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EXHIBIT 4
MAPICS, INC.,
A MASSACHUSETTS CORPORATION
AND
MAPICS, INC.,
A GEORGIA CORPORATION
AND
BANKBOSTON, N.A.,
AS RIGHTS AGENT
AMENDED AND RESTATED RIGHTS AGREEMENT
DATED AS OF MARCH 30, 1998
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TABLE OF CONTENTS
Section Page
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Section 1. Certain Definitions.................................................... 2
Section 2. Appointment of Rights Agent............................................ 8
Section 3. Issue of Rights Certificates........................................... 9
Section 4. Form of Rights Certificates............................................ 10
Section 5. Countersignature and Registration...................................... 11
Section 6 Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates........................................................... 12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......... 13
Section 8. Cancellation and Destruction of Rights Certificates.................... 15
Section 9. Reservation and Availability of Capital Stock.......................... 15
Section 10. Preferred Stock Record Date............................................ 16
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights....................................................... 17
Section 12. Certificate of Adjusted Purchase Price or Number of Shares............. 27
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.................................................................. 28
Section 14. Fractional Rights and Fractional Shares................................ 30
Section 15. Rights of Action....................................................... 31
Section 16. Agreement of Rights Holders............................................ 32
Section 17. Rights Certificate Holder Not Deemed a Stockholder..................... 32
Section 18. Concerning the Rights Agent............................................ 33
Section 19. Merger or Consolidation or Change of Name of Rights Agent.............. 33
Section 20. Duties of Rights Agent................................................. 34
Section 21. Change of Rights Agent................................................. 36
Section 22. Issuance of New Rights Certificates.................................... 36
Section 23. Redemption and Termination............................................. 37
Section 24. Exchange............................................................... 38
Section 25. Notice of Certain Events............................................... 39
Section 26. Notices................................................................ 40
Section 27. Supplements and Amendments............................................. 41
Section 28. Successors............................................................. 41
Section 29. Determinations and Actions by the Board of Directors, etc.............. 41
Section 30. Benefits of this Agreement............................................. 42
Section 31. Severability........................................................... 42
Section 32. Governing Law.......................................................... 43
Section 33. Counterparts........................................................... 43
Section 34. Descriptive Headings................................................... 43
Section 35. Effectiveness; Amendment and Restatement............................... 43
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EXHIBITS:
Exhibit A Terms of Preferred Stock
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights to Purchase Preferred Stock
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AMENDED AND RESTATED RIGHTS AGREEMENT
THIS AMENDED AND RESTATED RIGHTS AGREEMENT, is made and entered into as
of March 30, 1998 (the "Agreement"), among MAPICS, INC., a Massachusetts
corporation, MAPICS, INC., a Georgia corporation (the "Company"), and
BANKBOSTON, N.A., a national banking association formerly known as The First
National Bank of Boston, (the "Rights Agent"), and shall become effective at the
Effective Time (as defined herein).
W I T N E S S E T H:
WHEREAS, Marcam Corporation, a Massachusetts corporation ("Marcam"),
entered into the Rights Agreement dated as of December 3, 1996 (the "Original
Agreement") with The First National Bank of Boston, as rights agent (the
"Original Rights Agent"), pursuant to which Marcam established a rights plan on
the terms and conditions set forth in the Original Agreement;
WHEREAS, on December 3, 1996 (the "Rights Dividend Declaration Date"),
the Board of Directors of Marcam (the "Marcam Board") authorized and declared a
dividend distribution of one right (an "Existing Right") for each share of
Marcam's common stock, $.01 par value per share ("Existing Common Stock"),
outstanding at the close of business on December 16, 1996 (the "Record Date"),
and authorized the issuance of one Existing Right (as such number was adjusted
pursuant to Section 11(p) of the Original Agreement) for each share of Existing
Common Stock issued between the Record Date and the Distribution Date, each
Existing Right initially representing the right to purchase one one-thousandth
of a share of Series F Junior Participating Preferred Stock of Marcam upon the
terms and conditions set forth in the Original Agreement;
WHEREAS, on the Rights Dividend Declaration Date, the Marcam Board
authorized and declared a dividend distribution of ten Existing Rights (as such
number was adjusted pursuant to Section 11(p) of the Original Agreement) for
each share of Marcam's convertible preferred stock, $1.00 par value per share
(as such convertible preferred stock has been adjusted pursuant to the MSI
Distribution referred to below, the "Existing Convertible Preferred Stock"),
outstanding at the close of business on the Record Date;
WHEREAS, on July 25, 1997, Marcam transferred substantially all of the
business, assets and liabilities of certain of its product lines and $39,000,000
in cash to Marcam Solutions, Inc. ("MSI") and, on July 29, 1997, distributed to
its stockholders (the "MSI Distribution") all of the capital stock of MSI;
WHEREAS, in connection with the MSI Distribution, Marcam changed its
name to "MAPICS, Inc." (hereinafter referred to as "MAPICS-Mass.");
WHEREAS, the Board of Directors of MAPICS-Mass. (the "MAPICS-Mass.
Board") and the Board of Directors of the Company (the "Board") have adopted an
Agreement and Plan
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of Merger dated as of March 30, 1998 (the "Merger Agreement") pursuant to which
MAPICS-Mass. will be merged with and into the Company, with the Company being
the surviving corporation (the "Merger");
WHEREAS, effective as of the effective time of the Merger under the
Merger Agreement (the "Effective Time"), (a) each outstanding share of Existing
Common Stock and the Existing Right relating thereto will be converted into one
share of Common Stock and one right, which right will initially represent the
right to purchase one one-thousandth of a share of Series F Junior Participating
Preferred Stock of the Company upon the terms and conditions herein set forth
(each, a "Right" and, collectively, the "Rights") and (b) each outstanding share
of Existing Convertible Preferred Stock and the Existing Rights relating thereto
will be converted into one share of Convertible Preferred Stock and a number of
Rights equal to the number of such Existing Rights; and
WHEREAS, in connection with the Merger, the MAPICS-Mass. Board and the
Board have determined that it is in the best interest of MAPICS-Mass. and the
Company to amend and restate the Original Agreement as herein 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:
"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, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, any Person or entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan, or any Exempt Person; provided, however, that if any Person who was at any
time an Exempt Person but is subsequently no longer considered to be an Exempt
Person and who, at the time such Person is no longer considered to be an Exempt
Person, Beneficially Owns 20% or more of the Common Stock of the Company then
outstanding, such Person shall not be deemed an "Acquiring Person" unless and
until such Person, together with all Affiliates and Associates of such Person,
shall, subsequent to the time at which such Person ceases to be an Exempt
Person, either (i) become the Beneficial Owner of an additional 1% or more of
the shares of Common Stock of the Company then outstanding or (ii) enter into
any of the transactions set forth in Section 11(a)(ii)(A) hereof, then such
Person shall be deemed to be an "Acquiring Person" from and after the time
immediately preceding the earliest to occur of the events specified in clause
(i) or (ii) of this proviso. Notwithstanding the foregoing, no Person shall
become an "Acquiring Person" as the result of an acquisition of Common Stock by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 20% or more
of the Common Stock of the Company then
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outstanding; provided, however, that if a Person shall become the Beneficial
Owner of 20% or more of the Common Stock of the Company then outstanding by
reason of share purchases by the Company and shall, after such share purchases
by the Company, become the Beneficial Owner of any additional shares of Common
Stock of the Company, then such Person shall be deemed to be an "Acquiring
Person." Notwithstanding the foregoing, if the Board determines in good faith
that a Person who would otherwise be an "Acquiring Person," as defined pursuant
to the foregoing provisions of this paragraph (a), has become such
inadvertently, and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an "Acquiring Person"
for any purposes of this Agreement.
"Act" shall mean the Securities Act of 1933, as amended.
"Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
"Adverse Person" shall mean any Person declared to be an Adverse Person
by the Continuing Directors upon determination that the criteria set forth in
Section 11(a)(ii)(D) hereof apply to such Person.
"Adverse Person Event" shall mean the determination by the Continuing
Directors, pursuant to Section 11(a)(ii)(D) hereof, that a Person is an Adverse
Person.
"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").
"Agreement" shall mean this Rights Agreement as originally executed or
as it may from time to time be supplemented or amended pursuant to the
applicable provisions hereof.
