December 2, 2003
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TABLE OF CONTENTS
Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................8
Section 3. Issue of Right Certificates.......................................8
Section 4. Form of Right Certificates.......................................10
Section 5. Countersignature and Registration................................11
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates............................................12
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights.....................................13
Section 8. Cancellation and Destruction of Right Certificates...............16
Section 9. Reservation and Availability of Shares of Capital Stock..........16
Section 10. Preferred Stock Record Date......................................19
Section 11. Adjustment of Purchase Price,
Number of Shares or Number of Rights..........................19
Section 12. Certificate of Adjusted Purchase Price
or Number of Shares...........................................30
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning Power...........................30
Section 14. Fractional Rights and Fractional Shares..........................33
Section 15. Rights of Action.................................................34
Section 16. Agreement of Right Holders.......................................35
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Page
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Section 17. Right Certificate Holder Not Deemed a Stockholder................36
Section 18. Concerning the Rights Agent......................................36
Section 19. Merger or Consolidation or Change of Name of Rights Agent........37
Section 20. Duties of Rights Agent...........................................38
Section 21. Change of Rights Agent...........................................41
Section 22. Issuance of New Right Certificates...............................42
Section 23. Redemption and Termination.......................................42
Section 24. Exchange.........................................................44
Section 25. Notice of Certain Events.........................................45
Section 26. Notices..........................................................46
Section 27. Supplements and Amendments.......................................47
Section 28. Successors.......................................................48
Section 29. Determinations and Actions by the Board
of Directors..................................................48
Section 30. Benefits of this Agreement.......................................49
Section 31. Severability.....................................................49
Section 32. Governing Law....................................................49
Section 33. Counterparts.....................................................49
Section 34. Descriptive Headings.............................................49
EXHIBIT A Amended Certificate of Designation..............................A-1
EXHIBIT B Form of Right Certificate.......................................B-1
EXHIBIT C Summary of Rights to Purchase Preferred Stock...................C-1
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AMENDED AND RESTATED RIGHTS AGREEMENT
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Amended and Restated Rights Agreement, originally dated as of February 18,
1998, amended and restated as of February 11, 1999, and further amended and
restated as of December 2, 2003, between Lexmark International, Inc., a Delaware
corporation and successor by merger to Lexmark International Group, Inc. (the
"Company"), and The Bank of New York, a New York trust company and successor to
ChaseMellon Shareholder Services, L.L.C. (the "Rights Agent").
W I T N E S S E T H :
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WHEREAS, the Board of Directors of the Company on February 18, 1998 (the
"Rights Dividend Declaration Date") authorized and declared a dividend
distribution (the "Distribution") of one Right for each outstanding share of the
Class A Common Stock, par value $0.01 per share, and Class B Common Stock, par
value $0.01 per share, of the Company (collectively, the "Common Stock")
outstanding at the close of business on April 3, 1998 (the "Record Date") and
has authorized and directed the issuance of one Right (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p) hereof) in
respect of each share of Common Stock issued (whether originally issued or
delivered from the Company's treasury stock) between the Record Date and the
earlier of the Distribution Date or the Expiration Date (as such terms are
hereinafter defined), each Right initially representing the right to purchase,
under certain circumstances, one one-thousandth of a share of Series A Junior
Participating Preferred Stock of the Company having the rights, powers and
preferences set forth in the Certificate of Designation attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set forth
(the "Rights"); and
WHEREAS, the Company and the Rights Agent desire to amend this Agreement,
in accordance with Section 27 hereof, on the terms and subject to the conditions
hereinafter set forth;
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
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following terms have the meanings indicated:
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(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 securities of the Company constituting a
Substantial Block (as such term is hereinafter defined), but shall not
include (i) the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any
Person organized, appointed or established by the Company or any Subsidiary
of the Company for or pursuant to the terms of any such plan; (ii) any
Person who or which, together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of a Substantial Block solely as a
result of a change in the aggregate number of shares of Voting Stock
outstanding since the last date on which such Person acquired Beneficial
Ownership of any shares of the Voting Stock constituting all or a portion
of such Substantial Block; and (iii) any Person who or which, together with
all Affiliates and Associates of such Person, becomes the Beneficial Owner
of a Substantial Block in the good faith belief that such acquisition would
not (x) cause such Person and its Affiliates and Associates to become the
Beneficial Owner of a Substantial Block and such Person relied in good
faith in computing the percentage of its voting power on publicly filed
reports or documents of the Company which are inaccurate or out-of-date or
(y) otherwise cause a Distribution Date or the adjustment provided for in
Section 11(a) to occur. Notwithstanding clause (ii) or (iii) of the prior
sentence, if any Person that is not an Acquiring Person due to such clause
(ii) or (iii) does not cease to be the Beneficial Owner of a Substantial
Block by the close of business on the fifth Business Day after notice from
the Company (the date of notice being the first day) that such Person is
the Beneficial Owner of a Substantial Block, such Person shall, at the end
of such five Business Day period, become an Acquiring Person (and such
clause (ii) or (iii) shall no longer apply to such Person). For purposes of
this definition, the determination whether any Person acted in "good faith"
shall be conclusively determined by the Board of Directors of the Company,
acting by a vote of those directors of the Company whose approval would be
required to redeem the Rights under Section 23. Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as a result of an
acquisition of Common Stock by the Company which, by reducing the number of
shares of Common Stock outstanding, in-
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creases the proportionate number of shares of Common Stock beneficially
owned by such Person to 15% or more of the shares of Common Stock of the
Company then outstanding; provided, however, that if a Person shall become
the Beneficial Owner of 15% or more of the shares of Common Stock of the
Company then outstanding as a result of an acquisition of Common Stock by
the Company and shall, after such acquisition of Common Stock by the
Company, become the Beneficial Owner of any additional Common Stock of the
Company other than pursuant to a stock split, stock dividend or similar
transaction) and immediately thereafter be the Beneficial Owner of 15% or
more of the shares of Common Stock then outstanding, then such Person shall
be deemed to be an "Acquiring Person".
(b) "Act" shall have the meaning set forth in Sec- tion 9(c) hereof.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
as in effect on the date hereof.
(e) "Agreement" shall have the meaning set forth in the introduction
hereto.
(f) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to acquire (whether
such right is exercisable immediately or only after the passage of
time or upon the occurrence of an event) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," (1)
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 ex-
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change, (2) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event or (3) securities
issuable upon exercise of Rights from and after the occurrence of a
Triggering Event, which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the Distribution Date
or pursuant to Section 3(a) hereof ("Original Rights") or pursuant to
Section 11(i) or Section 22 hereof in connection with an adjustment
made with respect to Original Rights; or
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, the right to vote or dispose
of or has "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act),
including pursuant to any agreement, arrangement or understanding
(whether or not in writing) or has a "pecuniary interest" or an
"indirect pecuniary interest" in (as determined pursuant to Rule
16a-1(a)(2) of the General Rules and Regulations under the Exchange
Act); provided, however, that a Person shall -------- ------- not be
deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this subparagraph (ii) if the agreement, arrangement or
understanding to vote such security (1) arises solely from a revocable
proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this paragraph (f))
or disposing of any securities of the Company.
Notwithstanding the foregoing, nothing contained in this definition shall
cause a Person ordinarily engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially own," any
securities
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acquired in a bona fide firm commitment underwriting pursuant to an
underwriting agreement with the Company.
(g) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
(h) "Certification" shall have the meaning set forth in Section 18
hereof.
(i) "close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date, provided, however, if such date is not a
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Business Day it shall mean 5:00 P.M. on the next succeeding Business Day.
(j) "Common Stock" when used with reference to the Company shall mean
the Class A Common Stock, par value $0.01 per share, and Class B Common
Stock, par value $0.01 per share, of the Company. "Common Stock" when used
with reference to any Person other than the Company shall mean either the
capital stock with the greatest voting power of such other Person or, if
such Person is a Subsidiary of another Person, the equity securities or
other equity interest having power to control or direct the management of
such Person.
(k) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Company" shall have the meaning set forth in the introduction
hereto.
(m) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(n) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(o) "Distribution" shall have the meaning set forth in the recitals
hereto.
(p) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(q) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
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(r) "Exchange Act" shall have the meaning set forth in the definitions
of "Affiliate" and "Associate" above.
(s) "Exchange Ratio" shall have the meaning set forth in Section 24(a)
hereof.
(t) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(u) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(v) "Independent Director" shall mean, with respect to any transaction
or series of transactions, a member of the Board of Directors of the
Company other than a director who has a relationship that would interfere
with the exercise of independent judgment in carrying out the
responsibilities of a director or a financial interest in or with respect
to such transaction or series of transactions.
(w) "Original Rights" shall have the meaning set forth in the
definition of "Beneficial Owner" above.
