THIRD AMENDMENT TO RIGHTS AGREEMENT
Exhibit 4
THIRD AMENDMENT TO RIGHTS AGREEMENT
This THIRD Amendment to rights agreement, dated as of December 4, 2009 (this
“Amendment”), to the Rights Agreement, dated as of December 15, 1999, as amended (the “Rights
Agreement”), between Consolidated Graphics, Inc., a Texas corporation (the “Company”), and American
Stock Transfer & Trust Company, LLC, a New York limited liability trust company and successor to
American Stock Transfer & Trust Company, as rights agent (the “Rights Agent”).
WHEREAS, the Board of Directors of the Company has determined that it would be in the best
interests of the Company to amend the Rights Agreement as follows: (1) extend the Final Expiration
to December 14, 2010, (2) change the Purchase Price to $140.00, (3) amend the definition of
Beneficial Owner to exclude shares that may be acquired pursuant to unexercised options granted
under the Company’s employee benefit plans, provided, that shares acquired upon exercise of such
options will be included in such definition and (4) add a provision permitting the shareholders to
redeem the Rights in certain circumstances involving a Qualified Offer.
WHEREAS, the Rights Agreement permits the Company to amend the Rights Agreement, without
action of the holders of the Rights, if the Rights are then redeemable.
WHEREAS, the Rights are currently redeemable.
WHEREAS, the Rights Agent has agreed under the Rights Agreement to execute any such amendment
of the Rights Agreement if the Company so directs upon receipt of a certificate of an officer of
the Company that the proposed amendment complies with Section 27 of the Agreement regarding
supplements and amendments; and
WHEREAS, the Board of Directors of the Company has determined that this Amendment complies
with Section 27 of the Rights Agreement.
NOW, THEREFORE, in consideration of the premises set forth above, the parties hereto agree as
follows:
| 1. | Amendment to Definition of Final Expiration Date. |
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The definition of “Final Expiration Date” set forth in Section 1 of the Rights
Agreement is hereby amended by deleting “December 15, 2009” and replacing it with
“December 14, 2010.” |
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| 2. | Amendment to Purchase Price. |
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Section 7(b) of the Rights Agreement is hereby amended to read in its entirety: |
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“The Purchase Price for each one one-hundredth of a share of Preferred Stock issued pursuant
to the exercise of a Right shall initially be $140.00, shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall be payable in lawful money
of the United States of America, in accordance with paragraph 7(c) below.” |
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| 3. | Amendment to Definition of Beneficial Owner. |
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The definition of “Beneficial Owner” in Section 1 of the Rights Agreement is hereby amended
to add the following at the end of the definition: |
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“; and provided, further that, no Person shall be deemed to beneficially own securities that
the Person has the right to acquire pursuant to unexercised options granted pursuant to
employee benefit plans or employee stock plans of the Company (except that a Person shall be
deemed to beneficially own such securities upon the exercise of any such options).” |
| 4. | Additional Definitions. |
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The following definitions shall be added to Section 1 in alphabetical order: |
“Outside Directors” shall mean members of the Board who are not officers of the
Company or any of its Subsidiaries and who are not Acquiring Persons or representatives,
nominees, Affiliates or Associates of Acquiring Persons.
