ANACOMP, INC.
AND
MELLON INVESTOR SERVICES LLC
Rights Agent
RIGHTS AGREEMENT
Dated as of August 8, 2002
1. Certain Definitions..................................................................1
2. Appointment of Rights Agent..........................................................5
3. Issuance of Right Certificates.......................................................6
4. Form of Right Certificates...........................................................7
5. Countersignature and Registration....................................................8
6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates.........................................9
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.......................10
8. Cancellation and Destruction of Right Certificates..................................11
9. Reservation and Availability of Shares of Preferred Stock...........................11
10. Preferred Stock Record Date.........................................................13
11. Adjustments to Number and Kind of Shares, Number of Rights or Purchase Price........13
12. Certification of Adjustments........................................................22
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power................22
14. Fractional Rights and Fractional Shares.............................................26
15. Rights of Action....................................................................27
16. Agreement of Right Holders..........................................................27
17. Right Certificate Holder Not Deemed a Stockholder...................................28
18. Concerning the Rights Agent.........................................................28
19. Merger or Consolidation or Changed Name of Rights Agent.............................29
20. Rights and Duties of Rights Agent...................................................29
21. Change of Rights Agent..............................................................32
22. Issuance of New Right Certificates..................................................32
23. Redemption..........................................................................33
24. Exchange of Rights for Common Stock.................................................33
25. Notice of Proposed Actions..........................................................35
26. Notices.............................................................................36
27. Supplements and Amendments..........................................................37
28. Successors..........................................................................37
29. Determinations and Actions by the Board of Directors, etc...........................37
30. Benefits of this Rights Agreement...................................................38
31. Governing Law.......................................................................38
32. Counterparts........................................................................38
33. Descriptive Headings................................................................38
34. Severability........................................................................38
RIGHTS AGREEMENT
This Rights Agreement (the "Agreement" or "Rights Agreement"), is dated as
of August 8, 2002, between Anacomp, Inc., an Indiana corporation (the
"Company"), and Mellon Investor Services LLC, a New Jersey limited liability
company, as Rights Agent (the "Rights Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Board of Directors of the Company on July 22, 2002 (i)
authorized the issuance and declared a dividend of one right ("Right") for each
share of the common stock of the Company ("Common Stock") outstanding as of the
Close of Business (as such term is hereinafter defined) on August 20, 2002 (the
"Record Date"), each Right representing the right to purchase one one-hundredth
of a share of Series RP Preferred Stock of the Company having the rights, powers
and preferences set forth in the form of Articles of Amendment attached hereto
as Exhibit A upon the terms and subject to the conditions hereinafter set forth,
and (ii) further authorized the issuance of one Right with respect to each share
of Common Stock of the Company that shall become outstanding between the Record
Date, and the Distribution Date (as such term is hereinafter defined);
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties agree as follows:
1. Certain Definitions. For purposes of this Agreement the following terms
shall have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, without the prior approval of the Board of Directors, shall be the
Beneficial Owner (as such term is hereinafter defined) of twenty percent (20%)
or more of the outstanding Common Stock; provided, however, that in no event
shall a Person who or which, together with all Affiliates and Associates of such
Person, is the Beneficial Owner of less than 20% of the Company's outstanding
shares of Common Stock, become an Acquiring Person solely as a result of a
reduction of the number of shares of outstanding Common Stock, including
repurchases of outstanding shares of Common Stock by the Company, which
reduction increases the percentage of outstanding shares of Common Stock
beneficially owned by such Person, provided, however, that if a Person shall
become the Beneficial Owner of 20% or more of the Company's outstanding shares
of Common Stock then outstanding solely by reason of a reduction of the number
of shares of outstanding Common Stock, and shall thereafter 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" unless upon the
consummation of the acquisition of such additional shares of Common Stock such
person does not own twenty percent (20%) or more of the shares of Common Stock
then outstanding, and provided further, that an Acquiring Person shall not
include an Exempt Person (as such term is hereinafter defined) or a
Grandfathered Person (as such term is hereinafter defined); provided further
that a Grandfathered Person shall become an Acquiring Person if, (i) without the
prior approval of the Board of Directors, the Grandfathered Person becomes the
Beneficial Owner of an additional number of shares, in addition to such
Grandfathered Person's shares of Common Stock Beneficially Owned on the Record
Date, equal in the aggregate to 1% or more of the Common Stock then outstanding;
or (ii) in any event, if such Grandfathered Person becomes the Beneficial Owner
of 35% or more of the Company's Common Stock; but (iii) a Grandfathered Person
shall not become an Acquiring Person solely by reason of a reduction of the
number of shares of outstanding Common Stock. Notwithstanding the foregoing, if
the Board of Directors of the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently (including,
without limitation, because (i) such Person was unaware that it beneficially
owned a percentage of Common Stock that would otherwise cause such Person to be
an "Acquiring Person" or (ii) such Person was aware of the extent of its
Beneficial Ownership but had no actual knowledge of the consequences of such
Beneficial Ownership under this Agreement) and without any intention of changing
or influencing control of the Company, 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 or
to have become an "Acquiring Person" for any purposes of this Agreement.
(b) "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 ("Exchange Act"), as in effect
on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of any securities
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities), whether or not in writing, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," securities tendered
pursuant to a tender or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange; or (B) the right to vote 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 securities if
the agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not 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 with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting except as described in
the proviso to clause (B) of subparagraph (ii) of this Section 1(c) or disposing
of any securities of the Company; provided, however, that no Person who is an
officer, director or employee of an Exempt Person shall be deemed, solely by
reason of such Person's status or authority as such, to be the "Beneficial
Owner" of, to have "Beneficial Ownership" of or to "beneficially own" any
securities that are "beneficially owned" (as defined in this Section 1(c)),
including, without limitation, in a fiduciary capacity, by an Exempt Person or
by any other such officer, director or employee of an Exempt Person.
For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including any calculation
for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act as in effect on the date hereof.
(d) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the states of New York, California or
New Jersey are authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
California time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., California time, on the next succeeding
Business Day.
(f) "Common Stock" when used with reference to the Company shall mean
the common stock of the Company. "Common Stock" when used with reference to any
Person other than the Company which shall be organized in corporate form shall
mean the capital stock or other equity security with the greatest per share
voting power of such Person or, if such Person is a Subsidiary of or is
controlled by another Person, the Person which ultimately controls such
first-mentioned Person. "Common Stock" when used with reference to any Person
other than the Company which shall not be organized in corporate form shall mean
units of beneficial interest which shall represent the right to participate in
profits, losses, deductions and credits of such Person and which shall be
entitled to exercise the greatest voting power per unit of such Person.
(g) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(h) "Current Market Price" shall have the meaning set forth in Section
11(d) hereof.
(i) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(j) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(k) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
(l) "Exchange Act" shall have the meaning set forth in Section 1(b)
hereof.
(m) "Exempt Person" shall mean the Company or any Subsidiary of the
Company, including, without limitation, in its fiduciary capacity, any employee
benefit plan or employee stock plan of the Company or of any Subsidiary of the
Company, or any Person, organized, appointed, established or holding Common
Stock for or pursuant to the terms of any such plan or any Person funding other
employee benefits for employees of the Company or any Subsidiary of the Company.
(n) "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(o) "Flip-In Event" shall mean any event described in Section
11(a)(ii)(A), 11(a)(ii)(B) or 11(a)(ii)(C) hereof.
(p) "Flip-In Trigger Date" shall have the meaning set forth in Section
11(a)(iii) hereof.
(q) "Flip-Over Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a) hereof.
(r) "Grandfathered Person" shall mean each of Franklin Advisors and
Special Value Investment Management, LLC, provided that each of such Persons
shall cease to be a Grandfathered Person at such time as each such Person ceases
to Beneficially Own in excess of 20% of the Company's Common Stock.
(s) "NASDAQ" shall have the meaning set forth in Section 9(b) hereof.
(t) "Person" shall mean any individual, firm, corporation, limited
liability company, partnership, trust or other entity, and shall include any
successor in interest (by merger or otherwise) thereof or thereto.
(u) "Preferred Stock" shall mean the Series RP Preferred Stock, $0.01
par value, of the Company having the rights, powers and preferences set forth in
Exhibit A hereto, and, to the extent that there is not a sufficient number of
shares of Series RP Preferred Stock authorized to permit the full exercise of
the Rights, any other series of Preferred Stock, $0.01 par value, of the Company
designated for such purpose containing terms substantially similar to the terms
of the Series RP Preferred Stock.
(v) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(w) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(x) "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of the Agreement.
(y) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(z) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(aa) "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
(bb) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(cc) "Stock Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such or such earlier date as a majority of the directors shall become
aware of the existence of an Acquiring Person.
(dd) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ee) "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other persons
performing similar functions are beneficially owned, directly or indirectly, by
such Person and any corporation or other entity that is otherwise controlled by
such Person.
(ff) "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
(gg) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(hh) "Triggering Event" shall mean any event described in Section
11(a)(ii)(A), 11(a)(ii)(B) or 11(a)(ii)(C) or Section 13 hereof.
(ii) "Voting Power" shall mean the voting power of all securities of
the Company then outstanding and generally entitled to vote for the election of
directors of the Company.
Any determination required by the definitions contained in this Section 1
shall be made by the Board of Directors of the Company in its good faith
judgment, which determination shall be binding on the Rights Agent and the
holders of the Rights.
2. Appointment of Rights Agent. The Company hereby appoints the Rights
Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. In the event the Company appoints one or more Co-Rights
Agents, the respective duties of the Rights Agents and any Co-Rights Agents
shall be as the Company shall determine; provided such determination is
acceptable to the Rights Agent. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such co-Rights Agent.
3. Issuance of Right Certificates.
(a) Until the earlier of (i) the tenth day 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) or (ii) the tenth
business day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
of the first public announcement of the intent of any Person (other than an
Exempt Person) to commence (which intention to commence remains in effect for
five business days after such announcement), a tender or exchange offer upon the
successful consummation of which such Person, together with its Affiliates and
Associates, would be the Beneficial Owner of 20% or more of the outstanding
Common Stock (irrespective of whether any shares are actually purchased pursuant
to any such offer) (including any such date which is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of such dates
being herein referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of Section 3(c) hereof) by the certificates
for the Common Stock registered in the names of the holders of the Common Stock
and not by separate Right Certificates, and (y) each Right will be transferable
only in connection with the transfer of a share (subject to adjustment as
hereinafter provided) of Common Stock. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the Rights Agent
will, if requested and provided with all necessary information, send) by
first-class, postage prepaid mail, to each record holder of the Common Stock as
of the Close of Business on the Distribution Date, as shown by the records of
the Company, to the address of such holder shown on such records, a Right
certificate in substantially the form of Exhibit B hereto ("Right Certificate")
evidencing one Right for each share of Common Stock so held. As of and after the
Distribution Date the Rights will be evidenced solely by such Right
Certificates.