(x) "Person" shall mean any individual, firm, corporation, partnership
or other entity.
(y) "Preferred Stock" shall mean the shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company.
(z) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(aa) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(bb) "Record Date" shall have the meaning set forth in the recitals
hereto.
(cc) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(dd) "Rights" shall have the meaning set forth in the recitals hereto.
(ee) "Rights Agent" shall have the meaning set forth in the
introduction hereto.
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(ff) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(gg) "Rights Dividend Declaration Date" shall have the meaning set
forth in the recitals hereto.
(hh) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii) hereof.
(ii) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(jj) "Section 13 Event" shall mean any event described in Section
13(a) hereof.
(kk) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, includes a report
filed pursuant to Section 13(d) of the Exchange Act) by the Company or an
Acquiring Person that an Acquiring Person has become such.
(ll) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(mm) "Subsidiary" shall mean, with reference to any Person, any
corporation (or other entity) of which an amount of voting securities (or
comparable ownership interests) sufficient to elect at least a majority of
the directors (or comparable individuals) of such corporation (or other
entity) is beneficially owned or otherwise controlled, directly or
indirectly, by such Person.
(nn) "Substantial Block" shall mean a number of shares of the Voting
Stock which has 15% or more of the aggregate voting power of all
outstanding shares of Voting Stock.
(oo) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(pp) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(qq) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(rr) "Triggering Event" shall mean any Section 11(a)(ii) Event or
Section 13 Event.
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(ss) "Voting Stock" shall mean the outstanding shares of Class A
Common Stock, $0.01 par value, and any other shares of capital stock of the
Company which are entitled to vote generally in the election of directors.
Section 2. Appointment of Rights Agent. The Company hereby appoints
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the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company shall act as Co-Rights Agent and may from time to
time appoint such other Co-Rights Agents as it may deem necessary or
desirable upon ten calendar days' written notice to the Rights Agent. In no
event shall the Rights Agent have any duty to supervise or in any way be
liable for such Co-Rights Agents.
Section 3. Issue of Right Certificates. (a) Until the earlier of (i)
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the close of business on the tenth calendar day after the Shares
Acquisition Date (or, if the tenth calendar day after the Shares
Acquisition Date occurs before the Record Date, the close of business on
the Record Date) or (ii) the close of business on the tenth calendar 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 of, or first public announcement of the
intent of any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of
the Company or any Person organized, appointed or established by the
Company or any Subsidiary of the Company or any Person organized, appointed
or established by the Company or any Subsidiary of the Company for or
pursuant to the terms of such plan) to commence, a tender or exchange offer
if, upon consummation thereof, such Person would be an Acquiring Person
(the earlier of the dates in subsections (i) and (ii) hereof being herein
referred to as the "Distribution Date") (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of
the Common Stock (which certificates for the Common Stock shall be deemed
also to be Right Certificates) and not by separate Right Certificates, and
(y) the right to receive Right Certificates will be transferable only in
connection with the transfer of Common Stock. As soon as practicable after
receipt by the Rights Agent of written notice from the Company of the
Distribution Date, the Rights Agent, at the Company's expense, will send by
first-class, postage prepaid mail, to each record holder of Common Stock as
of the close of business on the Distribution Date, at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the
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form of Exhibit B hereto, evidencing one Right for each share of the Common
Stock so held, subject to adjustment as provided herein. As of the Distribution
Date, the Rights will be evidenced solely by such Right Certificates.
(b) As soon as practicable following the Record Date, the Company will send
a copy of a Summary of Rights to Purchase Preferred Stock, in substantially the
form attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of Common Stock as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company. With respect to certificates for Common Stock outstanding as of
the Record Date, until the Distribution Date, the Rights will be evidenced by
such certificates for Common Stock, and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the certificates for Common Stock outstanding
on the Record Date shall also constitute the transfer of the Rights associated
with the Common Stock represented by such certificate.
(c) Rights shall be issued in respect of all shares of Common Stock issued
after the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date (as such term is defined in Section 7), or, in certain
circumstances provided in Section 22 hereof, after the Distribution Date.
Certificates representing such shares of Common Stock shall have impressed on,
printed on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in an Amended and Restated Rights Agreement between
Lexmark International, Inc., as successor to Lexmark International Group,
Inc., and The Bank of New York, as successor to ChaseMellon Shareholders
Services, L.L.C. (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Lexmark International, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Lexmark International, Inc. will mail to the holder of this
certificate a copy of the Rights Agreement as in effect on the date of
mailing without charge
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within five Business Days after receipt of a written request therefor.
Under certain circumstances set forth in the Rights Agreement, Rights
beneficially owned by an Acquiring Person may become null and void.
After the due execution of any supplement or amendment to this Agreement in
accordance with the terms hereof, the reference to this Agreement in the
foregoing legend shall mean the Agreement as so supplemented or amended. Until
the Distribution Date, the Rights associated with the Common Stock represented
by certificates containing the foregoing legend shall be evidenced by such
certificates alone, and the surrender for transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the Common
Stock represented by such certificate. In the event that the Company purchases
or acquires any shares of Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any
Rights associated with the shares of Common Stock which are no longer
outstanding. The failure to print the foregoing legend on any such Common Stock
certificate or any other defect therein shall not affect in any manner
whatsoever the application or interpretation of the provisions of Section 7(e)
hereof.
Section 4. Form of Right Certificates. (a) The Right Certificates (and the
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forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially the same as Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. The Right Certificates
shall be in machine-printable format and in a form reasonably satisfactory to
the Rights Agent. Subject to the provisions of Section 11 and Section 22 hereof,
the Right Certificates, whenever distributed, shall be dated as of the Record
Date, shall show the date of countersignature, and on their face shall entitle
the holders thereof to purchase such number of shares of Preferred Stock (or
following a Triggering Event, Class A Common Stock, other securities, cash or
other assets, as the case may be) as shall be set forth therein at the price per
one one-thousandth of a share of Preferred Stock set forth therein (the
"Purchase Price"), but the
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number of such shares and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Notwithstanding any other provision of this Agreement, (i) any Right
Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights beneficially owned by: (x) an Acquiring Person or any Associate or
Affiliate thereof, (y) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
became such, or (z) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
such Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding (whether or not in writing) which has as a primary
purpose or effect avoidance of Section 7(e) hereof, (ii) any Right Certificate
issued at any time to any nominee of such Acquiring Person, Associate or
Affiliate, and (iii) any Right Certificate issued pursuant to Section 6 or
Section 11 hereof, upon transfer, exchange, replacement or adjustment of any
other Right Certificate referred to in this sentence, shall contain (to the
extent feasible following the written instruction of the Company to the Rights
Agent) the following legend, modified as applicable to apply to such Person:
The Rights represented by this Right Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
an Associate of an Acquiring Person (as such terms are defined in the
Amended and Restated Rights Agreement). Accordingly, this Right Certificate
and the Rights represented may become null and void in the circumstances
specified in Section 7(e) of the Amended and Restated Rights Agreement.
Section 5. Countersignature and Registration. The Right Certificates shall
---------------------------------
be executed on behalf of the Company by one of its authorized officers either
manually or by facsimile signature. The Right Certificates shall be
countersigned by an authorized signatory of 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 Com-
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pany who shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and issuance
and delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent, 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; and any Right Certificate may be signed on
behalf of the Company by any person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this Agreement any
such person was not such an officer.
In case any authorized signatory of the Rights Agent who shall have
countersigned any of the Right Certificates shall cease to be such signatory
before delivery by the Company, such Right Certificates, nevertheless, may be
issued and delivered by the Company with the same force and effect as though the
person who countersigned such Right Certificates not ceased to be such
signatory; and any Right Certificate may be countersigned on behalf of the
Rights Agent by any person who, at the actual date of the countersignature of
such Right Certificate, shall be a proper signatory of the Rights Agent to
countersign such Right Certificate, although at the date of the execution of
this Agreement any such person was not such a signatory.
Following the Distribution Date, the Rights Agent will keep or cause to be
kept, at its office designated for such purpose, 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 and the date of countersignature of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
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Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
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to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
Expiration Date, any Right Certificate or Right Certificates may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number of
shares of Preferred Stock (or following a Triggering Event, Class A Common
Stock, other securities, cash or other assets, as the case may
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be)as the Right Certificate or Right Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any Right Certificate
or Right Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any such surrendered Right Certificate until the
registered holder shall have completed and signed the certificate contained in
the form of assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence, as the Company shall reasonably request,
of the identity of the Beneficial Owner, Affiliates or Associates thereof or of
the holder, or of any other Person with which such holder or any of such
holder's Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of acquiring, holding,
voting or disposing of securities of the Company. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e), Section 14 and Section 20(k)
hereof, 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 from a Right Certificate holder of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right Certificates.