“Qualified Offer” shall mean a tender offer for all outstanding shares of
Common Stock which meets all of the following requirements:
(i) the same per share price and consideration is offered for all shares
of Common Stock in the Qualified Offer, and the per-share offer price (A) is greater
than the highest reported market price for the Common Stock of the Company during
the 36-month period immediately preceding the date on which the offer is commenced
within the meaning of Rule 14d-2(a) under the Exchange Act and (B) represents a
reasonable premium above the average of the Closing Prices for the five Trading Days
immediately preceding the date on which the offer is commenced, with, in the case of
an offer that includes shares of Common Stock of the offeror, such per-share offer
price being determined using the lower of (1) the lowest reported market price for
Common Stock of the offeror during the five Trading Days immediately preceding and
the five Trading Days immediately following the commencement of such offer within
the meaning of Rule 14d-2(a) under the Exchange Act and (2) the average of the last
sale prices (regular way) of such shares reported in the principal consolidated
transaction reporting system with respect to such shares for the five Trading Days
immediately preceding the date of any determination;
(ii) the consideration is at least 80 percent cash (and any non-cash
portion is comprised of shares listed on The New York Stock Exchange or other
national exchange, to be adjusted to reflect any decrease in the value of such
shares prior to the consummation of the Qualified Offer) and is to be paid upon
consummation of the Qualified Offer for all tendered or exchanged shares of Common
Stock in the Qualified Offer;
(iii) on or before the date such offer is commenced within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act (or any
comparable or successor Rule), such Person making the offer:
(A) has on hand cash or cash equivalents for the full amount
necessary to consummate such offer and has irrevocably committed in writing
to the Company to utilize such cash or cash equivalents for purposes of such
offer if consummated and to set apart and maintain available such cash or
cash equivalents for such purposes until the offer is consummated or
withdrawn; or
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(B) has all financing in the full amount necessary to consummate
such offer and has:
(1) entered into, and provided to the Company certified
copies of, definitive financing agreements (including exhibits and
related documents) for funds for such offer which, when added to the
amount of cash and cash equivalents available, committed in writing,
set apart and maintained in the same manner as described in clause
(A) above, are in an amount not less than the full amount necessary
to consummate such offer, which agreements are with one or more
responsible financial institutions or other entities having the
necessary financial capacity and ability to provide such funds, and
are subject only to customary terms and conditions (which shall in no
event include conditions requiring access by such financial
institutions to non-public information to be provided by the Company,
conditions based on the accuracy of any information concerning the
Company, or conditions requiring the Company to make any
representations, warranties or covenants in connection with such
financing); and
(2) provided to the Company copies of all written
materials prepared by such Person for such financial institutions in
connection with entering into such financing agreements; provided
that, “the full amount necessary to consummate such offer” in either
clause (A) or (B) above shall be an amount sufficient to pay for all
shares of Common Stock outstanding on a fully diluted basis the cash
portion of the consideration pursuant to the offer and the
second-step transaction required by clause (v) below and all related
expenses;
(iv) the offering Person requests the Company to call a special meeting of
the Company’s shareholders for the purpose of voting on a resolution accepting such
offer and authorizing the redemption of the Rights, and the offer contains a written
agreement of such Person to pay (or share with any other offering Person) all of the
Company’s costs of such special meeting;
(v) such offer remains open for at least 30 Business Days; provided,
however, that (x) if there is any increase in the price of such offer, such offer
must remain open for at least an additional 20 Business Days after the last such
increase, (y) such offer must remain open for at least 20 Business Days after the
date that any bona fide alternative offer is made which, in the opinion of one or
more investment banking firms designated by the Company, provides for consideration
per share in excess of that provided for in such offer, and (z) such offer must
remain open for at least 20 Business Days after the date, if any, on which such
Person reduces the per share price offered in accordance with clause (vii)(y) below
(provided, in the case of each of clauses (x), (y) and (z) above, in no event will
such offer have been outstanding for less than 30 Business Days); provided further,
however, that such offer need not remain open, as a result of this clause (v),
beyond (1) the time which any other offer satisfying the criteria for a Qualified