The Company shall promptly notify the Rights Agent in writing upon the
occurrence of the Distribution Date and, if such notification is given orally,
the Company shall confirm same in writing on or prior to the Business Day next
following. Until such notice is received by the Rights Agent, the Rights Agent
may presume conclusively for all purposes that the Distribution Date has not
occurred.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Stock,
substantially in the form attached hereto as Exhibit C ("Summary of Rights"), by
first-class, postage prepaid mail, to each record holder of Common Stock as of
the Close of Business on the Record Date, at the address of such holder shown on
the records of the Company.
(c) Rights shall be issued in respect of all shares of Common Stock
that are issued (either as an original issuance or from the Company's treasury)
after the Record Date prior to the earlier of the Distribution Date or the
Expiration Date. With respect to certificates representing such shares of Common
Stock, the Rights will be evidenced by such certificates for Common Stock
registered in the names of the holders thereof together with the Summary of
Rights. Until the Distribution Date (or, if earlier, the Expiration Date), the
surrender for transfer of any certificate for Common Stock outstanding on the
Record Date (with or without a copy of the Summary of Rights attached thereto),
shall also constitute the surrender for transfer of the Rights associated with
the Common Stock represented thereby.
(d) Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date shall have impressed on, printed on, written on or otherwise
affixed to them a legend in substantially the following form:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in the Rights Agreement between Anacomp, Inc. and
Mellon Investor Services, LLC, as Rights Agent, dated as of August 8, 2002,
as the same may be amended from time to time (the "Rights Agreement"), the
terms of which are incorporated herein by reference and a copy of which is
on file at the principal executive office of Anacomp, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Anacomp, Inc. will mail to the holder of this certificate a
copy of the Rights Agreement without charge after receipt by it of a
written request therefor. Under certain circumstances as provided in the
Rights Agreement, Rights issued to, beneficially owned by or transferred to
any person who is or becomes an Acquiring Person (as defined in the Rights
Agreement) or an Associate or Affiliate (as defined in the Rights
Agreement) thereof and certain transferees thereof will be null and void
and will no longer be transferable.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the Distribution Date, be evidenced by such certificates alone, and registered
holders of Common Stock shall also be the registered holders of the associated
Rights, and the surrender for transfer of any such certificate shall also
constitute the surrender for transfer of the Rights associated with the Common
Stock represented thereby. In the event that the Company purchases or acquires
any shares of Common Stock after the Record Date but prior to the earlier of the
Distribution Date, the Redemption Date or the Expiration Date, any Rights
associated with such shares of Common Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the shares of Common Stock no longer outstanding.
Notwithstanding this paragraph (d), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
4. Form of Right Certificates.
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when, as and if
issued, shall be substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate (but which do
not affect the rights, duties or responsibilities of the Rights Agent) and as
are not inconsistent with the provisions of this Rights Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11, 13 and 22 hereof, the Right Certificates evidencing
the Rights issued on the Record Date whenever such certificates are issued,
shall be dated as of the Record Date and the Right Certificates evidencing
Rights to holders of record of Common Stock issued after the Record Date shall
be dated as of the Record Date but shall also be dated to reflect the date of
issuance of such Right Certificate. On their face, Right Certificates shall
entitle the holders thereof to purchase, for each Right, one one-hundredth of a
share of Preferred Stock, or other securities or property as provided herein, as
the same may from time to time be adjusted as provided herein, at the price per
one one-hundredth of a share of Preferred Stock of $150.00, as the same may from
time to time be adjusted as provided herein (the "Purchase Price").
(b) Notwithstanding any other provision of this Rights Agreement, any
Right Certificate that represents Rights that are or were at any time on or
after the earlier of the Stock Acquisition Date or the Distribution Date
beneficially owned by an Acquiring Person or any Affiliate or Associate thereof
(or any transferee of such Rights) shall, to the extent the Rights Agent has
notice thereof and to the extent feasible, have impressed on, printed on,
written on or otherwise affixed to it (if the Company or the Rights Agent has
knowledge that such Person is an Acquiring Person or an Associate or Affiliate
thereof or transferee of such Persons or a nominee of any of the foregoing) the
following legend:
The beneficial owner of the Rights represented by this Right Certificate is
an Acquiring Person or an Affiliate or Associate (as defined in the Rights
Agreement) of an Acquiring Person or a subsequent holder of such Right
Certificates beneficially owned by such Persons. Accordingly, this Right
Certificate and the Rights represented hereby are null and void and will no
longer be transferable as provided in the Rights Agreement.
The provisions of Section 11(a)(ii) and Section 24 of this Rights Agreement
shall be operative whether or not the foregoing legend is contained on any such
Right Certificates.
5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the Company
by its Chief Executive Officer, its President or any Vice President, either
manually or by facsimile signature, and have affixed thereto the Company's seal
or a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned, either manually or by facsimile, by the
Rights Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, and receipt by the Rights Agent
of notice to that effect and all other relevant information referred to in
Section 3(a), the Rights Agent will keep or cause to be kept, at one of its
offices designated for such purposes, records for registration and transfer of
the Right Certificates issued hereunder. Such records shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, the date of each
of the Right Certificates and the certificate numbers for each of the Right
Certificates.
6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14
hereof, at any time after the Close of Business on the Distribution Date and at
or prior to the Close of Business on the Expiration Date, any Right Certificate
or Certificates (other than Right Certificates representing Rights that have
become null and void pursuant to Section 11(a)(ii) hereof or that have been
exchanged pursuant to Section 24 hereof) may be (i) transferred or (ii) split
up, combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of shares of Preferred
Stock or other securities as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer any Right Certificate shall surrender the Right Certificate
at the office of the Rights Agent designated for such purposes with the form of
assignment on the reverse side thereof duly endorsed (or enclose with such Right
Certificate a written instrument of transfer in form satisfactory to the Company
and the Rights Agent), duly executed by the registered holder thereof or his
attorney duly authorized in writing, and with such signature guaranteed by a
member of a securities approved medallion program. Any registered holder
desiring to split up, combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be split up, combined or exchanged at the
office of the Rights Agent designated for such purpose. Thereupon the Rights
Agent shall, subject to Sections 4(b), 7(e), 11 and 14 hereof, countersign (by
manual or facsimile signature) and deliver to the person entitled thereto a
Right Certificate or Right Certificates, as the case may be, as so requested.
Neither the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate or Certificates until the registered holder thereof shall have
completed and signed the certificate contained in the form of assignment set
forth on the reverse side of each such Right Certificate and provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) thereof and the Affiliates and Associates of such Beneficial
Owner (or former Beneficial Owner), and of the Rights evidenced thereby, as the
Company or the Rights Agent shall reasonably request. The Company or the Rights
Agent 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 Right Certificates. The Rights Agent shall promptly
forward any such sum collected by it to the Company or to such Persons as the
Company shall specify by written notice. The Rights Agent shall have no duty or
obligation under this Section unless and until it is satisfied that all such
taxes and/or governmental charges have been paid.
(b) Subject to the provisions of Section 11(a)(ii) hereof, upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, if requested by the Company, reimbursement to the
Company and the Rights Agent of all reasonable expenses incidental thereto, and
upon surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will execute and deliver a new Right Certificate of like
tenor to the Rights Agent for delivery to the registered owner in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 11(a)(ii) hereof, the Rights shall become
exercisable, and may be exercised to purchase Preferred Stock, except as
otherwise provided herein, in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed and properly
completed (with such signature duly guaranteed), to the Rights Agent at the
office of the Rights Agent designated for such purpose, together with payment of
the Purchase Price with respect to each Right exercised, subject to adjustment
as hereinafter provided, and an amount equal to any tax or charge required to be
paid under Section 9(d) hereof, by certified check, cashier's check, bank draft
or money order payable to the order of the Company, at or prior to the Close of
Business on the earlier of (i) August 20, 2012 (the "Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof
(such date being herein referred to as the "Redemption Date") or (iii) the time
at which all such Rights are exchanged as provided in Section 24 hereof (the
earliest of (i), (ii) and (iii) being herein referred to as the "Expiration
Date").
(b) The Purchase Price and the number of shares of Preferred Stock or
other securities or consideration to be acquired upon exercise of a Right shall
be subject to adjustment from time to time as provided in Sections 11 and 13
hereof. The Purchase Price shall be payable in lawful money of the United States
of America, in accordance with Section 7(c) hereof.
(c) Except as provided in Section 11(a)(ii) hereof, upon receipt of a
Right Certificate with the form of election to purchase duly executed and
properly completed, accompanied by payment of the Purchase Price (as such amount
may be reduced pursuant to Section 11(a)(iii) hereof) or so much thereof as is
necessary for the shares to be purchased and an amount equal to any applicable
tax or charge required to be paid under Section 9(d) hereof by cash, certified
check or official bank check payable to the order of the Company, the Rights
Agent shall, subject to Section 20(k), thereupon promptly (i) requisition from
any transfer agent of the Preferred Stock (or make available if the Rights Agent
is the transfer agent) certificates for the number of shares of Preferred Stock
so elected to be purchased and the Company will comply and hereby authorizes and
directs such transfer agent to comply with all such requests, (ii) requisition
from the Company the amount of cash to be paid in lieu of issuance of fractional
shares in accordance with Section 14(b) hereof, and (iii) promptly after receipt
of such Preferred Stock certificates cause the same to be delivered to or upon
the order of the registered holder of such Right Certificate, registered in such
name or names as may be designated by such holder, and, when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered holder
of such Right Certificate. In the event of a purchase of securities, other than
Preferred Stock, pursuant to Section 11(a) or Section 13 hereof, the Rights
Agent shall promptly take the appropriate actions corresponding to the foregoing
clauses (i) through (iii). In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11(a) hereof, the Company will make all arrangements
necessary so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when necessary to comply
with this Agreement.
(d) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) properly completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof, and of the Rights evidenced thereby, as the Company or the
Rights Agent shall reasonably request.
