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EXHIBIT (c)(15)
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COMPUTER SCIENCES CORPORATION
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
AMENDED AND RESTATED RIGHTS AGREEMENT
DATED AS OF DECEMBER 21, 1988
AMENDED AND RESTATED AS OF FEBRUARY 18, 1998
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TABLE OF CONTENTS
Section Page
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l Certain Definitions................................................................1
2 Appointment of Rights Agent........................................................6
3 Issue of Rights Certificates.......................................................6
4 Form of Rights Certificates........................................................8
5 Countersignature and Registration..................................................9
6 Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates......................9
7 Exercise of Rights; Purchase Price; Expiration Date of Rights....................10
8 Cancellation and Destruction of Rights Certificates..............................12
9 Reservation and Availability of Stock ...........................................13
10 Preferred Stock Record Date......................................................14
11 Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.............................................................15
12 Certificate of Adjusted Purchase Price or Number of Shares.......................24
13 Consolidation, Merger or Sale or Transfer of Assets or Earning Power.............24
14 Fractional Rights and Fractional Shares..........................................28
15 Rights of Action.................................................................29
16 Agreement of Rights Holders......................................................30
17 Rights Certificate Holder Not Deemed a Stockholder...............................30
18 Concerning the Rights Agent......................................................31
19 Merger or Consolidation or Change of Name of Rights Agent........................31
20 Duties of Rights Agent...........................................................32
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Section Page
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21 Change of Rights Agent...........................................................34
22 Issuance of New Rights Certificates..............................................35
23 Redemption and Termination.......................................................35
24 Notice of Certain Events.........................................................36
25 Notices..........................................................................37
26 Supplements and Amendments.......................................................37
27 Successors.......................................................................38
28 Determination and Actions by the Board of Directors, etc.........................38
29 Benefits of this Agreement.......................................................39
30 Severability.....................................................................39
31 Governing Law....................................................................39
32 Counterparts.....................................................................39
33 Descriptive Headings.............................................................40
Exhibit A -- Form of Certificate of Amendment of Certificate of Designations
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
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AMENDED AND RESTATED RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 21, 1988, amended and restated as
of February 18, 1998 (the "Agreement"), between COMPUTER SCIENCES CORPORATION, a
Nevada corporation (the "Company"), and CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
(the "Rights Agent").
W I T N E S S E T H
WHEREAS, on December 21, 1988 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one preferred stock purchase right (a "Right") for each share of
common stock, $1.00 par value, of the Company (the "Common Stock") outstanding
at the close of business on January 3, 1989 (the "Record Date"), and authorized
the issuance of one Right for each share of Common Stock issued between the
Record Date (whether originally issued or delivered from the Company's treasury)
and the Distribution Date (as hereinafter defined), each Right initially
representing the right to purchase one four-thousandth (l/4000th) of a share of
Series A Junior Participating Preferred Stock of the Company having the rights,
powers and preferences set forth in the form of Certificate of Amendment of
Certificate of Designations attached hereto as Exhibit A, upon 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
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding; provided, however
that (i) the term "Acquiring Person" shall not include the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan, (ii) a
person who becomes the Beneficial Owner of at least twenty percent (20%) of such
outstanding shares of Common Stock as the result of a stock repurchase plan or
self-tender offer of the Company shall not be deemed an Acquiring Person, and
the Stock Acquisition Date shall not be deemed to occur, until such Person,
together with all Affiliates and Associates of such Person, thereafter becomes
the Beneficial Owner of, in the aggregate, a number of additional shares of
Common Stock equal to one percent (1%) or more of the then outstanding shares
(and, at that time, owns at least twenty percent (20%) of such outstanding
shares), and (iii) the term "Acquiring
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Person shall not include a person who becomes the Beneficial Owner of at least
twenty percent (20%) of such outstanding shares of Common Stock as the result of
an acquisition of shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock at a price and on
terms determined by at least a majority of the members of the Board of Directors
who are not officers of the Company and who are not representatives, nominees,
Affiliates or Associates of an Acquiring Person, after receiving advice from one
or more investment banking firms, to be (a) at a price which is fair to
stockholders of the Company (taking into account all factors which such members
of the Board deem relevant including, without limitation, prices which could
reasonably be achieved if the Company or its assets were sold on an orderly
basis designed to realize maximum value) and (b) otherwise in the best interests
of the Company and its stockholders.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "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 and in effect on the date of
this Agreement (the "Exchange Act)".
(d) 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, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not
in writing) 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," (A) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase or
exchange, or (B) securities issuable upon exercise of Rights at any time
prior to the occurrence of a Triggering Event, or (C) 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)) or Section 22 hereof (the "Original Rights")
or pursuant to Section ll(i) hereof in connection with an adjustment
made with respect to any Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has
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"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; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under this
subparagraph (ii) as a result of an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (A) 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 provisions of the General Rules and
Regulations under the Exchange Act, and (B) is not also then reportable
by such Person 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 (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of this
paragraph (d)) or disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (d) shall cause a
person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of forty days after the date of such
acquisition.
(e) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of California are authorized or
obligated by law or executive order to close.
(f) "Close of business" on any given date shall mean 5:00 P.M.,
California time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., California time, on the next succeeding
Business Day.
(g) "Common Stock" shall mean the common stock, $1.00 par value, of the
Company, except that "Common Stock" when used with reference to any Person other
than the Company shall mean the capital stock (or units of beneficial interest
which represent the right to participate in profits, losses, deductions and
credits) of such Person with the greatest voting power, or the equity securities
or other equity interest having power to control or direct the management, of
such Person.
(h) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, while such Person is a member of the Board, who is not
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an Acquiring Person or an Affiliate or Associate of an Acquiring Person, or a
representative of an Acquiring Person or of any such Affiliate or Associate, and
who was a member of the Board prior to the date of this Agreement, or (ii) any
Person who subsequently becomes a member of the Board, while such Person is a
member of the Board, who is not an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or a representative of an Acquiring Person or of any such
Affiliate or Associate, if such Person's nomination for election or election to
the Board is recommended or approved by a majority of the Continuing Directors.
(i) "Current market price" shall have the meaning set forth in Section
ll(d) hereof.
(j) "Current Value" shall have the meaning set forth in Section
ll(a)(iii) hereof.
(k) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(l) "Equivalent Preferred Stock" shall have the meaning set forth in
Section ll(b) hereof.
(m) "Exchange Act" shall have the meaning set forth in Section l(c)
hereof.
(n) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(o) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(p) "Person" shall mean any individual, firm, corporation, partnership,
association, trust or other entity.
(q) "Preferred Stock" shall mean shares of Series A Junior Participating
Preferred Stock, $1.00 par value, of the Company and, to the extent that there
is not a sufficient number of shares of Series A Junior Participating Preferred
Stock authorized to permit the full exercise of the Rights, any other series of
Preferred Stock, $1.00 par value, of the Company designated for such purpose
containing terms substantially similar to the terms of the Series A Junior
Participating Preferred Stock.
(r) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(s) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
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(t) "Record Date" shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.
(u) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(v) "Rights" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
(w) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.
(x) "Section ll(a)(ii) Event" shall mean any event described in Section
ll(a)(ii) hereof.
(y) "Section ll(a)(ii) Trigger Date" shall have the meaning set forth in
Section ll(a)(iii) hereof.
(z) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(aa) "Spread" shall have the meaning set forth in Section ll(a)(iii)
hereof.
(bb) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) under the Exchange Act) by
the Company or an Acquiring Person that an Acquiring Person has become such or
such earlier date as a majority of the directors shall become aware of the
existence of an Acquiring Person.
(cc) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect at least
a majority of the directors of such corporation is beneficially owned, directly
or indirectly, by such Person, or which is otherwise controlled by such Person.
(dd) "Substitution Period" shall have the meaning set forth in Section
ll(a)(iii) hereof.