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, along with a signature guarantee and
such other further documentation as the Rights Agent may reasonably request and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) Subject to Section 7(e) hereof,
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the registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein, including, without limitation, the
restrictions on exercisability set forth in Sections 9(c), 11(a)(iii), 23(b) and
24(b) hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Right Certificate, with the form of election to purchase on the
reverse side thereof duly executed, to the Rights Agent at the designated office
of the Rights Agent, together with payment of the aggregate Purchase Price for
the total number of one one-thousandths of shares of Preferred Stock (or shares
of Class A Common Stock, other securities, cash or other assets, as the case may
be) as to which the Rights are then exercisable, at or prior to the earliest of
(i) the close of business on January 31, 2009 (the "Final Expiration Date"),
(ii) the time at which the Rights are exchanged as provided in Section 24, or
(iii) the time at which the Rights are redeemed as provided in Section 23 (such
earliest date being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a share of Preferred
Stock pursuant to the exercise of a Right shall initially be $200, shall be
subject to adjustment from time to time as provided in Sections 11 and 13 hereof
and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable Rights,
with the form of election to purchase and the certificate duly executed and
completed accompanied by payment of the Purchase Price for the number of one
one-thousandths of shares of Preferred Stock (or shares of Class A Common Stock,
other securities, cash or other assets, as the case may be) to be purchased and
an amount equal to any applicable transfer tax, the Rights Agent shall
thereupon, subject to Section 20(k), promptly (i) requisition from any transfer
agent of Preferred Stock certificates for the number of one one-thousandths of
shares of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, (ii) if the
Company shall have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of shares of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such receipts
shall be deposited by the transfer agent with the depositary agent) and the
Company hereby directs the depositary agent to comply with such request, (iii)
when appropriate, requisition from any transfer agent of the Common Stock of the
Company cer-
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tificates for the total number of shares of Class A Common Stock to be paid in
accordance with Section 11(a)(ii) and 11(a)(iii), (iv) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14, (v) promptly after receipt
of such certificates or depositary receipts, cause the same to be delivered to
or upon the order of the registered holder of such Right Certificate, registered
in such name or names as may be designated by such holder and (vi) when
appropriate, after receipt promptly deliver such cash to or upon the order of
the registered holder of such Right Certificate. The payment of the then
Purchase Price may be made in cash or by certified bank check or bank draft or
money order payable to the order of the Company or the Rights Agent. In the
event that the Company is obligated to issue securities, distribute property or
pay cash pursuant to Section 11(a)(iii) hereof, the Company will make all
arrangements necessary so that cash, property or securities are available for
issuance, distribution or payment by the Rights Agent, if and when appropriate.
(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 registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section 11(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person became such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
(whether or not in writing) regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is a part of a plan,
arrangement or understanding (whether or not in writing) which has as a primary
purpose or effect the avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such
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Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and
Section 4(b) hereof are complied with, but shall have no liability to any holder
of Right Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the
Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder upon the occurrence of any purported exercise as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner, Affiliates or Associates thereof or of the holder, or of any
other Person with which such holder or any of such holder's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting or disposing of any
securities of the Company 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Capital 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 (and
following the occurrence of a Triggering Event, out of its authorized and un-
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issued shares of Common Stock and/or other securities) or out of its authorized
and issued shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and issued Common Stock and/or other
securities) held in its treasury, the number of shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Class A Common Stock and/or
other securities) that will be sufficient to permit the exercise in full of all
outstanding Rights (it being understood that any of the foregoing shares or
securities may also be reserved for other purposes) or will take such other
steps as are appropriate to assure that the number of such shares or securities
(or their equivalents) sufficient to permit the exercise in full of all
outstanding Rights will be available upon such exercise.
(b) So long as the shares of Preferred Stock (and, following the occurrence
of a Triggering Event, Class A Common Stock and/or other securities) issuable
upon the exercise of Rights may be listed on any national securities exchange,
the Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable (but only to the extent that it is reasonably likely
that the Rights will be exercised), all shares reserved for such issuance to be
listed on such exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts (X) (i) to file, as soon as
practicable following the first occurrence of a Section 11(a)(ii) Event, or as
soon as required by law, as the case may be, a registration statement under the
Securities Act of 1933, as amended (the "Act"), with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) to cause
such registration statement to become effective as soon as practicable after
such filing, and (iii) to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable for
such securities, and (B) the Expiration Date and (Y) (i) to file appropriate
applications with any state or federal regulatory bodies having jurisdiction
over the issuance of the securities (or assets) purchasable upon exercise of the
Rights in order to obtain any approvals or orders of such bodies as may be
legally required, (ii) to cause such approvals to be obtained or orders to be
issued as soon as practicable after such filing and (iii) to cause such
approvals or orders to remain effective until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities (or assets), and
(B) the Expiration Date, to the extent
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not previously obtained. The Company will also take such action as may be
appropriate under the blue sky laws of the various states. The Company may
temporarily suspend, (X) for a period of time not to exceed ninety (90) days
after the date set forth in clause (X)(i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective and (Y) for a period of
time not in excess of 180 days after such date (or for such longer period as is
required by any applicable law, rule or regulation of any appropriate regulatory
bodies), the exercisability of the Rights in order to obtain any such required
regulatory body approvals or orders. Upon any such suspension, the Company shall
issue a public announcement and shall give simultaneous written notice to the
Rights Agent stating that the exercisability of the Rights has been temporarily
suspended, as well as a public announcement and notice to the Rights Agent at
such time as the suspension is no longer in effect. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualifications in such jurisdiction
shall have been obtained.
(d) The Company covenants and agrees that it will take all such action as
may be necessary to ensure that all shares of the Preferred Stock (and following
the occurrence of a Triggering Event, Class A Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time of delivery of
the certificates for such shares (subject to payment of the Purchase Price), be
duly and validly authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of the Preferred Stock (or Class A Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required (a) to pay any transfer tax which may be payable in
respect of any transfer involved in the transfer or delivery of Right
Certificates or the issuance or delivery of certificates for the Preferred Stock
(or Class A Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or (b) to issue or deliver any certificates for
shares of the Preferred Stock (or Class A Common Stock and/or other securities,
as the case may be) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being
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payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax is
due.
Section 10. Preferred Stock Record Date. Each person in whose name any
------------------------------
certificate for any number of shares of Preferred Stock (or Class A Common Stock
and/or other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
such whole and/or fractional shares of Preferred Stock (or Class A Common Stock
and/or other securities, as the case may be) represented thereby on, and such
certificate shall be dated the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made and shall show the date of countersignature;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Stock (or Class A Common Stock and/or other securities, as
the case may be) transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Stock
(or Class A Common Stock and/or other securities, as the case may be) transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any rights
of a stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
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Rights. The Purchase Price, the number of shares covered by each Right and the
------
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Stock payable in shares of the
Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as other-
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wise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price
in effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive upon payment of the
Purchase Price then in effect the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and
at a time when the Preferred Stock (or Common Stock and/or other securities)
transfer books of the Company were open, he or she would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii), 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 24 of this Agreement, in the event any Person,
alone or together with its Affiliates and Associates, becomes an Acquiring
Person except as the result of a transaction set forth in Section 13(a) hereof,
then, prior to the later of (x) the date on which the Company's rights of
redemption pursuant to Section 23(a) expire, or (y) five (5) days after the date
of the first occurrence of a Section 11(a)(ii) Event, proper provision shall be
made so that each holder of a Right, except as provided in Section 7(e) hereof,
shall thereafter have a right to receive, upon exercise thereof at the then
current Purchase Price for the number of one one-thousandths of a share of
Preferred Stock for which such Right is then exercisable in accordance with the
terms of this Agreement, in lieu of shares of Preferred Stock, such number of
shares of the Class A Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one one-thousandths of a share of Preferred Stock for which a Right is then
exercisable and dividing that product by (y) 50% of the Current Market Price per
share of the Class A Common Stock of the Company (determined pursuant to Section
11(d)) on the date of the occurrence of the event listed above in this
subparagraph (ii) (such number of shares are hereinafter referred to as the
"Adjustment Shares") provided that the Purchase Price and the number of
Adjustment Shares shall be further adjusted as provided in this Agreement to
reflect any events occurring after the date of such first occurrence.