8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
9. Reservation and Availability of Shares of Preferred Stock.
(a) The Company covenants and agrees that at all times it will cause
to be reserved and kept available, out of and to the extent of its authorized
and unissued shares of Preferred Stock not reserved for another purpose (and,
following the occurrence of a Triggering Event, other securities) or held in its
treasury, the number of shares of Preferred Stock (and, following the occurrence
of a Triggering Event, 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 in accordance with this Agreement, provided,
however, that the Company shall not be required to reserve and keep available
shares of Preferred Stock or other securities sufficient to permit the exercise
in full of all outstanding Rights pursuant to the adjustments set forth in
Section 11(a)(ii), Section 11(a)(iii) or Section 13 hereof unless, and only to
the extent that, the Rights become exercisable pursuant to such adjustments.
(b) The Company shall (i) use its best efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Preferred Stock (and following the occurrence of a Triggering Event, other
securities) issued or reserved for issuance upon exercise thereof to be reported
by the National Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ"), or such other system then in use, and if the Common Stock
shall become listed on any national securities exchange, to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Preferred Stock (and, following the occurrence of a Triggering Event, other
securities) issued or reserved for issuance upon exercise thereof to be listed
on such exchange upon official notice of issuance upon such exercise and (ii) if
then necessary, to permit the offer and issuance of such shares of Preferred
Stock (and, following the occurrence of a Triggering Event, other securities),
register and qualify such share of Preferred Stock (and, following the
occurrence of a Triggering Event, other securities) under the Securities Act and
any applicable state securities or "blue sky" laws (to the extent exemptions
therefrom are not available), cause such registration statement and
qualifications to become effective as soon as possible after such filing and
keep such registration and qualifications effective until the Expiration Date of
the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) days, the exercisability of the Rights in order to prepare
and file a registration statement under the Securities Act and permit such
registration statement to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. The Company shall notify the
Rights Agent whenever it makes a public announcement pursuant to this Section
9(b) and provide the Rights Agent with a copy of such announcement.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained and until a registration statement
under the Securities Act (if required) shall have been declared effective.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Preferred Stock (and following
the occurrence of a Triggering Event, 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 in respect thereof), be duly and
validly authorized and issued and fully paid and nonassessable shares in
accordance with applicable law.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all taxes and governmental charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any shares
of Preferred Stock (or other securities, as the case may be) upon the exercise
of Rights. The Company shall not, however, be required to pay any tax or charge
which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of certificates
for Preferred Stock (or other securities, as the case may be) upon exercise of
Rights in a name other than that of, the registered holder of the Right
Certificate, and the Company shall not be required to issue or deliver a Right
Certificate or certificate for Preferred Stock (or other securities, as the case
may be) to a person other than such registered holder until any such tax or
charge shall have been paid (any such tax or charge being payable by the holder
of such Right Certificate at the time of surrender) or until it has been
established to the Company's or the Rights Agent's satisfaction that no such tax
or charge is due.
10. Preferred Stock Record Date. Each Person in whose name any certificate
for shares of Preferred Stock (or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the shares of Preferred Stock (or other
securities, as the case may be) represented thereby on, and such certificate
shall be dated, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Purchase Price (and any applicable taxes
or charges) was made. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to the 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.
11. Adjustments to Number and Kind of Shares, Number of Rights or Purchase
Price. The number and kind of shares subject to purchase upon the exercise of
each Right, the number of Rights outstanding and the Purchase Price are subject
to adjustment from time to time as provided in this Section 11.
(a) (i)....In the event the Company shall at any time after the date
of this Rights Agreement (A) declare or pay any dividend on Preferred Stock
payable in shares of Preferred Stock, (B) subdivide or split the outstanding
shares of Preferred Stock into a greater number of shares, (C) combine or
consolidate the outstanding shares of Preferred Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Preferred Stock,
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), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of shares of Preferred Stock or capital stock, as the case may
be, issuable on such date, shall be proportionately adjusted so that the holder
of any Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and kind of
shares of capital stock or other securities, which, if such Right had been
exercised immediately prior to such date, the holder thereof would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
hereof, the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 24, 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 consolidate with or merge with and into the Company or any
of its Subsidiaries or otherwise combine with the Company or any of its
Subsidiaries and the Company or such Subsidiary shall be the continuing or
surviving corporation of such consolidation, merger or combination and the
Common Stock of the Company shall remain outstanding and no shares thereof shall
be changed into or exchanged for stock or other securities of the Company or of
any other Person or cash or any other property, or (2) shall, in one or more
transactions, other than in connection with the exercise of a Right or Rights
and other than in connection with the exercise or conversion of securities
exercisable for or convertible into securities of the Company or of any
Subsidiary of the Company, transfer any assets or property to the Company or any
of its Subsidiaries in exchange (in whole or in part) for any shares of any
class of capital stock of the Company or any of its Subsidiaries or any
securities exercisable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries, or otherwise obtain from the
Company or any of its Subsidiaries, with or without consideration, any
additional shares of any class of capital stock of the Company or any of its
Subsidiaries or any securities exercisable for or convertible into shares of any
class of capital stock of the Company or any of its Subsidiaries (other than as
part of a pro rata offer or distribution by the Company or such Subsidiary to
all holders of such shares), or (3) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire (other than as a pro rata
dividend) or dispose, to, from or with, as the case may be, in one transaction
or a series of transactions, the Company or any of its Subsidiaries, assets
(including securities) on terms and conditions less favorable to the Company or
such Subsidiary than the Company or such Subsidiary would be able to obtain in
arm's-length negotiation with an unaffiliated third party, or (4) shall receive
any compensation from the Company or any of its Subsidiaries for services other
than compensation for employment as a regular or part-time employee, or fees for
serving as a director, at rates in accordance with the Company's (or its
Subsidiary's) past practices, or (5) shall receive the benefit, directly or
indirectly (except proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits or tax
advantage provided by the Company or any of its Subsidiaries, or (6) shall
engage in any transaction with the Company (or any of its Subsidiaries)
involving the sale, license, transfer or grant of any right in, or disclosure
of, any patents, copyrights, trade secrets, trademarks, know-how or any other
intellectual or industrial property rights recognized under any country's
intellectual property laws which the Company (including its Subsidiaries) owns
or has the right to use on terms and conditions not approved by the Board; or
(B) any Person, alone or together with its Affiliates and
Associates, shall become an Acquiring Person; or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse stock split),
or any 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 or any Affiliate or
Associate of such 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, or securities exercisable for or convertible into equity
securities of the Company or any of its Subsidiaries, which is directly or
indirectly beneficially owned by any Acquiring Person or any Affiliate or
Associate of any Acquiring Person (any of (A), (B) or (C) being referred to
herein as a "Flip-In Event"), then upon the first occurrence of such Flip-In
Event (A) the Purchase Price shall be adjusted to be the Purchase Price in
effect immediately prior to the Flip-In Event multiplied by the number of one
one-hundredth of a share of Preferred Stock for which a Right was exercisable
immediately prior to such Flip-In Event, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided in
this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the
right to receive, upon exercise thereof at a price equal to the Purchase Price
(as so adjusted), in accordance with the terms of this Agreement and in lieu of
shares of Preferred Stock, such number of shares of Common Stock as shall equal
the result obtained by dividing the Purchase Price (as so adjusted) by 50% of
the Current Market Price per share of the Common Stock (determined pursuant to
Section 11(d) hereof) on the date of such Flip-In Event; provided, however, that
the Purchase Price (as so adjusted) and the number of shares of Common Stock so
receivable upon the exercise of a Right shall, following the Flip-In Event, be
subject to further adjustment as appropriate in accordance with Section 11(f)
hereof. Notwithstanding anything in this Agreement to the contrary, however,
from and after the Flip-In Event, any Rights that are beneficially owned by (x)
any Acquiring Person (or any Affiliate or Associate of any Acquiring Person),
(y) a transferee of any Acquiring Person (or any such Affiliate or Associate)
who becomes a transferee after the Flip-In Event or (z) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became a transferee
prior to or concurrently with the Flip-In Event pursuant to either (I) a
transfer from the Acquiring Person to holders of its equity securities or to any
Person with whom it has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (II) a transfer which the Board of Directors
has determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding the provisions of this paragraph, and subsequent
transferees of such Persons, shall be null and void without any further action
and any holder of such Rights shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this Agreement. The Company shall
use all reasonable efforts to ensure that the provisions of this Section
11(a)(ii) are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. From and after the Flip-In Event, no Right Certificate
shall be issued pursuant to Section 3 or Section 6 hereof that represents Rights
that are or have become null and void pursuant to the provisions of this
paragraph, and any Right Certificate delivered to the Rights Agent that
represents Rights that are or have become null and void pursuant to the
provisions of this paragraph shall be canceled. The Company shall give the
Rights Agent written notice of the identity of any such Acquiring Person,
Associate or Affiliate, and the Rights Agent may rely on such notice in carrying
out its duties under this Agreement and shall be deemed not to have any
knowledge of the identity of any such Acquiring Person, Associate or Affiliate
unless and until it shall have received such notice.