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, other
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 offer 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
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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 11(a)(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 "beneficial ownership"
of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Exchange Act,
or any comparable or successor rule), 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 or consent 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 or
consent as described in the proviso to subparagraph
(ii) of this paragraph (h)) or disposing of any
voting securities of the Company (a joint filing of a
Schedule 13D under the Exchange Act or any comparable
or successor report being deemed to be conclusive
evidence of such an agreement, arrangement or
understanding); provided, however, that nothing in
this paragraph (h) 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. Notwithstanding
anything in this definition of Beneficial Ownership
to the contrary, the phrase "then outstanding," when
used with reference to a Person's Beneficial
Ownership of securities of the Company, shall mean
the number of such securities then issued and
outstanding together with the number of such
securities not then actually issued and outstanding
which such Person would be deemed to own beneficially
hereunder.
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"Board" shall have the meaning set forth in the preamble of the
Agreement.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the Commonwealth of Georgia are authorized
or obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 P.M., Georgia
time, on such date provided, however, that if such date is not a Business Day it
shall mean 5:00 P.M., Georgia time, on the next succeeding Business Day.
"Common Stock" shall mean the common stock, $.01 par value per share,
of the Company, except that "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock 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.
"Common Stock Equivalents" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Company" shall mean the Person named as the "Company" in the first
paragraph of this Agreement until a successor corporation shall have become such
or until a Principal Party shall assume, and thereafter be liable for, all
obligations and duties of the Company hereunder, pursuant to the applicable
provisions of this Agreement, and thereafter "Company" shall mean such successor
corporation or Principal Party.
"Company Securities" shall mean the Convertible Preferred Stock and the
Common Stock of the Company.
"Continuing Director" shall mean (i) any member of the Board, while
such Person is a member of the Board, who is not an Acquiring Person or an
Adverse Person, or an Affiliate or Associate of any such Person, or a
representative of any such Person or of any such Affiliate or Associate, and who
was a member of the Board on the date of this Agreement, or (ii) any Person who
becomes a member of the Board subsequent to the date of this Agreement, while
such Person is a member of the Board, who is not an Acquiring Person or an
Adverse Person, or an Affiliate or Associate of any such Person, or a
representative of any such 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.
"Convertible Preferred Stock" shall mean the Series D Convertible
Preferred Stock, par value $1.00 per share, of the Company and the Series E
Convertible Preferred Stock, par value $1.00 per share, of the Company.
"Current Market Price" shall have the meaning set forth in Section
11(d)(i) hereof.
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"Current Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
"Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
"Effective Time" shall have the meaning set forth in the preamble of
the Agreement.
"Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
"Exchange Act" shall have the meaning set forth in the definition of
"Affiliate" in this Section 1.
"Exempt Person" shall mean General Atlantic Partners 32, L.P., General
Atlantic Partners 21, L.P. and GAP Coinvestment Partners, L.P., together with
any of their Affiliates and Associates (the "General Atlantic Parties");
provided, however, that (i) the General Atlantic Parties shall no longer be
considered an Exempt Person if at any time the Board determines (with the
concurrence of a majority of the Continuing Directors) that any of the General
Atlantic Parties has breached any of the provisions of (A) Article 9 of the
Convertible Preferred Stock Purchase Agreement dated September 20, 1995 by and
among the Company, General Atlantic Partners 21, L.P., GAP Coinvestment
Partners, L.P. and The Northwestern Mutual Life Insurance Company or (B) Section
10.1 of the Convertible Preferred Stock and Warrant Purchase Agreement dated
July 19, 1996 by and among the Company, General Atlantic Partners 32, L.P. and
GAP Coinvestment Partners, L.P. (as such provisions may be amended or
supplemented from time to time, the "General Atlantic Standstill Agreements");
or (ii) a General Atlantic Party shall no longer be considered an Exempt Person
from and after the time such General Atlantic Party's rights and obligations
under the General Atlantic Standstill Agreements shall have terminated.
"Existing Common Stock" shall have the meaning set forth in the
preamble of the Agreement.
"Existing Convertible Preferred Stock" shall have the meaning set forth
in the preamble of the Agreement.
"Existing Securities" shall mean the convertible preferred stock, $1.00
par value per share, and the common stock, $.01 par value per share, of Marcam
or MAPICS-Mass., as the case may be.
"Existing Right" shall have the meaning set forth in the preamble of
the Agreement.
"Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
"Final Amendment Date" shall mean the earlier of the Distribution Date
or the occurrence of an Adverse Person Event.
"Final Expiration Date" shall mean the close of business on December
16, 2006.
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"Initial Exercise Price" shall be $60.00.
"MAPICS-Mass." shall have the meaning set forth in the preamble of the
Agreement.
"MAPICS-Mass. Board" shall have the meaning set forth in the preamble
of the Agreement.
"Marcam" shall have the meaning set forth in the preamble of the
Agreement.
"Marcam Board" shall have the meaning set forth in the preamble of the
Agreement.
"Merger" shall have the meaning set forth in the preamble of the
Agreement.
"Merger Agreement" shall have the meaning set forth in the preamble of
the Agreement.
"MSI Distribution" shall have the meaning set forth in the preamble of
the Agreement.
"Nasdaq" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System.
"Original Agreement" shall have the meaning set forth in the preamble
of the Agreement.
"Original Rights" shall have the meaning set forth in the definition of
"Beneficial Owner" in this Section 1.
"Original Rights Agent" shall have the meaning set forth in the
preamble of the Agreement.
"Person" shall mean any natural person, firm, association, corporation,
partnership, trust or other entity or organization.
"Preferred Stock" shall mean the Series F Junior Participating
Preferred Stock, par value $1.00 per share, of the Company having the terms set
forth in Exhibit A.
"Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
"Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
"Record Date" shall have the meaning set forth in the preamble of the
Agreement.
"Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
"Rights" shall have the meaning set forth in the preamble of the
Agreement.
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"Rights Agent" shall mean the Person named as the "Rights Agent" in the
first paragraph of this Agreement until a successor Rights Agent shall have
become such pursuant to the applicable provisions hereof, and thereafter "Rights
Agent" shall mean such successor Rights Agent. If at any time there is more than
one Person appointed by the Company as Rights Agent pursuant to the applicable
provisions of this Agreement, "Rights Agent" shall mean and include each such
Person.
"Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
"Rights Dividend Declaration Date" shall have the meaning set forth in
the preamble of this Agreement.
"Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii)(A), (B), (C) or (D) hereof.
"Section 11(a)(ii) Trigger Date" shall have the meaning set forth in
Section 11(a)(iii) hereof.
"Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
"Spread" shall have the meaning set forth in Section 11(a)(iii) hereof.
"Stock Acquisition Date" shall mean the first date of a 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.
"Subsidiary" shall mean, with reference to any Person, including the
Company, any corporation (or other entity) of which an amount of voting
securities sufficient to elect at least a majority of the directors (or their
equivalent) of such corporation (or other entity) is beneficially owned,
directly or indirectly, by such Person, or which is otherwise controlled by such
Person.
"Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
"Trading Day" shall have the meaning set forth in Section 11(d)(i)
hereof.
"Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent.
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution
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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 earliest of (i) the Close of Business on the tenth
day (or such later date as may be determined by action of the Board (with the
concurrence of a majority of the Continuing Directors)) after the Stock
Acquisition Date (or, if the tenth day after the Stock Acquisition Date occurs
before the Record Date, the Close of Business on the Record Date), (ii) the
Close of Business on the tenth Business Day (or, if such tenth Business Day
occurs before the Record Date, the Close of Business on the Record Date), or
such later date as may be determined by action of the Board (with the
concurrence of a majority of the Continuing Directors), after the date that a
tender offer 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 for the maximum number of shares that may be purchased thereunder, such
Person would be the Beneficial Owner of 20% or more of the shares of Common
Stock then outstanding or (iii) the Close of Business on the tenth Business Day
after an Adverse Person Event (the earliest of (i), (ii) and (iii) 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 Company Securities registered in the names of the holders
of the Company Securities (which certificates for Company Securities 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 Company Securities (including a transfer to the Company or
a conversion of shares of Convertible Preferred Stock). 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 Company Securities 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, substantially in
the form specified in Section 4 hereof (the "Rights Certificates"), evidencing
one Right for each share of Common Stock so held or evidencing ten Rights for
each share of Convertible Preferred Stock so held (as the case may be), subject
to adjustment as provided herein. In the event that an adjustment in the number
of Rights per share of Company Securities has been made pursuant to Section
11(p) hereof, at the time of distribution of the Rights Certificates, the
Company shall make the 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) In accordance with the Original Agreement, Marcam sent a copy
of a Summary of Rights, in substantially the form attached hereto as Exhibit C,
to each record holder of the Existing Securities as of the Close of Business on
the Record Date. With respect to certificates
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for the Company Securities outstanding as of the Effective Time, until the
Distribution Date, the Rights will be evidenced by such certificates for the
Company Securities and the registered holders of the Company Securities shall
also be the registered holders of the associated Rights. Until the earlier of
the Distribution Date or the Expiration Date (as such term is defined in Section
7 hereof), the transfer of any certificates representing shares of Company
Securities in respect of which Rights have been issued shall also constitute the
transfer of the Rights associated with such shares of Company Securities.