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(iii) In the event that the number of shares of Common Stock which are
authorized by the Company's Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights are
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing subparagraph (ii), the Company shall (A) determine the excess of
(1) the value of the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase Price (such excess, the "Spread"),
and (B) with respect to each Right, make adequate provision to substitute for
the Adjustment Shares, upon exercise of the Rights and payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Class A
Common Stock or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock which a majority of
the Independent Directors and the Board of Directors of the Company have deemed
to have the same value as shares of Class A Common Stock (such shares of
preferred stock, "Common Stock Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by a majority of the Independent Directors and the Board of Directors
of the Company based upon the advice of a nationally recognized investment
banking firm selected by the Board of Directors of the Company; provided,
--------
however, if the Company shall not have made adequate provision to deliver value
-------
pursuant to clause (B) above within thirty (30) days following the later of (x)
the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the
Company's rights of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, shares of Class
A Common Stock (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. If the Board of
Directors of the Company shall determine in good faith that it is likely that
sufficient additional shares of Class A Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek shareholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the extent
that the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section
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11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights, and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares
and/or to decide the appropriate form of distribution to be made pursuant to
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement and shall give
simultaneous written notice to the Rights Agent stating that the exercisability
of the Rights has been temporarily suspended, as well as a public announcement
and notice to the Rights Agent at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the Common Stock
shall be the Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and
the value of any Common Stock Equivalent shall be deemed to have the same value
as the Common Stock on such date. The Company shall give the Rights Agent notice
of the selection of any Common Stock Equivalent under this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Stock entitling them (for a
period expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or securities having substantially the same rights,
privileges and preferences as the shares of Preferred Stock ("Equivalent
Preferred Stock") or convertible into the Preferred Stock or Equivalent
Preferred Stock) at a price per share of the Preferred Stock or Equivalent
Preferred Stock (or having a conversion price per share, if a security
convertible into the Preferred Stock or Equivalent Preferred Stock) less than
the Current Market Price (as defined in Section 11(d) per share of the Preferred
Stock or Equivalent Preferred Stock, as the case may be) on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, of which the numerator shall be the number of shares of Preferred
Stock outstanding on such record date plus the number of shares of Preferred
Stock or Equivalent Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock or Equivalent Preferred Stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such Current Market Price and of
which the denominator shall be the number of shares of Preferred Stock
outstanding on such record date plus the number of additional shares of
Preferred Stock and/or Equivalent Pre-
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ferred Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration 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 Preferred Stock owned by or held for the account of the Company shall
not be deemed outstanding for the purpose of any such computation. Such
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 issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness or assets
(other than a regular periodic cash dividend or a dividend payable in Preferred
Stock) or subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the Current
Market Price per share of Preferred Stock (as defined in Section 11(d)) 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
applicable to one share of Preferred Stock and of which the denominator shall be
such Current Market Price per share of Preferred Stock. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market Price" per
share of Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the 30 consecutive Trading
Days (as such term is hereinafter defined in this para-
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graph (d)) immediately prior to such date and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily closing
prices per share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event that the
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Current Market Price per share of Common Stock is determined during the period
following the announcement by the issuer of such Common Stock of (A) a dividend
or distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than the Rights)
or (B) any subdivision, combination or reclassification of such Common Stock,
and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day
period, as set forth above after the ex-dividend date for such dividend or
distribution or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market Price shall be
appropriately adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of the Common Stock are
not listed or admitted to trading on the New York Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
shares of the Common Stock are listed or admitted to trading or, if the shares
of the Common Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the shares
of the Common Stock are not quoted by such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Stock selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Stock, the
fair value of such shares on such date shall be as determined in good faith by
the Independent Directors if the Independent Directors constitute a majority of
the Board of Directors or, in the event the Independent Directors do not
constitute a majority of the Board of Directors, by an independent investment
banking firm selected by the Board of Directors, whose determination shall
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be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading is open for the transaction of business or, if the shares of
the Common Stock are not listed or admitted to trading on any national
securities exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which
banking institutions in the State of New York are not authorized or obligated by
law or executive order to close. If the Common Stock is not publicly held or not
so listed or traded, "Current Market Price" per share shall mean the fair value
per share as determined in good faith by the Independent Directors if the
Independent Directors constitute a majority of the Board of Directors or, in the
event the Independent Directors do not constitute a majority of the Board of
Directors, by an independent investment banking firm selected by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "Current Market
Price" per share of Preferred Stock shall be determined in the same manner as
set forth above for the Common Stock in clause (i) of this Section 11(d) (other
than the last sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in any manner described
in clause (i) of this Section 11(d), the "Current Market Price" per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Stock occurring after
the date of this Agreement) multiplied by the Current Market Price per share of
the Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "Current Market Price" per share of the
Preferred Stock shall mean the fair value per share as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "Current Market Price" of one
one-thousandths of a share of Preferred Stock shall be equal to the "Current
Market Price" of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless
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such adjustment would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this Section
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11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest ten-thousandth of a share of
Common Stock or one millionth of a share of Preferred Stock as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a) or
Section 13(a), the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock other than shares of Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares contained in Section 11(a) through (q),
inclusive, and the provisions of Sections 7, 9, 10, 13 and 14 with respect to
the Preferred Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Section 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares (calculated to
the nearest one-millionth) obtained by (i) multiplying (x) the number of shares
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
-27-
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of shares of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of shares of Preferred
Stock for which a Right was exercisable immediately prior to such adjustment.
Each Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after the adjustment
of the Purchase Price. The Company shall make a public announcement and shall
give simultaneous written notice to the Rights Agent of its election to adjust
the number of Rights, indicating the record date for the adjustment to be made.
This record date may be the date on which the Purchase Price is adjusted or any
day thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Right
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14, the additional Rights to
which such holders shall be entitled as a result of such adjustment, or, at the
option of the Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase 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 Purchase Price per share and the number of shares which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below one one-thousandth
-28-
of the then stated value, if any, of a share of Preferred Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable such number of one
one-thousandths of a share of such Preferred Stock at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the shares
of Preferred Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise over and above the shares of Preferred Stock and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
-------- -------
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Board of Directors of the Company shall determine to be
advisable in order that any consolidation or subdivision of shares of Preferred
Stock, issuance wholly for cash of any of shares of Preferred Stock at less than
the Current Market Price, issuance wholly for cash of the Preferred Stock or
securities which by their terms are convertible into or exchangeable for
Preferred Stock, stock dividends or issuance of rights, options or warrants
referred to hereinabove in this Section 11, hereafter made by the Company to
holders of its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that, after the Distribution Date, it
will not, except as permitted by Sections 23, 24 and 27 hereof, take (nor will
it permit any of its Subsidiaries to take) any action if at the time such action
is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the
Rights.
(o) The Company covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate
-29-
with any other Person (other than a Subsidiary of the Company in a transaction
which complies with Section 11(n)), (ii) merge with or into any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(n)), or (iii) sell or transfer (or permit any of its Subsidiaries to
sell or transfer), 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) to, any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(n)) if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect which would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction, the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
(q) Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date, the Company may, in lieu of making any adjustment to the
Purchase Price, the number of shares of Preferred Stock eligible for purchase on
exercise of each Right or the number of Rights outstanding, which adjustment
would otherwise be required by Section
-30-
11(a)(i), 11(b), 11(c), 11(h) or 11(i), make such other equitable adjustment or
adjustments thereto as the Board of Directors (whose determination shall be
conclusive) deems appropriate in the circumstances and not inconsistent with the
objectives of the Board of Directors in adopting this Agreement and such
Sections.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
-------------------------------------------------------------
Whenever an adjustment is made as provided in Sections 11 and 13, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment and the adjusted
Purchase Price, (b) promptly file with the Rights Agent and with each transfer
agent for the Preferred Stock and the Common Stock a copy of such certificate
and (c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 26. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
---------------------------------------------------------------
Power. (a) In the event that, following the Shares Acquisition Date, directly or
-----
indirectly, (x) the Company shall consolidate with, or merge with and into, any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(n)) and the Company shall not be the continuing or
surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction which complies with Section
11(n)) shall consolidate, 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 Common Stock
shall be changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise transfer),
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) to any other Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(n) hereof), then, and in each such case proper provision shall be made so
that (i) each holder of a Right (except as provided in Section 7(e)) shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement, such
number of validly issued, fully paid, non-assessable and freely tradable shares
of
-31-
Common Stock of the Principal Party (as hereinafter defined), not subject to any
liens, encumbrances, rights of call or first refusal, or other adverse claims as
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the then number of one one-thousandths of a share of Preferred
Stock for which a Right is exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to
the first occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price per share of the Common Stock
of such Principal Party (determined in the manner described in Section 11(d)) on
the date of consummation of such consolidation, merger, sale or transfer; (ii)
the Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 shall thereafter apply 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 Section 9) 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 the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; and (v) the provisions of Section 11(a)(ii) hereof
shall be of no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(1) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a), the Person that is the issuer of any
securities into which shares of Common Stock of the Company are converted
in such merger or consolidation, and if no securities are so issued, the
Person that is the other party to the merger or consolidation; and
(2) in the case of any transaction described in (z) of the first
sentence in this Section 13, the Person that
-32-
is the party receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (x) 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, and such Person is a
direct or indirect Subsidiary of another corporation the Common Stock of which
is and has been so registered, "Principal Party" shall refer to such other
corporation; (y) if such Person is a Subsidiary, directly or indirectly, of more
than one corporation, the Common Stocks of two or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such
corporations is the issuer of the Common Stock having the greatest market value.