(ee) "Trading Day" shall have the meaning set forth in Section ll(d)
hereof.
(ff) "Triggering Event" shall mean any Section ll(a)(ii) Event or any
Section 13 Event.
Any determination required by the definitions contained in this Section
1 shall be made by the Board of Directors of the Company in its good faith
judgment,
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which determination shall be binding on the Rights Agent and the holders of the
Rights.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall, prior to the Distribution Date, also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the tenth business
day after the Stock Acquisition Date or, if the tenth business day after the
Stock Acquisition Date occurs before the Record Date, the close of business on
the Record Date), or (ii) the close of business on the tenth business day after
the date that a tender or exchange offer by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any such plan) is
first published or sent or given within the meaning of Rule 14d-2(a) of the
General Rules and Regulations under the Exchange Act, if upon consummation
thereof, such Person would be the Beneficial Owner of 30% or more of the shares
of Common Stock then outstanding (irrespective of whether any shares are
actually purchased pursuant to any such offer) (the earlier of (i) or (ii) 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 Common Stock shall be deemed also to be
certificates for Rights and not by separate certificates, and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock (including a transfer to the Company);provided, however,
that, notwithstanding anything to the contrary in the foregoing definition of
the "Distribution Date," clause (ii) of the definition does not apply to the
tender offer commenced by CAI Computer Services Corp. on February 17, 1998.. As
soon as practicable after the Distribution Date, the Rights Agent will send by
first-class, insured, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more rights
certificates, in substantially the form of Exhibit B hereto (the "Rights
Certificates"), evidencing one Right for each share of Common Stock so held,
subject to adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to Section
ll(p) hereof, at the time of distribution of the Rights Certificates, the
Company shall make the
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necessary and appropriate rounding adjustments (in accordance with Section 14(a)
hereof) so that Rights certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), by first-class, postage prepaid
mail, to each record holder of the Common Stock as of the close of business on
the Record Date, at the address of such holder shown on the records of the
Company. With respect to certificates for the Common Stock outstanding as of the
Record Date, until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the Common Stock
shall also be the registered holders of the associated Rights. Until the earlier
of the Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights have
been issued shall also constitute the transfer of the Rights associated with
such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock
which are issued after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates representing such shares
of Common Stock shall also be deemed to be certificates for Rights, and shall
bear the following legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in the Rights Agreement between Computer
Sciences Corporation (the "Company") and American Transtech (the "Rights
Agent") dated as of December 21, 1988 (the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by
this certificate. The Rights Agent will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of
mailing, without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement,
Rights issued to, or held by, any person who is, was or becomes an
Acquiring Person or any Affiliate or Associate thereof (as such terms
are defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and
void."
With respect to such certificates containing the foregoing legend, until
the earlier of the Distribution Date or the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such
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certificates alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof) shall each be substantially
in the form set forth in Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as 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. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall be
dated as of the Record Date and on their face shall entitle the holders thereof
to purchase such number of four-thousandths of a share of Preferred Stock as
shall be set forth therein at the price set forth therein (such exercise price
per one four-thousandth of a share, the "Purchase Price"), but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase
Price thereof shall be subject to adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any Rights
Certificate issued pursuant to Section 3(a) or Section 22 hereof that represents
Rights beneficially owned by any Person known to be: (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 becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
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 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 which has as a
primary purpose or effect avoidance of Section 7(e) hereof, and any Rights
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) the following legend:
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"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement."
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any Vice President, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Rights Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company; and
any Rights Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its principal office or offices designated as the appropriate
place for surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the Date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the close of business on the Distribution Date, and
at or prior to the close of business on the Expiration Date, any Rights
Certificate or Certificates may be transferred, split up, combined or exchanged
for another Rights Certificate or Certificates, entitling the registered holder
to purchase a like number
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of four-thousandths of a share of Preferred Stock (or, following a Triggering
Event, Common Stock, other securities, cash or other assets, as the case may be)
as the Rights Certificate or 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 Rights Certificate or
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Certificates to be transferred,
split up, combined or exchanged at the principal office or offices of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e) and
Section 14 hereof, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
or security reasonably satisfactory to them, and reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section ll(a)(iii) and Section 23(a)
hereof) in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate on the reverse side thereof duly executed, to the Rights Agent
at the principal office or offices of the Rights Agent of the Rights Agent
designated for such purpose, together with payment of the aggregate Purchase
Price with respect to the total number of four-thousandths of a share of
Preferred Stock (or Common Stock or other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then
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exercisable, at or prior to the earlier of (i) the close of business on December
21, 1998 (the "Final Expiration Date"), or (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof (the earlier of (i) and (ii) being
herein referred to as the ("Expiration Date").
(b) The Purchase Price for each one four-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $235.00,
and shall be subject to adjustment from time to time as provided in Sections 11
and 13(a) hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one four-thousandth of a share of Preferred Stock (or Common Stock or
other securities, cash or other assets, as the case may be) to be purchased as
set forth below and an amount equal to any applicable transfer tax, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the total number of four-thousandths of a share of Preferred
Stock to be purchased and the Company hereby authorizes its transfer agent to
comply with all such requests, or (B) 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 four-thousandths of a
share 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 will direct the
depositary agent to comply with such request, (ii) requisition from the Company
an amount of cash, if any, to be paid in lieu of fractional shares in accordance
with Section 14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof, deliver such cash, if
any, to or upon the order of the registered holder of such Rights Certificate.
The payment of the Purchase Price (as such amount may be reduced pursuant to
Section ll(a)(iii) hereof) may be made in cash or by certified bank check or
money order payable to the order of the Company. In the event that the Company
is obligated to issue other securities (including Common Stock) of the Company,
pay cash and/or distribute other property pursuant to Section ll(a) hereof, the
Company will make all arrangements necessary so that such other securities, cash
and/or other property are available for distribution by the Rights Agent, if and
when appropriate.
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(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent and delivered to, or upon the order of, the registered
holder of such Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the first occurrence of a Section ll(a)(ii) Event, any Rights beneficially
owned by (i) an Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes such, or
(iii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and 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
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
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
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 Rights 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 continued in the form of election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such exercise, and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in
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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 Rights
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy such cancelled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of 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 Section ll(a)(ii) Event, out of its
authorized and unissued shares of Common Stock and/or other securities or out of
its authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Section ll(a)(ii) Event,
Common Stock and, or other securities) that, as provided in this Agreement
including Section ll(a)(iii) hereof, will be sufficient to permit the exercise
in full of all outstanding Rights, provided, however, that the Company shall not
be required to reserve and keep available shares of Preferred Stock, Common
Stock or other securities sufficient to permit the exercise in full of all
outstanding Rights pursuant to the adjustments set forth in Section ll(a)(ii),
Section ll(a)(iii) or Section 13 hereof unless, and only to the extent that, the
Rights become exercisable pursuant to such adjustments.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Section ll(a)(ii) Event, Common Stock and/or other securities)
issuable and deliverable 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, all shares reserved
for such issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) If necessary to permit the offer and issuance of Preferred Stock
(and, following the occurrence of a Section ll(a)(ii) Event, Common Stock and/or
other securities) issuable and deliverable upon the exercise of Rights, the
Company shall use its best efforts to (i) file, as soon as practicable following
the earliest date after the first occurrence of a Section ll(a)(ii) Event on
which the consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section ll(a)(iii) hereof, or as
soon as is required by law following the Distribution Date, as the case may be,
a registration statement under the Act, with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after such
filing, and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until
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the earlier of (A) the date as of which the Rights are no longer exercisable for
such securities, and (B) the date of the expiration of the Rights. The Company
will also use reasonable efforts to take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the Rights. The Company
may temporarily suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence of this Section
9(c), the exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained or an exemption therefrom shall
have been obtained or be available and until a registration statement (if
required) has been declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all four-thousandths of a share of Preferred
Stock (and, following the occurrence of a Section ll(a)(ii) Event, 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 non
assessable.