(c) Rights shall be issued in respect of all shares of Common
Stock that are issued (whether originally issued or from the Company's treasury)
after the Effective Time but prior to the earlier of the Distribution Date or
the Expiration Date. Rights shall also be issued to the extent provided in
Section 22 in respect of all shares of Common Stock which are issued (whether
originally issued or from the Company's treasury) after the Distribution Date
and prior to the Expiration Date. Certificates representing such shares of
Common Stock in respect of which Rights are issued pursuant to the first
sentence of this Section 3(c) shall also be deemed to be certificates for
Rights, and commencing as soon as reasonably practicable following the date
hereof shall bear a legend in substantially the following form:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Amended and Restated Rights
Agreement among MAPICS, Inc., a Georgia corporation (the "Company"),
MAPICS, Inc., a Massachusetts corporation, and BankBoston, N.A.,
formerly known as The First National Bank of Boston (the "Rights
Agent") dated as of March 30, 1998 (as amended, supplemented or
otherwise modified from time to time, the "Rights Agreement"), the
terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal offices of 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 Company 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, an Adverse Person or any Affiliate or
Associate of an Acquiring Person or an Adverse Person (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.
Commencing as soon as reasonably practicable following the Effective
Time, certificates representing shares of Company Securities that are delivered
prior to the Distribution Date shall also bear the foregoing legend. With
respect to such certificates containing the foregoing legend, until the earlier
of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated
with the Company Securities represented by such certificates shall be evidenced
by such certificates alone and registered holders of Company Securities 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 Company Securities 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
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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 or trading market on which the Rights may from time to time be listed
or traded, 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 Distribution Date and on their face shall entitle the holders thereof
to purchase such number of one-thousandths of a share of Preferred Stock as
shall be set forth therein at the price per share set forth therein (such
exercise price per one one-thousandth of a share hereinafter referred to as 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) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by: (i) an Acquiring
Person, an Adverse Person or any Associate or Affiliate of an Acquiring Person
or an Adverse Person, (ii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate of an Acquiring Person or an
Adverse Person) who becomes a transferee after the Acquiring Person or Adverse
Person becomes such, or (iii) a transferee of an Acquiring Person or an Adverse
Person (or of any such Associate or Affiliate of an Acquiring Person or an
Adverse Person) who becomes a transferee prior to or concurrently with the
Acquiring Person or the Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person or the Adverse Person to holders of equity interests in such
Acquiring Person or Adverse Person or to any Person with whom such Acquiring
Person or Adverse Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which a
majority of the Board has determined is part of a plan, arrangement or
understanding that 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:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person,
Adverse Person, or an Affiliate or Associate of an Acquiring Person or
Adverse 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, 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 Treasurer or
Secretary or any Assistant Treasurer or Assistant Secretary of the Company,
either annually 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
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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 Certificates 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, the Rights Certificate number 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 of one one-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 office 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 or Certificates until the registered holder shall have completed and
signed the certificate contained in the form of assignment set forth on the
reverse side of each 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 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.
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(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 set
forth in Section 9(c), Section 11(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 set forth on the reverse side
thereof and the certificate contained therein completed and duly executed, to
the Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the total
number of one one-thousandths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earlier of (i) the
Final Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof, (iii) the time at which the Rights expire
pursuant to Section 13(d) hereof or (iv) the time at which such Rights are
exchanged as provided in Section 24 hereof (the earliest of (i), (ii), (iii) or
(iv) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be the
Initial Exercise Price, 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 set forth on the reverse side
thereof and the certificate contained therein completed and duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-thousandth of a share of Preferred 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, promptly (i) 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 one
one-thousandths of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) requisition from the Company the 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, 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
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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 11(a)(iii) hereof) shall be made in cash or by certified check,
cashier's check or bank draft 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 or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash or other property are available for distribution by the Rights
Agent, if and when appropriate. The Company reserves the right to require prior
to the occurrence of a Triggering Event that, upon any exercise of Rights, such
number of Rights be exercised so that only whole shares of Preferred Stock would
be issued.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the 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.
(c) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of an event described in Section
11(a)(ii)(A) or (C) and from and after the Close of Business on the tenth day
after the occurrence of an event described in Section 11(a)(ii)(B) or (D), any
Rights beneficially owned by (i) an Acquiring Person, an Adverse Person or an
Associate or Affiliate of an Acquiring Person or Adverse Person, (ii) a
transferee of any such Acquiring Person or Adverse Person (or of any such
Associate or Affiliate of an Acquiring Person or an Adverse Person) who becomes
a transferee after such Acquiring Person or Adverse Person becomes such, or
(iii) a transferee of any such Acquiring Person or Adverse Person (or of any
such Associate or Affiliate of an Acquiring Person or an Adverse Person) who
becomes a transferee prior to or concurrently with such Acquiring Person or
Adverse Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from such Acquiring Person or
Adverse Person to holders of equity interests in such Acquiring Person or
Adverse Person or to any Person with whom such Acquiring Person or Adverse
Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a majority of the Board 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
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights Certificates
or other Person as a result of its failure to make any determinations with
respect to an Acquiring Person or Adverse Person or any of their 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
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holder upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the 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
canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Rights Certificates to the Company, or shall, at the written
request of the Company, destroy such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock 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 Triggering Event, Common
Stock or other securities) that, as provided in this Agreement, including
Section 11(a)(iii) hereof, will be sufficient to permit the exercise in full of
all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Nasdaq National Market or any over-the-counter market
on which the Common Stock is traded, the Company shall use its best efforts to
cause all shares reserved for such issuance to be listed on such exchange or
market upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, a
registration statement under the Act, with respect to the Common Stock or other
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
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requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities, and (B) the Expiration
Date. The Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various states
in connection with the exercisability of the Rights. 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. In addition, if the Company shall
determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until
such time as a registration statement has been declared effective. Upon any
suspension of the exercisability of the Rights referred to in this Section 9(c),
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
and shall be void so long as held by a holder in any jurisdiction where the
requisite qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been obtained or be
obtainable, the exercise thereof shall not be permitted under applicable law or
a registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-thousandths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock or other securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges that
may be payable in respect of the issuance or delivery of the Rights Certificates
and of any certificates for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock 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 that 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 one one-thousandths of a share of Preferred Stock (or Common Stock 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 one
one-thousandths of a share of Preferred Stock (or Common Stock 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 Certificates 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 one
one-thousandths of a share of Preferred Stock (or Common Stock or other
securities, as the case may be) is issued upon the
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exercise of Rights shall for all purposes be deemed to have become the holder of
record of such Preferred Stock (or Common Stock 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 or other securities, as the case may
be) transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock 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, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number 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 Effective
Time (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), except
as otherwise provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and kind of
shares of Preferred Stock or capital stock, as the case may be, which, if such
Right had been exercised immediately prior to such time and at a time when the
Preferred Stock transfer books (or other capital stock transfer books, as the
case may be) 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 reclassification. If an event occurs that would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii)
hereof.