Offer is then required to be kept open under this clause (v), or (2) the scheduled
expiration date, as such date may be extended by public announcement on or before
the then scheduled expiration date, of any other tender or exchange offer for Common
Stock with respect to which the Board has agreed to redeem the Rights immediately
before acceptance for payment of Common Stock thereunder (unless such other offer is
terminated before its expiration without any Common Stock having been purchased
thereunder);
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(vi) such offer is accompanied by a written opinion, in customary form, of
a nationally recognized investment banking firm which is addressed to the Company
and the holders of Common Stock other than such Person and states that the price to
be paid to holders pursuant to the offer is fair from a financial point of view to
such holders and includes any written presentation of such firm showing the analysis
and range of values underlying such conclusions and such written opinion and any
such presentation is updated and provided to the Company within two Business Days
before the date such offer is consummated;
(vii) before or on the date that such offer is commenced within the meaning of
Rule 14d-2(a) of the General Rules and Regulations under the Exchange Act, such
Person makes an irrevocable written commitment to the Company and, with respect to
clause (x), to its shareholders, (x) to consummate a transaction or transactions
promptly upon the completion of such offer (and in no event later than five Business
Days thereafter), whereby all Common Stock not purchased in such offer will be
acquired at the same cash price per share paid in such offer, subject only to the
condition that the Board of Directors shall have granted any approvals required to
enable such Person to consummate such transaction or transactions following
consummation of such offer without obtaining the vote of any other shareholder, (y)
that such Person will not make any amendment to the original offer which reduces the
per share price offered (other than a reduction to reflect any dividend declared by
the Company, other than a regular quarterly dividend, after the commencement of such
offer or any material change in the capital structure of the Company initiated by
the Company after the commencement of such offer, whether by way of
reclassification, recapitalization, reorganization, repurchase or otherwise),
changes the form of consideration offered, or reduces the number of shares being
sought or which is in any other respect materially adverse to the Company’s
shareholders, and (z) that neither such Person nor any of its Affiliates or
Associates will make any offer for or purchase any equity securities of the Company
for a period of one year after the commencement of the original offer if such
original offer does not result in the tender of at least two-thirds (2/3) of the
outstanding shares of Common Stock not owned by such Person (including its
Affiliates and Associates), unless another tender offer by another party for all
outstanding Common Stock is commenced that (a) constitutes a Qualified Offer (in
which event, any new offer by such Person or of any Affiliates or Associates must be
at a price no less than that provided for in such original offer) or (b) is approved
by the Board of Directors of the Company (in which event any new offer by such
Person or of any of its Affiliates or Associates must be at a price no less than
that provided for in such approved offer);
(viii) such offer is conditioned on a minimum of at least 80% of the
outstanding shares of the Common Stock (other than shares of Common Stock held by
the offeror or its Affiliates and Associates) being tendered and not withdrawn as of
the offer’s expiration date, which condition shall not be waivable; and
(viii) in addition to each of the requirements set forth above, such offer
is not subject to any financing, funding or similar condition, nor any condition
relating to completion of or satisfaction with any due diligence or similar
investigation, and, subject to the foregoing, otherwise provides for usual and
customary terms and conditions.
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| 5. | Amendment to Redemption and Termination Provision. |
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Section 23 is hereby amended and restated in its entirety: |
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“Section 23. Redemption and Termination. |
(a) The Rights may be redeemed by action of the Board pursuant to subparagraph (b) of
this Section 23 or by shareholder action pursuant to subparagraph (c) of this Section 23 and
shall not be redeemed in any other manner.
(b) The Company may, at its option, but only by the vote of a majority of the Board of
Directors, at any time prior to the earlier of (i) the Close of Business on the tenth
Business Day following the Close of Business on the Share Acquisition Date, subject to
extension by the Company as provided in Section 27 hereof or (ii) the Close of Business on
the Expiration Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $.01 per Right, subject to adjustments as provided in subsection (f)
below (the “Redemption Price”). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable pursuant to Section 11(a)(ii) prior to the
expiration of the Company’s right of redemption under this subsection (b).