(c) The Company shall not consummate any Section 13 Event unless all
regulatory approvals for the consummation of such Section 13 Event and the
exercise of the Rights in accordance with the terms of this Agreement have been
obtained and the Principal Party shall have a sufficient number of authorized
shares of its Common Stock which are neither outstanding nor reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this Section 13
and further providing that, as soon as practicable after the date of any
consolidation, merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party will
(i) prepare and file a registration statement under the Act with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, will use its best efforts to cause
such registration statement to become effective as soon as practicable
after such filing and will 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 Expiration Date;
and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form
10 under the Exchange Act.
-33-
The provisions of this Section 13 shall similarly apply to successive Section 13
Events. In the event that a Section 13 Event shall occur at any time after the
occurrence of a Section 11(a)(ii) Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable in the manner described in
Section 13(a).
Section 14. Fractional Rights and Fractional Shares. (a) The Company shall
----------------------------------------
not be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights. In lieu of such fractional Rights, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right. For the
purposes of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares (other than fractions
which are integral multiples of one one-thousandth of a
-34-
share of Preferred Stock). In lieu of fractional shares that are not integral
multiples of one one-thousandth of a share of Preferred Stock, the Company may
pay to the registered holders of Right Certificates at the time the Rights
evidenced thereby are exercised or exchanged as herein provided an amount in
cash equal to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred
Stock (as determined pursuant to Section 11(d)(ii)) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event the Company shall not be
required to issue fractions of shares of Class A Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Class A Common Stock. In lieu of fractional shares of Class A Common Stock, the
Company may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share of Class A Common Stock.
For purposes of this Section 14(c), the current market value of one share of
Class A Common Stock shall be the closing price of one share of Class A Common
Stock (as determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly waives
his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as otherwise permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect
-------------------
of this Agreement are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder 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 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 specifi-
-35-
cally 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 hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this
Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
-----------------------------
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the 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 with the appropriate forms and certificates fully
executed, along with a signature guarantee and such other and further
documentation as the Rights Agent may reasonably request;
(c) subject to Section 6 and Section 7(f) hereof, 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 required to be affected by any notice to the
contrary;
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to
perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any
governmental authority,
-36-
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any
-------- -------
such order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Right Certificate Holder Not Deemed a 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 the number of shares of Preferred
Stock or any other securities of the Company which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), 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. 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 to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent
(including the reasonable fees and expenses of counsel), for anything done or
omitted by the Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending against any
claim of liability in the premises. 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.
The Rights Agent shall be protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate
-37-
for Common Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, instruction, adjustment notice, 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.
In addition to the foregoing, the Rights Agent shall be protected and shall
incur no liability for, or in respect of, any action taken or omitted by it in
connection with its administration of this Agreement in reliance upon (i) the
proper execution of the certification concerning beneficial ownership appended
to the Form of Assignment and the Form of Election to Purchase included as part
of Exhibit B hereto (the "Certification"), unless the Rights Agent shall have
actual knowledge that, as executed, the Certification is untrue or (ii) the
non-execution or failure to complete the Certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution or failure.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. 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
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. 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 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.
-38-
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
----------------------
and obligations 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 the 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 any one of the Chairman
of the Board, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct. The issuance or non-issuance
of a Right Certificate or Preferred Stock or other security issued in lieu
of Preferred Stock in accordance with instructions given to the Rights
Agent by the Company pursuant to Section 20(k) hereof or in accordance with
the terms hereof shall not constitute negligence, bad faith or willful
misconduct.
-39-
(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 Sections 11 or 13 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 actual notice of
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 or Common Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Preferred
Stock or Common Stock will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder and
certificates delivered pursuant to any provision hereof from any one of the
Chairman of the Board, the President, any Vice President, the Secretary or
the Treasurer of the Company, and is authorized to apply to such officers
for advice or instructions in connection with its duties, and it shall not
be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any
-40-
such officer. An application by the Rights Agent for instructions may set
forth in writing any action proposed to be taken or omitted by the Rights
Agent with respect to its duties and obligations under this Agreement and
the date on and/or after which such action shall be taken, and the Rights
Agent shall not be liable for any action taken or omitted in accordance
with a proposal included in any such application on or after the date
specified therein (which date shall not be less than one Business Day after
the Company receives such application) without the consent of the Company
unless prior to taking or omitting such action, the Rights Agent has
received written instructions in response to application specifying the
actions to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the 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 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 by itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct; provided, however, reasonable
-------- -------
care was exercised in the selection thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not
-41-
been completed or indicates an affirmative response, the Rights Agent shall
not take any further action with respect to such requested exercise or
transfer without first consulting the Company. The Company shall give the
Rights Agent prompt written instructions as to the action to be taken
regarding the Rights Certificates involved. The Rights Agent shall not be
liable for acting in accordance with such instructions.
Section 21. Change of Rights Agent. The Rights Agent or any successor
-----------------------
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Stock and the Common Stock by registered or
certified mail, and, at the Company's expense, to the holders of the Right
Certificates by first class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Preferred Stock and the Common Stock by registered or certified
mail, and to the holders of the Right Certificates by first-class mail. If the
Rights Agent shall resign or be removed or shall otherwise become incapable of
acting, the Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the Company shall become
the temporary Rights Agent and the registered holder 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 corporation organized and doing business under the laws
of the United States or of the State of New York (or of any other state of the
United States so long as such corporation is authorized to do business as a
banking or trust institution in the State of New York), in good standing, having
a principal office in the State of New York, which is authorized under such laws
to exercise corporate trust powers and is subject to supervision or examination
by federal or state authority or which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $25 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further
-42-
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 Preferred Stock and the Common Stock, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
----------------------------------
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the
redemption or expiration the Rights, the Company (a) shall, with respect to
shares of Common Stock so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company, and (b)
may, in any other case, if deemed necessary or appropriate by the Board of
Directors of the Company, issue Right Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided, however,
-------- -------
that (i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section 23. Redemption and Termination. (a) The Board of Directors of the
--------------------------
Company may, at its option, at any time prior to the earlier of (x) the close of
business on the tenth calendar day following the Shares Acquisition Date (or if
the Shares Acquisition Date shall have occurred prior to the Record Date, the
close of business on the tenth day following
-43-
the Record Date), or (y) the Final Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of $.001 per Right as
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"), and the Company may, at its
option, pay the Redemption Price either in shares of its Common Stock (valued at
their Current Market Price as defined in Section 11(d)(i) on the date of the
redemption), other securities, cash or other assets. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired.
(b) In deciding whether or not to exercise the Company's right of
redemption hereunder, the Board of Directors of the Company shall act in good
faith, in a manner they reasonably believe to be in the best interests of the
Company and with such care, including reasonable inquiry, skill and diligence,
as a person of ordinary prudence would use under similar circumstances, and they
may consider the long-term and short-term effects of any action upon employees,
customers and creditors of the Company and upon communities in which offices or
other establishments of the Company are located, and all other pertinent
factors.
(c) Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action and
without any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the Redemption
Price for each Right held. Within 10 days after 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 the Rights Agent and to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23, and other than
-44-
in connection with the repurchase of Common Stock prior to the Distribution
Date.
Section 24. Exchange. (a) The Board of Directors of the Company may, at its
--------
option (provided that there are then Independent Directors in office and a
majority of the Independent Directors concur), at any time and from time to time
on or after a Section 11(a)(ii) Event, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for shares of
Class A Common Stock at an exchange ratio of one share of Class A Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 24(a) and without any
further action and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such Rights shall be to
receive that number of shares of Class A Common Stock equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. Promptly after
the action of the Board of Directors ordering an exchange of the Rights, the
Company shall give notice of any such exchange to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry books of
the Rights Agent; provided, however, that the failure to give, or any defect in,
-------- -------
such notice shall not affect the validity of such exchange. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the shares of Class A Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights which
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute shares of Preferred Stock (or Equivalent Preferred Stock,
as such term is defined in Section 11(b) hereof) for shares of Class A Common
Stock exchangeable for the Rights, at the initial rate of one one-thousandth of
a share of Preferred Stock (or Equivalent Pre-
-45-
ferred Stock) for each share of Class A Common Stock, as appropriately adjusted
to reflect adjustments in the dividend rights of the Preferred Stock pursuant to
the terms thereof.