(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 Rights Certificates and
of any certificates for a number of four-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of four-thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in respect of a name other than that of,
the registered holder of the Rights Certificates evidencing Rights surrendered
for exercise or to issue or deliver any certificates for a number of
four-thousandths of shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax shall have been paid (any
such tax being payable by the holder of such Rights 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 a number of four-thousandths of a share of Preferred Stock (or
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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 fractional shares of Preferred Stock (or 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 Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
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 (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or 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
Rights 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 or to receive dividends or
other distributions, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number
of shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation and the Company's
capital stock is not converted into securities or property (including
cash) of another Person), except as otherwise provided in this Section
ll(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 other capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of
the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or such capital stock which, if such Right had
been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or
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reclassification. If an event occurs which would require an adjustment
under both this Section ll(a)(i) and Section ll(a)(ii) hereof, the
adjustment provided for in this Section ll(a)(i) shall be in addition
to, and shall be made prior to, any adjustment required pursuant to
Section ll(a)(ii) hereof.
(ii) In the event ("Section ll(a)(ii) Event") that the Stock
Acquisition Date shall have occurred, then promptly following the close
of business on the tenth business day after such Section ll(a)(ii) Event
(or, if the tenth business day after such Section ll(a)(ii) Event occurs
before the Record Date, the close of business on the Record Date),
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the
right to receive, upon exercise thereof, in lieu of a number of
four-thousandths of a share of Preferred Stock, one share of Common
Stock (as constituted on the date of this Agreement) of the Company for
each Right which was exercisable immediately prior to the occurrence of
such Section ll(a)(ii) Event (such number of shares, the "Adjustment
Shares") at an adjusted Purchase Price (the "Section 11 Price") equal to
the product obtained by multiplying the Adjustment Shares by 10% of the
current market price (as determined pursuant to Section ll(d) hereof)
per share of the Common Stock on the date of the occurrence of Such
Section ll(a)(ii) Event; and, following the occurrence of such Section
ll(a)(ii) Event, the Section 11 Price shall be the "Purchase Price" for
all purposes of this Agreement 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; and provided, further, that if the transaction that
would otherwise give rise to the foregoing adjustment is also subject to
the provisions of Section 13 hereof, then only the provisions of Section
13 hereof shall apply and no adjustment shall be made pursuant to this
Section ll(a)(ii).
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's articles of incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) of this
Section ll(a) and the Rights shall become so exercisable, to the extent
permitted by applicable law and any agreements in effect on the date
hereof to which the Company is a party, 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 payment
of the applicable Purchase Price, (l) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or shares or units of shares of
Preferred Stock or other equity securities of the Company, (4) debt
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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 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
ll(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "Section ll(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 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 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 ll(a)(ii) Trigger Date, in order that the Company may seek
stockholder 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
ll(a)(iii), the Company (x) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any authorization
of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For purposes of
this Section ll(a)(iii), the value of the Common Stock shall be the
current market price (as determined pursuant to Section ll(d) hereof)
per share of the Common Stock on the Section ll(a)(ii) Trigger Date and
the value of the Series A Junior Participating Preferred Stock shall be
deemed to be the fair value on such day as determined in good faith by
the Board of Directors. The Board of Directors may, but shall not be
required to, establish procedures to allocate the right to receive
Common Stock upon the exercise of Rights pursuant to this Section
ll(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
forty-five
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(45) calendar days after such record date) Preferred Stock (or shares
having the same rights, privileges and preferences as the shares of Preferred
Stock ("Equivalent Preferred Stock")) or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the current market price (as determined pursuant to Section ll(d)
hereof) per share of Preferred Stock 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,
the numerator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred
Stock (and/or 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 the denominator of which shall be the
number of shares of Preferred Stock outstanding on such record date, plus the
number of additional shares of Preferred Stock and/or Equivalent Preferred 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
may 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 and
shall be binding on the Rights Agent and the holders of the Rights. 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 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 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
corporation) of evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Preferred Stock, but including any dividend
payable in stock other than Preferred Stock) or subscription rights or warrants
(excluding those referred to in Section ll(b) hereof), the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the current market price (as determined pursuant to
Section ll(d) hereof) per share of Preferred Stock on such record date, less the
fair market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or
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evidences of indebtedness so to be distributed or of such subscription rights or
warrants applicable to a share of Preferred Stock and the denominator of which
shall be such current market price (as determined pursuant to Section ll(d)
hereof) 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 be adjusted to be the
Purchase Price which would have been 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 ll(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 thirty (30) consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for purposes of
computations made pursuant to Section ll(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 current market
price per share of the Common Stock is determined during a 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 thirty (30) Trading Day or ten (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 properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case
as reported in the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York
Stock Exchange or the Pacific Stock Exchange or, if the shares of Common
Stock are not listed or admitted to trading on the New York Stock
Exchange or the Pacific 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 Common Stock are listed or admitted to trading or, if the shares of
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
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shares of Common Stock 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 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 as determined in good faith by the Board of
Directors of the Company shall be used. 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 Common Stock are not
listed or admitted to trading on any national securities exchange, a
Business Day. 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 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.
(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 ll(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 a manner described in clause (i) of this
Section ll(d), the "current market price" per share of Preferred Stock
shall be conclusively deemed to be an amount equal to 4,000 (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 four-thousandth of a share of Preferred Stock shall be equal to
the "current market price" of one share of Preferred Stock divided by
4,000.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section ll(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 one-thousandth of a share of Common Stock
or other share or one
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forty-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section ll(e), an adjustment required
by this Section 11 shall be made no later than the earlier of (i) three (3)
years from the date of the transaction which mandates such adjustments, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section ll(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than 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 Preferred Stock contained in Sections ll(a), (b),
(c), (e), (g), (h), (i), (j), (k), and (m), and the provisions of Sections 7, 9,
10, 13 and 14 hereof with respect to the Preferred Stock shall apply on like
terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of four-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 ll(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections ll(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 four-thousandths of a
share of Preferred Stock (calculated to the nearest one forty-thousandth)
obtained by (i) multiplying (x) the number of four-thousandths of a share
covered by a Right immediately prior to this adjustment, by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price, and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment in the
number of four-thousandths of a share of Preferred Stock purchasable upon the
exercise of a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of four-thousandths of a
share of Preferred Stock for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the nearest
one forty-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 adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the
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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 Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section ll(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates 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 Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of four-thousandths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per one four-thousandth of a
share and the number of four-thousandths of a share which were expressed in the
initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then stated value, if any, of the number of
four-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of four-thousandths of a share of
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 number of four-thousandths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of four-thousandths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of
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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 in their good faith judgment the Board of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii) issuance wholly
for cash of shares of Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Preferred Stock, (iv) stock
dividends or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred Stock
shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section ll(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section ll(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating 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 ll(o) hereof), if (x) at the time of or immediately after
such consolidation, merger, sale or transfer 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, sale or transfer, 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.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or Section 26 hereof, take (or
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend Declaration
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
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into a smaller number of shares, the Purchase Price per Right immediately
following such event shall be equal to the product of the Purchase Price per
Right immediately prior to such event multiplied by a fraction, the numerator
which shall be the total number of Rights outstanding immediately prior to such
event and the denominator of which shall be the total number of Rights
outstanding immediately following such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25 hereof. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall not
affect the validity of or the force or effect of or the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained. Any adjustment to be made
pursuant to Sections 11 and 13 of this Agreement shall be effective as of the
date of the event giving rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event ("Section 13(a) Event") that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section ll(o) hereof), and the
Company shall not be the continuing or surviving corporation of such
consolidation or merger, (y) any Person (other than a Subsidiary of the Company
in a transaction which complies with Section ll(o) hereof) shall consolidate
with, or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger, and, in
connection with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for stock or other
securities of any other Person 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 transaction or a series of related 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 Person or Persons
(other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section ll(o) hereof), then, and in
each such case, proper provisions shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon
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the exercise thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal
to the result obtained by (1) multiplying the then current Purchase Price by the
number of four-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 ll(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 event, multiplying the number of such four-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Section ll(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and (2) 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 50% of the current market price (determined pursuant to Section
ll(d)(i) hereof) per share of the Common Stock of such Principal Party on the
date of consummation of such Section 13 Event (or the fair market value on such
date of other securities or property of the Principal Party, as provided for
herein); provided that the Purchase Price and the number of shares of common
stock of such Principal Party issuable upon exercise of each Right shall be
further adjusted as provided in this Agreement to reflect any events occurring
after the date of the first occurrence of a Section 13 event; (ii) such
Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company pursuant to
this Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Purchase Price,
such cash, shares, rights, warrants and other property which such holder would
have been entitled to receive had he, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property; and (v) the provisions of
Section ll(a)(ii) hereof shall be of no effect following the first occurrence of
any
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Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a): (A) the Person that is the
issuer of any securities into which shares of Common Stock of the
Company are converted in such merger or consolidation, or, if there is
more than one such issuer, the issuer whose Common Stock has the
greatest market value or (B) if no securities are so issued, (x) the
Person that is the other party to such merger or consolidation and
survives said merger or consolidation, or, if there is more than one
such Person, the Person whose Common Stock has the greatest market value
or (y) if the Person that is the other party to the merger or
consolidation does not survive the merger or consolidation, the Person
that does survive the merger or consolidation (including the Company if
it survives); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions, or, if each
Person that is a party to such transaction or transactions receives the
same portion of the assets or earning power so transferred or if the
Person receiving the greatest portion of the assets or earning power
cannot be determined, whichever of such Persons as is the issuer of
Common Stock having the greatest market value of shares outstanding;
provided, however, that in any such case, (1) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect subsidiary of
another Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (2) if such
Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such persons
is the issuer of the Common Stock having the greatest aggregate market
value.