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(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Agreement, directly or
indirectly, (1) shall merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of such
merger or combination and the Common Stock of the Company shall remain
outstanding and unchanged, (2) shall merge or otherwise combine with any
Subsidiary of the Company, (3) shall, in one transaction or a series of
transactions, transfer any assets to the Company or to any of its Subsidiaries
in exchange (in whole or in part) for shares of Common Stock, for shares of
other equity or voting securities of the Company or any Subsidiary of the
Company, or for securities exercisable for or convertible into shares of equity
or voting securities of the Company or any Subsidiary of the Company (Common
Stock or otherwise) or otherwise obtain from the Company, with or without
consideration, any additional shares of equity or voting securities of the
Company or securities exercisable for or convertible into shares of such equity
or voting securities of the Company (other than pursuant to a pro rata
distribution to all holders of Common Stock or upon the exercise of a
convertible security of the Company or any Subsidiary of the Company in
accordance with its terms), (4) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with (as the case may be) the Company or any
of its Subsidiaries, assets on terms and conditions less favorable to the
Company than the Company would be able to obtain in arm's-length negotiations
with an unaffiliated third party, other than pursuant to a transaction set forth
in Section 13(a) hereof, (5) shall sell, purchase, lease, exchange, mortgage,
pledge, transfer or otherwise acquire or dispose of in one transaction or a
series of transactions, to, from or with (as the case may be) the Company or any
of its Subsidiaries (other than incidental to the lines of business, if any,
engaged in as of the date hereof between the Company and such Acquiring Person
or Associate or Affiliate) assets having an aggregate fair market value of more
than $1,000,000, other than pursuant to a transaction set forth in Section 13(a)
hereof and other than pursuant to a transaction or series of transactions that
have been approved by a majority of the Continuing Directors, (6) shall receive
any compensation from the Company or any of the Company's Subsidiaries other
than compensation for full-time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries') past practices, or (7)
shall receive the benefit, directly or indirectly (except proportionately as a
stockholder and except if resulting from a requirement of law or governmental
regulation), of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided by the Company or
any of its Subsidiaries, or
(B) (X) 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, any Person or entity organized, appointed or established by the Company
for or pursuant to the terms of any such plan or an Exempt Person), alone or
together with any Affiliates and Associates of such Person, shall, at any time
after the Rights Dividend Declaration Date, become the Beneficial Owner of 20%
or more of the shares of Common Stock then outstanding, or (Y) any Person who
was at any time an Exempt Person but is subsequently no longer considered to be
an Exempt Person, alone or together with any Affiliates and Associates of such
Person, becomes an Acquiring Person, in
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either case (1) unless the event causing the 20% threshold to be crossed is a
transaction set forth in Section 13(a) hereof, or is 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 a majority of the
Continuing Directors, after receiving advice from one or more investment banking
firms, to be (a) at a price that is fair to stockholders (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 interest of the Company and its stockholders, (2) unless
the event causing the 20% threshold to be crossed is the result of an
acquisition of the Common Stock by the Company which, by reducing the number of
shares outstanding, increases the proportionate number of shares beneficially
owned by such Person, alone or together with any Affiliates and Associates of
such Person, to 20% or more of the Common Stock of the Company then outstanding
(provided, however, that if such Person, alone or together with any Affiliates
and Associates of such Person, shall become the Beneficial Owner of 20% or more
of the Common Stock of the Company then outstanding by reason of share purchases
by the Company and shall after such share purchases by the Company become the
Beneficial Owner of any additional Common Stock of the Company, then such Person
shall be deemed to become the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding for purposes of this clause (B)); or (3) unless
the Board determines in good faith that such Person, alone or together with any
Affiliates and Associates of such Person, has become the Beneficial Owner of 20%
or more of the shares of Common Stock then outstanding inadvertently, and such
Person divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be the Beneficial Owner of 20%
or more of the shares of Common Stock then outstanding, or
(C) during such time as there is an Acquiring Person, there shall
be any reclassification of securities (including any reverse stock split), or
recapitalization of the Company, or any merger or consolidation of the Company
with any of its Subsidiaries or any other transaction or series of transactions
involving the Company or any of its Subsidiaries (whether or not with or into or
otherwise involving an Acquiring Person), other than a transaction or
transactions to which the provisions of Section 13(a) hereof apply (whether or
not with or into or otherwise involving an Acquiring Person), which has the
effect, directly or indirectly, of increasing by more than 1% the proportionate
share of the outstanding shares of any class of equity securities of the Company
or any of its Subsidiaries which is directly or indirectly beneficially owned by
any Acquiring Person or any Associate or Affiliate of any Acquiring Person, or
(D) a majority of the Continuing Directors shall declare any
Person to be an Adverse Person, upon a determination that such Person, alone or
together with its Affiliates and Associates, has, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner of an amount of Common
Stock which a majority of Continuing Directors determine to be substantial
(which amount shall in no event be less than 10% of the shares of Common Stock
then outstanding) and a majority of the Continuing Directors determines, after
reasonable inquiry and investigation, which may include a review of the public
record regarding such Person and any information such directors may request from
such Person and consultation with such persons as
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such directors shall deem appropriate, that (1) such Beneficial Ownership by
such Person is intended to cause the Company to repurchase the Common Stock
beneficially owned by such Person or to cause pressure on the Company to take
action or enter into a transaction or series of transactions intended to provide
such Person with short-term financial gain under circumstances where such
directors determine that the best long-term interests of the Company and its
stockholders would not be served by taking such action or entering into such
transactions or series of transactions at that time or (2) such Beneficial
Ownership is causing or is reasonably likely to cause a material adverse impact
(including, but not limited to, impairment of relationships with customers,
impairment of the Company's ability to maintain its competitive position or
impairment of the Company's business reputation) on the business or prospects of
the Company, then, promptly following the occurrence of any event described in
Section 11(a)(ii)(A), (B), (C) or (D) hereof, 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 at the
then current Purchase Price in accordance with the terms of this Agreement, in
lieu of a number of one one-thousandths of a share of Preferred Stock, such
number of shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one one-thousandths of a share of Preferred Stock for which a Right was or
would have been exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event, whether or not such Right was then exercisable, and (y)
dividing that product (which, following such first occurrence, shall thereafter
be referred to as the "Purchase Price" for each Right and for all purposes of
this Agreement) by 50% of the Current Market Price per share of Common Stock
(determined pursuant to Section 11(d) hereof) on the date of such first
occurrence (such number of shares being referred to herein as the "Adjustment
Shares").
(iii) In the event that the number of shares of Common Stock which
are authorized by the Company's articles of organization but
not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit
the exercise in full of the Rights in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company
shall (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value"),
and (B) with respect to each Right (subject to Section 7(e)
hereof), make adequate provision to substitute, upon the
exercise of a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of
preferred stock which the Board has deemed to have the same
value as shares of Common Stock (such shares of preferred
stock being referred to herein as "Common Stock
Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, as adjusted (less
the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board based upon
the advice of a nationally recognized investment banking firm
selected by the Board; provided, however, that if the Company
shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following
the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y)
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the date on which the Company's right of redemption pursuant
to Section 23(a) expires (the later of (x) and (y) being
referred to herein as the "Section 11(a)(ii) Trigger Date"),
then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, which shares
or cash have an aggregate value equal to the Spread. For
purposes of the preceding sentence, the term "Spread" shall
mean the excess of (i) the Current Value over (ii) the
Purchase Price. If the number of shares of Common Stock that
are authorized by the Company's articles of organization but
not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit
the exercise in full of any Rights and the Board determines 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 11(a)(ii) Trigger
Date, in order that the Company may seek stockholder approval
for the authorization of such additional shares (such thirty
(30) day period, as it may be extended, shall be referred to
as the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the
preceding provisions of this Section 11(a)(iii), the Company
(x) shall provide, subject to Section 7(e) hereof, that such
action shall apply uniformly to all outstanding Rights, and
(y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares or to decide the
appropriate form of distribution to be made pursuant to such
provisions 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 11(a)(iii), the value of each
Adjustment Share shall be the Current Market Price per share
of the Common Stock (as determined pursuant to Section 11(d)
hereof) on the Section 11(a)(ii) Trigger Date and the per
share per unit value of any Common Stock Equivalent shall be
deemed to equal the Current Market Price per share of the
Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock entitling them
to subscribe for or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Preferred Stock, 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 per share of Preferred Stock (as determined
pursuant to Section 11(d) hereof) 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
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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 or Equivalent Preferred Stock (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 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 noncash consideration shall be as determined in good
faith by the Board, 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, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly or other periodic cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(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 per share of Preferred Stock (as determined pursuant to
Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights
Agent) of the portion of the cash, assets or 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
per share of Preferred Stock (as determined pursuant to Section 11(d) hereof).