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance with the
foregoing subparagraph (ii) such number or fractions of shares of Preferred
Stock having an aggregate current market value equal to the Current Market Price
of a share of Common Stock. In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued to
permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board of Directors shall, to the extent permitted by
applicable law and any material agreements then in effect to which the Company
is a party (A) determine the excess (such excess, the "Spread") of (1) the value
of the shares of Common Stock issuable upon the exercise of a Right in
accordance with the foregoing subparagraph (ii) (the "Current Value") over (2)
the Purchase Price (as adjusted in accordance with the foregoing subparagraph
(ii)), and (B) with respect to each Right (other than Rights which have become
null and void pursuant to the foregoing subparagraph (ii)), make adequate
provision to substitute for the shares of Common Stock issuable in accordance
with the foregoing paragraph (ii) upon exercise of the Right and payment of the
Purchase Price (as adjusted in accordance therewith), (1) cash, (2) a reduction
in such Purchase Price, (3) shares of Preferred Stock or other equity securities
of the Company (including, without limitation, shares or fractions of shares of
preferred stock which, by virtue of having dividend, voting and liquidation
rights substantially comparable to those of the shares of Common Stock, are
deemed in good faith by the Board of Directors to have substantially the same
value as the shares of Common Stock (such shares of Preferred Stock and shares
or fractions of shares of preferred stock are hereinafter referred to as "Common
Stock Equivalents," (4) debt securities of the Company, (5) other assets, or (6)
any combination of the foregoing, having a value which, when added to the value
of the shares of Common Stock actually issued upon exercise of such Right, shall
have an aggregate value equal to the Current Value (less the amount of any
reduction in such Purchase Price), where such aggregate value has been
determined by the Board of Directors upon the advice of a nationally recognized
investment banking firm selected in good faith by the Board of Directors;
provided, however, that if the Company shall not make adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
date of the Flip-In Event (the "Flip-in Trigger Date"), then the Company shall
be obligated to deliver, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party, upon the
surrender for exercise of a Right and without requiring payment of such Purchase
Price, shares of Common Stock (to the extent available), and then, if necessary,
such number or fractions of shares of Preferred Stock (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread. If the Board of Directors of the Company shall determine in
good faith that it is likely that sufficient additional shares of Common Stock
and/or Common Stock Equivalents 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
Flip-In Trigger Date, in order that the Company may seek stockholder approval
for the authorization of such additional shares or Common Stock Equivalents
(such thirty (30) day period, as it may be extended, is hereinafter called the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the second and/or third sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to the last sentence
of Section 11(a)(ii) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to the first sentence of Section 11(a)(iii) 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. The Company shall notify the Rights Agent
whenever it makes a public announcement pursuant to this Section 11(a)(iii) and
provide the Rights Agent with a copy of such announcement. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the Current Market
Price per share of the Common Stock on the Flip-In Trigger Date and the per
share or 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. The Board
of Directors may, but shall not be required to, establish procedures to allocate
the right to receive Common Stock upon the exercise of the Rights among holders
of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
forty-five calendar days after such record date) Preferred Stock, shares having
the same rights, privileges and preferences as the Preferred Stock ("Equivalent
Preferred Stock") or securities convertible into Preferred Stock or equivalent
preferred stock at a price per share of Preferred Stock or 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 on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
equivalent preferred stock (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Market
Price, and the denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of additional shares of
Preferred Stock and/or equivalent preferred stock to be offered for subscription
or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than cash, the
value of such non-cash consideration shall be as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Shares of Preferred Stock owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness, cash, 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 on such record
date, less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or evidences of
indebtedness 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. 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 the Common Stock for the thirty
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to, but not including, such date, and for purpose of computations made pursuant
to Section 11(a)(iii) hereof, the "Current Market Price" per share of the Common
Stock on any date shall be deemed to be the average of the daily closing prices
per share of the Common Stock for the ten consecutive Trading Days immediately
following, but not including, 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 the Common Stock of (i) any
dividend or distribution on the Common Stock (other than a regular quarterly
cash dividend and other than the Rights), (ii) any subdivision, combination or
reclassification of the Common Stock, and prior to the expiration of the
requisite thirty Trading Day or ten Trading Day period, as set forth above,
after the ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification occurs, then, and in each
such case, the Current Market Price shall be properly adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the shares of Common Stock are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the shares of 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 sale 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 shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be used
and shall be binding on the Rights Agent. The term "Trading Day" shall mean a
day on which the principal national securities exchange on which the shares of
Common Stock are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to trading
on any national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, "Current Market Price" per share shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "Current
Market Price" per share (or one one-hundredth of a 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 (or one one-hundredth of a 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 100 (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 and the "Current Market Price" per one one-hundredth of a share
of Preferred Stock shall, be equal to the Current Market Price per share of the
Common Stock (as appropriately adjusted). If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "Current Market Price"
per shall mean the fair value per share as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(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 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 ten-thousandth of a share of Common Stock or
other share or one-hundred-thousandth of a share of Preferred Stock, as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment, or (ii)
the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(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 shares of Preferred Stock contained in Section
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 shares of Preferred
Stock purchasable from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-hundredth of a
share of Preferred Stock (calculated to the nearest one-hundred-thousandth)
obtained by (i) multiplying (x) the number of one one-hundredth of a share of
Preferred Stock covered by a Right immediately prior to this adjustment, by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price or any adjustment to the number of shares of Preferred Stock
for which a Right may be exercised made pursuant to Sections 11(a)(i), 11(b) or
11(c), 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 shares of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest 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 (with prompt
written notice thereof to the Rights Agent) 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 Right
Certificates have been issued, shall be at least ten days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to holders of record
of Right Certificates on such record date Right 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 Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Preferred Stock issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue to
express the Purchase Price per share and the number of shares which were
expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value, if any, of the shares of Common
Stock, Preferred Stock or other capital stock issuable upon exercise of the
Rights, the Company shall take any corporate action, including using its best
efforts to obtain any required stockholder approvals, which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Common Stock, Preferred Stock or
other capital stock at such adjusted Purchase Price. If upon any exercise of the
Rights, a holder is to receive a combination of Common Stock and Common Stock
Equivalents, a portion of the consideration paid upon such exercise, equal to at
least the then par value of a share of Common Stock of the Company, shall be
allocated as the payment for each share of Common Stock of the Company so
received.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice
thereof to the Rights Agent) until the occurrence of such event the issuance to
the holder of any Right exercised after such record date the shares of Preferred
Stock and other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the shares of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares of Preferred Stock and other capital stock 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 of Directors of the
Company shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Stock, (ii) issuance for cash of any shares of
Preferred Stock at less than the Current Market Price, (iii) issuance for cash
of shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person, (ii) merge
with or into any other Person, 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, if (x) at the time of or immediately after such
consolidation, merger or sale there are any charter or by-law provisions or any
rights, warrants or other instruments or securities outstanding or agreements in
effect which 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. The Company shall not
consummate any such consolidation, merger or sale unless prior thereto the
Company and such other Person shall have executed and delivered to the Rights
Agent a supplemental agreement evidencing compliance with this subsection. (o)
The Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23, Section 24 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
eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Record Date and prior to the
Distribution Date (i) declare or pay any dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
shares of Common Stock, or (iii) combine the outstanding shares of Common Stock
into a smaller number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered thereafter, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock following any such event equals 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 or which shall be
the number of shares of Common Stock outstanding immediately prior to the
occurrence of such event and the denominator of which shall be the number of
shares of Common Stock outstanding immediately following the occurrence of such
event.
12. Certification of Adjustments. Whenever an adjustment is made or any
event affecting the Rights or their exercisability occurs (including, without
limitation, an event which causes the Rights to become null and void) as
provided in Sections 11 and 13 hereof, the Company shall (a) promptly prepare a
certificate signed by its Chief Executive Officer, its President or any Vice
President and by the Treasurer or any Assistant Treasurer or the Secretary or
any Assistant Secretary of the Company setting forth such adjustment or
describing such event, and a brief, reasonably detailed statement of the facts,
computations and methodology accounting for any adjustment, (b) promptly file
with the Rights Agent and with each transfer agent for the Preferred Stock and
the Common Stock a copy of such certificate and (c) mail a brief summary thereof
to each holder of a Right Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock) in accordance
with Section 26 hereof. Notwithstanding the foregoing sentence, the failure of
the Company to give such notice shall not affect the validity of or the force or
effect of or the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate prepared by the Company
pursuant to this Section 12 and on any adjustment or statement therein contained
and shall have no duty or liability with respect to, and shall not be deemed to
have knowledge of, any such adjustment or any such event unless and until it
shall have received such certificate. Any adjustment to be made pursuant to
Sections 11 and 13 of this Rights Agreement shall be effective as of the date of
the event giving rise to such adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
(a) In the event that following the first occurrence of a Flip-In
Event, directly or indirectly, (x) the Company shall consolidate with, or merge
with and into, any other Person or Persons and the Company shall not be the
surviving or continuing corporation of such consolidation or merger, or (y) any
Person or Persons shall consolidate with, or merge with and into, the Company,
and the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or of the Company or
cash or any other property other than, in the case of the transactions described
in subparagraphs (x) or (y), a merger or consolidation which would result in all
of the Voting Power represented by the securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into securities of the surviving entity) all
of the Voting Power represented by the securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation and
the holders of such securities not having changed as a result of such
transactions), or (z) the Company or one or more of its Subsidiaries shall sell,
mortgage or otherwise transfer to any other Person or any Affiliate or Associate
of such Person, 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), then, on the first occurrence
of any such event (a "Flip-Over Event"), proper provision shall be made so that
(i) each holder of a Right (other than Rights which have become null and void
pursuant to Section 11(a)(ii) hereof) shall thereafter have the right to
receive, upon the exercise thereof at the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof), in accordance with the
terms of this Agreement and in lieu of shares of Preferred Stock or Common Stock
of the Company, such number of validly authorized and issued, fully paid,
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall equal
the result obtained by dividing the Purchase Price (as theretofore adjusted in
accordance with Section 11(a)(ii) hereof) by 50% of the Current Market Price per
share of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such consolidation, merger,
sale or transfer; provided, however, that the Purchase Price (as theretofore
adjusted in accordance with Section 11(a)(ii) hereof) and the number of shares
of Common Stock of such Principal Party so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in accordance with Section
11(f) hereof to reflect any events occurring in respect of the Common Stock of
such Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such Flip-Over Event, all the obligations and duties of the
Company pursuant to this Rights Agreement; (iii) the term "Company" for all
purposes of this Rights Agreement shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the provisions of Section
11 hereof shall only apply to such Principal Party following the first
occurrence of a Flip-Over Event; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with Section 9 hereof) in connection
with the consummation of any such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter deliverable upon
the exercise of the Rights; provided, however, that, upon the subsequent
occurrence of any merger, consolidation, sale of all or substantially all
assets, recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right, such
cash, shares, rights, warrants and other property which such holder would have
been entitled to receive had he, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (x) or (y) of the
first sentence of Section 13(a) hereof; (A) the Person that is the issuer of the
securities into which shares of Common Stock of the Company are converted in
such merger or consolidation, or, if there is more than one such issuer, the
issuer the Common Stock of which has the greatest aggregate market value or (B)
if no securities are so issued, (x) the Person that is the other party to the
merger or consolidation and that survives said merger or consolidation, or, if
there is more than one such Person, the Person the Common Stock of which has the
greatest market value or (y) if the Person that is the other party to the merger
or consolidation does not survive the merger or consolidation, the Person that
does survive the merger or consolidation (including the Company if it survives);
and
(ii) in the case of any transaction described in (z) of the first
sentence in Section 13(a) hereof, the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest aggregate market value of shares
outstanding;
provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), (1) if the Common Stock of such Person is not at such time and has not
been continuously over the preceding 12-month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or (2) if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stocks
of all of which are and have been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the issuer of the Common Stock
having the greatest market value of shares outstanding, or (3) if such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in clauses (1) and (2) above shall apply to each of the owners having an
interest in the joint venture as if the Person owned by the joint venture was a
Subsidiary of both or all of such joint venturers, and the Principal Party in
each such case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger, sale
or transfer referred to in Section 13(a) unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock that have not been
issued or reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and the
Principal Party involved therein shall have executed and delivered to the Rights
Agent an agreement confirming that the requirements of Sections 13(a) and (b)
hereof shall promptly be performed in accordance with their terms and that such
consolidation, merger, sale or transfer of assets shall not result in a default
by the Principal Party under this Rights Agreement as the same shall have been
assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof and
further providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the date of expiration of the Rights,
and similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the Principal
Party shall become listed on a national securities exchange, to list (or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on such securities exchange and, if the Common Stock of the
Principal Party shall not be listed on a national securities exchange, to cause
the Rights and the securities purchased upon exercise of the Rights to be
reported by NASDAQ or such other system or exchange then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the shares of Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
In the event that any of the transactions described in Section 13(a) hereof
shall occur at any time after the occurrence of a transaction described in
Section 11(a)(ii) hereof, the Rights which have not theretofore been exercised
shall thereafter be exercisable in the manner described in Section 13(a).