(c) If, for any reason, the Rights cannot be exercised for the Common
Stock of such Principal Party, then a holder of Rights will have the right to
exchange each Right for cash from such Principal Party in an amount equal to
twice the Purchase Price as calculated above. If, for any reason, the foregoing
formulation cannot be applied to determine the cash amount to which the holder
of Rights is entitled, then the Continuing Directors on the Board of Directors
of the Company shall determine such amount reasonably and in good faith.
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(d) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and 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), (b) and (c) of this Section
13 and further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer 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, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date and similarly comply with applicable state securities
laws;
(ii) will deliver to holders of the Rights historical financial
statements of the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act;
(iii) use its best efforts, if the Common Stock of the Principal
Party shall become listed on a national securities exchange, to list (or
continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common
Stock of the Principal Party shall not be listed on a national
securities exchange, to cause the Rights and the securities purchasable
upon exercise of the Rights to be reported by NASDAQ or such other
system then in use; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
ll(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
(e) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs (x) and
(y) of Section 13(a) if (i) such transaction is consummated with a Person or
Persons who
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acquired shares of Common Stock pursuant to a tender offer or exchange offer for
all outstanding shares of Common Stock which complies with the provisions of
Section ll(a)(ii)(A) hereof (or a wholly owned subsidiary of any such Person or
Persons), (ii) the price per share of Common Stock offered in such transaction
is not less than the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant to such tender offer
or exchange offer, and (iii) the form of consideration being offered to the
remaining holders of shares of Common Stock pursuant to such transaction is the
same as the form of consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by this Section
13(e), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section ll(p) hereof, or to
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, there shall be paid to the registered holders of the Rights
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 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 of the Rights 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 Pacific Stock Exchange or, if the Rights are not listed or admitted
to trading on the New York Stock Exchange or Pacific 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
four-
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thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one four-thousandth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one four-thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one four-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one four-thousandth of a share of Preferred Stock shall be one four-thousandth
of the current market value of a share of Preferred Stock (as determined
pursuant to Section ll(d)(ii) hereof) on 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 Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be
the closing price of one share of Common Stock (as determined pursuant to
Section ll(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 permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights 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 Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
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Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only
in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purposes, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and the
Rights Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other
than the Company or the Rights Agents) for all purposes whatsoever, and neither
the Company nor the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as 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, 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. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purposes the holder of the number of
four-thousandths of a share 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 Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
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action, or to receive notice of meetings or other actions affecting stockholders
(except as provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements 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, 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. Notwithstanding
anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever, even if the Rights Agent has been advised of the likelihood of such
loss or damage and regardless of the form of action.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection with
its administration of this Agreement in reliance upon any Rights Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency
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created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force Provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of "current market price") be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full 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.
(d) The Rights Agent shall not be liable for or by reason of the
statements
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of fact or recitals contained in this Agreement or in the Rights Certificates or
be required to verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not 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 Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any adjustment required under the provisions of
Section 11 or Section 13 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of the certificate described in
Section 12 hereof setting forth 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 Common Stock or Preferred Stock to
be issued pursuant to this Agreement or any Rights Certificates or as to whether
any shares of Common Stock or Preferred Stock will, when so 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 from the
Chairman of the Board, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of the Company,
and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, 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 itself or by or
through its
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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
and continued employment 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
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise of transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent
(with or without cause) upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock, by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (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 Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Company), then the incumbent Rights
Agent or any registered holder of any Rights Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of any other state of the United States in good standing, which
is authorized under such laws to exercise corporate trust or stock transfer
powers or (b) an affiliate of a corporation described in clause (a) of this
sentence. After appointment, the successor Rights Agent shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent
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without further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and the
Preferred Stock, and mail a notice thereof in writing to the registered holders
of the Rights 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 Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights 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 Rights 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 of 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 Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the close of business on the earliest of (i) the tenth business
day after the date of the first Section ll(a)(ii) Event, (ii) the date of the
first Section 13(a) event, or (iii) the Final Expiration Date, redeem all but
not less than all the then outstanding Rights at a redemption price of $0.01 per
Right, as such amount may be 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"). The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the "current market price", as defined in Section ll(d)(i)
hereof, of the Common Stock at the time of redemption) or
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39
any other form of consideration deemed appropriate by the Board of Directors.
(b) 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 so held, without any interest thereon. Promptly after the
action of the Board of Directors ordering the redemption of the Rights, 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 all such holders at
each holder's last address as it appears 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. The failure to give notice required by this
Section 23(b) or any defect therein shall not affect the legality or validity of
the action taken by the Company.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to effect any reclassification of its Preferred
Stock (other than a reclassification involving only the subdivision of
outstanding shares of Preferred Stock), or (iv) to effect any consolidation or
merger into or with any other Person (other than a Subsidiary of the Company in
a transaction which complies with Section ll(o) hereof), or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one transaction or a series of related 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 ll(o) hereof), or (v) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution of
rights or warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the shares of Preferred
Stock, if any such date is to be fixed, and such notice shall be so
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given in the case of any action covered by clause (i) or (ii) above at least ten
(10) days prior to the record date for determining holders of the shares of
Preferred Stock for purposes of such action, and in the case of any such other
action, at least ten (10) days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the shares of
Preferred Stock whichever shall be the earlier. The failure to give notice
required by this Section 24 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.
(b) In case any of the events set forth in Section ll(a)(ii) hereof
shall occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the consequences of
the event to holders of Rights under Section ll(a)(ii) hereof, and (ii) all
references in the preceding paragraph to Preferred Stock shall be deemed
thereafter to refer to Common Stock and/or, if appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Computer Sciences Corporation
0000 Xxxx Xxxxx Xxxxxx
Xx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Vice President,
General Counsel and Secretary
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 Rights
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:
ChaseMellon Shareholder Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Reorganization Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid,
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41
addressed to such holder at the address of such holder as shown on the registry
books of the Transfer Agent.