(d) In the event that there shall not be sufficient shares of Class A
Common Stock or Preferred Stock issued, but not outstanding, or authorized but
unissued, to permit any exchange of Rights as contemplated in accordance with
this Section 24 or that any regulatory actions or approvals are required in
connection therewith, the Company shall take all such action as may be necessary
to authorize additional Class A Common Stock or Preferred Stock for issuance
upon exchange of the Rights.
(e) The Company shall not be required to issue fractional shares of Class A
Common Stock or to distribute certificates which evidence fractional shares of
Class A Common Stock pursuant to this Section 24. In lieu of such fractional
shares of Class A Common Stock, the Company shall pay to the registered holders
of the Right Certificates with regard to which such fractional shares of Class A
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 Class A Common Stock.
For the purposes of this Section 24(e), the current market value of a whole
share of Class A Common Stock shall be the closing price of a share of Class A
Common Stock (as determined pursuant to the second sentence of Section 11(d)(i)
hereof) for the Trading Day immediately prior to the date of exchange pursuant
to this Section 24.
(f) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute for any share of Class A Common Stock exchangeable for a
Right (i) Common Stock Equivalents (ii) cash, (iii) debt securities of the
Company, (iv) other assets, or (v) any combination of the foregoing, having an
aggregate value which a majority of the Independent Directors and the Board of
Directors of the Company shall have determined in good faith to be equal to the
Current Market Price of one share of Class A Common Stock (determined pursuant
to Section 11(d) hereof) on the Trading Date immediately preceding the date of
exchange pursuant to this Section 24.
Section 25. Notice of Certain Events. In case the Company shall propose at
------------------------
any time following the Distribution Date (a) to pay any dividend payable in
stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular periodic
cash dividend), or (b) to offer to the holders of Pre-
-46-
ferred Stock rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of
Preferred Stock (other than a reclassification involving only the subdivision of
outstanding Preferred Stock), or (d) to effect any consolidation or merger into
or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(n) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more transactions, of more than 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to, any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(n) hereof),
or (e) to effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to the Rights Agent and to each
holder of a Right, in accordance with Section 26, a notice of such proposed
action, which shall specify the record date for the purposes of such stock
dividend, distribution of rights or Rights, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the 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
(a) or (b) above at least twenty (20) days prior to the record date for
determining holders of the Preferred Stock for purposes of such action, and in
the case of any such other action, at least twenty (20) days prior to the date
of the taking of such proposed action or the date of participation therein by
the holders of the Preferred Stock, whichever shall be the earlier.
In case a Section 11(a)(ii) Event shall occur, then, in any such case, the
Company shall as soon as practicable thereafter give to the Rights Agent and to
each holder of a Right, to the extent feasible and in accordance with Section
26, a notice of the occurrence of such event, which shall specify the event and
the consequences of the event to holders of Rights under Section 11(a)(ii) and
all references in the preceding paragraph to Preferred Stock shall be deemed to
thereafter refer to Class A Common Stock and/or other securities, as the case
may be.
Section 26. Notices. Notices or demands authorized by this Agreement to be
-------
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall
-47-
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:
Lexmark International, Inc.
One Lexmark Centre Drive
000 Xxxx Xxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: 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 any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00 Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate 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.
Section 27. Supplements and Amendments. Prior to the earlier of the
----------------------------
Distribution Date or the Shares Acquisition Date and subject to the ultimate
sentence of this Section 27, the Company may from time to time supplement or
amend this Agreement without the approval of any holders of Right Certificates.
From and after the earlier of the Distribution Date or the Shares Acquisition
Date, and subject to the penultimate sentence of this Section 27, the Company
may from time to time supplement or amend this Agreement without the approval of
any holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or (iii) to lengthen the time
period during which the Rights may be redeemed following the Shares Acquisition
Date for up to an additional twenty days beyond the time period set forth in
Section 23(a) or (iv) to change or supplement the provisions hereunder in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates
-48-
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person). 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 27, the Rights Agent shall execute such
supplement or amendment unless the Rights Agent shall have determined in good
faith that such supplement or amendment would adversely affect its interests
under this Agreement. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment shall be made on or after the Distribution
Date which changes the Redemption Price, the Final Expiration Date, the Purchase
Price or the number of shares of Preferred Stock for which a Right is then
exercisable.
Section 28. Successors. All the covenants and provisions of this Agreement
----------
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors. For all
----------------------------------------------------
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the
provisions of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company (and, where specifically
provided for herein, the Independent Directors) shall have the exclusive power
and authority to administer this Agreement and to exercise all rights and powers
specifically granted to the Board or the Company (or, as expressly provided, the
Independent Directors), or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for the purpose of clause (ii) below, all omissions
with respect to the foregoing) which are done or made by the Board (or, as
provided for, by the Independent Directors) in good faith, shall (i) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Right Certificates and all other parties, and (ii) not subject the Board or the
Independent Directors to any liability to the holders of the Right Certificates.
-49-
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
--------------------------
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock) any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or restriction
------------
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
-------- -------
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of Directors.
Section 32. Governing Law. 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 in accordance
with the laws of such State applicable to contracts to be made and performed
entirely within such State except that the rights, duties and obligations of the
Rights Agent under this Agreement shall be governed by the laws of the State of
New York.
Section 33. Counterparts. This Agreement may be executed in any number of
------------
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
---------------------
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
-50-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
LEXMARK INTERNATIONAL, INC.
Attest
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxx X. Xxxxx
------------------------- ---------------------
Name: Xxxxxxx X. Xxxx Name: Xxxx X. Xxxxx
Title: Vice President, Title: Executive Vice
General Counsel President and Chief
And Secretary Financial Officer
[SEAL]
Attest: THE BANK OF NEW YORK
as Rights Agent
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxxx Xxxxxxx
-------------------------- ----------------------
Name: Xxxxxxx Xxxxxx Name: Xxxxxxxx Xxxxxxx
Title: Vice President Title: Asst. Vice President
EXHIBIT A
Series A Junior Participating Preferred Stock
(Liquidation Preference $1.00 Per Share)
AMENDED CERTIFICATE OF DESIGNATION
LEXMARK INTERNATIONAL GROUP, INC.
----------------------------
Certificate of Designation of Board of Directors Classifying
and Designating a Series of Preferred Stock as
Series A Junior Participating Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
----------------------------
Dated as of February 11, 1999
A-1
LEXMARK INTERNATIONAL GROUP, INC.
----------
Amended Certificate of Designation of
Board of Directors Classifying and Designating a
Series of Preferred Stock as
Series A Junior Participating Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
----------
Lexmark International Group, Inc., a Delaware corporation, having its
principal office in the State of Kentucky in the City of Lexington (the
"Company"), hereby certifies that:
Pursuant to authority conferred upon the Board of Directors by the Third
Restated Certificate of Incorporation ("Charter") and Bylaws of the Company, the
Board of Directors (A) pursuant to resolutions adopted on February 18, 1998 (i)
authorized the creation and issuance of up to 1,000,000 shares of Series A
Junior Participating Preferred Stock which stock was previously authorized but
not issued and (ii) determined the voting powers, designations, preferences and
relative, participating, optional or other special rights, qualifications,
limitations or restrictions, and terms and conditions of redemption of the
shares of such series and the Dividend Rate payable on such series and (B)
pursuant to resolutions adopted on February 11, 1999, authorized certain
modifications to such voting powers, designations, preferences and relative,
participating, optional or other special rights, qualifications, limitations or
restrictions, and terms and conditions of redemption, number of shares and
Dividend Rate. Such voting powers, designations, preferences and relative,
participating, optional or other special rights, qualifications, limitations or
restrictions, and terms and conditions of redemption, number of shares and
Dividend Rate, as modified, are as follows:
Section 1. Number of Shares and Designation. This class of Preferred Stock
--------------------------------
shall be designated the Series A Junior Participating Preferred Stock (the
"Series A Preferred Shares") and the number of shares which shall constitute
such series shall be 1,000,000 shares, par value $0.01 per share. Such number of
shares may be increased or decreased by
A-2
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of Series A Preferred Shares to a number less than the number of
shares then outstanding plus the number of shares reserved for issuance upon the
exercise of outstanding options, rights or warrants or upon the conversion of
any outstanding securities issued by the Company convertible into Series A
Preferred Shares.
Section 2. Dividend Rights. (1) Subject to the rights of holders of any
----------------
shares of any series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Shares with respect to dividends, the holders
of Series A Preferred Shares shall be entitled prior to the payment of any
dividends on shares ranking junior to the Series A Preferred Shares to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the first day
of February, May, August and November in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing on the
first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Shares, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject
to the provision for adjustment hereinafter set forth, 1,000 times the aggregate
per share amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions (other
than a dividend payable in shares of common stock, par value $0.01 per share, of
the Company (the "Common Stock") or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise)) declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date, or, with
respect to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Shares. In the event
the Company shall at any time (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
then in each such case the amount to which holders of Series A Preferred Shares
were entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(2) The Company shall declare a dividend or distribution on the Series A
Preferred Shares as provided in subparagraph (1) above immediately after it
declares a dividend or
A-3
distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Preferred Shares shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
(3) Dividends shall begin to accrue and be cumulative on outstanding Series
A Preferred Shares from the Quarterly Dividend Payment Date next preceding the
date of issue of such Series A Preferred Shares, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of Series A Preferred Shares entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the Series A Preferred Shares in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time outstanding.