(d) Furthermore, in case the Principal Party which is to be a party to
a transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then Current
Market Price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable for, or convertible into, Common Stock of such Principal
Party at less than such then current market price (other than to holders of
Rights pursuant to this Section 13) or (ii) providing for any special payment,
tax or similar provisions in connection with the issuance of the Common Stock of
such Principal Party pursuant to the provisions of Section 13; then, in such
event, the Company hereby agrees with each holder of Rights that it shall not
consummate any such transaction unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the holders of record of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the then current
market value of a whole Right. For the purposes of this Section 14(a), the then
current market value of a Right shall be determined in the same manner as the
Current Market Price of a share of Common Stock shall be determined pursuant to
Section 11(d) hereof.
(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-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates which evidence fractional shares of Preferred Stock
(other fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock). Fractions of shares of Preferred Stock in integral multiples
of one one-hundredth of a share of Preferred Stock may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depository selected by it, provided that
such agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled as
beneficial owners of the shares of Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share of Preferred Stock, the
Company may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one one-hundredth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value of
one one-hundredth of a share of Preferred Stock shall be the Current Market
Price of a share of Common Stock (as determined pursuant to Section 11(d)(ii)
hereof) for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Flip-In Event, the Company shall not
be required to issue fractions of shares or units of Common Stock or Common
Stock Equivalents or other securities upon exercise of the Rights or to
distribute certificates which evidence fractional shares of such Common Stock or
Common Stock Equivalents or other securities. In lieu of fractional shares or
units of such Common Stock or Common Stock Equivalents or other securities, the
Company may pay to the registered holders of Right Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the Current Market Value of a share or unit of such Common Stock or
Common Stock Equivalent or other securities. For purposes of this Section 14(c),
the Current Market Value shall be determined in the manner set forth in Section
11(d) hereof for the Trading Day immediately prior to the date of such exercise
and, if such Common Stock Equivalent is not traded, each such Common Stock
Equivalent shall have the value of one one-hundredth of a share of Preferred
Stock.
(d) The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares upon
exercise of a Right.
(e) Whenever a payment for fractional Rights or fractional shares is
to be made by the Rights Agent, the Company shall (i) promptly prepare and
deliver to the Rights Agent a certificate setting forth in reasonable detail the
facts related to such payments and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agent in the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate and shall have
no duty with respect to, and shall not be deemed to have knowledge of any
payment for fractional Rights or fractional shares under any Section of this
Agreement relating to the payment of fractional Rights or fractional shares
unless and until the Rights Agent shall have received such a certificate and
sufficient monies.
15. Rights of Action. All rights of action in respect of this Agreement,
other than any rights of action vested in the Rights Agent hereunder, are vested
in the respective holders of record of the Right Certificates (and, prior to the
Distribution Date, the holders of record of the Common Stock); and any holder of
record of any Right Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company or any
other Person to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach by the Company of this Agreement and, accordingly, that they will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations by the Company of the obligations of any
Person subject to this Agreement. Holders of Rights shall be entitled to recover
the reasonable costs and expenses, including attorneys' fees, incurred by them
in any action against the Company to enforce the provisions of this Agreement.
16. Agreement of Right Holders. Every holder of a Right by accepting the
same consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be evidenced
by a Right Certificate and will be transferable only in connection with the
transfer of Common Stock;
(b) after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the office of the Rights Agent designated for such purpose, duly endorsed or
accompanied by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent or the transfer agent
of the Common Stock) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall 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, judgment, decree or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory, self-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, that the Company must use its best efforts to
have any such injunction, order, judgment, decree or ruling lifted or otherwise
overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Stockholder. No holder of a
Right, as such, shall be entitled to vote, receive dividends in respect of or be
deemed for any purpose to be the holder of Common Stock or any other securities
of the Company which may at any time be issuable upon the exercise of the
Rights, nor shall anything contained herein or in any Right Certificate be
construed to confer upon the holder of any Right Certificate, as such, any of
the rights of a stockholder of the Company or any right to vote in 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 in respect
of any such stock or securities, or otherwise, until the Right or Rights
evidenced by such Right Certificate shall have been exercised in accordance with
the provisions hereof.
18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all service rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the preparation, negotiation, delivery, amendment,
administration and execution of this Rights 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, damage,
judgment, fine penalty, claim, demand, settlement, cost or expense (including,
without limitation, the reasonable fees and expenses of legal counsel), incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (each as determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction), for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance,
administration, exercise and performance of its duties under this Rights
Agreement, including, without limitation, the costs and expenses of defending
against and appealing any claim of liability arising therefrom, directly or
indirectly. The costs and expenses incurred in enforcing this right of
indemnification shall be paid by the Company. The provisions of this Section 18
and Section 20 below shall survive the exercise or expiration of the Rights, the
termination of this Rights Agreement and the resignation or removal of the
Rights Agent. Anything in this Rights Agreement to the contrary notwithstanding,
in no event shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of action.
(b) The Rights Agent shall be authorized and protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it in
connection with its acceptance and administration of this Rights Agreement and
the exercise and performance of its duties hereunder, in reliance upon any Right
Certificate, certificate for Common Stock or 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, guaranteed, verified or acknowledged, by the proper Person or
Persons, or otherwise upon the advice of counsel as set forth in Section 20
hereof.
19. Merger or Consolidation or Changed Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and, in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver such Right Certificates so countersigned; and in case at that
time any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificate shall have the full
force provided in the Right Certificates and in this Rights Agreement.
20. Rights and Duties of Rights Agent. The Rights Agent undertakes only the
duties and obligations expressly imposed by this Rights Agreement (and no
implied duties) upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company or an employee of the Rights Agent), and, the advice or
opinion of the Rights Agent's outside counsel, or the opinion of counsel who is
an employee of the Rights Agent, shall be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no liability for
or in respect of as to any action taken, suffered or omitted by it in accordance
with such advice or opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring Person and
the determination of "Current Market Price") be proved or established by the
Company prior to taking, suffering or omitting to take 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 certificate signed by the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate shall be
full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it under the provisions of this Rights Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (each as determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Any liability of the Rights Agent under this Rights Agreement
will be limited to the amount of fees paid by the Company to the Rights Agent.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not have any liability or be under any
responsibility in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this Rights
Agreement or in any Right Certificate; nor shall it be responsible for any
adjustment required under the provisions of Sections 11, 13, 23 or 24 hereof or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after receipt of a Certificate furnished pursuant to Section 12 describing any
such adjustment, upon which Certificate the Rights Agent may rely); nor shall it
by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant
to this Rights Agreement or any Right Certificate or as to whether any shares of
Common Stock will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Rights 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 Chief Executive Officer, the President or any Vice
President or the Secretary or any Assistant Secretary or 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 such instructions shall be full
authorization and protection to the Rights Agent and the Rights Agent shall not
be liable for or in respect of any action taken, suffered or omitted by it in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions. The Rights Agent shall be fully authorized
and protected in relying upon the most recent instructions received from any
such officer. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Rights
Agreement and the date on and/or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken or suffered by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an omission), the
Rights Agent shall have received written instructions in response to such
application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate, 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 the Rights
Agent were not the Rights Agent under this Rights Agreement. Nothing herein
shall preclude the Rights Agent or any such stockholder, affiliate, director,
officer or employee of the Rights Agent from acting in any other capacity for
the Company or for any other 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 (through
its directors, officers or employees) or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for any act,
omission, default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, omission, default, neglect
or misconduct, absent gross negligence, bad faith or willful misconduct (each as
determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction) 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
it believes 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 Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise of transfer without first
consulting with the Company.
21. Change of Rights Agent. The Rights Agent or any successor Rights Agent
may resign and be discharged from its duties under this Rights Agreement upon 30
days' notice in writing, or such earlier period as shall be agreed to in
writing, mailed to the Company and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent (with or without cause) upon 30 days' notice in writing, or such
earlier period as shall be agreed to in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Stock by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. Notwithstanding the foregoing provisions of this
Section 21, in no event shall the resignation or removal of a Rights Agent be
effective until a successor Rights Agent shall have been appointed and have
accepted such appointment. If the Company shall fail to make such appointment
within a period of 30 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who shall, with such
notice, submit his Right Certificate for inspection by the Company), then the
incumbent Rights Agent or the holder of record of any Right Certificate may
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be (a) a Person organized and doing business under the laws of the
United States or any State thereof, in good standing, which 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 Person 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 Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price per share and the number or kind or class of
shares of stock or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Rights Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
following the Distribution Date and prior to the redemption or expiration of the
Rights, the Company shall, with respect to shares of Common Stock so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities
hereinafter issued by the Company, in each case existing prior to the
Distribution Date, issue Right Certificates representing the appropriate number
of Rights in connection with such issuance or sale; provided, however, that (i)
no such Right Certificate shall be issued if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued, and (ii) no such Right
Certificate shall be issued, if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
23. Redemption.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (x) the first occurrence of a Flip-In Event or (y)
the Close of Business on the Expiration Date, redeem all but not less than all
the then outstanding Rights at a redemption price of $0.001 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").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights (or at such later time as the
Board of Directors may establish for the effectiveness of such redemption), 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. The Company shall promptly give public
notice of any such redemption (with prompt written notice thereof to the Rights
Agent); provided, however, that the failure to give, or any defect in, any such
notice shall not affect the legality or validity of such redemption. Within ten
(10) days after such action of the Board of Directors ordering the redemption of
the Rights (or such later time as the Board of Directors may establish for the
effectiveness of such redemption), the Company shall mail a notice of redemption
to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption shall state the method by which the payment of the Redemption Price
will be made. The failure to give notice required by this Section 23(b) or any
defect therein shall not affect the legality or validity of the action taken by
the Company.