Section 26. Supplements and Amendments Prior to the close of business on
the earliest of (i) the tenth business day after the date of the First Section
ll(a)(ii) Event, (ii) the date of the first Section 13(a) Event, or (iii) the
Final Expiration Date and, in each case subject to extension by the Board of
Directors by amendment hereof, and subject to the penultimate sentence of this
Section 26, the Company may, in its sole and absolute discretion and the Rights
Agent shall, if the Company so directs, supplement or amend any provision of
this Agreement without the approval of any holders of certificates representing
shares of Common Stock. Thereafter, subject to the penultimate sentence of this
Section 26, the Company may and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights 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 change or supplement any provision
hereunder in any manner which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of any
such Person); provided, this Agreement may not be supplemented or amended to
lengthen, pursuant to clauses (i) or (ii) of this sentence, (A) a time period
relating to when the Rights may be redeemed or this Agreement amended at the
sole and absolute discretion of the Company at such time as the Rights are not
then redeemable, or (B) any other time period unless such lengthening is for the
purpose of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than any Acquiring Person and its
Associates or Affiliates). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 26, the Rights Agent
shall execute such supplement or amendment. Notwithstanding anything contained
in this Agreement to the contrary, no supplement or amendment shall be made
which changes the Redemption Price or the Final Expiration Date. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 27. 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 28. Determination and Actions by the Board of Directors. etc.
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 last sentence
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of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under the Exchange
Act. The Board of Directors of the Company (or, as set forth herein, certain
specified members thereof) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, but not limited to, a
determination to redeem or not redeem the Rights, or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including,
for purposes of clause (y) below, all omissions with respect to the foregoing)
which are done or made by the Board of Directors of the Company in good faith,
shall (x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject any member of
the Board of Directors to any liability to the holders of the Rights or to any
other Person.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of 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 Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 30. 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 business day following the date of such determination by the Board of
Directors of the Company.
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Nevada and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be
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performed entirely within such State.
Section 32. 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 33. 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.
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44
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.
Attest: COMPUTER SCIENCES CORPORATION
By: /s/Xxxxxxx X. Xxxx By: /s/Van X. Xxxxxxxxx
------------------------------ ---------------------------------
Xxxxxxx X. Xxxx Van X. Xxxxxxxxx
Secretary President
[ Seal ]
Attest: CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/Xxxxx X. Xxxxx By: /s/Xxxxx X. Xxxxxxxxx
----------------------------- ---------------------------------
Xxxxx X. Xxxxx Xxxxx X. Xxxxxxxxx
Team Leader Officer
[ Seal ]
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EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
$1.00 PAR VALUE
OF
COMPUTER SCIENCES CORPORATION
Pursuant to Section 78.195 of the General Corporation
Law of the State of Nevada
We, Xxxxxxx X. Xxxx, Vice President, and Xxxxxxx X. Xxxxxxx, Assistant
Secretary, of COMPUTER SCIENCES CORPORATION, a corporation organized and
existing under the General Corporation Law of the State of Nevada, in accordance
with the provisions of Section 78.195 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by
the Restated Articles of Incorporation of the Corporation: (i) the Board on
December 21, 1988 adopted a resolution creating a series of Preferred Stock, par
value $1.00 per share, designated as Series A Junior Participating Preferred
Stock, and caused to be filed with the Nevada Secretary of State on January 13,
1989 a Certificate of Designations with respect thereto; and (ii) the Board on
October 30, 1995 amended and restated such resolution in its entirety and caused
to be filed with the Nevada Secretary of State on November 3, 1995 a Certificate
of Amendment of Certificate of Designations with respect to the Series A Junior
Participating Preferred Stock; and
That on June 17, 1996, prior to the issuance of any shares of Series A
Junior Participating Preferred Stock, the Board of Directors, pursuant to the
authority conferred upon the Board by the Restated Articles of Incorporation,
again amended and restated such resolution in its entirety, effective as of
August 1, 1996, as follows:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of its Restated
Articles of Incorporation, a series of Preferred Stock of the Corporation be,
and it hereby is, created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof, are as follows:
46
Section 1. Designation and Amount. The shares of such series shall be
designated as Series A Junior Participating Preferred Stock, par value $1.00 per
share (the "Series A Preferred Stock"), and the number of shares constituting
such series shall be Two Hundred Thousand (200,000).
Section 2. Dividends and Distributions.
(a) The holders of shares of Series A Preferred Stock, in preference to
the holders of shares of Common Stock, $1.00 per share, of the Corporation (the
"Common Stock") and of any other junior stock of the Corporation that may be
outstanding, shall be entitled to receive, when, as and if declared by the Board
of Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the fifteenth day of January, April, July and October in each
year (each such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00
per share ($4.00 per annum), or (ii) subject to the provision for adjustment
hereinafter set forth, 4,000 times the aggregate per share amount of all cash
dividends, and 4,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock, or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event that the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common Stock, then and
in each such event, the amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under clause (ii) 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.
(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided, however,
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 ($4.00 per annum)
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47
on the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series A Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall not bear interest. Each share of
Preferred Stock shall rank on a parity with each other share of Preferred Stock,
regardless of series, with respect to the payment of dividends at the
respectively designated rates. Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(a) Each share of Series A Preferred Stock shall entitle the holder
thereof to 1 vote with the right to cumulate votes in certain instances in the
manner set forth in the Restated Articles of Incorporation of the Corporation on
all matters submitted to a vote of the stockholders of the Corporation. In the
event that the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then and in
each such event, the number of votes per share to which holders of shares of
Series A Preferred Stock are entitled shall be increased, in the case of a
subdivision, or in the case of such a dividend, or reduced, in the case of a
combination, in the same proportion as the subdivision, increase by dividend, or
combination of the Common Stock.