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 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to such date, and for the purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing
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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) any
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 the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification shall not have
occurred prior to the commencement of the requisite thirty (30) Trading Day or
ten (10) Trading Day period, as set forth above, 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 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 on the Nasdaq National Market or in the
over-the-counter market, as reported by Nasdaq or such other system then in use,
or, if on any such date the 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. 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 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 whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current
Market Price per share of Preferred Stock shall be determined
in the same manner as set forth above for the Common Stock in
clause (i) of this Section 11(d) (other than the last sentence
thereof). If the Current Market Price per share of Preferred
Stock cannot be determined in the manner provided above or if
the Preferred Stock is not publicly held or listed or traded
in a manner described in clause (i) of this Section 11(d), the
Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such
number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to
the Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, Current Market Price per
share of the Preferred Stock shall mean the fair value per
share as determined in good faith by the Board, whose
determination shall be described in a
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statement filed with the Rights Agent and shall be conclusive
for all purposes. For all purposes of this Agreement, the
Current Market Price of one one-thousandth of a share of
Preferred Stock shall be equal to the Current Market Price of
one share of Preferred Stock divided by 1,000.
(iii) For the purpose of any computation hereunder, the value of any
securities or assets other than Common Stock or Preferred
Stock shall be the fair value as determined in good faith by
the Board, or, if at the time of such determination there is
an Acquiring Person, by a majority of the Continuing Directors
then in office, or, if there are no Continuing Directors, by a
nationally recognized investment banking firm selected by the
Board, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all
purposes.
(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 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest one hundred-thousandth of a share of
Common Stock or other share or one ten-millionth of a share of Preferred Stock,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three (3) years from the date of the transaction which mandates
such adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(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 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) hereof, 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 one one-thousandths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, 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
one one-thousandths of a share of Preferred Stock obtained by (i) multiplying
(x) the number of one one-thousandths of a share covered by a Right immediately
prior to this
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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 shares of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one-hundred
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 adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the 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 11(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 one one-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 share and the number of
shares 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 par value of the shares of Common
Stock issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable such number
of one 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
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to defer until the occurrence of such event the issuance to the holder of any
Right exercised after such record date the number of one one-thousandths of a
share of Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of one
one-thousandths of a share of Preferred Stock and other capital stock or
securities of the Company, if any, issuable upon such exercise on the basis of
the 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 or
securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board 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, consolidate with any other Person (other than
a Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(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 or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) (i) 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 (A) declare
a dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (B) subdivide the outstanding shares of Common Stock, or (C)
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combine the outstanding shares of Common Stock into a smaller number of shares,
the number of Rights associated with each share of Common Stock then
outstanding, or issued or delivered thereafter but prior to the Distribution
Date, shall be proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such event shall equal
the result obtained by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such event by a fraction the
numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to the occurrence of the event and the denominator
of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
(ii) Anything in this Agreement to the contrary notwithstanding, in
the event that an adjustment is required pursuant to the terms
of any series of the Convertible Preferred Stock to be made to
the number of shares of Common Stock issuable upon conversion
of shares of such series of the Convertible Preferred Stock,
the number of Rights associated with each share of such series
of the Convertible Preferred Stock then outstanding shall be
adjusted so that the number of Rights thereafter associated
with each share of such series of the Convertible Preferred
Stock following any such adjustment shall equal the number of
shares of Common Stock issuable upon conversion of shares of
such series of the Convertible Preferred Stock immediately
following such adjustment.
(q) The failure by the Continuing Directors to declare a Person to
be an Adverse Person following such Person becoming the Beneficial Owner of 10%
or more of the outstanding Common Stock shall not imply that such Person is not
an Adverse Person or limit such directors' right at any time in the future to
declare such Person to be an Adverse Person.
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 Company Securities, 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 Company Securities) in accordance with Section 26 hereof. The Rights
Agent shall be fully protected in relying on any such certificate and on any
adjustment therein contained.
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Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(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 that
complies with Section 11(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 11(o) hereof), then, and in each such case and except as
contemplated in Section 13(d) hereof, proper provision 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 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, nonassessable and freely
tradable shares of Common Stock of the Principal Party, 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 one thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one
one-thousandths of a share for which a Right was exercisable immediately prior
to the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant to
Section 11(d)(i) hereof) per share of the Common Stock of such Principal Party
on the date of consummation of such 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; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
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(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)
hereof, the Person that is the issuer of any
securities into which shares of Common Stock of the
Company are converted in such merger or
consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a) hereof,
the Person that is the party receiving the greatest
portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (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) in
case 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) 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) and (b) of this
Section 13 and further providing that, as soon as practicable after the date of
any Section 13 Event, 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
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its
Affiliates that comply in all respects with the
requirements for registration on Form 10 under the
Exchange Act.
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The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a Section
11(a)(ii) Event, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.
(d) 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 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 11(a)(ii)(B) 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(d), 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 11(p)
hereof, or to distribute Rights Certificates that evidence fractional Rights. If
the Company determines not to issue fractional Rights, there shall be paid in
lieu thereof 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 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. 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 shall be used.
(b) The Company shall not be required to issue fractions of shares
of Preferred Stock (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of a
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share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-thousandth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates, with
regard to which such fractional shares of Preferred Stock would otherwise be
issuable, 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
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth share of Preferred Stock
shall be one one-thousandth of the closing price per share of Common Stock
(determined pursuant to Section 11(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 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
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Right 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 in 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 Company Securities); and any
registered holder of any Rights Certificate (or, prior to the Distribution Date,
of the Company Securities), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the Distribution Date, of
the Company Securities), 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 Agreement.
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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 Company Securities;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal 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 duly completed and 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 Company
Securities 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 Company Securities certificate made
by anyone other than the Company or the Rights Agent) 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 purpose the holder of the number of
one one-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 action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or
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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.
(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 Company Securities 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 created by this Agreement, any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the counter-signature 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 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
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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 or Adverse
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 Clerk or any Assistant
Clerk 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 any
of the statements 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 breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate;
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 actual notice of any such adjustment);
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or
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reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common 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 Clerk, any
Assistant Clerk, 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 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 contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 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.
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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 Company
Securities 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 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 Company Securities 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 any registered holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then 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 any state thereof in good standing, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Company Securities and 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 the Board 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 (other than upon exercise of a Right) and prior
to the redemption or expiration of the Rights, the Company
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(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, notes, warrants or
debentures issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board, 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, (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, and
(iii) no such Rights Certificate shall be issued upon the conversion of any
shares of the Convertible Preferred Stock.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the earlier
of (i) the Close of Business on the tenth day following the Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred prior to the Record
Date, the close of business on the tenth day following the Record Date), or such
later date as may be determined by action of the Board (with the concurrence of
a majority of the Continuing Directors), or (ii) the Final Expiration Date,
redeem all but not less than all of the then outstanding Rights at a redemption
price of $.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"); provided, however, that the Board may not redeem any Rights following
an Adverse Person Event; and provided, further, that if the Board authorizes
redemption of the Rights at or after the time a Person becomes an Acquiring
Person, then there must be Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such Continuing
Directors. Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a Section
11(a)(ii) Event until such time as the Company's right of redemption set forth
in the first sentence of this Section 23(a) has expired. 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 11(d) hereof, of the Common Stock at
the time of redemption) or any other form of consideration deemed appropriate by
the Board. The redemption of the Rights by the Board may be made effective at
such time, on such basis and with such conditions as the Board in its sole
discretion may establish; provided, however, that if the Board authorizes
redemption of the Rights at or after the time a Person becomes an Acquiring
Person, then there must be Continuing Directors then in office and such terms
and conditions shall require the concurrence of a majority of such Continuing
Directors.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed with the
Rights Agent and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held.
Promptly after the action of the Board 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
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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 the redemption will state
the method by which the payment of the Redemption Price will be made.
Section 24. Exchange.
(a) At any time after any Person becomes an Acquiring Person or an
Adverse Person, the Board (with the concurrence of a majority of the Continuing
Directors) may, at their option, exchange all or part of the then outstanding
and exercisable Rights (which (i) shall not include Rights that have become void
pursuant to Section 7(e) and (ii) shall include, without limitation, any Rights
issued after the Distribution Date as contemplated by Section 22 hereof) for
shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any of its Subsidiaries, any
employee benefit plan of the Company or any of its Subsidiaries or any Person
organized, appointed or established by the Company or any of its Subsidiaries
for or pursuant to the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the
shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board electing to exchange
any Rights pursuant to Section 24(a) and without any further action and without
any notice, the right to exercise such Rights will terminate and thereafter the
only right of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly thereafter give
notice of such exchange to the Rights Agent and the holders of the Rights to be
exchanged in the manner set forth in Section 26; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to Section 7(e)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Common Stock Equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the initial
rate of one Common Stock Equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of Common Stock Equivalents pursuant to the terms thereof, so that
each Common
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Stock Equivalent delivered in lieu of each share of Common Stock shall have
essentially the same dividend, liquidation and voting rights as one share of
Common Stock.