(c) In the case of a redemption permitted under Section 23(a), the
Company may, at its option, discharge all of its obligations with respect to the
Rights by (i) issuing a press release announcing the manner of redemption of the
Rights and (ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent of the Common Stock, and upon such action, all
outstanding Right Certificates shall be null and void without any further action
by the Company.
24. Exchange of Rights for Common Stock.
(a) The Board of Directors of the Company may, at its option, at any
time after the occurrence of a Flip-In Event, exchange all or part of the then
outstanding and exercisable Rights (which (i) shall not include Rights that have
become null and void pursuant to the provisions of Section 11(a)(ii) and (ii)
shall include, without limitation, any Rights issued after the Distribution Date
in accordance with Section 22) 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 an
Exempt Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of shares of Common Stock aggregating 50% or more
of the shares of Common Stock then outstanding. From and after the occurrence of
an event specified in Section 13(a) hereof, any Rights that theretofore have not
been exchanged pursuant to this Section 24(a) shall thereafter be exercisable
only in accordance with Section 13 and may not be exchanged pursuant to this
Section 24(a).
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of shares of Common Stock equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall promptly give public notice of any such exchange (with
prompt written notice thereof to the Rights Agent); provided, however, that the
failure to give, or any defect in, such notice shall not affect the legality or
validity of such exchange. The Company promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by which
the exchange of the shares of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become null and void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute, and, in the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall substitute to the extent of such insufficiency, for each
share of Common Stock that would otherwise be issuable upon exchange of a Right,
a number of shares of Preferred Stock or fractions thereof (or equivalent
preferred shares, as such term is defined in Section 11(b)) having an aggregate
current per share market price (determined pursuant to Section 11(d) hereof)
equal to the current per share market price of one share of Common Stock
(determined pursuant to Section 11(d) hereof) as of the date of the Flip-In
Event.
(d) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 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 which evidence fractional shares of
Common Stock. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right Certificates with regard to
which such fractional shares of Common Stock would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this paragraph (d), the current
market value of a whole share of Common Stock shall be the Current Market Price
of a share of Common Stock (as defined in Section 11(d) hereof for the purposes
of computations made other than pursuant to Section 11(a)(iii)) for the Trading
Day immediately prior to the date of exchange pursuant to this Section 24.
25. Notice of Proposed Actions.
(a) In case the Company, after the Distribution Date, shall propose
(i) to effect any of the transactions referred to in Section 11(a)(i) or to pay
any dividend to the holders of record of its Preferred Stock payable in stock of
any class or to make any other distribution to the holders of record of its
Preferred Stock (other than a regular periodic cash dividend), or (ii) to offer
to the holders of record of its Preferred Stock or options, warrants, or other
rights to subscribe for or to purchase shares of Preferred Stock (including any
security convertible into or exchangeable for Preferred Stock) or shares of
stock of any other class or any other securities, options, warrants, convertible
or exchangeable securities or other rights, or (iii) to effect any
reclassification of its Preferred Stock or any recapitalization or
reorganization of the Company, or (iv) to effect any consolidation or merger
with or into, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to the Rights Agent and to each holder of
record of a Right Certificate, in accordance with Section 26 hereof, notice of
such proposed action, which shall specify the record date for the purposes of
such transaction referred to in Section 11(a)(i), or such dividend or
distribution, or the date on which such reclassification, recapitalization,
reorganization, consolidation, merger, sale or transfer of assets, liquidation,
dissolution or winding up is to take place and the record date for determining
participation therein by the holders of record of 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 10 days prior to the record date
for determining holders of record of the Preferred Stock for purposes of such
action, and in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of record of Preferred Stock, whichever shall be the earlier.
(b) In case any of the transactions referred to in Section 11(a)(ii)
or Section 13 of this Rights Agreement are proposed, then, in any such case, the
Company shall give to the Rights Agent and to each holder of record of a Right
Certificate, in accordance with Section 26 hereof, notice of the proposal of
such transaction at least 10 days prior to consummating such transaction, which
notice shall specify the proposed event and the consequences of the event to
holders of Rights under Section 11(a)(ii) or Section 13 hereof, as the case may
be, and, upon consummating such transaction, shall similarly give notice thereof
to the Rights Agent and to each holder of record of a Right Certificate.
(c) The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action.
26. Notices. Notices or demands authorized by this Rights Agreement to be
given or made by the Rights Agent or by the holder of record of any Right
Certificate or Right to or on the Company shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Rights Agent), or by facsimile transmission, as
follows:
Anacomp, Inc.
00000 Xxxxxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Secretary
Facsimile No.: (000) 000-0000
with a copy to:
Xxxx Xxxx Xxxx & Freidenrich LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Facsimile No: (000) 000-0000
Subject to the provisions of Section 20 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company), or by
facsimile transmission, as follows:
Mellon Investor Services LLC
00 Xxxx Xxxxxx, 0xx Xx.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
Facsimile No.: (000) 000-0000/6319
with a copy to:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
Facsimile No.: (000) 000-0000
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
27. Supplements and Amendments. Except as provided in the penultimate
sentence of this Section 27, for so long as the Rights are then redeemable, the
Company may in its sole and absolute discretion, and the Rights Agent shall if
the Company so directs, supplement or amend any provision of this Agreement in
any respect without the approval of any holders of the Rights. At any time when
the Rights are no longer redeemable, except as provided in the penultimate
sentence of this Section 27, the Company may, and the Rights Agent shall, if the
Company so directs, supplement or amend this Agreement without the approval of
any holders of Right Certificates in order to (i) cure any ambiguity, (ii)
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen any
time period hereunder, or (iv) change or supplement the provisions hereunder in
any manner which the Company may deem necessary or desirable; provided that no
such supplement or amendment shall adversely affect the interests of the holders
of Rights as such (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person), and no such amendment may cause the Rights again to
become redeemable or cause the Agreement again to become amendable other than in
accordance with this sentence. Upon delivery of a certificate from an
appropriate officer of the Company and, if requested by the Rights Agent, an
opinion of counsel, that states that the proposed supplement or amendment
complies with this Section 27, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Rights Agreement to the
contrary, (a) no supplement or amendment shall be made which changes the
Redemption Price; and (b) the Rights Agent may, but shall not be obligated to,
enter into any supplement or amendment that affects the Right's Agent's own
rights, duties, obligations or immunities under this Agreement and the Rights
Agent shall not be bound by supplements or amendments not executed by it. Prior
to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
28. Successors. All of the covenants and provisions of this Rights
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.
29. Determinations and Actions by the Board of Directors, etc. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors 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 with respect to
the redemption or exchange of the Rights or to amend the Agreement). All such
actions, calculations, interpretations and determinations (including, for
purpose of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Company's Board of 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 Persons, and (y) not subject the Board to any liability
to the holders of the Rights. The Rights Agent is entitled always to assume the
Company's Board of Directors acted in good faith and shall be fully protected
and incur no liability in reliance thereon.
30. Benefits of this Rights Agreement. Nothing in this Rights Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Stock) any legal or equitable right, remedy or
claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the holders of
record of the Right Certificates (and, prior to the Distribution Date, the
Common Stock).
31. Governing Law. This Rights Agreement and each Right Certificate issued
hereunder shall be deemed to be a contract made under the laws of the State of
Indiana and for all purposes shall be governed by and construed in accordance
with the laws of such state applicable to contracts to be made solely by
residents of such state and performed entirely within such state; provided,
however, that all provisions regarding the rights, duties, obligations and
immunities of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
32. Counterparts. This Rights 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.
33. Descriptive Headings. Descriptive headings of the several sections of
this Rights Agreement are inserted for convenience only and shall not control or
affect the meaning or construction of any of the provisions hereof.
34. Severability. If any term, provision, covenant or restriction of this
Rights Agreement is held by a court of competent jurisdiction or other authority
to be invalid, illegal or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Rights Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated.
[The remainder of this page is intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed, and their seals affixed and attested, all as of the date and
year first above written.
ATTEST: ANACOMP, INC.
By: /s/ XXXX X. XXXXX By: /s/ XXXXXXX X. XXXXXX
----------------------------------------- --------------------------
Name: Xxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President, Title: President
General Counsel & Secretary
ATTEST: MELLON INVESTOR SERVICES LLC
By: /s/ XXXXX X. XXXXX By: /s/ XXXX X. XXXXX, XX.
----------------------------------------- ---------------------------
Name: Xxxxx X. Xxxxx Name: Xxxx X. Xxxxx, Xx.
Title: Vice President Title: Vice President
EXHIBIT A
ARTICLES OF AMENDMENT
ARTICLES OF AMENDMENT OF
THE ARTICLES OF INCORPORATION OF
ANACOMP, INC.
Pursuant to Section 23-1-38-6 of the
Business Corporation Law of the State of Indiana
The undersigned, a duly appointed officer of Anacomp, Inc. (the
"Corporation"), organized and existing under the Business Corporation Law of the
State of Indiana, as amended (the "Act"), desiring to give notice of corporate
action amending the Articles of Incorporation, as amended, sets forth the
following facts.
35. Amendment.
(a) Name. The name of the Corporation following these Articles of
Amendment will be Anacomp, Inc.
(b) Incorporation. The Corporation was incorporated under the Act on
April 16, 1968.
(c) Amendment. Article VI (Terms of Shares) of the Articles of
Incorporation of the Corporation, as amended, shall now include a new Section,
Section 4, and the exact text of such Section 4 shall be as follows:
Section 4. Series RP Preferred Stock.