(b) Except as otherwise provided in the Restated Articles of
Incorporation of the Corporation or herein or by law, the holders of shares of
Series A Preferred
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Stock and the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(c) In addition, the holders of shares of Series A Preferred Stock shall
have the following special voting rights:
In the event that at any time dividends on Series A Preferred Stock,
whenever accrued and whether or not consecutive, shall not have been paid or
declared and a sum sufficient for the payment thereof set aside, in an amount
equivalent to six quarterly dividends on all shares of Series A Preferred Stock
at the time outstanding, then and in each such event, the holders of shares of
Series A Preferred Stock and each other series of preferred stock now or
hereafter issued that shall be accorded such class voting right by the Board of
Directors and that shall have the right to elect two directors as the result of
a prior or subsequent default in payment of dividends on such series (each such
other series being hereinafter called "Other Series of Preferred Stock"), voting
separately as a class without regard to series, shall be entitled to elect two
directors at the next annual meeting of stockholders of the Corporation, in
addition to the directors to be elected by the holders of all shares of the
Corporation entitled to vote for the election of directors, and the holders of
all shares (including the Series A Preferred Stock) otherwise entitled to vote
for directors, voting separately as a class, shall be entitled to elect the
remaining members of the Board of Directors, provided that the Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a class,
shall not have the right to elect more than two directors. Such special voting
right of the holders of shares of Series A Preferred Stock may be exercised
until all dividends in default on the Series A Preferred Stock shall have been
paid in full or declared and funds sufficient therefor set aside, and when so
paid or provided for, such special voting right of the holders of shares of
Series A Preferred Stock shall cease, but subject always to the same provisions
for the vesting of such special voting rights in the event of any such future
dividend default or defaults. At any time after such special voting rights shall
have so vested in the holders of shares of Series A Preferred Stock, the
Secretary of the Corporation may, and upon the written request of the holders of
record of 10% or more in number of the shares of Series A Preferred Stock and
each Other Series of Preferred Stock then outstanding addressed to the Secretary
at the principal executive office of the Corporation shall, call a special
meeting of the holders of shares of Preferred Stock so entitled to vote, for the
election of the directors to be elected by them as herein provided, to be held
within 60 days after such call and at the place and upon the notice provided by
law and in the Bylaws for the holding of meetings of stockholders; provided,
however, that the Secretary shall not be required to call such special meeting
in the case of any such request received less than 90 days before the date fixed
for any annual meeting of stockholders, and if in such case such special meeting
is not called or held, the holders of shares of Preferred Stock so entitled to
vote shall be entitled to exercise the special voting rights provided in this
paragraph
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49
at such annual meeting. If any such special meeting required to be called as
above provided shall not be called by the Secretary within 30 days after receipt
of any such request, then the holders of record of 10% or more in number of the
shares of Series A Preferred Stock and each Other Series of Preferred Stock then
outstanding may designate in writing one of their number to call such meeting,
and the person so designated may, at the expense of the Corporation, call such
meeting to be held at the place and upon the notice given by such person, and
for that purpose shall have access to the stock books of the Corporation. No
such special meeting and no adjournment thereof shall be held on a date later
than 60 days before the annual meeting of stockholders. If, at any meeting so
called or at any annual meeting held while the holders of shares of Series A
Preferred Stock have the special voting rights provided for in this paragraph,
the holders of not less than 40% of the shares of Series A Preferred Stock and
each Other Series of Preferred Stock then outstanding are present in person or
by proxy, which percentage shall be sufficient to constitute a quorum for the
election of additional directors as herein provided, the then authorized number
of directors of the Corporation shall be increased by two, as of the time of
such special meeting or the time of the first such annual meeting held while
such holders have special voting rights and such quorum is present, and the
holders of shares of Series A Preferred Stock and each Other Series of Preferred
Stock, voting as a class, shall be entitled to elect the additional directors so
provided for. If the directors of the Corporation are then divided into classes
under provisions of the Restated Articles of Incorporation of the Corporation or
the Bylaws, the two additional directors shall be members of those respective
classes of directors in which a vacancy is created as a result of such increase
in the authorized number of directors. If the foregoing expansion of the size of
the Board of Directors shall not be valid under applicable law, then the holders
of shares of Series A Preferred Stock and of each Other Series of Preferred
Stock, voting as a class, shall be entitled, at the meeting of stockholders at
which they would otherwise have voted, to elect directors to fill any then
existing vacancies on the Board of Directors, and shall additionally be
entitled, at such meeting and each subsequent meeting of stockholders at which
directors are elected, to elect all of the directors then being elected until by
such class vote two members of the Board of Directors have been so elected. Upon
the election at such meeting by the holders of shares of Series A Preferred
Stock and each Other Series of Preferred Stock, voting as a class, of the
directors they are entitled so to elect, the persons so elected, together with
such persons as may be directors or as may have been elected as directors by the
holders of all shares (including Series A Preferred Stock) otherwise entitled to
vote for directors, shall constitute the duly elected directors of the
Corporation. The additional directors so elected by holders of shares of Series
A Preferred Stock and each Other Series of Preferred Stock, voting as a class,
shall serve until the next annual meeting or until their respective successors
shall be elected and qualified, or if any such director is a member of a class
of directors under provisions dividing the directors into classes, each such
director shall serve until the annual meeting at which the term of office of
such director's class shall
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expire or until such director's successor shall be elected and shall qualify,
and at each subsequent meeting of stockholders at which the directorship of any
director elected by the vote of holders of shares of Series A Preferred Stock
and each other Series of Preferred Stock under the special voting rights set
forth in this paragraph is up for election, said special class voting rights
shall apply in the reelection of such director or in the election of such
director's successor; provided, however, that whenever the holders of shares of
Series A Preferred Stock and each Other Series of Preferred Stock shall be
divested of the special rights to elect two directors as above provided, the
terms of office of all persons elected as directors by the holders of shares of
Series A Preferred Stock and each Other Series of Preferred Stock, voting as a
class, or elected to fill any vacancies resulting from the death, resignation,
or removal of directors so elected by the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock, shall forthwith
terminate (and, if applicable, the number of directors shall be reduced
accordingly). If, at any time after a special meeting of stockholders or an
annual meeting of stockholders at which the holders of shares of Series A
Preferred Stock and each Other Series of Preferred Stock, voting as a class,
have elected directors as provided above, and while the holders of shares of
Series A Preferred Stock and each Other Series of Preferred Stock shall be
entitled so to elect two directors, the number of directors who have been
elected by the holders of shares of Series A Preferred Stock and each Other
Series of Preferred Stock (or who by reason of one or more resignations, deaths
or removals have succeeded any directors so elected) shall by reason of
resignation, death or removal be less than two but at least one, the vacancy in
the directors so elected by the holders of shares of the Series A Preferred
Stock and each Other Series of Preferred Stock may be filled by the remaining
director elected by such holders, and in the event that such election shall not
occur within 30 days after such vacancy arises, or in the event that there shall
not be incumbent at least one director so elected by such holders, the Secretary
of the Corporation may, and upon the written request of the holders of record of
10% or more in number of the shares of Series A Preferred Stock and each Other
Series of Preferred Stock then outstanding addressed to the Secretary at the
principal office of the Corporation shall, call a special meeting of the holders
of shares of Series A Preferred Stock and each Other Series of Preferred Stock
so entitled to vote, for an election to fill such vacancy or vacancies, to be
held within 60 days after such call and at the place and upon the notice
provided by law and in the Bylaws for the holding of meetings of stockholders;
provided, however, that the Secretary shall not be required to call such special
meeting in the case of any such request received less than 90 days before the
date fixed for any annual meeting of stockholders, and if in such case such
special meeting is not called, the holders of shares of Preferred Stock so
entitled to vote shall be entitled to fill such vacancy or vacancies at such
annual meeting. If any such special meeting required to be called as above
provided shall not be called by the Secretary within 30 days after receipt of
any such request, then the holders of record of 10% or more in number of the
shares of Series A Preferred Stock and each Other Series of Preferred Stock then
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51
outstanding may designate in writing one of their number to call such meeting,
and the person so designated may, at the expense of the Corporation, call such
meeting to be held at the place and upon the notice above provided, and for that
purpose shall have access to the stock books of the Corporation; no such special
meeting and no adjournment thereof shall be held on a date later than 60 days
before the annual meeting of stockholders.
(d) Nothing herein shall prevent the directors or stockholders from
taking any action to increase the number of authorized shares of Series A
Preferred Stock, or increasing the number of authorized shares of Preferred
Stock of the same class as the Series A Preferred Stock or the number of
authorized shares of Common Stock, or changing the par value of the Common Stock
or Preferred Stock, or issuing options, warrants or rights to any class of stock
of the Corporation as authorized by the Restated Articles of Incorporation of
the Corporation, as it may hereafter be amended.
(e) Except as set forth herein, holders of shares of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote as set forth in the
Restated Articles of Incorporation of the Corporation or herein or by law) for
taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever any dividends or other distributions payable on the Series
A Preferred Stock as provided in Section 2 hereof are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding shall have been paid
in full, the Corporation shall not, directly or indirectly:
(i) declare or pay dividends on, or make any other distributions
with respect to, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
A Preferred Stock;
(ii) declare or pay dividends on, or make any other distributions
with respect to any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, except dividends paid ratably on shares of the
Series A Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (both as to dividends and upon
liquidation, dissolution or winding up) the Series A Preferred Stock,
provided that the
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Corporation may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock of the
Corporation ranking junior (both as to dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of the
Corporation unless the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. Such
shares may not be reissued as part of any series of preferred stock including
Series A Preferred Stock).