(d) In the event that the number of shares of Common Stock which
are authorized by the Company's articles of organization, but not outstanding or
reserved for issuance are not sufficient to permit an exchange of Rights as
contemplated by this Section 24, the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates that 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 with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For purposes of this Section 24(e), the current market value of a
whole share of Common Stock shall be the closing price per share of Common Stock
(determined pursuant to Section 11(d)(ii) hereof) on the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular 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 11(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 or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(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, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend or 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 given in the case of any action covered by clause (i) or (ii) above
at least twenty (20) days prior to the record date for determining holders of
the shares of Preferred Stock for purposes of such action, and in the case
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of any such other action, at least twenty (20) days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the shares of Preferred Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event 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 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof and (ii) all references in the preceding paragraph to Common
Stock shall, to the extent appropriate, also be deemed thereafter to refer to
Common Stock or, if appropriate, other securities.
Section 26. Notices.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any 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:
MAPICS, Inc.
0000-X Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: President and Chief Executive Officer
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:
BankBoston, N.A.
c/o Boston EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxxx
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 Company Securities) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
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Section 27. Supplements and Amendments.
At any time prior to the Final Amendment Date, the Company 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. From and after the Final Amendment Date,
the Company 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, (iii) to shorten or lengthen any time period hereunder (which
lengthening or shortening, following the first occurrence of an event set forth
in the second proviso of the first sentence of Section 23(a) hereof, shall be
effective only if there are Continuing Directors and shall require the
concurrence of a majority of such Continuing Directors) or (iv) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person, an Adverse
Person or an Affiliate or Associate of such Person); provided, however, that
this Agreement may not be supplemented or amended, pursuant to clause (iii) of
this sentence, to lengthen (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable or (B) any other
time period unless such lengthening is for the purpose of protecting, enhancing
or clarifying the rights of or the benefits to the holders of Rights (other than
any Acquiring Person, an Adverse Person or an Associate or Affiliate of such
Person). Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Company Securities.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors,
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 provisions of the last sentence of Rule 13d-3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act; provided, however,
that for all purposes of this Agreement any calculation of the number of shares
of Common Stock outstanding at any particular time shall also include all shares
of Common Stock issuable upon conversion of all shares of Convertible Preferred
Stock outstanding at the applicable time. The Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors) shall have the
exclusive power and authority to administer this Agreement and to exercise all
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45
rights and powers specifically granted to the Board (with, where specifically
provided for herein, the concurrence of the Continuing Directors) or to the
Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret
the provisions of this Agreement, and (ii) make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights, to declare that a Person is an
Adverse Person or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all emissions with respect to the foregoing) which are done or made by the Board
(with, where specifically provided for herein, the concurrence of the Continuing
Directors) in good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject any member of the Board or any Continuing Director to any
liability to the holders of the Rights. Notwithstanding anything to the contrary
in this Agreement, from and after the election of directors of the Company at
the first annual meeting of stockholders of the Company called after the time a
Person becomes an Acquiring Person, all provisions of this Agreement that
require the action or concurrence of the Continuing Directors shall no longer
require the action or concurrence of the Continuing Directors but instead shall
require only the action of a majority of the Board.
Section 30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the
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 31. Severability.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be
invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid language from this Agreement would materially
and adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of such
determination by the Board. Without limiting the foregoing, if any provision
requiring that a determination made by less than the entire Board is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the entire Board.
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Section 32. 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 Georgia 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 performed entirely within
such State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
constriction of any of the provisions hereof.
Section 35. Effectiveness; Amendment and Restatement.
This Agreement shall become effective at the Effective Time of the
Merger pursuant to the Merger Agreement. In the event the Merger does not occur
or becomes ineffective for any reason, this Agreement shall be deemed null and
void. Upon the effectiveness hereof, (a) the Original Agreement shall be amended
and restated in full as set forth in this Agreement, (b) each outstanding share
of Existing Common Stock and the Existing Right relating thereto will be
converted into one share of Common Stock and one Right, and (c) each outstanding
share of Existing Convertible Preferred Stock and the Existing Rights relating
thereto will be converted into one share of Convertible Preferred Stock and a
number of Rights equal to the number of such Existing Rights. Neither the
execution and delivery of the Merger Agreement by the Company and MAPICS-Mass.,
nor the consummation of the Merger in accordance therewith, shall constitute or
result in an "Adverse Person Event," a "Section 11(a)(ii) Event" or a "Section
13 Event," as such terms are defined herein and in the Original Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Rights
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: MAPICS, INC., a Georgia corporation
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
---------------------------------- ----------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxx
Title: Secretary and General Counsel Title: President and Chief
Executive Officer
Attest: MAPICS, INC., a Massachusetts
corporation
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxx
---------------------------------- ----------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxx
Title: Clerk and General Counsel Title: President and Chief
Executive Officer
Attest: BANKBOSTON, N.A.
as Rights Agent
By: /s/ Xxxxxxxx Xxxxx By: /s/ Xxxxxxxxx X. Xxxxxxxx
---------------------------------- ----------------------------------
Name: Xxxxxxxx Xxxxx Name: Xxxxxxxxx X. Xxxxxxxx
Title: Account Manager Title: Administration Manager
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EXHIBIT A
TERMS OF PREFERRED STOCK
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series F Junior Participating Preferred Stock" and the
number of shares constituting such series shall be 30,000.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock ranking prior and superior to the shares of Series F
Junior Participating Preferred Stock with respect to dividends, the holders of
shares of Series F Junior Participating Preferred Stock, in preference to the
holders of Common Stock, $.01 par value per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors, out of funds of the Corporation
legally available for the payment of dividends, quarterly dividends payable in
cash on March 31, June 30, September 30 and December 31 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 F Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 1,000 times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable in shares of
Common Stock 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 F Junior Participating Preferred Stock. In the
event the Corporation shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock or effect a subdivision, combination or
consolidation of the outstanding Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount to
which holders of shares of Series F Junior Participating Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series F Junior Participating Preferred Stock as provided in paragraph (A)
above immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock) and the
Corporation shall pay such dividend or distribution on the Series F Junior
Participating Preferred Stock before the dividend or distribution declared on
the Common Stock is paid or set apart; 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
49
Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1.00 per share on the Series F Junior Participating 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 F Junior Participating Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of issue of such shares
of Series F Junior Participating 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 F Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series F Junior Participating
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 F Junior Participating 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 F
Junior Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series F Junior Participating Preferred Stock shall entitle the
holder thereof to 1,000 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock or
effect a subdivision, combination or consolidation of the outstanding Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share holders of shares of Series F
Junior Participating Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, by law, or in any other
Certificate of Vote of Directors establishing a series of Preferred Stock or any
similar stock, the holders of shares of Series F Junior Participating Preferred
Stock, the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
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(C) (i) If at any time dividends on any Series F Junior
Participating Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall xxxx the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series F Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series F Junior
Participating Preferred Stock) with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.
(ii) During any default period, such voting right of the
holders of Series F Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(c) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series F Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during
an existing default period, have previously exercised their right to elect
Directors, the Board of Directors shall within twenty (20) Business Days after
such default amend the Corporation's by-laws to make provision for the election
of directors consistent with the provisions of this Section 3 and call a special
meeting of the holders of shares of the Series F Junior Participating Preferred
Stock and all other holders of Preferred Stock who are then entitled to
participate in the election of such Directors for the purpose of electing the
additional Directors provided by this Section 3. Notice of such meeting and of
any annual meeting at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph (C)(iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his last address as
the same appears on the books of the Corporation. Such meeting shall be called
for a time not earlier than 10 days and not later than 60 days after such order
or request. Notwithstanding the provisions of this paragraph (C)(iii), no
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such special meeting shall be called during the period within 60 days
immediately preceding the date fixed for the next annual meeting of the
stockholders.
(iv) In any default period, the holders of Common Stock,
and other classes of stock of the Corporation, if applicable, shall continue to
be entitled to elect the whole number of Directors until the holders of
Preferred Stock shall have exercised their right to elect two (2) Directors
voting as a class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in office until their
successors shall have been elected by such holders or until the expiration of
the default period, and (y) any vacancy in the Board of Directors may (except as
provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority
of the remaining Directors theretofore elected by the holders of the class of
stock which elected the Director whose office shall have become vacant.