(i) Designation and Amount. The shares of such series shall be
designated as "Series RP Preferred Stock" (the "Series RP Preferred Stock"),
$0.01 par value per share, and the number of shares constituting such series
shall be 400,000.
(ii) Dividends and Distributions.
(A) The dividend rate on the shares of Series RP Preferred
Stock shall be for each quarterly dividend (hereinafter referred to as a
"quarterly dividend period"), which quarterly dividend periods shall commence on
January 1, April 1, July 1 and October 1 each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date") (or in the case of
original issuance, from the date of original issuance) and shall end on and
include the day next preceding the first date of the next quarterly dividend
period, at a rate per quarterly dividend period (rounded to the nearest cent)
equal to the greater of (a) $375.00 or (b) subject to the provisions for
adjustment hereinafter set forth, 100 times the aggregate per share amount of
all cash dividends, and 100 times the aggregate per share amount (payable in
cash, based upon the fair market value at the time the non-cash dividend or
other distribution is declared as determined in good faith by the Board of
Directors) of all non-cash dividends or other distributions other than a
dividend payable in Common Shares or a subdivision of the outstanding Common
Shares (by reclassification or otherwise), declared (but not withdrawn) on the
Common Shares, par value $0.01 per share, of the Corporation during the
immediately preceding quarterly dividend period, or, with respect to the first
quarterly dividend period, since the first issuance of any share or fraction of
a share of Series RP Preferred Stock. In the event this Company shall at any
time after August 20, 2002 (the "Rights Declaration Date") (i) declare any
dividend on Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the amount to which holders of
shares of Series RP 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
Common Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately prior to
such event.
(B) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series RP Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series RP
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 RP
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 RP 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 RP Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be no more
than 45 days prior to the date fixed for the payment thereof.
(iii) Voting Rights. The holders of shares of Series RP Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series RP Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Shares payable in Common
Shares, (ii) subdivide the outstanding Common Shares, or (iii) combine the
outstanding Common Shares into a smaller number of shares, then in each such
case the number of votes per share to which holders of shares of Series RP
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
Common Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately prior to
such event.
(B) Except as otherwise provided herein, in the Articles of
Incorporation or by law, the holders of shares of Series RP Preferred Stock and
the holders of Common Shares shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, in the Articles of
Incorporation and in the By-laws, holders of Series RP 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 Shares as set forth
herein) for taking any corporate action.
(iv) Reacquired Shares. Any shares of Series RP 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
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.
(v) Liquidation, Dissolution or Winding Up. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of the Series RP Preferred Stock shall be entitled to
receive the greater of (a) $15,000.00 per share, plus accrued dividends to the
date of distribution, whether or not earned or declared, or (b) an amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
100 times the aggregate amount to be distributed per share to holders of Common
Shares. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Shares payable in Common
Shares, (ii) subdivide the outstanding Common Shares, or (iii) combine the
outstanding Common Shares into a smaller number of shares, then in each such
case the amount to which holders of shares of Series RP Preferred Stock were
entitled immediately prior to such event pursuant to clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(vi) Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the Common Shares 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 RP
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 100 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 Common Share is changed or exchanged. In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare any dividend on Common
Shares payable in shares of Common Shares, (ii) subdivide the outstanding Common
Shares, or (iii) combine the outstanding Common Shares into a smaller number of
shares, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series RP Preferred Stock
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of Common Shares outstanding immediately after such event
and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(vii) No Redemption. The shares of Series RP Preferred Stock
shall not be redeemable.
(viii) Fractional Shares. Series RP Preferred Stock may be issued
in fractions of a share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of Series RP Preferred Stock. All payments made with respect to fractional
shares hereunder shall be rounded to the nearest whole cent.
(ix) Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series RP Preferred Stock as provided in Section
4(b) above are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series RP Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(I) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series RP 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) with the Series RP Preferred
Stock, except dividends paid ratably on the Series RP 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 on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series RP Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity 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 RP Preferred Stock; or
(IV) purchase or otherwise acquire for consideration
any shares of Series RP Preferred Stock, or any shares of stock ranking on a
parity with the Series RP 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 Section 4(i)(1)
above, purchase or otherwise acquire such shares at such time and in such
manner.
(x) Ranking. The Series RP Preferred Stock shall be junior to all
other Series of the Corporation's preferred stock as to the payment of dividends
and the distribution of assets, unless the terms of any series shall provide
otherwise.
(xi) Amendment. The Amended and Restated Articles of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series RP Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of two-thirds or more of the outstanding shares of Series RP
Preferred Stock voting together as a single class. 36. Manner of Adoption and
Vote.
The manner of adoption and vote by which this amendment was approved by the
Corporate is as follows:
Action by Directors. The Board of Directors of the Corporation, as of July
22, 2002, duly adopted this Amendment.
Action by Shareholders. This amendment was adopted without shareholder
action, and shareholder action was not required.
IN WITNESS WHEREOF, the undersigned Corporation has caused these Articles
of Amendment to be signed by a duly authorized officer this 7th day of August,
2002.
Anacomp, Inc.
By: /s/ XXXXXXX X. XXXXXX
----------------------
Xxxxxxx X. Xxxxxx
President
EXHIBIT B
[Form of Right Certificate]
Certificate No. ____ _____ Rights
August 20, 2012
NOT EXERCISABLE AFTER OR EARLIER IF REDEEMED OR EXCHANGED. AT THE OPTION OF
THE COMPANY, THE RIGHTS MAY BE REDEEMED AT $0.001 PER RIGHT OR EXCHANGED
FOR PREFERRED STOCK ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN THE
EVENT THAT THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO A
PERSON WHO IS AN ACQUIRING PERSON OR CERTAIN TRANSFEREE OF THE RIGHTS
PREVIOUSLY OWNED BY SUCH PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY SHALL BE NULL AND VOID AND WILL NO LONGER BE
TRANSFERABLE.
RIGHT CERTIFICATE
ANACOMP, INC.
This certifies that ___________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of August 8, 2002 ("Rights Agreement") between Anacomp, Inc.,
an Indiana corporation ("Company"), and Mellon Investor Services LLC, a New
Jersey limited liability company ("Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 p.m. (California time) on August 20, 2012, at the
office of the Rights Agent designated for such purpose, or the designated office
of its successors as Rights Agent, designated for such purposes, one
one-hundredth of a fully paid and nonassessable share of Series RP Preferred
Stock of the Company ("Preferred Stock") at a purchase price of $150.00 per one
one-hundredth of a share, as the same may from time to time be adjusted in
accordance with the Rights Agreement ("Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed. Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Rights Agreement.
As provided in the Rights Agreement, the Purchase Price and the number of
shares of Preferred Stock or other securities which may be purchased upon the
exercise of the Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events and, upon the
happening of certain events, securities other than shares of Preferred Stock, or
other property, may be acquired upon exercise of the Rights evidenced by this
Right Certificate, as provided by the Rights Agreement.
Upon the occurrence of a Flip-In Event, if the Rights evidenced by this
Rights Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person, (ii) a transferee of any
such Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person who,
after such transfer, became an Acquiring Person, or any Affiliate or Associate
of an Acquiring Person, such Rights shall be null and void and will no longer be
transferable and no holder hereof shall have any right with respect to such
Rights from and after the occurrence of such Flip-In Events.
This Right Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of the Right Certificates, which
limitation 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 principal executive office of
the Company and are available upon written request to the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Right Certificate or Right Certificates of like tenor and
date evidencing Rights entitling the holder of record to purchase a like
aggregate number of shares of Preferred Stock as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled such
holder to purchase. If this Right Certificate shall be exercised in part, the
holder shall be entitled to receive upon surrender hereof, another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, at any time prior to the
earlier of (i) the occurrence of a Flip-In Event (as such term is defined in the
Rights Agreement) or (ii) the Expiration Date (as such term is defined in the
Rights Agreement), the Rights evidenced by this Certificate may be redeemed by
the Company at its option at a redemption price of $0.001 per Right. Subject to
the provisions of the Rights Agreement, the Company may, at its option, at any
time after a Flip-In Event, exchange all or part of the Rights evidenced by this
Certificate for shares of the Company's Common Stock or for Preferred Stock (or
shares of a class or series of the Company's preferred stock having the same
rights, privileges and preferences as the Preferred Stock).
In the event (i) any person or group becomes an Acquiring Person or (ii)
any of the types of transactions, acquisitions or other events described above
as self-dealing transactions occur, and prior to the acquisition by such person
or group of 50% or more of the outstanding shares of Common Stock, the Board may
require all or any portion of the outstanding Rights (other than Rights owned by
such Acquiring Person which have become void) to be exchanged for Common Stock
on a pro rata basis, at an exchange ratio of one share of Common Stock or one
one-hundredth of a share of Preferred Stock (or of a share of a class or series
of the Company's Preferred Stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
No fractional shares of Preferred Stock shall be issued upon the exercise
of any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may, at the
option of the Company, be evidenced by depositary receipts), and no fractional
shares of Common Stock will be issued upon the exchange of any Right or Rights
evidenced hereby, and in lieu thereof, as provided in the Rights Agreement,
fractions of shares of Preferred Stock or Common Stock shall receive an amount
in cash equal to the same fraction of the then Current Market Price (as such
term is defined in the Rights Agreement) of a share of Preferred Stock or Common
Stock, as the case may be.
No holder of this Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common 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 in 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 (other than certain actions specified in
the Rights Agreement) or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised or exchanged as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal. Dated as of ________________________, _____.
ATTEST: ANACOMP, INC.
By:
----------------------------------------
Secretary
Title:
COUNTERSIGNED: MELLON INVESTOR SERVICES LLC
As Rights Agent
By:
Authorized Officer
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer any or all of the Rights
represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________________________________________________________
________________________________________________________________________________
(Name, address and social security or other
identifying number of transferee)
___________________________________ (_______________) of the Rights represented
by this Right Certificate, together with all right, title and interest in and to
said Rights, and hereby irrevocably constitutes and appoints
_________________________ attorney to transfer said Rights on the books of the
within-named Company with full power of substitution.
Dated:___________________, ______ __________________________________
(Signature)
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
37. the rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned and transferred by or on behalf of a Person who is or was
an Acquiring Person (as such capitalized terms are defined in the Rights
Agreement);
38. after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated:___________________, ______ __________________________________
(Signature)
Signature Guaranteed:
Form of Reverse Side of Right Certificate
(continued)
NOTICE
The signatures to the foregoing Assignment and the foregoing Certificate, if
applicable, must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a participant in a Securities Transfer
Association ("STA") recognized signature program.