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made to:
(a) the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares of Series A
Preferred Stock shall have received the greater of (i) $40.00 per share ($.01
per one four-thousandth of a share), plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, or (ii) an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 4,000 times the aggregate amount
to be distributed per share to holders of shares of Common Stock (the "Series A
Liquidation Preference"); or
(b) the holders of shares of Preferred Stock regardless of series,
except distributions made ratably on the Series A Preferred Stock and all other
Preferred Stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up.
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53
In the event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then and in each such event, the amount to which holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event under clause (ii) at paragraph (a) of this Section 6 shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event, and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In the event that the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, or otherwise changed, then and in
each such event, the shares of Series A Preferred Stock shall at the same time
be similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 4,000 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 that the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then and in each such event, the amount
set forth in the preceding sentence with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event, and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable. Notwithstanding the foregoing, the Corporation may acquire
shares of Series A Preferred Stock in any other manner permitted by law, the
Restated Articles of Incorporation of the Corporation or herein.
Section 9. Amendment. The Restated Articles of Incorporation of the
Corporation shall not be amended in any manner that would materially and
adversely alter or change the powers, preferences or special rights of the
Series A Preferred Stock without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series A Preferred Stock, voting
together as a single series.
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Section 10. Fractional Shares. Series A Preferred Stock may be issued in
fractions of a share (in one four-thousandth (1/4000) of a share and integral
multiples thereof) that shall entitle the holder thereof, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of shares of Series A Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate of
Amendment and do affirm the foregoing as true under the penalties of perjury
this day of , 19 .
------------------------------
Xxxxxxx X. Xxxx
Vice President
------------------------------
Xxxxxxx X. Xxxxxxx
Assistant Secretary
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EXHIBIT B
FORM OF
RIGHTS CERTIFICATE
Certificate No. R-______ ______ Rights
NOT EXERCISABLE AFTER DECEMBER 21, 1998 OR EARLIER IF REDEEMED. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY CERTAIN PERSONS OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.
Rights Certificate
COMPUTER SCIENCES CORPORATION
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 and conditions of a
Rights Agreement (the "Rights Agreement") dated as of December 21, 1988, as
amended and restated as of August 1, 1996, by and between COMPUTER SCIENCES
CORPORATION, a Nevada corporation (the "Company"), and CHASEMELLON SHAREHOLDER
SERVICES, L.L.C. (the "Rights Agent"), to purchase from the Company at any time
prior to 5:00 o'clock p.m., California time, on the earliest of (i) the date of
the action of a majority, but not less than three, of the Independent Directors
directing the Company to redeem the Rights pursuant to Section 23(a) of the
Rights Agreement, (ii) the date upon which the Rights are redeemed pursuant to
Section 25 of the Rights Agreement, or (iii) December 21, 1998, at the office or
agency of the Rights Agent at 00 Xxxxxxxxxx Xxxx, Xxxxxxxx Xxxxxx, Xxxxxxxxxx
Xxxx, Xxx Xxxxxx 00000, or at the office of its successor as Rights Agent, one
four-thousandth of a fully paid and nonassessable share of Series A Junior
Participating Cumulative Preferred Stock, par value $1.00 per share, of the
Company (a "Preferred Share") or, in certain circumstances, other securities or
other property, at a purchase price of $235.00 per one four-thousandth of a
Preferred Share (the "Exercise Price"), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase, including Certificate,
on the reverse side hereof completed and duly executed, with signature
guaranteed.
The number of Rights represented by this Rights Certificate and the
Exercise Price set forth above are the number of Rights and the Exercise Price
as of December 21, 1988, based upon the Preferred Shares as constituted on such
date. As provided in the Rights Agreement, the Exercise Price and the number of
56
Preferred Shares or other securities or other property that may be purchased
upon the exercise of the Rights represented by this Rights Certificate are
subject to modification and adjustment upon the occurrence of certain events.
The Rights Agreement contains a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of Rights Certificates. This Rights Certificate is
subject to all the terms and conditions of the Rights Agreement, which terms and
conditions are hereby incorporated herein by reference and made a part hereof.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned offices of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
presentation and surrender at the above-mentioned offices of the Rights Agent,
with the Form of Assignment, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date
representing Rights entitling the holder thereof to purchase a like aggregate
number of Preferred Shares or, in certain circumstances, other securities or
other property, as the Rights represented by the Rights Certificate or Rights
Certificates surrendered shall have entitled such holder to purchase. If this
Rights Certificate shall be exercised in part, the holder shall be entitled to
receive, upon the surrender hereof with the Form of Election to Purchase,
including Certificate, on the reverse side hereof completed and duly executed,
with signature guaranteed, another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised. Subject to the provisions of the
Rights Agreement, the Rights represented by this Rights Certificate may be
redeemed by the Company, at its option, at a redemption price of $.01 per Right.
No fractional securities shall be issued upon the exercise of any Right
or Rights represented hereby (other than fractions of Preferred Shares that are
integral multiples of one four-thousandth of a Preferred Share, that may, at the
option of the Company, be represented by depositary receipts), but in lieu
thereof, a cash payment shall be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or other securities or property that may at any time be issuable on the
exercise hereof, nor shall anything contained 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,
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57
until the Right or Rights represented by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights 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 ____________, _____.
Attest: COMPUTER SCIENCES CORPORATION
a Nevada corporation
By__________________________ By__________________________________
Name: Name:
Title: Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.,
as Rights Agent
By___________________________
Name:
Title:
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Form of Reverse Side of Rights Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer any or all of the Rights
represented by this Rights Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
________________________________________________________________________________
________________________________________________________________________________
(Name, address and social security or other identifying number of
transferee)______________________________ ( ) of the Rights represented
by this Rights Certificate, together with all right, title and interest in and
to said Rights, and hereby irrevocably constitutes and appoints
______________________ attorney to transfer said Rights on the books of Project
First Corporation with full power of substitution.
Dated:_______________, 19___ _____________________________
(Signature)
Signature Guaranteed:
Certificate
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this
Rights Certificate are not Beneficially owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: _______________, 19___ ______________________________
(Signature)
Signature Guaranteed:
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Form of Reverse Side of Rights Certificate
(continued)
NOTICE
The signatures to the foregoing Assignment and the foregoing
Certificate, if applicable, must correspond to the name as written upon the face
of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a member firm of
a registered national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company may deem the Rights represented by this Rights
Certificate to be Beneficially Owned by a 20% Stockholder or an Affiliate or
Associate of a 20% Stockholder (as such capitalized terms are defined in the
Rights Agreement), and not issue any Rights Certificate or Rights Certificates
in exchange for this Rights Certificate.
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Form of Reverse Side of Rights Certificate
(continued)
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise any or all of the Rights
represented by this Rights Certificate)
To COMPUTER SCIENCES CORPORATION:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other Person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security _____________________________
or other identifying number
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security ______________________________
or other identifying number
________________________________________________________________________________
________________________________________________________________________________
(Please print name and address)
Dated: ______________, 19___ ______________________________
(Signature)
Signature Guaranteed:
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Form of Reverse Side of Rights Certificate
(continued)
Certificate
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this
Rights Certificate are not Beneficially Owned by a 20% Stockholder or an
Affiliate or Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement).
Dated: ______________ 19___ ______________________________
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Election and the foregoing Certificate,
if applicable, must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
In the event that the foregoing Certificate is not duly executed, with
signature guaranteed, the Company may deem the Rights represented by this Rights
Certificate to be Beneficially Owned by a 20% Stockholder or an Affiliate or
Associate of a 20% Stockholder (as such capitalized terms are defined in the
Rights Agreement), and not issue any property or certificate for securities upon
the exercise of this Rights Certificate or issue any new Rights Certificate for
any remaining balance of unexercised Rights represented by this Rights
Certificate.