References in this paragraph (C) to Directors elected by the holders of a
particular class of stock shall include Directors elected by such Directors to
fill vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period,
(x) the right of the holders of Preferred Stock as a class to elect Directors
shall cease, (y) the term of any Directors elected by the holders of Preferred
Stock as a class shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the Corporation's by-laws irrespective of any
increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3
(such number being subject, however, to change thereafter in any manner provided
by law or in the Corporation's articles of organization or by-laws). Any
vacancies in the Board of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by a majority of the remaining
Directors.
(D) Except as set forth herein, or as otherwise provided by law,
holders of Series F Junior Participating Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series F Junior Participating Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of Series
F Junior Participating Preferred Stock outstanding shall have been paid in full,
the Corporation shall not:
(i) declare or pay dividends on or make any other
distributions on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series F Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up)
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with the Series F Junior Participating Preferred Stock, except dividends paid
ratably on the Series F Junior Participating 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 (either as to dividends or upon
liquidation, dissolution or winding up) to the Series F Junior Participating
Preferred Stock, provided that the 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 (either as to dividends or upon
dissolution, liquidation or winding up) to the Series F Junior Participating
Preferred Stock;
(iv) purchase or otherwise acquire for consideration any
shares of Series F Junior Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series F Junior Participating 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 F Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of undesignated Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series F Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series F Junior Participating Preferred Stock
shall have received $1,000 per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series F Liquidation Preference"). Following the payment of
the full amount of the Series F Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series F Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series F Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph
C
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53
below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
F Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series F Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series F Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio of the Adjustment
Number to 1 with respect to such Preferred Stock and Common Stock, on a per
share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series F Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series F Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time declare or pay
any dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(D) Neither the consolidation, merger or other business
combination of the Corporation with or into any other corporation nor the sale,
lease, exchange or conveyance of all or any part of the property, assets or
business of the Corporation shall be deemed to be a liquidation, dissolution or
winding up of the Corporation for purposes of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Series F Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding
-6-
54
sentence with respect to the exchange or change of shares of Series F Junior
Participating 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 F Junior
Participating Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series F Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets upon liquidation,
dissolution, winding up or otherwise, unless the terms of any such series shall
provide otherwise.
Section 10. Amendment. The articles of organization of the
Corporation shall not be further amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series F Junior
Participating Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least seventy-five percent of the
outstanding shares of Series F Junior Participating Preferred Stock, voting
together as a single class.
Section 11. Fractional Shares. Series F Junior Participating
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series F Junior Participating Preferred Stock.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R-_______________ Rights
NOT EXERCISABLE AFTER DECEMBER 16, 2006 OR EARLIER IF REDEEMED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.01 PER
RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON, AN ADVERSE
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON OR AN ADVERSE PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON, AN ADVERSE PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON OR ADVERSE 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.](1)
------------------------
(1) If applicable, insert this portion of the legend and delete preceding
sentence.
56
RIGHTS CERTIFICATE
MAPICS, INC.
This Rights Certificate certifies that or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the holder thereof, subject to the terms, provisions and conditions of
the Amended and Restated Rights Agreement, dated as of March 30, 1998 (as
amended, supplemented or otherwise modified from time to time, the "Rights
Agreement"), among MAPICS, Inc., a Massachusetts corporation, MAPICS, Inc., a
Georgia corporation (the "Company"), and BankBoston, N.A., a national banking
association (the "Rights Agent"), to purchase from the Company after the
Distribution Date (as such term is defined in the Rights Agreement) and at any
time prior to the Expiration Date (as such term is defined in the Rights
Agreement) at the office or offices of the Rights Agent designated for such
purpose or its successors as Right Agent, one-thousandth of a fully paid,
nonassessable share of Series F Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $60.00 per one one
thousandth of a share (the "Purchase Price"), upon presentation and surrender of
this Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of based on the Preferred Stock as constituted
at such date. The Company reserves the right to require prior to the occurrence
of a Triggering Event (as such term is defined in the Rights Agreement) that a
number of Rights be exercised so that only whole shares of Preferred Stock will
be issued.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights
evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring
Person, an Adverse Person or an Affiliate or Associate of an Acquiring Person or
Adverse Person, (ii) a transferee of an Acquiring Person or an Adverse Person
(or of any such Associate or Affiliate of an Acquiring Person or an Adverse
Person), or (iii) under certain circumstances specified in the Rights Agreement,
a transferee of a person who, after such transfer, became an Acquiring Person or
an Adverse Person (or an Associate or Affiliate of an Acquiring Person or an
Adverse Person), such Rights shall become null and void and no holder hereof
shall have any right with respect to such Rights from and after the occurrence
of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a
57
full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific circumstances
set forth in the Rights Agreement. Copies of the Rights Agreement are on file at
the office of the Company and are also available upon written request to the
Company.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office or offices of the Rights Agent designated
for such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-thousandths of a share of Preferred
Stock as the Rights evidenced 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 surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $.01 per Right at any time prior to the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close of
business on the tenth day following the Record Date), or such later date as may
be determined by action of the Board (with the concurrence of a majority of the
Continuing Directors), or (ii) the Final Expiration Date. Under certain
circumstances set forth in the Rights Agreement, the decision to redeem shall
require the concurrence of a majority of the Continuing Directors.
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred Stock), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of shares of Preferred
Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this 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.
58
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers.
ATTEST: MAPICS, INC., a Georgia corporation
By:
-----------------------------------------
President and Chief Executive Officer
Countersigned:
BANKBOSTON, N.A.
By:
-----------------------------------------
Authorized Signature
59
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to
transfer the Rights Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto (Please
print name and address of transferee) this Rights Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
----------------------------------
Signature
Signature Guaranteed:
-----------------
Certificate
---------------------------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [is][is not] being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person, an
Adverse Person or an Affiliate or Associate of an Acquiring Person or an Adverse
Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [did][did not] acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person, an Adverse Person or an Affiliate or Associate of an Acquiring Person or
an Adverse Person.
----------------------------------
Signature
Signature Guaranteed:
----------------
60
NOTICE
The signature to the foregoing Assignment and Certificate 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.
61
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Rights
Certificate.)
To: MAPICS, INC.
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)
----------------------------------
Signature
Signature Guaranteed:
----------------
Certificate
--------------------------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [are][are not]
are not being exercised by or on behalf of a Person who is or was an Acquiring
Person, an Adverse Person or
62
an Affiliate or Associate of an Acquiring Person or an Adverse Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [did][did not] acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person, an Adverse Person or an Affiliate or Associate of an Acquiring Person or
an Adverse Person.
----------------------------------
Signature
Signature Guaranteed:
----------------
Certificate
--------------------------
NOTICE
The signature to the foregoing Election to Purchase and Certificate
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.
63
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On December 3, 1996, the Board of Directors of Marcam Corporation (the
"Company") declared a dividend of one preferred stock purchase right (a "Right")
for each outstanding share of the Company's Common Stock and a dividend of ten
Rights for each outstanding share of the Company's Series D and E Convertible
Preferred Stock (the "Convertible Preferred Stock" and together with the Common
Stock, the "Company Securities") to stockholders of record at the close of
business on December 16, 1996 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company a unit consisting of one one
thousandth of a share (a "Unit") of Series F Junior Participating Preferred
Stock, $1.00 par value per share (the "Preferred Stock"), at a purchase price of
$60.00 per Unit (the "Purchase Price"), subject to adjustment. The description
and terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement") between the Company and The First National Bank of Boston, as Rights
Agent.
Initially, the Rights will be attached to all certificates representing
Company Securities then outstanding, and no separate Rights Certificates will be
distributed. The Rights will separate from the Company Securities and a
Distribution Date will occur upon the earlier of (i) 10 days (or such later date
as may be determined by action of the Board of Directors (with the concurrence
of a majority of the Continuing Directors (as defined below))) following a
public announcement either that a person or group of affiliated or associated
persons, other than an Exempt Person (as defined below), (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial ownership of 20% or
more of the outstanding shares of Common Stock, or that a person or group who
was at any time an Exempt Person but is subsequently no longer considered to be
an Exempt Person becomes an Acquiring Person (the "Stock Acquisition Date"),
(ii) 10 business days (or such later date as may be determined by action of the
Board of Directors (with the concurrence of a majority of the Continuing
Directors)) following the commencement of a tender offer or exchange offer that
may result in a person or group beneficially owning 20% or more of such
outstanding shares of Common Stock or (iii) 10 business days after the
Continuing Directors of the Company shall declare any Person to be an Adverse
Person (as defined below), upon a determination that such Person, alone or
together with its affiliates and associates, has become the beneficial owner of
an amount of Common Stock which the Continuing Directors determine to be
substantial (which amount shall in no event be less than 10% of the shares of
Common Stock then outstanding) and a majority of the Continuing Directors
determines, after reasonable inquiry and investigation, including consultation
with such persons as such directors shall deem appropriate, that (a) such
beneficial ownership by such person is intended to cause the Company to
repurchase the Common Stock beneficially owned by such person or to cause
pressure on the Company to take action or enter into a transaction or series of
transactions intended to provide such person with short-term financial gain
under circumstances where such directors determine that the best long-term
interests of the Company and its stockholders would not be served by taking such
action or entering into such transaction or series of transactions at that time
or (b) such beneficial ownership is causing or is reasonably likely to cause a
material adverse impact (including, but not limited to, impairment of
relationships with customers, impairment of the Company's ability to
64
maintain its competitive position or impairment of the Company's business
reputation) on the business or prospects of the Company.