The Board of Directors may fix a record date for the determination of holders of
Series A Preferred Shares entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30 days
prior to the date fixed for the payment thereof.
Section 3. Liquidation. (1) Upon any liquidation, dissolution or winding up
-----------
of the Company, no distribution shall be made 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 Shares unless, prior thereto, the holders
of shares of Series A Preferred Shares shall have received $1.00 per share (the
"Series A Liquidation Preference"), plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment. Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series A Preferred Shares unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in
subparagraph (3) below to reflect such events as stocks splits, stock dividends
and re-
A-4
capitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
Series A Preferred Shares and shares of Common Stock, respectively, holders of
Series A Preferred Shares and holders of shares of Common Stock shall receive
their ratable and proportionate share of the remaining assets to be distributed
in the ratio of the Adjustment Number to 1 with respect to the Series A
Preferred Shares and Common Stock, on a per share basis, respectively.
(2) In the event, however, that there are not sufficient assets available
to permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Stock, if any, which
rank on a parity with the Series A Preferred Shares, then such remaining assets
shall be distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however, that there
are not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(3) In the event the Company shall at any time (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such Adjustment
Number 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 4. No Redemption. The Series A Preferred Shares shall not be
-------------
redeemable.
Section 5. Voting Rights. The holders of Series A Preferred Shares
--------------
shall have the following voting rights:
(1) Subject to the provision for adjustment hereinafter set forth, each
Series A Preferred Share shall entitle the holder thereof to 1,000 votes on all
matters voted on at a meeting of the stockholders of the Company. In the event
the Company shall at any time (i) declare or pay any dividend on Common Stock
payable in shares of Common Stock, or (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes per share to which
A-5
holders of Series A Preferred Shares were entitled immediately prior to such
event shall be adjusted by multiplying such number 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.
(2) Except as otherwise provided herein or by law, the holders of Series A
Preferred Shares and the holders of shares of Class A Common Stock and any other
capital stock of the Company having general voting rights shall vote together as
one voting group on all matters submitted to a vote of stockholders of the
Company.
(3) Except as set forth herein or as otherwise provided by law, holders of
Series A Preferred Shares shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Class A Common Stock as set forth herein) for taking any corporate
action.
Section 6. Certain Restrictions.
--------------------
(1) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on Series A Preferred Shares outstanding shall have been paid
in full, 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 Shares;
(ii) declare or pay dividends on or make any other distributions on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Shares,
except dividends paid ratably on the Series A Preferred Shares and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) 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 Shares,
provided that the Company may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in ex-
A-6
change for shares of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series A
Preferred Shares; or
(iv) purchase or otherwise acquire for consideration any shares of
Series A Preferred Shares or any shares of stock ranking on a parity with
the Series A Preferred Shares, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board of Directors)
to all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(2) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under subparagraph (1) of this Section 6, purchase or
otherwise acquire such shares at such time and in such manner.
Section 7. Reacquired Shares. Any Series A Preferred Shares purchased or
------------------
otherwise acquired by the Company in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein or in the Charter.
Section 8. Merger, Consolidation, etc. In case the Company shall enter into
--------------------------
any merger, consolidation, 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 Series A Preferred
Share shall at the same time be similarly exchanged or changed into an amount
per share (subject to the provision for adjustment hereinafter set forth) equal
to 1,000 times the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or for which each
share of Common Stock is changed or exchanged. In the event the Company shall at
any time (i) declare any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of Series A Preferred Shares shall be adjusted by multiplying such amount
A-7
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 9. Ranking. The Series A Preferred Shares shall rank, with respect
-------
to the payment of dividends and distribution of assets, junior to all series of
any other class of the Company's Preferred Stock unless the terms of any such
series shall provide otherwise.
Section 10. Amendment. The Charter, including this Amended and Restated
---------
Certificate of Designation establishing the rights and preferences of the Series
A Preferred Shares, shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series A
Preferred Shares so as to affect them adversely without the affirmative vote of
the holders of a majority of the outstanding shares of Series A Preferred
Shares, voting separately as one voting group.
Section 11. Fractional Shares. Series A Preferred Shares may be issued in
------------------
fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Shares.
A-8
IN WITNESS WHEREOF, the Company has caused this Amended and Restated
Certificate of Designation to be signed in its name and on its behalf and
attested to by the undersigned on this 11th day of February, 1999 and the
undersigned acknowledges under the penalties of perjury that this Amended and
Restated Certificate of Designation is the corporate act of said Company and
that to the best of his knowledge, information and belief, the matters and facts
set forth herein are true in all material respects.
LEXMARK INTERNATIONAL GROUP, INC.
By:
-----------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and
Chief Financial
Officer
Attest:
--------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President, General
Counsel and Secretary
A-9
EXHIBIT B
[Form of Right Certificate]
Certificate No. R- Rights
-------
NOT EXERCISABLE AFTER JANUARY 31, 2009 OR EARLIER IF NOTICE OF REDEMPTION
IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE AMENDED AND
RESTATED RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS DEFINED IN THE AMENDED AND RESTATED RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS AMENDED AND RESTATED RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE AMENDED AND RESTATED RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE AMENDED AND RESTATED
RIGHTS AGREEMENT.]a
LEXMARK INTERNATIONAL, INC.
Right Certificate
This certifies that ____________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Amended and
Restated Rights Agreement dated as of December __, 2003 (the "Amended and
Restated Rights Agreement") between Lexmark International, Inc., a Delaware
corporation and successor by merger to Lexmark International Group, Inc. (the
"Company"), and The Bank of New York, as successor to ChaseMellon Shareholder
Services, L.L.C., a New York trust company (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Amended and Restated
---------------------------
a The portion of the legend in brackets shall be inserted only if applicable.
B-1
Rights Agreement) and prior to 5:00 P.M. (New York City time) on January 31,
2009 at the designated office of the Rights Agent, or its successors as Rights
Agent, in New York, New York, one one-thousandth of a fully paid non-assessable
share of the Series A Junior Participating Preferred Stock, par value $0.01 per
share (the "Preferred Stock"), of the Company, at a purchase price of $200 per
one one-thousandth of a share (the "Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase and
related certificate duly executed, along with a signature guarantee and such
other and further documentation as the Rights Agent may reasonably request. The
number of Rights evidenced by this Right Certificate (and the number of shares
which may be purchased upon exercise thereof) set forth above, and the Purchase
Price per share set forth above, are the number and Purchase Price as of
February 18, 1998, based on the Preferred Stock of the Company as constituted at
such date.
Upon the occurrence of a Triggering Event (as such term is defined in the
Amended and Restated Rights Agreement, if the Rights evidenced by this Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Amended
and Restated Rights Agreement), (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances specified in the
Amended and Restated Rights Agreement, a transferee of a person who after such
transfer, became an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of such Triggering Event.
As provided in the Amended and Restated Rights Agreement, the Purchase
Price and the number and kind of shares of Preferred Stock (or, in certain
circumstances, common stock and/or other securities) which may be purchased upon
the exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Amended and Restated Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Amended and Restated Rights Agreement reference is hereby
made for a full description of the rights, limitations of rights, obligations,
duties and immunities hereunder of the Rights Agent, the Company and the holders
of the Right Certificates. Copies of the Amended and Restated Rights Agreement
are
B-2
on file at the above-mentioned office of the Rights Agent, and at the executive
offices of the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the designated office of the Rights Agent, along with a signature
guarantee and such other and further documentation as the Rights Agent may
reasonably request, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-thousandth of a share of Preferred
Stock as the Rights evidenced by the Right 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, along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request, another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Amended and Restated Rights Agreement, the
Rights evidenced by this Certificate may be (i) redeemed by the Company at a
redemption price of $.001 per Right or (ii) exchanged by the Company in whole or
in part for shares of common stock or Preferred Stock.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the 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 any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Amended and Restated Rights Agreement.
B-3
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ___________.
[SEAL]
ATTEST: LEXMARK INTERNATIONAL, INC.