(c) (i) If the Company receives a Qualified Offer, the Outside Directors of the
Board shall call a special meeting of shareholders (the “Special Meeting”) for the
purpose of voting on a resolution (i) accepting such Qualified Offer, as such
Qualified Offer may be amended or revised by the offering Person from time to time
to increase the price per share to be paid to holders of shares of Common Stock, and
(ii) authorizing the redemption of all but not less than all the then outstanding
Rights at the Redemption Price pursuant to subparagraph (c)(ii) of this Section 23
(the “Resolution”). The Special Meeting shall be held on a date selected by the
Board of Directors, which date shall not be less than 90 or more than 120 days after
the later of (A) the date such Qualified Offer is received by the Company (the
“Offer Date”) and (B) the date of any previously scheduled meeting of shareholders
to be held within 60 days after the Offer Date; provided, however, that if (x) such
other meeting shall have been called for the purpose of voting on a resolution with
respect to another Qualified Offer and (y) the Offer Date is not later than 15 days
after the date such other Qualified Offer was received by the Company, then both the
Resolution and such other resolution shall be voted on at such meeting (in addition
to any other matters or resolutions to be considered at such meeting) and such
meeting shall be deemed to be the Special Meeting; provided, however, that in any
12-month period the Company shall not be required to hold more than one Annual
Meeting and one Special Meeting; and provided further, that if the Company shall
publicly announce that the Board of Directors has determined that it is in the best
interest of shareholders to seek an alternative transaction so as to obtain greater
value for shareholders than that provided by such Qualified Offer, then such vote
shall be postponed to a meeting called by the Board of Directors which shall occur
within 90 days after the date of such announcement. The Board of Directors shall set
a date for determining the shareholders of record entitled to notice of and to vote
at the Special Meeting in accordance with the Company’s Articles of Incorporation,
By-Laws and applicable law. At the offering Person’s request, the Company shall
include in any proxy soliciting material prepared by it in connection with the
Special Meeting proxy soliciting material submitted by the offering Person;
provided, however, that the offering Person, by written agreement with the Company
contained in or delivered with such request, shall have indemnified the Company
against any and all liabilities resulting from any statements found to be
defamatory, misstatements, misleading statements or omissions contained in or
omitted from the offering Person’s proxy soliciting materials and have agreed to pay
the Company’s incremental costs incurred as a result of including such material in
the Company’s proxy soliciting material. Notwithstanding anything to the
contrary contained this Agreement, if the Board of Directors determines that it is
in the best interests of shareholders to seek an alternative transaction so as to
obtain greater value for shareholders than that provided by any Qualified Offer, the
Company shall be entitled to include information relating to such alternative
transaction in the proxy soliciting material prepared by it in connection with the
Special Meeting.
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(ii) If at the Special Meeting, the Resolution, or a resolution with
respect to another Qualified Offer, receives the affirmative vote of holders of the
greater of (A) a majority of the voting power of the shares of Common Stock present
and entitled to vote on the Resolution, or (B) a majority of the voting power of the
minimum number of shares of Common Stock entitled to vote on the Resolution that
would constitute a quorum for the transaction of business at the meeting (except
where the Company’s Articles of Incorporation or the Texas Business Corporation Act
or successor statute require a larger proportion or number), as such vote is
determined at the Special Meeting, not giving effect to any affirmative votes cast
by the offering Person or any of its Affiliates, then all of the Rights shall be
redeemed by the Company pursuant to such shareholder action at the Redemption Price,
effective immediately before the consummation of the Qualified Offer (provided that
the Qualified Offer was to be consummated before 60 days after the date of the
Special Meeting).
(iii) Nothing in this subparagraph (c) shall be construed as limiting or
prohibiting the Company or any offering Person from proposing or engaging in any
acquisition, disposition or other transfer of any securities of the Company, any
merger or consolidation involving the Company, any sale or other transfer of assets
of the Company, any liquidation, dissolution or winding-up of the Company, or any
other business combination or other transaction, or any other action by the Company
or such offering Person; provided, however, that the holders of Rights shall have
the rights set forth in this Rights Agreement with respect to any such acquisition,
disposition, transfer, merger, consolidation, sale, liquidation, dissolution,
winding-up, business combination, transaction or action.