The term "Exempt Person" means General Atlantic Partners 32, L.P.,
General Atlantic Partners 21, L.P. and GAP Coinvestment Partners, L.P., together
with their affiliates and associates, as long as the Company's standstill
agreement still applies to such persons and as long as such persons have not
breached such standstill agreements. If any person or group who was at any time
an Exempt Person but is subsequently no longer considered to be an Exempt Person
and who, at the time such person or group is no longer considered to be an
Exempt Person, Beneficially Owns 20% or more of the Common Stock of the Company
then outstanding, such person or group shall not be deemed an "Acquiring Person"
unless and until such person or group shall, subsequent to the time at which
such person or group ceases to be an Exempt Person, either (i) become the
Beneficial Owner of an additional 1% or more of the shares of Common Stock of
the Company then outstanding or (ii) enter into one or more "self-dealing"
transactions as set forth in the Rights Agreement, then such person or group
shall be deemed to be an "Acquiring Person" from and after the time immediately
preceding the earliest to occur of the events specified in clause (i) or (ii) of
this sentence.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the Company Security certificates
and will be transferred with and only with such Company Security certificates,
(h) new Company Security certificates issued after the Record Date will contain
a notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Company Securities outstanding,
even without such notation, will also constitute the transfer of the Rights
associated with the Company Securities represented by such certificate. Pursuant
to the Rights Agreement, the Company reserves the right to require prior to the
occurrence of a Triggering Event (as defined below) that, upon any exercise of
Rights, a number of Rights may be exercised so that only whole shares of
Preferred Stock will be issued.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 16, 2006, unless earlier redeemed by
the Company as described below.
As soon as practicable after the Distribution Date, separate
certificates evidencing the Rights ("Rights Certificates") will be mailed to
holders of record of the Company Securities as of the close of business on the
Distribution Date and, thereafter, such separate Rights Certificates alone will
represent the Rights. All shares of Common Stock issued prior to the
Distribution Date will be issued with Rights. Shares of Common Stock issued
following the Distribution Date (other than upon exercise of a Right) pursuant
to the exercise of stock options or under any employee plan or arrangement, or
upon the exercise, conversion or exchange of securities, notes, warrants or
debentures issued by the Company (other than the Convertible Preferred Stock)
will be issued with Rights. Except as otherwise determined by the Board of
Directors, no other shares of Common Stock issued following the Distribution
Date will be issued with Rights.
-2-
65
In the event that the Continuing Directors determine that a person is
an Adverse Person or, at any time following the Distribution Date, (i) the
Company is the surviving corporation in a merger with an Acquiring Person and
its Common Stock is not changed or exchanged, (ii) either a person or group,
other than an Exempt Person, becomes the beneficial owner of 20% or more of the
then outstanding shares of Common Stock, or a person or group who was at any
time an Exempt Person but is subsequently no longer considered to be an Exempt
Person becomes an Acquiring Person (in either case except pursuant to an offer
for all outstanding shares of Common Stock which the Continuing Directors
determine to be fair to, and otherwise in the best interests of, the Company and
its stockholders), (iii) an Acquiring Person engages in one or more
"self-dealing" transactions as set forth in the Rights Agreement, or (iv) during
such time as there is an Acquiring Person, an event occurs which results in such
Acquiring Person's ownership interest being increased by more than 1% (e.g., a
reverse stock split), each holder of a Right will thereafter have the right to
receive, upon exercise, that number of shares of Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) which equals
the exercise price of the Right divided by one-half of the current market price
(as defined in the Rights Agreement) of the Common Stock at the date of the
occurrence of the event. However, Rights are not exercisable following the
occurrence of any of the events set forth above until such time as the Rights
are no longer redeemable by the Company as set forth below. Notwithstanding any
of the foregoing, following the occurrence of any of the events set forth in
this paragraph, all Rights that are, or (under certain circumstances specified
in the Rights Agreement) were, beneficially owned by an Acquiring Person or an
Adverse Person will be null and void. The events set forth in this paragraph are
described in Section 11(a)(ii) of the Rights Agreement and are referred to as
"Section 11(a)(ii) Events."
For example, at an exercise price of $60.00, each Right not owned by an
Acquiring Person or an Adverse Person (or by certain related parties) following
an event set forth in the preceding paragraph would entitle its holder to
purchase $120.00 worth of Common Stock (or other consideration, as noted above)
for $60.00. Assuming that the Common Stock has a per share value of $20.00 at
such time, the holder of each valid Right would be entitled to purchase six
shares of Common Stock for $60.00.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation (other than a
merger which follows an offer determined by the Board of Directors to be fair as
described in clause (ii) of the second preceding paragraph), or (ii) more than
50% of the Company's assets or earning power is sold or transferred, each holder
of a Right (except Rights which previously have been voided as set forth above)
shall thereafter have the right to receive, upon exercise, that number of shares
of common stock of the acquiring company which equals the exercise price of the
Right divided by one-half of the current market price (as defined in the Rights
Agreement) of such common stock at the date of the occurrence of the events set
forth in this paragraph and in the second preceding paragraph are referred to as
the "Triggering Events."
-3-
66
At any time after the occurrence of a Section 11(a)(ii) Event, the
Board (with the concurrence of a majority of the Continuing Directors) may
exchange the Rights (other than Rights owned by an Acquiring Person or Adverse
Person which have become void), in whole or in part, at an exchange ratio of one
share of Common Stock, or one Common Stock Equivalent (as defined in the Rights
Agreement), per Right (subject to adjustment).
The Purchase Price payable, and the number of Units of Preferred Stock
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Stock, (ii) if holders of the Preferred Stock are granted certain
rights or warrants to subscribe for Preferred Stock or convertible securities at
less than the current market price of the Preferred Stock, or (iii) upon the
distribution to holders of the dividends payable on the Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in
part, at any time until ten days following the Stock Acquisition Date or such
later date as may be determined by action of the Board of Directors (with the
concurrence of a majority of the Continuing Directors), at a price of $.01 per
Right (payable in cash, Common Stock or other consideration deemed appropriate
by the Board of Directors). If the Board of Directors authorizes redemption of
the Rights at or after the time a Person becomes an Acquiring Person, there must
be Continuing Directors then in office and such authorization shall require the
concurrence of a majority of such Continuing Directors. The Company may not
redeem the Rights if the Continuing Directors have previously declared a person
to be an Adverse Person. Immediately upon the action of the Board of Directors
ordering redemption of the Rights, with, where required, the concurrence of the
Continuing Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.01 per Right redemption price.
The term "Continuing Directors" means any member of the Board of
Directors of the Company who was a member of the Board of Directors on the date
of the Rights Agreement, and any person who is subsequently elected to the Board
of Directors if such person is recommended or approved by a majority of the
Continuing Directors, but shall not include an Acquiring Person, an Adverse
Person or an affiliate or associate of an Acquiring Person or an Adverse Person,
or any representative of the foregoing entities.
Calculations of the number of shares of Common Stock outstanding at any
time shall include the number of shares of Common Stock issuable upon conversion
of all shares of Convertible Preferred Stock outstanding at the applicable time.
-4-
67
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be amended by the
Board of Directors of the Company prior to the earlier to occur of the
determination that a person is an Adverse Person or the Distribution Date. After
the earlier of such events, the provisions of the Rights Agreement may be
amended by the Board of Directors (in certain circumstances, with the
concurrence of the Continuing Directors) in order to cure any ambiguity, to make
changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or any Adverse Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A dated
December 5, 1996. A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
-5-