In the event that the foregoing Certificate is not duly executed, with signature
guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such capitalized terms are defined in the
Rights Agreement), and not issue any Right Certificate or Right Certificates in
exchange for this Right Certificate.
Form of Reverse of Right Certificate
(continued)
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder
desires to exercise any or all of the Rights
represented by this Right Certificate)
To Anacomp, Inc.:
The undersigned hereby irrevocably elects to exercise _______________
(__________) of the Rights represented by this Right Certificate to purchase the
shares of the Common Stock of the Company, or other securities or property
issuable upon the exercise of said number of Rights pursuant to the Rights
Agreement.
The undersigned hereby requests that a certificate for any such securities and
any such property be issued in the name of and delivered to:
________________________________________________________________________________
________________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
The undersigned hereby further requests that if said number of Rights shall not
be all the Rights represented by this Right Certificate, a new Right Certificate
for the remaining balance of such Rights be issued in the name of and delivered
to:
________________________________________________________________________________
________________________________________________________________________________
(Name, address and social security or other
identifying number of issuee)
Dated:___________________, ______ __________________________________
(Signature)
Signature Guaranteed:
Form of Reverse Side of Right Certificate
(continued)
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined pursuant to
the Rights Agreement);
39. after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Right Certificate from any
Person who is or was an Acquiring Person or an Affiliate or Associate of an
Acquiring Person or any transferee of such Persons.
Dated:___________________, ______ __________________________________
(Signature)
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and the foregoing
Certificate, if applicable, must correspond to the name as written upon the face
of the this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever, and must be guaranteed by a member firm of
a registered national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
In the event that the foregoing Certificate is not executed, with signature
guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such capitalized terms are defined in the
Rights Agreement), and not issue any Right Certificate or Right Certificates in
exchange for this Right Certificate.
EXHIBIT C
SUMMARY OF RIGHT
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
ISSUED TO, BENEFICIALLY OWNED BY OR TRANSFERRED TO ANY PERSON WHO IS OR BECOMES
AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) OR AN ASSOCIATE OR
AFFILIATE (AS DEFINED IN THE RIGHTS AGREEMENT) THEREOF AND CERTAIN TRANSFEREES
THEREOF WILL BE NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
ANACOMP, INC.
Summary of Terms of
Rights Agreement
Nature of Right: When exercisable, each Right (a "Right") will initially
entitle the holder to purchase one one-hundredth of a share
of Series RP Preferred Stock ("Preferred Stock") of Anacomp,
Inc. (the "Company").
Means of Distribution: The Rights will be distributed to holders of the Company's
outstanding Common Stock as a dividend of one Right for each
share of Common Stock. The Rights will also be attached to
all future issuances of Common Stock that occur prior to the
Distribution Date (as defined below).
Exercisability: Rights become exercisable on the earlier of: (i) the tenth
day following the date of public announcement by the Company
or by any person or group (an "Acquiring Person") that such
person or group has acquired beneficial ownership of 20% or
more of the Company's outstanding Common Stock, or (ii) the
tenth business day (unless extended by the Board prior to the
time a person becomes an Acquiring Person) following the
commencement, or announcement of an intention to commence, by
any person or group of a tender or exchange offer which would
result in such person owning 20% or more of the outstanding
Common Stock of the Company (the earlier of such dates is
referred to as the "Distribution Date"), provided that an
--------
Acquiring Person does not include an Exempt Person (as such
term is defined in the Rights Agreement). Rights will trade
separately from the Common Stock once the Rights become
exercisable.
Exercise Price: $150.00 per share, which is the amount that in the judgment
of the Board of Directors represents the long-term value of
the Common Stock over the term of the Rights Agreement (the
"Exercise Price").
Term: The Rights will expire upon the earlier of (i) ten years
after the date of issuance, or August 20, 2012 or
(ii) redemption or exchange by the Company as described below.
Redemption of Rights: Rights are redeemable at a price of $0.001 per Right, by the
vote of the Company's Board of Directors, at any time until
the occurrence of a Flip-In Event (defined below).
Preferred Stock: The Preferred Stock purchasable upon exercise of the Rights
will be nonredeemable and junior to any other series of
preferred stock the Company may issue (unless otherwise
provided in the terms of such other series). Each share of
Preferred Stock will have a preferential cumulative quarterly
dividend in an amount equal to the greater of (a) $375.00 or
b) 100 times the dividend declared on each share of Common
Stock. In the event of liquidation, the holders of Preferred
Stock will receive a preferred liquidation payment equal to
the greater of (a) $15,000.00 per share, plus accrued
dividends to the date of distribution whether or not earned
or declared, or (b) an amount per share equal to 100 times
the aggregate payment to be distributed per share of Common
Stock. Each share of Preferred Stock will have 100 votes,
voting together with the shares of Common Stock. In the
event of any merger, consolidation or other transaction in
which shares of Common Stock are exchanged for or changed
into other securities, cash and/or other property, each share
of Preferred Stock will be entitled to receive 100 times the
amount and type of consideration received per share of Common
Stock. The rights of the Preferred Stock as to dividends,
liquidation and voting, and in the event of mergers and
consolidations, are protected by customary anti-dilution
provisions. Fractional shares (in integral multiples of one
one-hundredth) of Preferred Stock will be issuable; however,
the Company may elect to distribute depositary receipts in
lieu of such fractional shares. In lieu of fractional shares
other than fractions that are multiples of one one-hundredth
of a share, 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. Because of the nature of the
Preferred Stock's dividend, liquidation and voting rights,
the value of one one-hundredth of a share of Preferred Stock
purchasable upon exercise of each Right should approximate
the value of one share of Common Stock.
Rights in Event of In the event that an Acquiring Person engages in certain
Self-Dealing Transaction or self-dealing transactions with the Company, or a Person
Acquisition of Substantial becomes the beneficial owner of 20% or more of the
Amount of Common Stock: outstanding Common Stock ("Flip-In Events"), a holder of a
Right thereafter has the right to purchase, upon payment of
the then current Exercise Price, in lieu of one one-hundredth
of a share of Preferred Stock per outstanding Right, such
number of shares of Common Stock having a market value at the
time of the transaction equal to the Exercise Price divided
by one-half the Current Market Price (as defined in the
Rights Agreement) of the Common Stock. Notwithstanding the
foregoing, Rights held by the Acquiring Person or any
Associate or Affiliate thereof or certain transferees will be
null and void and no longer be transferable.
Self-dealing transactions are defined to include a
consolidation, merger or other combination of an Acquiring
Person with the Company in which the Company is the surviving
corporation, the transfer of assets to the Company in
exchange for securities of the Company, or otherwise obtain
securities of the Company (other than in a pro rata
distribution to all stockholders), the sale, purchase,
transfer, distribution, lease, mortgage, pledge or
acquisition of assets by the Acquiring Person to, from or
with the Company on other than an arm's length basis,
compensation to an Acquiring Person for services (other than
for employment as a regular or part-time employee or director
on a basis consistent with the Company's past practice), a
loan or provision of other financial assistance (except
proportionately as a stockholder) to an Acquiring Person or
the licensing, sale or other transfer of proprietary
technology or know-how from the Company to the Acquiring
Person on terms not approved by the Board of Directors or a
reclassification, recapitalization or other transaction with
the effect of increasing by more than 1% the Acquiring
Person's proportionate share of any class of securities of
the Company.
Rights in Event of If, following the occurrence of a Flip-In Event, the Company
Business Combination: is acquired by any person in a merger or other business
combination transaction in which the Common Stock is
exchanged or converted or in which the corporation is not the
surviving corporation, or 50% or more of its assets or
earnings power are sold to any person, each holder of a Right
(other than an Acquiring Person, or Affiliates or Associates
of an Acquiring Person) shall thereafter have the right to
purchase, upon payment of the then current Exercise Price,
such number of shares of common stock of the acquiring
company having a current market value equal to the Exercise
Price divided by one-half the Current Market Price of such
common stock.
Exchange Option: In the event (i) any person or group becomes an Acquiring
Person or (ii) any of the types of transactions, acquisitions
or other events described above as self-dealing transactions
occur, and prior to the acquisition by such person or group
of 50% or more of the outstanding shares of Common Stock, the
Board may require all or any portion of the outstanding
Rights (other than Rights owned by such Acquiring Person
which have become void) to be exchanged for Common Stock on a
pro rata basis, at an exchange ratio of one share of Common
Stock or one one-hundredth of a share of Preferred Stock (or
of a share of a class or series of the Company's Preferred
Stock having equivalent rights, preferences and privileges),
per Right (subject to adjustment).
Fractional Shares: No fractional shares of Common Stock will be issued upon
exercise of the Rights and, in lieu thereof, a payment in
cash will be made to the holder of such Rights equal to the
same fraction of the current market value of a share of
Common Stock.
Adjustment: The Exercise Price payable, and the number of shares 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) upon the grant
to holders of the Preferred Stock of 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 Preferred Stock of evidences of indebtedness or assets
(excluding dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to
above). The number of Rights associated with each share of
Common Stock is also subject to adjustment in the event of a
stock split of the Common Stock or a stock dividend on the
Common Stock payable in Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring,
in any such case, prior to the Distribution Date.
Rights as Stockholder: The Rights themselves do not entitle the holder thereof to
any rights as a stockholder, including, without limitation,
voting rights or to receive dividends.
Amendment of Rights: Until the Rights become nonredeemable, the Company may,
except with respect to the redemption price, amend the
Agreement in any manner. After the Rights become
nonredeemable, the Company may amend the Agreement to cure
any ambiguity, to correct or supplement any provision which
may be defective or inconsistent with any other provisions,
to shorten or lengthen any time period under the Rights
Agreement, or to change or supplement any provision in any
manner the Company may deem necessary or desirable, provided
that no such amendment may adversely affect the interests of
the holders of the Rights (other than the Acquiring Person or
its Affiliates or Associates) or cause the Rights to again be
redeemable or the Agreement to again be freely amendable.
A copy of the Rights Agreement is available, free of charge, from the
Company, Anacomp, Inc., 00000 Xxxxxxxxxxx Xxxxxx, Xxxxx, XX 00000, Attention:
Secretary. This summary description of the Rights Agreement does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement, as amended from time to time, which is incorporated in this summary
description by reference.