By: By:
------------------------ ------------------------
Name: Name:
Title: Title:
Countersigned:
THE BANK OF NEW YORK,
as Rights Agent
By:
---------------------------------
Authorized Signature
Date:
B-4
[Form of Reverse Side of Right Certificate]
-------------------------------------------
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
------------------------------------------
hereby sells, assigns and transfers unto
--------------------------------------
-------------------------------------------------------------------------------
(Please print name and address of transferee)
-------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________ Attorney, to transfer
the within Right Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ,
------------ ------
---------------------------
Signature
Signature Guaranteed:
---------------------------------------------------------
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
B-5
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
pursuant to the Amended and Restated Rights Agreement);
(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 of an Acquiring Person.
Dated: ,
------------ -----
---------------------------
Signature
Signature Guaranteed:
---------------------------------------------------------
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
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-6
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights evidenced by the Right Certificate.)
Lexmark International, Inc.:
The undersigned hereby irrevocably elects to exercise ______________ Rights
represented by this Right Certificate to purchase the shares of the Preferred
Stock issuable upon the exercise of such Rights (or such other securities of the
Company or of any other Person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of:
Please insert social security or
other taxpayer 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:
Please insert social security or
other taxpayer identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: ,
------------ ------
---------------------------
Signature
Signature Guaranteed:
-----------------------------------------------------------
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
B-7
CERTIFICATE
-----------
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Amended and Restated Rights Agreement);
(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 of an Acquiring Person.
Dated: ,
------------ ------ -----------------------
Signature
Signature Guaranteed:
-----------------------------------------------------------
(Signatures must be guaranteed by a commercial bank or trust company or by a
member of the New York Stock Exchange.)
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
B-8
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
The Board of Directors of Lexmark International, Inc. as successor by
merger to Lexmark International Group, Inc. (the "Company") has declared a
dividend distribution of one Right for each outstanding share of Class A Common
Stock, par value $0.01 per share, and Class B Common Stock, par value $0.01 per
share (collectively, the "Common Stock"), of the Company. The distribution is
payable to holders of record on April 3, 1998 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one one-thousandth
of a share of Series A Junior Participating Preferred Stock (the "Preferred
Stock"), at a price of $200 per one one-thousandth of a share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in an Amended and Restated Rights Agreement (the "Amended and Restated
Rights Agreement") between the Company and The Bank of New York, as Rights Agent
(the "Rights Agent").
Distribution Date; Transfer of Rights
-------------------------------------
Until the earlier to occur of (i) ten calendar days following the date (the
"Shares Acquisition Date") of public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person") acquired, or obtained
the right to acquire, beneficial ownership of Class A Common Stock or other
voting securities ("Voting Stock") that have 15% or more of the voting power of
the outstanding shares of Voting Stock or (ii) ten calendar days (or such later
date as may be determined by action of the Board of Directors prior to the time
any person or group of affiliated persons becomes an Acquiring Person) following
the commencement or announcement of an intention to make a tender offer or
exchange offer the consummation of which would result in such person or group
acquiring, or obtaining the right to acquire, beneficial ownership of Voting
Stock having 15% or more of the voting power of the outstanding shares of Voting
Stock (the earlier of such dates being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Company's Common Stock
certificates outstanding as of the Record Date, by such Common Stock
certificates. The Amended and Restated Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the
Company's Common Stock. Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Stock certificates issued after the Record
Date upon transfer or new issuance of the Company's Common Stock will contain a
notation incorporating the Amended and Re-
C-1
stated Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of any of
the Company's Common Stock certificates outstanding as of the Record Date 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 Company's Common Stock
as of the close of business on the Distribution Date and such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire at the close of business on January 31, 2009, unless earlier redeemed or
exchanged by the Company as described below.
Exercise of Rights for Common Stock of the Company
--------------------------------------------------
In the event that a Person becomes an Acquiring Person, each holder of a
Right will thereafter have the right to receive, upon exercise, Class A Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the Purchase Price of the Right.
Notwithstanding any of the foregoing, following the occurrence of the event set
forth in this paragraph, all Rights that are, or (under certain circumstances
specified in the Amended and Restated Rights Agreement) were, beneficially owned
by any Acquiring Person will be null and void.
Exercise of Rights for Shares of the Acquiring Company
------------------------------------------------------
In the event that, at any time following the Shares Acquisition Date, (i)
the Company is acquired in a merger or other business combination transaction,
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been
voided as set forth above) shall thereafter have the right to receive, upon
exercise, common stock of the acquiring company having a value equal to two
times the Purchase Price of the Right.
Adjustments to Purchase Price
-----------------------------
The Purchase Price payable, and the number of shares of
Preferred Stock (or Class A Common Stock or other securities, as the case may
be) issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, com-
C-2
bination or reclassification of the Preferred Stock, (ii) upon the grant to
holders of the Preferred Stock of certain rights or warrants to subscribe for
shares of the Preferred Stock or convertible securities at less than the current
market price of the Preferred Stock or (iii) upon the distribution to holders of
the Preferred Stock of evidences of indebtedness or assets (excluding regular
periodic cash dividends out of earnings or retained earnings or dividends
payable in the Preferred Stock) or of subscription rights or warrants (other
than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until the earlier of (i) three years from the date of the event giving
rise to such adjustment and (ii) the time at which cumulative adjustments
require an adjustment of at least 1% in such Purchase Price. No fractional
shares will be issued (other than fractional shares which are integral multiples
of one one-thousandth of a share of Preferred Stock) and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Preferred Stock
on the last trading date prior to the date of exercise.
Redemption and Exchange of Rights
---------------------------------
At any time after the occurrence of the event set forth under the heading
"Exercise of Rights for Common Stock of the Company" above, the Board of
Directors (with the concurrence of a majority of the Independent Directors (as
defined below)) may exchange the Rights (other than Rights owned by the
Acquiring Person which shall have become void), in whole or in part, at an
exchange ratio of one share of Class A Common Stock (or a fraction of a share of
Preferred Stock having the same market value) per Right (subject to adjustment).
At any time prior to 5:00 P.M. New York City time on the tenth calendar day
following the Shares Acquisition Date, the Company may redeem the Rights in
whole, but not in part, at a price of $.001 per Right (the "Redemption Price").
Immediately upon the action of the Board of Directors of the Company electing to
redeem the Rights, the Company shall make announcement thereof, and upon such
action, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised or exchanged, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
C-3
Terms of the Preferred Stock
----------------------------
The Preferred Stock will rank junior to all other series of the Company's
preferred stock with respect to payment of dividends and as to distributions of
assets in liquidation. Each share of Preferred Stock will have a quarterly
dividend rate per share equal to the greater of $1.00 or 1,000 times the per
share amount of any dividend (other than a dividend payable in shares of Common
Stock or a subdivision of the Common Stock) declared from time to time on the
Common Stock, subject to certain adjustments. The Preferred Stock will not be
redeemable. In the event of liquidation, the holders of the Preferred Stock will
be entitled to receive a preferred liquidation payment per share of $1.00 (plus
accrued and unpaid dividends) or, if greater, an amount equal to 1,000 times the
payment to be made per share of Common Stock, subject to certain adjustments.
Generally, each share of Preferred Stock will vote together with the Class A
Common Stock and any other series of cumulative preferred stock entitled to vote
in such manner and will be entitled to 1,000 votes, subject to certain
adjustments. In the event of any merger, consolidation, combination or other
transaction in which shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or other property, each share of Preferred
Stock will be entitled to receive 1,000 times the aggregate amount of stock,
securities, cash and/or other property, into which or for which each share of
Common Stock is changed or exchanged, subject to certain adjustments. The
foregoing dividend, voting and liquidation rights of the Preferred Stock are
protected against dilution in the event that additional shares of Common Stock
are issued pursuant to a stock split or stock dividend or distribution. Because
of the nature of the Preferred Stock's dividend, voting, liquidation and other
rights, the value of the one one-thousandth of a share of Preferred Stock
purchasable with each Right is intended to approximate the value of one share of
Class A Common Stock.
Amendments to Terms of the Rights
---------------------------------
Any of the provisions of the Amended and Restated Rights Agreement may be
amended by the Board of Directors of the Company prior to the Distribution Date.
After the Distribution Date, the provisions of the Amended and Restated Rights
Agreement may be amended by the Board in order to cure any ambiguity, defect or
inconsistency, or to make changes which do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person); provided,
--------
however, that no supplement or amendment may be made after the Distribution Date
-------
which changes those provisions relating to the principal economic terms of the
Rights.
C-4
The term "Independent Directors" means, with respect to any transaction or
series of transactions, a member of the Board of Directors of the Company other
than a director who has a relationship that would interfere with the exercise of
independent judgment in carrying out the responsibilities of a director or a
financial interest in or with respect to such transaction or series of
transactions.
A copy of the Amended and Restated Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to Amendment No. 2 to the
Registration Statement on Form 8-A dated February 27, 1998. A copy of the
Amended and Restated 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 Amended and Restated Rights
Agreement, which is hereby incorporated herein by reference.
C-5