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EXHIBIT C
SUMMARY OF THE RIGHTS
On December 21, 1988, the Board of Directors of Computer Sciences
Corporation (the "Company") authorized and declared a dividend distribution of
one preferred stock purchase right (a "Right") for each share of common stock,
$1.00 par value, of the Company (the "Common Stock") outstanding at the close of
business on January 3, 1989 (the "Record Date"), and authorized the issuance of
one Right for each share of Common Stock issued between the Record Date (whether
originally issued or delivered from the Company's treasury) and the Distribution
Date (as defined in Section 2 below).
The following is a brief description of the Rights. It is intended to
provide a general description only and is subject to the detailed terms and
conditions of a Rights Agreement (the "Rights Agreement") dated as of December
21, 1988, as amended and restated as of August 1, 1996, by and between the
Company and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (the
"Rights Agent").
1. Common Share Certificates Representing Rights
Until the Distribution Date, (a) the Rights are not exercisable, (b) the
Rights are attached to and trade only together with the Common Shares and (c)
Common Share certificates represent the Rights related thereto. Common Share
certificates issued after the Record Date and prior to the Distribution Date
will contain a notation incorporating the Rights Agreement by reference.
2. Distribution Date
The "Distribution Date" is the earlier of (a) the tenth business day
following the date of the first public announcement that any person (other than
the Company or certain related entities) has become the beneficial owner of 20%
or more of the outstanding Common Shares (such person is a "20% Stockholder" and
the date of such public announcement is the "20% Ownership Date") or (b) the
tenth business day following the date of the commencement of, or the
announcement of an intention to make, a tender offer or exchange offer by any
Person (other than the Company or certain related entities), if upon the
consummation thereof such person would be the owner of at least 30% of the
Common Shares.
Upon the close of business on the Distribution Date, the Rights will
separate from the Common Shares, Right certificates will be issued and the
Rights will become exercisable to purchase Preferred Shares, Common Shares or
other securities as described in Section 4 below.
63
3. Expiration of Rights
The Rights will expire on December 21, 1998, unless earlier redeemed.
4. Exercise of Rights
Rights may be exercised, at the option of the holders, pursuant to
paragraphs (a), (b) or (c) below. No Right may be exercised more than once or
pursuant to more than one of such paragraphs. From and after the first event of
the type described in paragraphs (b) or (c) below, each Right that is
beneficially owned by a 20% Stockholder or that was attached to a Common Share
that is subject to an option beneficially owned by a 20% Stockholder will be
void.
(a) Right to Purchase Preferred Shares. Unless the Rights have
previously expired or been redeemed, from and after the close of business on the
Distribution Date, each Right (other than a Right that has become void) will be
exercisable to purchase one four-thousandth of a share of Series A Junior
Participating Cumulative Preferred Stock, par value $1.00 per share, of the
Company (the "Preferred Shares"), at the exercise price calculated in accordance
with the terms of the Rights Agreement (as such price may be adjusted from time
to time to prevent dilution, the "Exercise Price"). The Exercise Price as of
August 1, 1996 was $78.33. Prior to the Distribution Date, the Company may
substitute for all or any portion of the Preferred Shares that would otherwise
be issuable upon exercise of the Rights, cash, assets or other securities having
the same aggregate value as such Preferred Shares. The Preferred Shares are
nonredeemable and may not be issued except upon exercise of Rights. The holder
of a Preferred Share is entitled to receive when, as and if declared, the
greater of (a) cash and non-cash dividends in an amount equal to 4,000 times the
dividends declared on each Common Share or (b) a preferential annual dividend of
$4.00 per Preferred Share ($.001 per one four-thousandth of a Preferred Share).
In the event of liquidation, the holders of Preferred Shares will be entitled to
receive a liquidation payment in an amount equal to the greater of (x) $40.00
per Preferred Share ($.01 per one four-thousandth of a Preferred Share), plus
all accrued and unpaid dividends and distributions on the Preferred Shares, or
(y) an amount equal to 4,000 times the aggregate amount to be distributed per
Common Share. Each Preferred Share has one vote, voting together with the Common
Shares. In the event of any merger, consolidation or other transaction in which
Common Shares are exchanged, the holder of a Preferred Share will be entitled to
receive 4,000 times the amount received per Common Share. The rights of the
Preferred Shares as to dividends, voting and liquidation preferences are
protected by anti-dilution provisions.
(b) Right to Purchase Common Shares of the Company. Unless the Rights
have previously expired or been redeemed, from and after the close of business
on the tenth business
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64
day following the 20% Ownership Date (or, if the tenth business day after the
20% ownership Date occurs before the Record Date, the close of business on the
Record Date), each Right (other than a Right that has become void) will be
exercisable to purchase one Common Share at 10% of the then current market value
of the Common Shares. If the Company does not have sufficient Common Shares
available for all Rights to be exercised, the Company will substitute for all or
any portion of the Common Shares that would otherwise be issuable upon the
exercise of the Rights, cash, assets or other securities or any combination of
the foregoing having the same aggregate value as such Common Shares.
(c) Right to Purchase Common Stock of a Successor Corporation. Unless
the Rights have previously expired or been redeemed, if, on or after the 20%
Ownership Date, (a) the Company is acquired in a merger or other business
combination in which the Company is not the surviving corporation or in which
the outstanding Common Shares are changed into or exchanged for stock or assets
of another person or (b) 50% or more of the Company's consolidated assets or
earning power are sold (other than in transactions in the ordinary course of
business), then each Right (other than a Right that has become void) will
thereafter be exercisable to purchase, at the Exercise Price (initially
$235.00), shares of common stock of the surviving corporation or purchaser,
respectively, with an aggregate market value equal to two times the Exercise
Price. If the surviving corporation or purchaser does not have sufficient common
stock available or is not publicly held, then each Right can be put to the
surviving corporation or purchaser for a cash payment equal to the Exercise
Price.
5. Adjustments to Prevent Dilution. The Exercise Price, the number of
outstanding Rights and the number of Preferred Shares or Common Shares issuable
upon exercise of the Rights are subject to adjustment from time to time as set
forth in the Rights Agreement in order to prevent dilution.
6. Cash Paid Instead of Issuing Fractional Securities. No fractional
securities will be issued upon exercise of a Right (other than fractions of
Preferred Shares that are integral multiples of one four-thousandth of a
Preferred Share and that may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash will be made
based on the market price of such securities.
7. Redemption. At any time prior to the close of business on the
earliest of (i) the tenth business day after the date of the first event of the
type described in Section 4(b) above, (ii) the date of the first event of the
type described in Section 4(c) above or (iii) the Rights' date of expiration
given in Section 3 above, the Board of Directors may direct the Company to
redeem the Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"), and the Company
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65
will so redeem the Rights. Thereafter, the right to exercise Rights will
terminate and the only right of the holders of Rights will be to receive the
Redemption Price.
8. No Stockholder Rights Prior to Exercise. Until a Right is exercised,
the holder thereof, as such, will have no rights as a stockholder of the Company
(other than rights resulting from such holder's ownership of Common Shares),
including, without limitation, the right to vote or receive dividends.
9. Amendment of Rights Agreement. At any time prior to the close of
business on the earliest of (i) the tenth business day after the date of the
first event of the type described in Section 4(b) above, (ii) the date of the
first event of the type described in Section 4(c) above or (iii) the Rights'
date of expiration given in Section 3 above, the Board of Directors may, without
the approval of any holders of Rights, direct the Company and the Rights Agent
to amend the Rights Agreement in any manner, whether or not such amendment is
adverse to the holders of Rights. At any time thereafter the first event of the
type described in Section 4(b) or (c) above, the Board of Directors may, without
the approval of any holders of Rights, direct the Company and the Rights Agent
to amend the Rights Agreement in any manner so long as such amendment does not
materially and adversely affect the interests of the holders of Rights.
4