(d) Immediately upon the effectiveness of the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to subparagraph (b) of this Section
23 (which action may be conditioned on the occurrence of one or more events or on the
existence of one or more facts or may be effective at some future date), evidence of which
shall have been filed with the Rights Agent, or upon effectiveness of the redemption of the
Rights pursuant to subparagraph (c) of this Section 23, evidence of which shall have been
filed with the Rights Agent, and in each case without any further action and without any
notice, the right to exercise the Rights will terminate, and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the redemption of the Rights as contemplated in this Section 23(d), the
Company shall give notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to the Rights Agent and to all such holders at
their last addresses as they appear upon the registry books of the Rights Agent or, before
the Distribution Date, on the registry books of the Transfer Agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made. The failure to give the notice
required by this Section 23(d) or any defect therein shall not affect the legality or
validity of the action taken by the Company. Neither the Company nor any of its Affiliates
or Associates may redeem, acquire or purchase of value any Rights at any time in any manner
other than that
specifically set forth in this Section 23, or in connection with the purchase,
acquisition or redemption of shares of Common Stock before the Distribution Date.
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(e) The Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the Current Per Share Market Price of the Common Stock as of the time of
redemption) or any other form of consideration deemed appropriate by the Board.
(f) In the event the Company shall at any time after the Record Date (A) pay any
dividend on its Common Stock in shares of its Common Stock, (B) subdivide or split the
outstanding shares of its Common Stock into a greater number of shares of (C) combine or
consolidate the outstanding shares of its Common Stock into a smaller number of shares of
its Common Stock or effect a reverse split of the outstanding shares of its Common Stock,
then and in such event the Redemption Price shall be appropriately adjusted to reflect such
event.
| 6. | Amendment to Determinations and Actions by Board of Directors Provision. |
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Section 29 is hereby amended by adding the following text at the end of the current paragraph: |
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“Without limiting the foregoing, nothing contained herein shall be constructed to suggest or
imply that the Board of Directors shall not be entitled to reject any Qualified Offer or any
other tender offer or other acquisition proposal, or to recommend that holders of Common Stock
reject any Qualified Offer or any other tender offer or other acquisition proposal, or to take
any other action (including, without limitation, the commencement, prosecution, defense or
settlement of any litigation and the submission of additional or alternative offers or other
proposals) with respect to any Qualified Offer or any other tender offer or other acquisition
proposal that the Board of Directors believes is necessary or appropriate in the exercise of
its fiduciary duty.” |
| 7. | Miscellaneous. |
(a) Except as expressly modified by this Amendment, all of the terms, covenants,
agreements, conditions and other terms of the Rights Agreement shall remain in full force
and effect in accordance with their respective terms. As used in the Amendment, the terms
“this Rights Agreement,” “herein,” “hereinafter,” “hereunder,” “hereto” and words of similar
import shall mean and refer to, from and after the date of this Amendment, unless the
context otherwise requires, the Rights Agreement as amended by this Amendment.
(b) Capitalized terms used in this Amendment and not otherwise defined herein shall
have the meanings given to such terms in the Rights Agreement.
(c) This Amendment may be executed in one more counterparts, and signature pages may be
delivered by facsimile which shall be deemed an original, but all of which together shall
constitute one and the same instrument, and shall become effective upon its execution by the
parties hereto.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the day and year first above written.
| CONSOLIDATED GRAPHICS, INC. | ||||
| By: | /s/ Xxx X. Xxxxx | |||
| Name: Xxx X. Xxxxx | ||||
| Title: Chief Executive Officer | ||||
| AMERICAN STOCK TRANSFER & | ||||
| TRUST COMPANY, LLC | ||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name: Xxxxxxx X. Xxxxxx | ||||
| Title: Vice President | ||||
Signature Page to Third Amendment to the Rights Agreement
